THE NORTH WIND AND THE SUN: JAPAN'S RESPONSE TO THE POLITICAL CRISIS IN BURMA, 1988-1996

By Donald M. Seekins

Introduction

JAPANESE parents often tell their children Aesop's fable about the North Wind and the Sun, in which they have a contest to see who can make a traveler take off his coat. The North Wind blows cold gusts on the traveler, but the harder he blows the more tightly the unfortunate man clutches the coat around his body. The Sun then pours down his warm rays, and in that way easily succeeds in getting the man to doff his garment.

The moral of the fable is that it is easier to get people to do what you want them to do through warmth and encouragement than through harshness. As a lesson in human relations, the story teaches tolerance, patience, and acceptance rather than the "cold" measurement of human behavior against the standards of universal ethical principles. These sentiments resonate strongly with the cultural-ideological values of contemporary Japan, where non-judgmental, results-oriented consensus-building is emphasized and the exercise of raw power minimized (or, perhaps more accurately, concealed) in the interests of social harmony. This may explain the fable's enduring appeal in Japan.

It was not surprising, then, when Japanese diplomats and journalists during the mid-1990s drew upon the imagery of the North Wind and the Sun to illustrate their government's approach to the ongoing political crisis in Burma. As one participant at an Amnesty International symposium in Tokyo commented: "It is said that Japanese policy is not to say 'stop ODA [official development assistance]' in the manner of the North Wind's blowing, but to resolve matters little by little by warming things up like the Sun" (Amnesty International-Japan Branch 1995:68). The allusion here is to Japan's use of "quiet diplomacy" (shizuka na gaikoo) or "quiet dialogue" (shizuka na taiwa) to nudge SLORC (the State Law and Order Restoration Council), little by little, in the direction of democratization and respect for human rights, an approach that differs markedly from the sharp criticisms and economic sanctions levelled against SLORC by the United States and Europe. When Daw Aung San Suu Kyi was released in July 1995 after nearly six years of house arrest, Japanese diplomats were quick to attribute the action to the superior effectiveness of their government's "sun diplomacy" (taiyoo gaikoo) (Asahi Shimbun 1995).

Economic interests have taken priority in Tokyo's foreign policy ever since the end of World War II, a strategy designed to ensure national survival and prosperity. But although Japan's response to the political crisis in Burma still reflects the interests, aspirations, and self-images of business-oriented elites, it has also inspired a genuine debate (of a scope perhaps unprecedented in the nation's postwar history) concerning the proper nature of Japan's international responsibilities. In particular, Japan's leaders have found it necessary to modify "economics first" in light of ongoing events involving Daw Aung San Suu Kyi, whose image has catalyzed a heightened awareness of international human rights issues that previously had generated little interest within Japan's characteristically inward-looking society.

Tokyo's Burma policy since 1988, however, has been plagued by ambiguity. Due to the close interpenetration of business, bureaucratic, and political elites that exists within the domestic political system, it is often difficult for outside observers to track the policy decision-making process or to discover precisely who advocated a given policy, and for what reasons. Critics both within Japan and abroad have frequently accused the government of using "quiet dialogue" as a front for maintaining a "business as usual" status quo.

Neither inside nor outside the government, however, has there been unanimity regarding the official stance on Burma, and at least three Burma policy "constituencies" can be identified. The human rights constituency, including progressive journalists, intellectuals, lawyers, certain members of the Diet, domestic non-governmental organizations (Amnesty International-Japan, the People's Forum on Burma), and Burmese expatriate organizations in Japan (such as the Burma Youth Volunteer Association-Japan), maintains a critical position resembling that of the governments of the United States and other Western countries. Although limited in resources and popular support, this constituency cannot be ignored because of its policy affinities with some of Japan's major trading partners in the West.

The business constituency, including government agencies (especially the Ministry of International Trade and Industry), business associations (such as Keidanren ["Federation of Economic Organizations"], the most important business association in Japan), individual corporations, and a coterie of powerful conservative politicians, has far more influence in Japan than the human rights constituency. Yet Japanese business has not yet gotten what it wants—the large-scale resumption of loan projects, including new projects—in Burma because:

(1) although Japanese leaders view Burma as an important country in terms of economic potential and geographical proximity, it is not as central to Japanese interests as China and the more developed

ASEAN states, where the business environment is much less risky. Vietnam, moreover, has competed successfully with Burma for Japanese capital during the early and mid-1990s;

(2) the international stature of Daw Aung San Suu Kyi makes it impossible for Tokyo to reward SLORC with full economic engagement; and,

(3) SLORC has not devised concrete measures to deal with the problem of its unpaid yen-denominated debt.

Nevertheless, Tokyo's Burma policy does benefit the business constituency in that it constitutes a low-risk strategy that ensures Japan a significant economic presence inside the country, thus allowing business to be poised for full engagement as soon as political conditions change for the better.

Between these two constituencies, and especially inside the Japanese Ministry of Foreign Affairs, stands the Sun Diplomacy constituency, which in 1989 attempted to reach beyond economic interests by normalizing relations with Burma and resuming committed ODA funds in order to buy time within which SLORC and its democratic opponents could work out their differences.

In explaining Japan's relations with Burma, all of these important factors must be kept in mind. I will therefore begin my analysis by recounting in detail the process of normalization of relations in 1989 and the subsequently important roles played by Japanese business interests on the one hand and Daw Aung San Suu Kyi on the other. I will then conclude by summing up the following questions:

(1) To what extent do Burma-Japan relations since 1988 represent a departure from the "economics first" approach that has dominated Japan's foreign relations since the end of the Pacific War?

(2) Has "sun diplomacy" been successful? And what alternative policy might have been, or in future could be, more effective in modifying SLORC's behavior?

