U.S.Policy in the Asia-Pacific Regi

[moe@xxxxxxxxxxxxx]

The document that reflects the U.S. Policy toward Asia

The Truth Shall Set Thee Free

*EPF404 05/07/98 
TEXT: ROTH TESTIMONY ON U.S. SECURITY POLICY IN ASIA-PACIFIC 
(Asia's security is prerequisite for America's) (5330) 

Washington -- The United States is strongly committed to the security of the
Asia-Pacific region as Asia's stability is a fundamental prerequisite for
America's, according to Assistant Secretary of State for East Asian and
Pacific Affairs Stanley Roth. 

America's presence in the region, and bilateral security alliances and
relationships, and multilateral fora such as the ASEAN Regional Forum are
key to maintaining this stability, Roth said in May 7 remarks before the
House International Relations Subcommittee on Asia and the Pacific. 

Roth stressed that the U.S.-Japan security treaty remains the foundation of
U.S. engagement in Asia. 

"The historic revision last year of the Cold War era Defense Guidelines and
Secretary Albright's signing last week of the amendment to the Acquisition
and Cross Servicing Agreement (ACSA) mean that the alliance is stronger,
deeper and broader than at any time in recent history," he said. 

U.S. relations with the Republic of Korea (ROK) are another a crucial
component of U.S. security policy in the region, according to Roth. 

"The 37,000 U.S. forces in South Korea in conjunction with a close,
cooperative relationship with our South Korean allies have been the basic
foundation of peace on the Korean Peninsula for the better part of the past
fifty years. And as my recent trip to South Korea with Secretary Albright
has demonstrated, our friendship with the ROK has never been stronger." 

"The United States and South Korea see eye to eye on North Korean policy,"
Roth said. 

Roth pointed out that there are four major security challenges in the
region: the Korean Peninsula situation, China, maritime territorial
disputes, and the security implications of the Asian financial crisis. 

"During this critical period of transition in Asia, our engagement in the
region has never been more important," he said. "(Our involvement) will help
to determine the kind of region that will emerge from these transitions and
will assure our ability to mobilize support for issues of importance to the
United States in the future." 

Following is the text of Roth's remarks: 

(begin text) 

TESTIMONY OF 
STANLEY O. ROTH 
ASSISTANT SECRETARY OF STATE FOR 
EAST ASIAN AND PACIFIC AFFAIRS 

HOUSE INTERNATIONAL RELATIONS COMMITTEE 
ASIA AND THE PACIFIC SUBCOMMITTEE 

MAY 7, 1998 

Mr. Chairman, thank you for the invitation to speak before the Asia and
Pacific Subcommittee on U.S. security policy toward East Asia and the
Pacific. I am honored to testify today alongside my distinguished colleagues
Undersecretary of Defense for Policy Slocombe and CINCPAC Admiral Prueher. I
welcome the opportunity for a productive exchange of views on this important
topic with the members of the Subcommittee. 

Peace and stability in East Asia and the Pacific is a fundamental
prerequisite for U.S. security. Nearly one half the world's people live in
countries bordering the Asia Pacific region and over half of all economic
activity in the world is conducted there. Four of the world's major powers
rub shoulders in Northeast Asia while some of the most strategically
important waterways on the globe flow through Southeast Asia. The U.S.
itself is as much a Pacific nation as an Atlantic one, with the states of
Alaska, California, Oregon and Washington bordering on the Pacific ocean and
Hawaii surrounded by it. American citizens in Guam, American Samoa, and the
Commonwealth of the Northern Marianas live closer to Asian capitals than to
our own, vast numbers of Americans work in the Asia-Pacific region, and an
increasingly large number of Americans trace their ancestry back to the
Pacific Rim. 

