Chapter I. Changes in International Community and Japanese Foreign Policy Tasks
Few periods in the postwar period have been as fraught with changes of historic significance as this one year from the Arch Summit to the Houston Summit. After Solidarity's landslide victory in the Polish elections, Hungary's dismantling of the border fences, and the official reassessment of the Hungarian uprising, Hungary moved in September 1989 to allow East German citizens to exit for West Germany and Poland inaugurated Eastern Europe's first non-Communist government. Although General Secretary Gorbachev visited Berlin in October, East German General Secretary Honecker resigned soon afterward and the Berlin Wall came down in November. The incumbent leadership was also driven out in Bulgaria and Czechoslovakia, and the Ceausescu regime toppled in Romania in December. In March 1990, in the Soviet Union a special session of the Congress of People's Deputies was held which rescinded the Communist Party's monopoly on power. With the free elections that have taken place in East Germany and elsewhere, we now have increasing democratization and an accelerating shift to market economies in Eastern Europe. In American-Soviet relations, the summit meetings in Malta and Washington have meant expanded dialogue on a widening range of issues, including arms control and disarmament, regional conflicts, human rights, bilateral issues, and such global issues as the global environment, drugs, and terrorism, and American-Soviet relations seem to be entering a new era. As a result, the East-West relationship characterized by ideological discord that has continued for more than 40 years has started to change and a new relationship based upon dialogue and cooperation has started to emerge.
Nevertheless, these changes have only just begun, and they have by no means been consolidated. Especially, President Gorbachev, one of the major initiators of these changes, faces numerous problems at home and the future of reform is still far from certain. The Soviet Union maintains huge military capability including nuclear capability, and the uncertainty surrounding the situation within the Soviet Union is a cause of uncertainty in the outlook for the future of international relations.
Likewise, even though the East-West ideological discord has been diminished, there are still conflicts of interest among countries outside of the East-West framework, regional conflicts persist, and there is no reduction in the possibility for the eruption of new conflicts. Iraq's invasion of Kuwait is representative here.
Even in the Asia-Pacific region, the other side of the striking economic development of recent years is that there has been no change in the structure of discord on the Korean Peninsula and there is no resolution in sight for the Cambodian problem. At the same time, there are fears that there may be an escalation of the Kashmir conflict between India and Pakistan. Nor have any substantive changes been evident in the position of the Government of the Soviet Union on the Northern Territories problem with Japan.
In Africa and Latin America, even though there have been some changes for the better in the solution of the Namibian problem, the resolution of the Nicaraguan civil war and the moves for democratization, there seems to be no end to the domestic disorder in the wake of harsh debt problems and deteriorating economic situations.
Looking at the world economy, the free-trading system that has sustained Free World peace and prosperity in the postwar era is now facing major trials as the structure of the world economy changes, and the issue of how to sustain this system is an urgent one. It is thus very much hoped that the Uruguay Round will be successfully negotiated by the year-end deadline.
As seen, the welcome historic changes taking place in Europe in the East-West relationship and in American-Soviet relations notwithstanding, the international community's future must be said to be fraught with uncertainties and instabilities.
It is thus all the more imperative that this opportunity provided by the increasing shift to democracy and free-market economies and the change in East-West relations from discord to dialogue and cooperation be capitalized upon and that these progressive developments be further promoted and developed on a global basis, including the Asia-Pacific region.
As this time of historic change, Japan, which already bears considerable responsibility and plays an important role for the stability and prosperity of the international community, must make an even greater effort to fulfill its responsibilities and act more vigorously.
Section 1. Structural Changes in the Postwar International Order
1. Changes in the International Order
(1) Changes in the Soviet Union and Europe
(a) The Soviet Union
The rapid changes currently taking place in the international situation are in part the culmination of long years of structural changes and global developments. Yet the undisputed direct cause triggering the recent changes in East-West relations has been the Soviet Union, particularly the leadership exercised by President Gorbachev, the domestic reforms that he has pursued (perestroika and glasnost), and the so-called "new thinking" in Soviet foreign policy.
It is well known that President Gorbachev has undertaken these reforms in the Soviet Union out of reflection about the conspicuous sluggishness in the Soviet economy, the corruption and bureaucratic rigidity that have led to economic stagnation, the economic distortions introduced by the huge weight of military spending, and other problems. At the same time this Soviet decision to embark upon reforms was also prompted in large part by the solid diplomatic and defense efforts of the United States and other Western countries, and the evident economic development achieved by the West.