The February 1989 Normalization of Relations

Nineteen eighty-eight, the "year of rage," caught most foreign observers by surprise. Much of the military's violence against largely unarmed demonstrators in August and September of that year took place in the central districts of Rangoon, where modest numbers of foreign diplomats were posted. Among those on the scene who disapproved of the behavior of the Tatmadaw (Burma's armed forces) was Ohtaka Hiroshi, Japan's ambassador to Burma. In protest, he joined the ambassadors of the United States and Western European countries in boycotting the regime's celebration of Independence Day on January 4, 1989 (Lintner, 1989) (significantly, his wife, Ohtaka Yoshiko, was chairwoman of the Nihon-Biruma Kyookai [Japan-Burma Association], a business-oriented interest group that had long played an important role in bilateral relations). Partly because of the ambassador's unsympathetic view of SLORC, the Japanese government assumed a stance of critical disengagement toward the junta, which held Ohtaka responsible for Tokyo's decision in September 1988 to suspend flows of official development assistance (ODA).

This response to the military takeover in Burma was in line with similar actions by other industrialized democracies (Lintner 1989a:195), and many foreign observers were impressed with Japan's apparent decisiveness. However, U.S. State Department sources have told this writer that, Ambassador Ohtaka's influence notwithstanding, Tokyo halted its aid flows reluctantly only after considerable pressure from Washington (personal communication, Okinawa, Japan, September 17, 1992). If this is true, Tokyo's subsequent and (for many observers, at least) unexpected decision on 17 February 1989 to restore normal relations with SLORC is not surprising.

In contrast to most governments, Japan's diplomatic relations are on a "government-to-government" rather than "state-to-state" basis. This means that when governments change due to extralegal means such as a coup d'etat, the Japanese government must make an explicit decision whether or not to extend recognition in order to restore normal diplomatic relations. According to Japanese officials, the United States and European countries, operating on the "state-to-state" basis, never had to make a decision about whether or not to extend recognition to the new martial law regime since normal diplomatic ties remained in place. When Ambassador Ohtaka talked with SLORC officials in late 1988, urging political stabilization, he emphasized that his discussions did not constitute Tokyo's formal recognition of SLORC (Biruma Joohoo, 1988).

According to a Foreign Ministry spokesman in Tokyo, the February 1989 move to normalize relations was predicated on two legal considerations: 1) SLORC enjoyed effective control over most of the country (actually a questionable premise, given that minority insurgencies in border areas remained strong), and 2) it had broken no international laws or treaties. The same spokesman further claimed that official recognition of SLORC would enable Japan to open a channel of communication through which it could encourage the junta to democratize the government and liberalize the economy (personal communication, Tokyo, February 6, 1991).

Reopening the ODA Pipeline

In the wake of normalization, the Japanese government resumed disbursement of ODA for six grant projects, worth Yen9.1 billion, and nineteen loan projects, worth Yen125.0 billion (Saitoo 1992: 23). Between 1989 and 1994, it approved no new aid projects apart from debt-relief grants and small-scale humanitarian aid (see Table One, Japanese Aid Projects in Burma, 1989-1994). But Japan had `broken ranks with the other industrialized democracies which had frozen virtually all ODA disbursements. Germany, for example, had been, after Japan, Burma's second-largest donor of ODA through the 1970s and 1980s. Bonn shut down all projects except for three small technical cooperation programs completed in 1993 (correspondence from the Institut fur Asienkunde, Germany, April 28, 1994).

Normalization evoked international criticism. According to one Western diplomat, it was "shocking and capricious," and "just proves you cannot trust Japan to behave responsibly" (Richburg, 1989: A20). Aung San Suu Kyi, at the time a relatively unknown figure outsider her own country, commented that "I think it would have been so much better if people could put human rights issues above economic issues, especially in a country like Burma where the human rights issue is so pressing" (Foreign Broadcast Information Service, 1989: 39-40).

The Smoking Gun

The Japanese government's motives were placed under considerable scrutiny after it was discovered that the Japan-Burma Association (Nihon-Biruma Kyookai, now known as the Nihon-Myanmaa Kyookai or Japan-Myanmar Association to reflect the official change of the country's name in 1989) had submitted a petition to the prime minister on January 25, 1989 requesting normalization and a resumption of aid flows. The petition emphasized that Japanese companies were liable to sustain huge losses on procurement of goods and services if ODA remained frozen. Drawing on the rhetoric of Burma's "historic friendship" with Japan, the petition also pointed out that non-recognition of SLORC would make it impossible for Burma to send an official representative to the funeral of the Shoowa Emperor, Hirohito, scheduled for February 24, 1989 (Nihon-Biruma Kyookai, 1989).

According to Japanese Ministry of Foreign Affairs sources, the Japan-Burma Association's petition had no part in the government's decision to recognize SLORC and the close timing between the two was coincidental (Tokyo, February 6, 1991). For critics of Japan's foreign policy, however, the petition was a "smoking gun" which illustrated the top priority Tokyo places on economic interests. The Association's corporate members was a business constituency honor roll, including many of Japan's largest trading and manufacturing companies, such as Mitsubishi Shooji, Mitsui Bussan, Nisshoo Iwai, Mitsubishi Petroleum, Mitsubishi Heavy Industries and Kashima Construction Company (See Table Two, Membership of the Japan-Myanmar Association in 1995). A Japanese Burma specialist, Professor Saitoo Teruko, commented in a 1992 article that the petition:

...which was translated into Burmese and circulated abroad, incurred

the ire of Burmese people struggling for the realization of democracy in

their homeland. An appeal to the Japanese government dated March 1, 1989,

from the Association of Burmese in Japan, spelled out the reasons for

opposing the Japanese stance. At a time when the military junta was

suppressing human rights under martial law conditions, withholding, not

granting, recognition and aid would help and encourage the Burmese

people, the group said...Finally, the group claimed, the aid was not for

the Burmese people but was to protect the interests of Japanese

companies involved (Saito, 1992: 22, 23).