For these and many other reasons, the U.S. has remained committed to the
security of the Asia-Pacific region and has spent its resources and blood
fulfilling that commitment. We have fought against aggression in Asia in
three major wars this century. Now, in an effort to preserve stability and
deter future conflicts, we maintain a sizable military presence in the
region. Today, our roughly 100,000 forward-deployed forces and our network
of mutual security alliances with Australia, Japan, the Philippines, the
Republic of Korea and Thailand remain the bedrock of our regional security
policy. We have reaffirmed and solidified all of these key security
alliances in recent years, while working to foster cooperative relationships
with other countries in the region. 

Indeed contact between the United States services and the armed forces of
both treaty allies and other friendly nations is a key component of our
military strategy in Asia. Military to military contacts allow us to better
understand our military counterparts throughout the region and provide a
mechanism through which we can work to constructively engage new generations
of military leaders. The International Military Education and Training
(IMET) program is extremely important in this regard. By exposing young
military leaders to American values and working to foster respect for
civilian authority and military professionalism, IMET provides a window
through which we can positively influence the development of foreign
military institutions. While such engagement can not be expected to
guarantee a perfect human rights record on the part of any military force,
it nonetheless represents an important opportunity to encourage adherence to
the rule of law and respect for basic human rights. I firmly believe that
these contacts work to advance our fundamental security goals in the region. 

Mr. Chairman, the remainder of my testimony this afternoon will be divided
into two parts. First, I will give an overview of our key security alliances
and relationships in the region. Second, I will address four specific
challenges confronting U.S. security policy in the Asia and Pacific. 

JAPAN 

The U.S.-Japan security treaty remains the foundation of U.S. engagement in
Asia. The historic revision last year of the Cold War era Defense Guidelines
and Secretary Albright's signing last week of the amendment to the
Acquisition and Cross Servicing Agreement (ACSA) mean that the alliance is
stronger, deeper and broader than at any time in recent history. Japan has
worked closely with the United States to address many regional issues,
including Cambodia, North Korea, Bosnia and Afghanistan. Despite the ongoing
stresses and strains in the economic dimension of our relationship, it is
important to recognize the key role that the US-Japan partnership continues
to play in maintaining regional peace and stability. 

With respect to specific US-Japan bilateral security issues, we have made
progress in implementing some of the recommendations contained in the 1996
Final Report of the Special Action Committee on Okinawa (SACO). Still, the
key issue of the relocation of Futenma Marine Corps Air Station remains
unresolved. We agree with the Japanese Government that a sea-based facility
offers the best alternative to the existing facility at Futenma and are
continuing to consult with the Japanese on this issue. My colleagues from
OSD and CINCPAC can talk about these issues in greater detail. 

SOUTH KOREA 

Our alliance with the ROK remains a crucial component of U.S. security
policy in the region. The 37,000 U.S. forces in South Korea in conjunction
with a close, cooperative relationship with our South Korean allies have
been the basic foundation of peace on the Korean Peninsula for the better
part of the past fifty years. And as my recent trip to South Korea with
Secretary Albright has demonstrated, our friendship with the ROK has never
been stronger. This was Secretary Albright's first trip to the ROK following
the election and inauguration of President Kim Dae-jung and thus was an
opportunity for her to get to know the new administration. I am pleased to
report that the Secretary established an excellent rapport with both
President Kim and Foreign Minister Park and conducted extensive, in-depth
discussions on the full range of issues. It was clear from these discussions
that the U.S. and South Korea see eye to eye on North Korea policy, with
Foreign Minister Park pledging his country's commitment to the Four Party
peace process and Secretary Albright wholeheartedly endorsing North-South
dialogue as an important means of reducing tensions on the Peninsula.
Foreign Minister Park further reaffirmed South Korea's support for the
Agreed Framework and for KEDO and reviewed efforts to coordinate a
humanitarian response to the food needs of the North. 

AUSTRALIA, THE PHILIPPINES AND THAILAND 

Our relationships with our three other treaty allies in the Asia-Pacific
region are similarly in good stead. We reaffirmed our alliance with
Australia in 1996 and enjoy cooperative relations with the Australians
across a broad spectrum of bilateral, regional and multilateral issues.
Australia is a staunch supporter of a strong U.S. presence in the region and
works closely with us in APEC, KEDO and the ARF. 