The reforms being promoted by President Gorbachev include increasing public access to information, abandonment of the constitutional principle of Communist Party rule, activization of the Soviet Parliament, and social democratization, and these changes have them-selves contributed considerably to the freeing of East-West relations from ideology-based discord. However, the democratization and liberalization that have been encouraged in the name of perestroika and glasnost have also brought a number of serious domestic problems to the surface, including the moves for independence in the Baltic countries, the declarations of sovereignty adopted by the Russian Republic and a number of other republics, the flaring of ethnic rivalries in an umber of areas the drift toward a split in the Communist Party, and dissatisfaction within the military against insufficient budget. Yet most serious of all are the grim economic difficulties currently facing the Soviet Union.
Secretary General Gorbachev was installed as President as a result of changes in the Soviet Constitution and outwardly appears to have consolidated his grip on power, but his administration still faces many very difficult problems, and this in itself is one of the factors making it difficult to predict what will happen in international relations.
(b) Eastern Europe
The countries of Eastern Europe were the scene of 1989's most dramatic moments. Among the factors behind these changes were dissatisfaction at having been dominated by the Soviet Union for so long, frustration with the suppression of civil liberties and the stagnation of their economies under Communist rule, and popular discontent with the vast gap that had opened up between their own standards of living and those in the industrialized democracies. It should be noted in passing that television played a major role both in giving rise to these changes and in spreading the tide of change.
Another factor encouraging the impetus for reform in Eastern Europe was that domestic reforms have been continued in the Soviet Union, and that the Soviet Union took a hands-off position because of the "new thinking" in Soviet foreign policy.
With the moves for democratization in Eastern Europe, free elections have been held, governments have been installed having a democratic power base, and it seems that there can be no turning back to the old regime, although the transformation to market economies will demand long-term efforts. Because the policies to promote this transformation of the economic structures must be basically tight policies with frugality on both the fiscal and the financial sides, and because these policies will necessarily entail unemployment, bankruptcies, and other economic difficulties, it is clear that economic reforms may well prove very difficult even for popularly elected new governments. At the same time, long-suppressed ethnic rivalries are already heating up. Thus it is essential that these countries be supported so that there is no turning back in their efforts to introduce democracy and market economies, this being essential not only for European stability but for the stable development of the entire international community.
Indeed, this realization underlay the 1989 Arch Summit's decision to extend support to Poland and Hungary, the subsequent establishment of the European Bank for Reconstruction and Development, the decision in the Group of 24 for Economic Assistance to Central and Eastern European Countries (G-24) ministerial-level meeting on support for the East European countries to expand the number of countries eligible for such assistance, and the Houston Summit's support for thisG-24 decision. At the same time, Japan has resolved to play an activerole in these support measures because of the realization that by doing so is part of Japan is making an effort to fulfill its responsibilities and play its due role in the international community.
(c) German Unification
German unification is another one of the biggest changes to come out of the whirlwinds of 1989. In July 1990 the two Germanys achieved currency, economic, and social union and full unification will be realized on October 3 when East Germany joins West Germany.
German unification is bound to have a major impact not only on the situation in Europe but on worldwide political and economic situations. Already Europe has begun discussing the ramifications of German unification from a variety of perspectives, including unified Germany's relationship with the North Atlantic Treaty Organization (NATO), the strengthening of political integration within the European Community (EC), and the strengthening of the Conference on Security and Cooperation in Europe (CSCE).
On unified Germany's relations with NATO, the Soviet Union agreed to have unified Germany remain in NATO after the July 1990 NATO Summit Meeting's appeal to Warsaw Pact member countries as explained later and the various German initiatives toward the Soviet Union.
One other difficult problem accompanying German unification was that of the border between Germany and Poland, and on this issue it was agreed that post-unification Germany and Poland would conclude a treaty in which both countries pledged to maintain their current borders unchanged.