Normalization was a product of "quiet dialogue." According to a report in the Far Eastern Economic Review, an "unofficial mission" from Tokyo, including an representative from the Ministry of International Trade and Industry (MITI, the agency most closely tied to business interests), visited Rangoon in early February 1989 and held talks with Ohn Gyaw, a high-ranking official in Burma's Ministry of Foreign Affairs (Holloway, 1989: 21). So low-profile was the delegation that its activities were apparently unknown to the Japanese embassy in Rangoon. Nevertheless, it gained Ohn Gyaw's assurance that SLORC would publish a draft multiparty election law by early March. In fact, the day before normalization was announced, SLORC released to the public a schedule for holding these elections (Holloway 1989:21). Thus, as the "Sun" showered its rays on Burma, it appeared that the country's political and humanitarian crises might be satisfactorily resolved while still allowing Japan an effective economic presence.

Normalization as a Maximin Strategy

Arguably, there were two alternatives to normalization available to the Japanese government at the beginning of 1989, either:

(1) following the western line by indefinitely freezing all aid projects while

still recognizing SLORC on the government-to-government level; or,

(2) recognizing SLORC, resuming all existing aid projects, and allowing

for the approval of new projects.

The first alternative was clearly improbable given the traditional strength of the business constituency. Aside from causing large losses to important Japanese companies (as outlined in the Japan-Burma Association's petition), stopping all aid projects would have set a worrying precedent for policy toward recipient countries in Asia -- especially China and Indonesia -- whose markets were bigger than Burma's. Given SLORC's xenophobia and the readily available sources of economic support from neighboring countries, moreover, it is questionable whether a firmer policy toward the junta would have been more successful than "Sun diplomacy."

Had Tokyo acted decisively, it might have been able to change the course of events during SLORC's first two years in power, for at that time Japan exercised a pre-eminent influence in Burma while the junta was organizationally weak and starved for cash. Cutting aid off entirely but then promising large sums if only SLORC allowed democratic reforms might have eased the regime into a more flexible posture. But major risks would have been involved, since SLORC might have reacted to Japan's assertive intrusion into its domestic affairs by becoming more recalcitrant.

The second, "business as usual," alternative was almost equally unattractive for two other reasons. First, such a policy would have aroused strong criticism from Japan's Western allies. Second, and more interestingly, Japan's aid program in Burma had been subject to critical scrutiny within the government even before 1988. Disbursement of loan funds for new major projects had ceased after 1986 (Ministry of Foreign Affairs, Japan, 1995: vol. 2, 157), and many policymakers questioned the overall ability of Ne Win's socialist economy to effectively utilize large-scale ODA. During a visit to Japan on the eve of the political crisis in March 1988, Burmese Deputy Prime Minister U Tun Tin was advised by Japan's Prime Minister and Minister of Finance that basic economic reforms were in order. According to economist David I. Steinberg, this "remonstrance" of U Tun Tin was a "major event in Burma's contemporary economic history" and a "precedent" for Japan: "(p)erhaps never before had Japan unilaterally laid down the requirement for policy changes on the part of a recipient" (Steinberg, 1990: 67). On a similar note, one official of the Japanese Ministry of Foreign Affairs said to this writer in 1991 that the Ministry of Finance, ever conscious of the bottom line, was becoming increasingly concerned lest more government funds be poured into a country that by the late 1980s was already unable to pay back its foreign debt, which at the time totaled approximately US$5.0 billion (personal communication, Tokyo, February 6, 1991).

Normalization represented a compromise between these two policies, each of which would have had high costs for powerful interests within Japan's political system. Perhaps the best way of viewing normalization is as Tokyo's "maximin strategy," to adopt a term used by the American philosopher John Rawls in reference to the process of ranking alternatives by their worst-case scenarios so as to adopt the one "the worst possible outcome of which is superior to the worst possible outcome of the others" (Rawls, 1971: 152, 153). When applied to Japan's policy alternatives vis-a-vis Burma, the maximin strategy reveals the following schema:

1: Normalization but no ODA funds - significant loss of influence inside

Burma; Japan replaced by Asian competitors in Burmese markets.

2: "Business as Usual" - misuse of funds on inappropriate ODA projects;

a new, disruptive issue in Japan's relations with Western countries.

3: Normalization and flow of committed ODA - partial but not complete

loss of influence inside Burma; limited criticism of Japan by Western

countries.

The first policy alternative was unacceptable because the commercial markets and political influence put at risk -- markets and influence patiently built up over the thirty-four years since the signing of a Burma-Japan peace treaty and war reparations agreement in 1954 -- were much too valuable to jeopardize. The second alternative was also unacceptable, because the Ministry of Finance felt it could not justify the high cost of squandered aid funds, and Japan's leaders did not want to increase political tensions with the West simply in order to gain the junta's good will. By rejecting both of these alternatives and adopting instead the plan for normalizing relations and reopening the pipeline of committed aid, Japan would retain considerable residual influence in Burma while SLORC consolidated its hold on power and embarked on a promising policy of economic liberalization. At worst, no futher funds would be committed, and criticism from the West could be kept within manageable proportions.

Japan's Economic Presence in Burma after 1988

Foreign Aid

From 1979 until the political turmoil and subsequent stoppage of ODA in 1988, Burma was consistently one of Japan's "top ten" aid recipients. For the 1980-1988 period, for instance, Japanese loans and grants constituted 64.9 percent of all OECD Development Assistance Committee (DAC) bilateral disbursements, with totals averaging US$157.8 million annually. Despite the fact that major new aid projects were not initiated after normalization, Japan retained its status as Burma's largest aid donor. During 1989-1993, it contributed on average US$71.6 million of aid per annum, a figure accounting for 81.8 percent of all DAC disbursements to Burma. In 1991, Burma was again among the "top ten" recipients of Japanese aid (ranked tenth) despite the freeze on new projects (see Table 3, Japan's Bilateral Official Development Assistance to Burma, 1979-1993).

Although new yen loan funds were not allocated after 1988 (or, more accurately, after 1986), the Japanese government extended debt-relief grants amounting to Yen30.7 billion (approximately US$300.0 million at US$1.00=yen100) during 1990-1994, with additional grants being given after that time. Following United Nations guidelines concerning Least Developed Countries, debt from Japan serviced by SLORC was converted by the Japanese government into grants for use by the regime (Amnesty International-Japan Branch 1995: 77, 78).