The Philippines has been a close friend since its independence in 1946 and
continues to be a valued alliance partner. Earlier this year we concluded a
Visiting Forces Agreement with the Philippines, which was an important step
in strengthening the security relationship between our two countries in the
post - bases era. The agreement, once approved by the Philippine Senate,
establishes the foundation for a resumption of joint military exercises and
U.S. ship visits to Philippine ports and thus provides a framework for
promoting increased defense cooperation between our two countries. 

Thailand is another old friend and one that has supported our efforts in the
region from the Korean War up through the present day. We maintain close
military to military relations with the Thai and enjoy access, as needed, to
strategic air bases. The Thai have been critical partners in our regional
counternarcotics efforts, as well as in efforts as diverse as environmental
protection and intellectual property rights enforcement. 

REGIONAL SECURITY ARCHITECTURE 

While our forward deployed forces and our network of mutual security
alliances are the cornerstone of our security policy in Asia, President
Clinton has also aggressively supported efforts to foster regional peace and
security through multilateral mechanisms. Over a relatively short period of
time, multilateral organizations have become an important feature of the
regional security architecture, as regional fora including APEC and the
ASEAN Regional Forum (ARF) have taken root and flourished. President
Clinton's commitment to work with and through these regional fora has given
substance to his notion of building a Pacific Community, and will likely be
one of the most important and enduring foreign policy innovations of his
Administration. 

APEC was established in 1989 to promote trade and investment liberalization
and to enhance overall economic cooperation in the region. Insofar as this
is a hearing on regional security policy not economic policy, I will not
focus on the importance of APEC, per se. Still, it is worth noting that
economic discussion builds confidence and eases tensions and in that way,
APEC contributes to regional security. 

The most important multilateral forum for the purposes of our discussion
today is the ASEAN Regional Forum. In 1993, the U.S. joined ASEAN in
creating the ARF, the first broadly based consultative body in Asia
concerned exclusively with security issues. The regular, institutionalized
meetings of the ARF have provided a mechanism through which members can come
together to resolve issues before they lead to conflict, and in so doing
they have encouraged members to cultivate habits of consultation and
cooperation. Although only in its fifth year, the ARF has already made
contributions towards promoting dialogue, encouraging transparency,
expanding cooperation, and defusing tensions. Most significant in this
regard was perhaps the 1995 ARF meeting held in Brunei. At that meeting,
which was held on the heels of the Mischief Reef incident in which China and
the Philippines clashed over disputed territorial claims in the South China
Sea, then foreign minister Qian Qichen responded to ASEAN concerns by
declaring that the PRC would pursue a solution to the dispute consistent
with the UN Convention on the Law of the Sea. While this declaration did not
resolve the conflicting claims -- and in fact I will say more about these
unresolved disputes later in my testimony -- it was nonetheless a turning
point in the history of the conflict. The ARF provides a critical mechanism
for engaging China and integrating China into the Asia-Pacific region, and
thus makes an important contribution to regional and arguably global security. 

Still, we have a long way to go if we are to see the ARF fulfill its true
potential as a regional forum. Engagement in the ARF has focused primarily
on confidence building measures (CBM's), and in this regard it is worth
noting that the Chinese, once reluctant and passive members of the ARF, have
made great strides in their efforts to proactively propose CBM's. We hope,
however, that the forum will be able to move beyond CBM's toward preventive
diplomacy -- a proposal which some parties have heretofore resisted. We
nonetheless plan to raise the topic at the upcoming ARF meeting in Manila
and hope to make progress in moving the forum forward. 

Mr. Chairman, I'd like now to discuss what I see as the four most important
challenges to U.S. security policy in the region. 

KOREA 

The U.S. continues to confront a serious military threat on the Korean
Peninsula. 1.8 million men are under arms on the Peninsula, making it one of
the most dangerous places on earth. The Demilitarized Zone, moreover, is not
truly demilitarized, as all too frequent incidents habitually remind us.
Deterrence, therefore, remains our top priority. 37,000 US troops and a
rock-solid alliance with the Republic of Korea have successfully deterred
North Korean aggression for almost half a century and will continue to be
the linchpin of our deterrence strategy. 