As the figures above and in Tables 1 and 3 suggest, the amount of post-normalization grants and prior-existing ODA was considerable and contributed significantly to the SLORC-era economy. This is suggested as well by Burmese government figures, which show that Japan remained the largest single country source of imports in the post-1988 period, accounting for 40.3 percent of imports in FY1987-88, 16.3 percent in FY1990-1991, and 28.6 percent in FY1992-1993 (Economist Intelligence Unit 1995:94). Japan's continued importance as a source of imports seems to reflect in large measure the procurement of goods in Japan by contractors seeking materials for on-going aid projects such as the Ngawun Bridge, located near Rangoon and completed in June 1991.

Originally funded by a ¥1.5 billion grant in 1986, the bridge was described in a 1992 article in the Japan Times as a "major success in technology transfer," since Burmese rather than Japanese engineers played the major role in its construction. A comment made by one of these engineers, however, suggests that the project was also very dependent upon material imports: "(b)ecause there are many rivers in our country, we have to construct many more bridges. If we can get construction material from Japan, we are confident that we can build longer bridges" (Japan Times 1992, my italics). A second pre-existing project for which funds were released was the Nawin Dam, located near the city of Prome (Pyay) in central Burma and originally funded by ¥8.0 billion in Japanese loans. In June 1992 work on the dam resumed, and construction was eventually completed in 1995 (Japan Times 1995a).

Japanese Companies in Burma

During the 1989-1994 period, private Japanese companies operating in Burma could be divided roughly into two categories: 1) small firms that operated outside the Japanese business mainstream and dared to enter a highly risky business environment, and 2) major general trading companies (soogoo shoosha) that existed at the heart of the business establishment but had adapted themselves to high-risk, low-profit markets such as that of Burma. An example of the former is Daichi, a signboard manufacturer that joined with SLORC in the early 1990s to establish a joint venture, the Myanmar-Concord Development Organization (MCDO), to build, in the words of the Bangkok Post, "an entire new city" in the Rangoon area, including a new airport, "almost 4,000 man-made lakes," resorts, a highway system, and high technology telecommunications systems. Total capital investment over 15 years was estimated at US$15.0 billion, and the new city was planned to have a population of up to four million people by 2001 (Bangkok Post 1990). MCDO established an office in the plush Akasaka district of central Tokyo, but by 1992 its ambitious plans had evaporated and its Akasaka office was closed. Another small company, MCG (Mimatsu Construction Group), played a central role in the 1989-90 sale to Japanese buyers of land belonging to the Burmese Embassy in Tokyo, thus securing an estimated ¥60.0 billion in revenues for the cash-starved SLORC regime (Tokyo Broadcasting System 1994; Dawn 1990:13). In 1990, MCG also entered into a joint venture contract to build a US$45.0 million hotel in Rangoon (Burma Action Group 1996:44).

The most important role in Burma-Japan economic relations, however, has traditionally been played by the soogoo shoosha, such as the Marubeni trading firm, with its major share in procurement contracts for the yen 27.0 billion Mingaladon Airport modernization project. These companies regularly act as intermediaries for generally risk-averse Japanese manufacturing firms and are ideally positioned to obtain procurement contracts linked to Japanese ODA. According to one observer, the soogoo shoosha, which enjoy excellent access to local powerholders and sources of information, act as "an unofficial proxy for the Japanese government, which for political reasons cannot cooperate too closely with the ruling junta" (Sender 1996:48). Adopting a "watch and wait" attitude on future ODA projects after 1988, by the mid-1990s the soogoo shoosha were lobbying energetically for new projects funded by yen loans. Many of these companies were corporate trustees of the Japan-Myanmar Association (see Table 2).

In terms of total amounts of private investment, figures for the SLORC era, though not entirely reliable, indicate that Japanese companies have invested less heavily in Burma than have companies of other nations, including those in the West. Statistics for the period from 1988 to mid-1995 in fact reveal that Japan's total private investment of US$107.0 million ranked a relatively modest seventh among foreign investors and below the levels of Britain, France, and the United States. French and American oil companies, in particular, invested heavily in Burma (Economist Intelligence Unit 1995:41).

However, Keidanren, the Federation of Economic Organizations, stepped up the pressure for full economic engagement when it sent a special mission of some fifty business leaders to Rangoon on June 15-18, 1994 (Tokyo Broadcasting System 1994; Myanmaa Nyuusu 1994:11-20). The mission, headed by Marubeni chairman Haruna Kazuo (an appropriate choice since his company was involved in the modernization of Mingaladon Airport and therefore eager to see that project receive additional ODA funds) met with top SLORC and other government leaders, including Khin Nyunt, Than Shwe, and David O. Abel. The mission was quite successful in promoting the mutual interests of the business constituency and SLORC.

After the Keidanren mission, a number of high profile Japanese companies to send their own investigative groups to Burma, or to make commitments to investing in the country. The first of these were securities and banking firms. In late 1994, for instance, Daiwa Securities, one of Japan's "big four" securities trading houses, signed a memorandum of understanding with SLORC to assist in the establishment of a Rangoon stock exchange (Far Eastern Economic Review 1994a:65), while in March 1995 the Bank of Tokyo (now Tokyo-Mitsubishi Bank, Japan's largest) became the first Japanese bank to reopen its office in Rangoon (it had closed its office there in 1984). Seven months later, Fuji Bank, too, reestablished its office in Rangoon.

Following this lead, companies of other kinds became interested in pursuing business opportunities in Burma. In February 1996, Mitsui Bussan (Mitsui Trading Company) made an agreement with Burma's Ministry of Construction to build a 9,600 square meter industrial park north of Rangoon (Sender 1996:48), while in April the soogoo shoosha Mitsui Bussan joined with the American and French oil companies Unocal and Total to sign a memorandum of understanding with SLORC to exploit the Yadana natural gas field in the Andaman Sea. This memorandum covered three projects valued collectively at US$700.0 million: construction of a 250 kilometer pipeline to southern Burma; connection of the pipeline with an electric power plant; and construction of a urea fertilizer production facility (Asahi Shimbun 1996; Economist Intelligence Unit 1996:19).

A Departure from 'Economics First'?

Apart from the alliance with the United States, which placed postwar Japan within the anti-communist camp during the Cold War, Japanese foreign policy has generally focused on economic interests, with foreign aid being the primary policy instrument. So important was foreign aid that by the early 1990s Japan had surpassed the United States as the world's largest donor in monetary terms, of ODA. The implication of this strong economic orientation in aid policy was that generous loans or grants could be given to governments such as Ne Win's Burma, Marcos' Philippines, or Suharto's Indonesia despite their corrupt or authoritarian nature. Soon after the establishment of SLORC, a leading Japanese economist commented on the importance of keeping politics out of aid policy:

This is a difficult problem. I may be misinformed, but because aid is a part of diplomatic relations between countries, there is no other alternative but to work with the existing political regime. For example, there was criticism that aid to the Philippines supported the Marcos dictatorship. But there was a flood in Manila, and without pumps donated by Japanese ODA, the downtown areas of the city would have been inundated. This was an important issue no matter who the leadership was in terms of the people's livelihood and health. (Gaikoo Forum, 1988:34, 35)

However, the 1989-1996 period did see a partial disengagement from "economics first" in Burma. This was done through the implicit promise to resume ODA on the generous levels of the 1980s should SLORC begin political reform or at least take a softer line vis-a-vis the democratic opposition. Moreover, the government of Prime Minister Kaifu Toshiki announced in 1991 guidelines that included democratization and basic human rights as factors to be taken into consideration in formulating aid policy toward specific countries (Japan Times 1991). These guidelines, formally adopted the following year as the "Fundamental Principles of ODA" (Seifu kaihatsu enjo Taikoo), make the following four stipulations with respect to the allocation of ODA:

(1) that environmental issues as well as economic issues in the recipient country be considered;

(2) that ODA not be used for military purposes or for the promotion of international conflicts;

(3) that full consideration be paid to the recipient country's military spending, procurement of weapons of mass destruction, development/production of missiles, and export/import of weapons; and

(4) that full consideration be paid as well to the possibility of promoting a democratic government, a market economy, and the observance of basic human rights in the recipient country (Ministry of Foreign Affairs, Japan 1995: vol. 1, 46-51).

Skeptics regarded the Fundamental Principles, especially the fourth one dealing with democratization and human rights, as little more than window-dressing designed to placate Japan's Western allies. For the mid-1990s, at least, this seems to be true, for two of Japan's largest recipients of ODA during those years--the People's Republic of China and Indonesia--had notoriously repressive governments and human rights problems. Japan had in fact been the first country to resume large-scale aid to China after the June 1989 Tian'anmen Massacre, and the East Timor crisis, including a November 1991 incident in which as many as 180 unarmed demonstrators were killed by the Indonesian army outside a Timorese Catholic church, had minimal impact on the flow of ODA funds between Tokyo and Jakarta.

One problem with the Fundamental Principles is that there are no clearly defined guidelines for how the are to be applied. At the Amnesty International symposium mentioned earlier, an official of Japan's Ministry of Foreign Affairs hinted at the equivocal nature of the Principles as follows:

Although the Fundamental Principles of ODA have four points, these are not necessarily a 'negative checklist'. Should [a recipient country] not meet one criterion, this doesn't mean that ODA will be stopped. Rather, a decision is made comprehensively, taking all factors into consideration. (Amnesty International - Japan Branch 1995:69)

Official Japanese perceptions of the junta and its fulfillment of requirements under the Four Fundamental Principles seemed to many domestic and foreign critics to be excessively optimistic, even easy-going. Government spokesmen argued, for instance, that SLORC's economic liberalization policies justified some form of continuing ODA engagement, since this would encourage the regime to move further toward a free market economy. Tokyo also saw fit to interpret the National Convention of January 1993, which SLORC convened for the purpose of drafting a new constitution, as a sincere gesture towards transfer to civilian rule, thus justifying certain concessions. Whatever the reasoning involved, however, the wisdom of Tokyo's leniency toward SLORC remains questionable given the regime's high levels of military spending. In terms of proportion of total government spending, Burma's defense budget is one of the largest in the world, and by the mid-1990s the Burmese land army was the second largest in Southeast Asia, next only to that of war-battered Vietnam. Such facts seem clearly contrary to the spirit of the Four Principles of ODA funding and suggest that the business constituency still retained major influence of the conduct of relations with Burma.

Aung San Suu Kyi as a Factor in Burma-Japan Relations

For most Japanese citizens who followed world affairs in the 1990s, Aung San Suu Kyi was a charismatic and attractive figure. Because she is Asian, they may have identified with her more easily than with other internationally prominent human rights advocates such as Bishop Desmond Tutu of South Africa or Rigoberta Menchu of Guatemala, who both share with Daw Suu Kyi the distinction of having won the Nobel Peace Prize. Aung San Suu Kyi's father, Aung San, had a close historical association with Japan. While Daw Suu Kyi was at Kyoto University's Center for Southeast Asian Studies during the mid-1980s she conducted research on her father's life.

After her house arrest, and especially after she received the Nobel Prize in October 1991, a number of books were written about Daw Suu Kyi in Japanese. Her collection of writings, Freedom from Fear, was translated into Japanese and published in 1991, and a translated collection of her speeches was published in 1996 (Aung San Suu Kyi 1991; Aung San Suu Kyi 1996). In 1994, she even made it into the world of manga (Japanese book-length comics) when one manga publisher came out with the story of her life, Aung San Suu Kyi: Tatakau kujaku [Aung San Suu Kyi: The fighting peacock] as part of its "Super Nobel Prize Stories" series (Akazu 1994). In the comic, she and her husband, Michael Aris, are portrayed as examples of the bishoonen (beautiful young people) types popular with Japanese readers (see Figure 1).