At the same time, we are working hand-in-hand with the ROK to diminish the
threat of conflict through diplomatic channels, first by reducing tensions
through confidence building measures and ultimately by working towards the
peaceful reunification of the Peninsula. A key component of these diplomatic
efforts is North-South dialogue, for peace must be achieved primarily by the
two parties themselves. The U.S. has consistently supported meaningful,
direct contacts between the ROK and the DPRK, and thus we are encouraged by
the recent reinitiation of bilateral talks in Beijing. We also support the
overtures that President Kim Dae-jung has unilaterally made towards the
DPRK, including an offer of summit talks and the relaxation of controls on
visits to, and trade with, the North. 

Complementing bilateral ROK-DPRK dialogue is the Four Party peace process. I
have led the U.S. delegations in two plenary sessions of the Four Party
Peace talks in Geneva, and though progress has been slow, I am hopeful that
talks will resume later this year and that the process will move forward. 

A second security issue is the food crisis in the North which adds an
element of uncertainty into an already complicated picture. We simply don't
know what a desperate, starving North Korea might do, and in that way the
crisis is as much a security threat as a humanitarian one. Aware that
deterrence might not hold under these circumstances and concerned by the
suffering of the North Korean people, the U.S. has strongly supported the
World Food Program's appeal for 658,000 tons of emergency food assistance.
This year alone, the U.S. has pledged 200,000 tons to the WFP, while others,
most notably, China, the ROK and the EU have all made significant
contributions of food (in the case of China and the EU, these contributions
are not in direct response to the WFP appeal.) We hope, in this context,
that Japan will again make a significant contribution and rejoin the group
of nations working to stem the humanitarian crisis. 

A third security issue in regard to Korea -- nuclear proliferation -- is an
area in which we have had considerable success. Only a few years ago, we
faced the grave threat of an accelerated North Korean nuclear program
jeopardizing both the security of U.S. forces on the Peninsula and that of
our regional allies. Today, thanks to the Agreed Framework and the Korean
Peninsula Energy Development Organization (KEDO), the North Korean nuclear
program is frozen, canning of spent fuel is almost completed and
construction of light water reactors has begun. 

But funding issues remain key, both for the light water reactors and for
heavy fuel oil. In the face of serious economic hardship, South Korea has
publicly confirmed its intention to fund 70% of the overall cost of light
water reaction construction. Japan, despite its own economic difficulties,
has also pledged a significant contribution to the project. This is an
extraordinary example of burden-sharing in the post-Cold War era, and our
allies should be commended for their willingness to work with us to ensure
the situation remain diffused. 

As for heavy fuel oil, the U.S. agreed to take the lead in arranging
financing for and we are hard at work trying to fulfill that commitment. The
problem, as the members of this Subcommittee know, is that by the end of
1997 KEDO had accumulated a 47 million dollar debt from previous funding
shortfalls. We appreciate the extra $10 million dollars that Congress
appropriated contingent upon coming up with the $37 million needed to
eliminate this debt from other sources, and are actively seeking to raise
these funds. 

CHINA 

If the Korean Peninsula is the most immediately dangerous place in which the
U.S. is engaged in the Asia-Pacific, China is clearly the most complex and
challenging. Demography alone makes China an important player in the world.
But China's remarkable economic achievements, increasing diplomatic
prominence and growing military strength mean that China in the 21st century
will profoundly shape the very nature of our world. As the members of this
Subcommittee know, the Clinton Administration's strategy of comprehensive
engagement toward China is based on the premise that it is in our interest
to work toward the emergence of China as a major power that is stable, open
and non-aggressive; that embraces political pluralism and international
rules of conduct; and that works with us to build a secure international
order as well as peace and stability in the Asia Pacific region. We have
made significant, if uneven, progress with the Chinese in all of these
areas, and I am optimistic that in the wake of Secretary Albright's trip and
in the run-up to the summit, we will continue to build on the progress
achieved in Washington last October, when we agreed with the PRC to move
towards a "constructive strategic partnership." 