The news and broadcast media, including the state-run television network, NHK, gave Suu Kyi fairly extensive coverage. In a 1991 historical program on wartime Japanese assistance for the Burmese independence movement, for example, she was mentioned as Aung San's daughter, indicating that she is the inheritor of his patriotic legacy (Nippon Hoosoo Kyookai 1991). Commercial television stations, such as the Tokyo Broadcasting System (TBS), also featured her activities in programs such as TBS's Sunday evening news analysis program, Joohoo Tokushuu [News special edition]. Japanese newspapers, and especially the more liberal dailies like the Asahi Shimbun and the Mainichi Shimbun, paid more attention to her than did their counterparts in the West (the New York Times, for example), which were preoccupied by developments in the Middle East and Eastern Europe. After Daw Suu Kyi's release from house arrest in July 1995, the Mainichi Shimbun published her weekly "Letter from Burma" in Japanese, with the English-language version appearing in the Mainichi Daily News. In 1996, the series won an award from the Japan Publishers and Editors Association (Mainichi Daily News 1996b).

On several occasions, members of both houses of Japan's parliament, the Diet, petitioned for Daw Suu Kyi's release from house arrest. In April 1994, the Japan Times reported that more than half the Diet membership, 403 out of 763 persons, signed such a petition, which was then addressed to the Secretary-General of the United Nations in coordination with similar petitions from other countries (Japan Times 1994). In addition, certain members of the Diet, including Eda Satsuki and Hatoyama Yukio, organized a "Parliamentary Coalition to Seek the Release of Aung San Suu Kyi," whose agenda included holding study sessions on the Burma crisis and coordinating activities with parliamentarians in other countries (Amnesty International-Japan Branch 1995:85, 86).

The Diet's influence over Japan's foreign policy was (and remains) very limited compared to that of the executive agencies of government and the Liberal Democratic Party (even after the LDP fragmented in summer 1993). But even senior LDP politicians and elite bureaucrats could ill afford to ignore Aung San Suu Kyi. In a meeting with SLORC chairman Saw Maung in August 1990, Watanabe Michio, a powerful Diet member and LDP faction leader, not to mention the first Japanese legislator to visit Burma after the SLORC takeover, urged both the transfer of power to civilians and the release of Aung San Suu Kyi. Similar requests were made when Daw Suu Kyi was awarded the Nobel Peace Prize in October 1991. In addition, Japanese officials made their concerns known to other Asian leaders: in December 1991, Prime Minister Miyazawa Kiichi brought up Aung San Suu Kyi and the Burmese political crisis in his discussions with Malaysia's prime minister, Mahathir Mohamad; and the following month, Watanabe Michio, newly appointed Foreign Minister, broached the same issues with Chinese deputy prime minister Wu Xueqian in Beijing (Seekins 1992:36).

In Japan as elsewhere, Aung San Suu Kyi's emergence as a figure of international stature had two somewhat contradictory consequences. First, her determined opposition to SLORC made it possible to keep the Burmese crisis in the international limelight. Without a charismatic leader, the Burmese democracy movement would probably have slipped into obscurity. Aung San Suu Kyi's prominence before both domestic and international audiences meant that Japanese officials had to give her at least symbolic gestures of support even if they preferred to conduct business as usual.

However, as Aung San Suu Kyi herself became the central focus of "quiet dialogue," Tokyo's official concern for her personal welfare drew attention away from other, more deeply rooted problems such as the junta's systematic denial of human rights throughout the country, both in ethnic minority and Burman areas. In a sense, Aung San Suu Kyi's existence under house arrest simplified Japan's task of negotiating with SLORC. She became a bargaining chip in SLORC's efforts to secure a bigger slice of the Japanese ODA pie. Their decision to release her in July 1995 reflected confidence that she would soon be marginalized and forgotten by the international community.

The Suu Kyi-centered bilateral discourse was clearly not her own intention. "What," a correspondent for the Far Eastern Economic Review asked her in August 1995, "do you think about Japan's decision to resume aid?"

(Suu Kyi): I think they should wait and see a bit and not rush into it. Aid

should get to people who need it most and it should be given in the right

way at the right time. If it is a reward for my release, I'm just one political

prisoner released, and there are others as well. The change in conditions

of just one person is not enough (Fairclough 1995: 26).

In the months leading up to Daw Suu Kyi's release from house arrest, the Sun diplomacy constituency's strategy -- using small incentives to remind SLORC that bigger rewards were contingent upon its good behavior -- seemed to be working. In February 1994, United States Congressman Bill Richardson was allowed to meet with her. More significantly, leaders from within the regime itself met with her on two separate occasions in September and October. To reward SLORC for these minor concessions, the Japanese government announced in late 1994 that it would approve US$10-20 million in new humanitarian aid (Far Eastern Economic Review 1994:13). During fiscal year 1994 (April 1994-March 1995) Tokyo gave Burma three debt relief grants totaling ¥12.0 billion, twice as much as in the previous year (See Table 1).

Then, in March 1995, while the Ministry of International Trade and Industry quietly restored financial risk guarantees for Japanese companies investing in Burma (Far Eastern Economic Review 1995:12), the government announced a new grant of ¥1.0 billion (US$10.0 million, the largest allocation of new aid since 1988) to be used to increase food production in Burma's border areas. Foreign Minister Kono Yoohei downplayed the political significance of this action, saying that "[The government] decided on the grant aid as humanitarian assistance. Therefore, there is no change in our aid policy" (The Japan Times, 1995). However, The Japan Times also cited Kono as saying that "Japan hopes that the military junta will take the aid as Tokyo's political message that Tokyo wants to see improvements in human rights in Myanmar" (The Japan Times 1995). In May 1995, an additional ¥4.0 billion in debt relief grant monies was given, presumably with the same or similar implied conditions with respect to human rights issues (Lintner 1995:15).

Aung San Suu Kyi's release on 10 July 1995 represents the culmination of "sun diplomacy." Japan was the first foreign government to be informed of her release, a fact which one Western journalist claimed "seems to indicate that Tokyo must have played an important behind-the-scenes role in the whole affair" (Lintner 1995:15). As in February 1989, when Japan normalized relations with SLORC and the junta announced a schedule for holding multiparty elections, it seemed in the late summer of 1995 that a resolution to the political crisis was within reach.

As a further inducement to good behavior, therefore, the Japanese cabinet approved in October an allocation of ¥1.6 billion for the renovation of a nursing college in Rangoon (Masaki 1995:3). This was followed up by a visit from SLORC deputy chairman General Maung Aye, who stopped in Japan from October 30 to November 8 and, together with Economic Planning Minister David O. Abel, visited various private companies and queried Japanese Foreign Ministry staff about future ODA funding (Masaki 1995a:19; Myanmaa Nyuusu 1995-96:4, 5). SLORC most likely hoped the meeting would lead to a full reopening of ODA, but Tokyo remained noncommittal in its public statements on the matter. In the words of one Japanese official in February 1996: "So far as aid to Myanmar is concerned, our policy is to decide case by case in consideration of the current situation, its democratization and protection of basic human rights" (International Herald Tribune 1996).

In an interview in the monthly magazine This Is Yomiuri, published by the Yomiuri Shimbun group, Suu Kyi specifically expressed her opposition to even humanitarian aid from Japan:

Interviewer: Let's talk about Japanese aid. Before my coming [to Burma], in discussions with various persons, it became apparent that the Japanese Foreign Ministry is taking the approach of neither resuming full-scale aid nor stopping aid completely on the basis of principle. 'Humanitarian aid or aid that will be especially effective in raising the people's livelihood will be undertaken on a case-by-case basis. But Daw Suu Kyi opposes absolutely all aid,' or so it has been said.

SUU KYI: The reason I oppose all ODA is that I don't think it is effective in

improving the people's livelihood. . . . One of these [ODA] programs

[involves] construction of new facilities for the nursing college [Rangoon

Nursing College]. This will not benefit the people as a whole. Those who

will secure contracts for construction of the facilities are people with close

ties to the regime. They'll make money on the contracts. Those who will be

chosen to attend the school will be those with close ties, including blood

ties, to the junta. There is no guarantee that in future these people

will work to benefit the nation as a whole. To get money, they may

work in a private hospital or go overseas. . . . (This Is Yomiuri , 1996: 204,

205).

The Limits of "Sun Diplomacy"

With normalization, the Sun diplomacy constituency envisioned its role as that of a middleman between Aung San Suu Kyi and SLORC, encouraging the two sides to engage in dialogue that might lead to political settlement. Continuing friction between the two sides, however, frustrated this attempt at mediation. After her release from house arrest, Daw Suu Kyi called for open dialogue with SLORC but gained no response. Tensions further escalated when the NLD announced its boycott of the November 1995 National Convention, and then finally boiled over in May 1996 when the junta detained 262 NLD representatives in order to prevent a party convention on the sixth anniversary of the May 1990 general election. As a result, at the end of 1996 there was no more hope of reconciliation than there had been after the general election of May 1990. "Sun diplomacy" had therefore failed insofar as SLORC persisted, and even intensified, its oppressive behavior, as on 9 November 1996 when the cars of Aung San Suu Kyi and other NLD leaders passing through the streets of Rangoon were attacked by a mob of club-wielding men, apparently recruited by elements within SLORC. There were no serious injuries, but the incident aroused fears that hard liners were plotting to eliminate the NLD. In the face of student demonstrations the following month, the junta imposed what seemed to be de facto house arrest on Daw Suu Kyi and continued to arrest and jail members of her political party. Human rights abuses against the general population as well as against specific ethnic minorities also, if anything, intensified, as shown in the Tatmadaw's harsh pacification of central Shan State after the January 1996 surrender of Khun Sa's Mong Tai Army (Seekins 1997).

As these events transpired, the Japanese government not surprisingly began to hedge in its policy of "quiet diplomacy" so as not to appear too solicitous to the junta at a time when it was being so openly oppressive. In a public statement on May 22, for instance, Prime Minister Hashimoto Ryuutaroo said that SLORC was "going against the democratization process" in detaining NLD members and that he, Hashimoto, was "closely following developments" (Daily Yomiuri 1996). Chief Cabinet Secretary Kajiyama Seiroku, too, shifted his rhetoric to be more critical of SLORC, especially when it was reported in June that the regime planned to arrest Aung San Suu Kyi. "[I]f [Suu Kyi] is arrested," Kajiyama was quoted as saying, "the government should do more than just call on the Burmese [Myanmar] government for moderation" (Mainichi Daily News 1996a).

Nor was Japan's response to the arrests merely rhetorical. In early 1996, the four agencies responsible for ODA policy--the Economic Planning Agency together with the three ministries of Finance, Foreign Affairs, and International Trade and Industry, respectively--came close to a consensus on unfreezing committed funds for the Mingaladon Airport modernization project; as a result of SLORC's crackdown on the NLD, however, these agencies decided to again postpone the project (Asahi Shimbun 1996b).

Still, the signals from Japan remained equivocal. On May 24, the Ministry of Transportation accepted a petition from All Nippon Airways (ANA), one of Japan's two international carriers, to open a direct flight between the new Kansai International Airport and Rangoon (Asahi Shimbun 1996a). Approval of the route was a small but symbolically important move, and given the tense atmosphere in Burma, it is surprising that the Ministry of Transportation did not delay its decision. Another ambiguous response from Tokyo was that given by Prime Minister Hashimoto to a letter from Aung San Suu Kyi dated 14 June 1996 and sent through the Japanese embassy in Rangoon. In that letter, Suu Kyi first thanked both the prime minister and the foreign minister for their moral support following SLORC's detention of NLD representatives. She then went on to ask that Japan, in concert with other members of international society, use its economic influence to promote democratization as prescribed in the fundamental principles of ODA adopted by the Japanese government. The Prime Minister sent no reply (Asahi Shimbun 1996c).

For their own part, business interests wanted to assure the junta that for them the policy of "economics first," which implied a de-linking of politics and economics, was alive and well. Keidanren, for instance, strongly advocated resuming large-scale loan projects to Burma and to that effect announced on May 28 that it was converting its informal study group on Burma into the more official "Japan-Myanmar Economic Committee," a redesignation one association official characterized as badly timed but necessary since, in his words, "there's no turning back" [i.e., from increased economic engagement with Burma] (Mainichi Daily News 1996).