In terms of regional security, engagement with China is paying dividends.
Peace in Korea is as fundamental a strategic interest for China as it is for
the United States, and the Chinese have played a critical role in working to
defuse tensions on the Peninsula. China worked with the U.S. to bring North
Korea to the negotiating table and now sits with us at the four party talks
in the common pursuit of a permanent peace. China chaired the most recent
North-South negotiation, which we enthusiastically support, and is
aggressively addressing the humanitarian crisis in North Korea through
significant, ongoing food and fuel donations. 

In a more broad-based sense, China has made great strides in its willingness
to engage in regional security dialogues. Whereas four years ago China was
reluctant to deal with its neighbors on a multilateral basis, today China is
actively engaged in the ARF, proactively proposing confidence building
measures and chairing key sessions. Indeed, as mentioned earlier, Beijing
publicly announced at the 1995 ARF its intention to ratify the Law of the
Sea Convention and committed itself to the peaceful resolution of the South
China Sea territorial disputes. 

On non-proliferation issues, prolonged engagement by multiple
administrations has similarly yielded tangible results. The Chinese have
come to recognize that the proliferation of weapons of mass destruction is
not in their own interests and have signed on to a number of
non-proliferation regimes. China has joined us in the BWC (Biological
Weapons Convention), the NPT (Nonproliferation Treaty), the CTBT
(Comprehensive Test Ban Treaty ), and the CWC (the Chemical Weapons
Convention). China has committed to phase out nuclear cooperation with Iran
and to refrain from assisting unsafeguarded nuclear facilities anywhere. It
has implemented nation-wide nuclear export controls, is in the process of
promulgating dual-use nuclear controls, and has joined the Zangger NPT
exporters' committee. China no longer exports complete ground-to-ground
missiles controlled by the Missile Technology Control Regime (MTCR). Clearly
there has been a positive evolution of China's attitudes and actions vis a
vis non-proliferation norms, particularly in the nuclear area. 

Still, we recognize that China remains a major producer of nuclear,
chemical, and missile related equipment, materials and technology. We
continue to have concerns about reports of missile equipment and technology
transfer to Iran and Pakistan, and we are troubled by the ability of Iran's
chemical weapons program to obtain assistance from Chinese entities. We are
urging the Chinese to update and strengthen their 1994 commitment to the
MTCR guidelines and parameters, to expand the scope of their chemical export
controls, and to become increasingly integrated into international
nonproliferation regimes. 

No analysis of security issues involving China would be complete without a
discussion of Taiwan. As we saw in March 1996, cross-Strait tensions can
rapidly and dangerously escalate. U.S. policy on PRC-Taiwan relations
remains unchanged: the United States continues to support peaceful
resolution of the Taiwan question and believes that cross-Strait dialogue
provides the most promising mechanism through which to defuse tensions. In
that regard, we are encouraged by signs of a renewed willingness on both
sides of the Taiwan Strait to resume their dialogue. Last month,
representatives from the PRC's ARATS and Taiwan's SEF, the two "unofficial"
organizations which carry out direct contacts between Beijing and Taipei,
met in Beijing for two days of talks, marking the first real step towards
the resumption of formal cross-Strait dialogue since Beijing suspended the
talks in June 1995. 

We welcome this new development and firmly believe that improvement in
cross-Strait relations will promote peace and stability in the entire
region. Any deterioration in Beijing - Taipei relations along the lines of
what took place in 1995-1996 would be costly and counterproductive for both
sides, and dangerous to the stability of the entire region. 

MARITIME TERRITORIAL DISPUTES 

The third major security issue -- and one that doesn't receive enough
attention -- is the issue of unresolved territorial disputes in the East and
South China Seas. In the East China Sea, Korea and Japan both lay claim to
Tokdo/Takeshima Island, while Japan, the PRC and Taiwan each lay claim to
the Senkaku/Diaoyutai Islands. Recent tensions over these conflicting claims
have led to an outpouring of nationalistic emotion on all sides, which could
preface a future clash among our friends and allies if matters are left
unresolved. 

The disputes in the South China Sea are extraordinarily complex. Numerous
islands and reefs, including the Paracel Islands and the Spratley Islands,
are the subject of overlapping claims among six disputants, China, Vietnam,
Taiwan, the Philippines, Malaysia and Brunei. As the clash between the PRC
and the Philippines over Mischief Reef in 1995 clearly demonstrated, these
disputes remain a dangerous source of potential conflict in the region.
Although the Mischief Reef incident ultimately led to China's commitment to
abide by the UN Convention on the Law of the Sea, tensions over conflicting
claims persist and no progress has been achieved towards a diplomatic
resolution of the numerous disputed claims. Thus future conflicts could
erupt in the absence of preventive measures to promote resolution to these
disputes. In fact, there have been several periods of heightened tensions in
these waters in the past six months alone, including Vietnamese patrol boats
escorting Chinese research vessels out of disputed waters off the coast of
southern Vietnam and Vietnamese troops garrisoned on Pidgeon/Tenant Reef
opening fire on a nearby Filipino fishing vessel. 

The United States has a clear and abiding interest in a South China Sea free
from such conflicts. The South China Sea is a strategic passageway through
which oil and other commercial resources flow from the Middle East and
Southeast Asia to Japan, Korea and China. It is also an operating area for
the U.S. Navy and Air Force and a transit point between military bases in
the Pacific and those in the Indian Ocean/Persian Gulf. Freedom of
navigation and open sea lines of communication in these waters are thus
vital interests for the United States. 

While taking no position on the legal merits of individual claims to
sovereignty over the various islands and waters, the United States has
consistently supported regional efforts such as the annual
Indonesian-sponsored Workshops on Managing Potential Conflict in the South
China Sea to address the disputes. Several different conceptual approaches
for resolution have been suggested by experts. One approach is to negotiate
an agreement that resolves the status of each of the claims. Alternatively,
if this is not achievable in the short-term, a different approach would
involve shelving sovereignty claims in favor of joint resource development.
No country in the region currently possesses the military capacity to impose
its claims, and no claimant has yet discovered commercially viable
quantities of oil or natural gas. Thus if the political will to reach a
negotiated settlement can be generated, a window of opportunity may exist in
which to find a 'win-win' solution. 

SECURITY IMPLICATIONS OF THE ASIAN FINANCIAL CRISIS 

The financial crisis which has rocked the region over the course of the past
ten months has broad ramifications for U.S. security policy. The U.S.
presence in Asia over the past half century provided a stable foundation on
which the nations of the region achieved unprecedented economic progress.
But just as peace and stability enabled economic progress, so too did
economic progress reinforce peace and stability. The two, in fact, are
intimately linked. And thus in the face of an economic crisis which is
profoundly affecting the region, the progress that has been made on the
security front can no longer be taken for granted. 

There is both an external and an internal dimension to the security
ramifications of the financial crisis. On the external front, one concern is
that North Korea might miscalculate that the South's current economic
difficulties make it vulnerable to military action. To address this concern,
the United States and the Republic of Korea have taken steps to strengthen
deterrence, including focusing on these issues at the twenty-ninth Security
Consultative Meeting-Military Consultative Meeting in Washington last December. 

A second external concern is that the economic hardship confronting
Thailand, Indonesia, and to a lesser extent Malaysia and the Philippines
could represent a setback to the progress that ASEAN has made in
establishing itself as an effective regional forum. ASEAN has credibly
evolved into a regional bloc capable of advocating Southeast Asian interests
with other key regional players, including China and Japan. In recent years,
ASEAN has begun to play a significant geopolitical role and in so doing has
emerged as a major force for stability in the region. Its recent record on
the geopolitical front is impressive, including leadership on the Paris
Peace Accords, in moderating tensions in the South China Sea, in the
formation of APEC and the ARF, and in the effort to resolve the crisis in
Cambodia. Should key ASEAN members turn inward as they focus on their
respective economic problems, or should inter-ASEAN tensions over financial
crisis-inspired problems such as refugees and/or economic migrants rise,
regional stability could suffer from an erosion of ASEAN leadership. 