Conclusion and Afterword

Japan's Burma policy since 1988 has had two themes: the pursuit of traditional economic interests as dictated by the business constituency, and the creation of a new "global" role for Japan which goes beyond economics to promote democracy and peace, as reflected in the Sun diplomacy constituency's hopes for a dialogue between Aung San Suu Kyi and the junta. Concerning the first question asked at the beginning of the article -- has there been a departure from "economics first"? -- it is apparent that the post-normalization maximin strategy has taken business constituency interests largely, but not exclusively, into account. While not adopting the sanctions-oriented strategies of Western countries, the Japanese government's limited economic self-restraint (no new loan projects) has frustrated elements within that constituency who want fuller engagement with SLORC.

The maximin strategy's low-risk approach has also frustrated the Sun diplomacy constituency's aspirations. During 1994-1995, Tokyo rewarded the junta with small amounts of new grant aid, but this did not effectively change SLORC's behavior, as reflected in its crackdown on the National League for Democracy in May 1996 and the violent attack on NLD leaders in November, probably instigated by hardline elements within the junta.

This leads to the second question posed above -- if Sun diplomacy has failed, what alternative policy might be more effective in modifying the regime's behavior? The Western alternative, harsh criticism and economic sanctions (supported by many members of Japan's human rights constituency), has been equally unsuccessful in promoting peaceful change, while heightening the junta's siege mentality.

This suggests that, given the Tatmadaw's mindset, the problem is more fundamental than merely discovering the right deal which will satisfy everyone. The generals are unanimous in their belief that Aung San Suu Kyi, the NLD, and ethnic minority oppositionists are grave threats to Burma's fragile national unity. The martial law regime's self-assumed role as the defender of national unity -- really its sole claim to legitimacy -- makes compromise on this issue difficult if not impossible. There is little evidence, moreover, to suggest that the junta considers Daw Suu Kyi less of a threat now than it did when it placed her under house arrest in July 1989.

Secondly, their behavior shows that they view politics as a zero-sum-game of winners and losers rather than a consensus-building process which includes, or can include, almost everyone. Given the consensus-oriented mindset of Japanese elites, the zero-sum-game, winner-take-all, approach may be difficult for them to fully comprehend. This may explain why Sun diplomacy has succeeded only in alienating Daw Suu Kyi, who has become increasingly critical of Japanese policy since her 1995 release from house arrest, while exerting minimal leverage on the junta, which willingly accepts any small "carrots" Tokyo sends in its direction, but fails to follow up and make major political concessions, such as releasing political prisoners, allowing the NLD to carry out effective party-building, or halting brutal attacks on ethnic minority populations.

Because of these internal factors, a much-needed political settlement will probably be a long time in coming, given even the most enlightened policies on the part of foreign countries. This does not mean that international support for the democracy movement is futile; rather, that Burma has become one of many intractable-seeming crisis areas, like Northern Ireland, Israel/Palestine, and Cambodia, where the road to peace is long and hard.

Between late 1996 and early 1998 no major changes took place in Burma-Japan relations. An important development was an increase in friction between Tokyo and Washington over Burma policy. The passage of selective purchasing laws by the state of Massachusetts and a number of United States cities—laws which penalize American and foreign companies doing business with the junta—is being challenged by the Japanese government and the European Union before the World Trade Organization on the grounds that the laws constitute restraint of trade.

On the home front, business interests kept up the pressure for full economic engagement. In February 1998, the Japan Chamber of Commerce and Industry, one of the country's most important business organizations, signed a memorandum of understanding with its Burmese counterpart to establish a bilateral Business Cooperation Committee in order to assist Japanese private investment (Reuters 1998). The Committee held its first Joint Meeting on November 20, 1998. Japanese prime minister Obuchi Keizoo sent "heartfelt congratulations," expressing his hope that future Burma-Japan business cooperation would be successful (Information Sheet 1998).

Pro-business spokesmen such as popular commentator Ohmae Ken'ichi have engaged in "Suu Kyi bashing" and "America bashing" (depicting Aung San Suu Kyi as an instrument of U.S. policy) as a way of tarring the Burmese democracy movement with the brush of American "hegemonism," a perceived phenomenon that is widely resented in Japan (Ohmae, 1997). This reflects the unfortunate tendency for the political crisis in Burma to become a sideshow in Japan-United States economic frictions, a situation made worse by the financial crisis in Southeast Asia.

In June 1998, veteran LDP leader and former foreign minister Mutoo Kabun established the "Parliamentarians' Group to Support the Myanmar Government," consisting of twenty LDP Diet members.

And, finally, several significant developments have taken place with respect to foreign aid policy. On 11 March 1998, the Japanese foreign ministry announced officially that it was releasing ¥2.5 billion (US$19.2 million) in loan funds for the Mingaladon Airport modernization project, funds that had been frozen since 1988 (Asahi Shimbun, 1998). A proposal to release ¥7.0 billion for this purpose had been opposed by the United States government in the summer of 1997. The ministry explained that the funds would be used to repair the dilapidated runway, which posed a danger to civil aircraft (including all Nippon Airways planes flying between Kansai International Airport and Rangoon). Using questionable terminology, the ministry labeled the loan aid as "humanitarian" since it would contribute to airport safety (Masaki, 1998). Since loan funds for projects such as the Nawin Dam have been disbursed quietly ever since 1988, these restored allocations do not constitute a new policy.

"Sun diplomacy" was not overlooked. In announcing the March 11th decision to Burma's ambassador in Tokyo, Foreign Ministry Political Affairs Vice Minister Koomura Masahiko emphasized that since political conditions were not suitable for the reopening of regular aid, the loan was made conditional on the initiation of dialogue between the junta and Aung San Suu Kyi. The exact nature of this conditionality, however, and how it would be enforced if dialogue did not take place, remain unclear.

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