On the internal front is the prospect of domestic instability in countries
afflicted by the crisis. Most worrisome in this regard is Indonesia, where
social tensions have clearly been on the rise. The vast, ethnically diverse
nation of Indonesia is of broad strategic significance for the United
States. It is the world's fourth most populous nation and boasts the world's
largest Muslim population; it contains over 13,000 islands which span
important sea lanes and airways; and it possesses vast natural resources,
including oil and natural gas. Moreover, whereas the Indonesia of yesteryear
championed an assertive nationalism which unnerved its smaller neighbors,
the Indonesia of recent decades has played a crucial role in fostering
regional stability. 

As the largest member of ASEAN and a founder of the ARF, Indonesia has
provided key leadership on a vast array of issues, from the search for a
solution to the continuing crisis in Cambodia to the pursuit of resolution
to territorial disputes in the South China Sea. Indonesia has also become
increasingly active in world affairs, contributing to peacekeeping efforts
in Bosnia and Angola, supporting non-proliferation efforts such as the CTBT,
and joining the quest for stability on the Korean Peninsula by becoming a
member of KEDO. Finally, Indonesia has been a key partner in APEC, working
closely with the U.S. to foster trade liberalization. Should Indonesia
become unstable and turn inward, progress on a whole host of issues would
suffer and ASEAN's effectiveness as a moderate regional forum would be
severely undermined. 

To avert this undesirable outcome, we have worked closely with Indonesia,
the IMF, Japan and other donor countries to support policy reforms needed
for Indonesia's economic recovery. Steadfast implementation of reforms
remains the key. In the case of Indonesia, we have pledged over 50 million
dollars in food and medical supplies for a humanitarian aid package, and are
negotiating up to one billion dollars in export-import insurance for
short-term trade credits. 

Even as we have made these efforts on the economic front, we have continued
to attach priority to human rights issues. We are deeply concerned by the
rising social tensions in Indonesia and are closely monitoring the
escalation of student protests as well as the disappearance of activists. We
have repeatedly raised our concerns at high levels within the Indonesian
government. I personally have raised the issue of disappearances up to the
ministerial level in Jakarta and both Assistant Secretary Shattuck and I
have met with the Indonesian Ambassador in Washington to express our
concerns. We have called on the Indonesian government to conduct a full
investigation into the disappearances of activists and the allegations of
torture and have made clear our expectation that peaceful demonstrations
will be allowed to continue. I'm pleased to report that there has been some
progress, including the reappearance of several prominent 'disappeared'
activists and Indonesian government approval for ICRC visits to Aceh. 

Mr. Chairman, the past twelve months have brought many challenges to the
Asia-Pacific region, including the Asian financial crisis, factional
fighting in Cambodia, the worsening of the food crisis in North Korea, and
most recently, social unrest in Indonesia. At the same time, the past year
has also brought constructive change to Asia, including the smooth
transition into the post-Deng Xiaoping era in China; the revision of the
US-Japan defense guidelines; the commitment to a 'constructive strategic
partnership' between the U.S. and China; and the triumphs of the democratic
process in South Korea. Our experience in the region over the past four
decades has taught us that the best way for us to promote democratic
principles, encourage economic growth, deter regional aggression, and secure
our own maritime interests is to be an active presence in the Asia-Pacific. 

During this critical period of transition in Asia, our engagement in the
region has never been more important. It will help to determine the kind of
region that will emerge from these transitions and will assure our ability
to mobilize support for issues of importance to the United States in the
future. I thank the Congress for its support of our engagement in the
Asia-Pacific and for this opportunity to lay out the Administration's
security policy in the region. 

(end text)