(d) Building New International Relations in Europe
With the democratization in Eastern Europe and the start of the withdrawal of Soviet forces, the Warsaw Pact's military significance has been greatly diminished. At the same time, with the enhanced independence claimed by the countries of Eastern Europe, the Warsaw Pact is also losing political significance. In addition, with many of the East European countries hoping for associate membership in the EC and the expectation that trade among the Communist Economic Conference (COMECON) members, including the sale of oil and other resources from the Soviet Union, will be conducted at international prices starting in 1991 the basic meaning of the COMECON arrangement is being undone.
In dealing with these changes in the security climate, as well as to create conditions in which the Soviet Union could condone having unified Germany remain in NATO, NATO has conducted a review of its role and strategy. The declaration issued by the July 1990 NATO Summit Meeting was in line with President Bush's early proposals in providing for enhancing NATO's political component, in proposing a joint declaration of non-aggression between the NATO countries and the Warsaw Pact countries, and in other innovations emphasizing the desirability of structuring "new partnerships" between East and West in line with a "new, promising era." At the same time, however, this declaration was explicit on the need for deterrent policy to use a mix of nuclear and conventional weapons and for the United States to maintain a presence in Europe to contribute to the maintenance of European peace and stability, thus reaffirming that there was no change in NATO's basic strategy.
Consistent with these moves to create a new order for European security, there have also been a number of proposals made on strengthening the CSCE. While the United States and the West European countries contend that the CSCE cannot substitute for NATO in the security field, it is increasingly argued that the CSCE, as a pan-European forum with a broad membership ranging from the United States and Canada to the Soviet Union and Eastern Europe and also including the neutral countries of Europe, should be able to play some role for European stability, and it is expected that the CSCE will be strengthened and probably institutionalized to some extent.
One of the other major developments in the move for the formation of a new order in Europe is that of EC political integration. Along with the movement for market integration by 1992, France and other countries are stepping up their efforts to promote and accelerate EC political integration in light of German unification. For the future, it is expected that the EC will be the political and economic core of Europe and that, drawing in the European Free Trade Association (EFTA) and the countries of Eastern Europe, will have a decisive say in the formation of a new European order.
(2) American-Soviet Relations
Closely linked to these changes in Europe, American-Soviet relations have also developed in new directions over the past year. With the impetus of the December 1989 Malta Summit, American-Soviet relations have transcended the Cold War approach and are moving toward a new relationship in which the two countries search for a new international order in the spirit of dialogue and cooperation. The May 1990 Washington Summit was a continuation of this process and reached agreement on a number of issues, including agreement in principle on the Strategic Arms Reduction Talks (START) providing for the first massive reduction in nuclear arsenals in history. There is also a heightening momentum for the United States and the Soviet Union to take initiatives and to cooperate in the solution of regional conflicts.
(3) Regional Conditions
The impact of the changes in the Soviet Union and Eastern Europe is also evident in conditions elsewhere. For example, the abandonment of the dictatorship of the Communist Party in the Soviet Union and Eastern Europe and the provision made to tolerate political pluralism has had a major impact on other countries that had maintained similar political systems. Likewise, as the Soviet Union and the countries of Eastern Europe seek for diplomatic relations with a wider range of countries, they are also reevaluating their military and economic assistance to fraternal countries. In addition, the popular demand for democracy is growing louder in an ever-increasing number of countries.
Conflicts grounded in the ideological rift between East and West are being defused and, as noted above, the United States and the Soviet Union are starting to take concerted action for the solution of regional conflicts and there has been considerable activization of the United Nations' peacekeeping and other activities. This trend has been conspicuous in the moves by the United States and the Soviet Union behind attainment of the independence of Namibia and peace in Nicaragua through the efforts by the United Nations, the U.S.-Soviet joint criticism of Iraq for its invasion of Kuwait, their Summit Meetings, and the adoption of the United Nations Security Council resolutions establishing sanctions against Iraq. Nevertheless, there has been no abatement in regional conflicts based upon religious differences, ethnic rivalries, historical territorial disputes, or other causes, and the possibility of new outbreaks of conflicts remains undiminished.
(4) The World Economy
Helped by the greater interdependence accruing as a result of the rapid developments in information and communications technologies as well as by the coordination of international financial trade and macroeconomic policies in the Summit Meetings and other gatherings, Japan, the United States, and the EC are enjoying the longest postwar expansion in history and the world economy is continuing to do very well.
However the free trade system that underlies this development is facing major changes on two fronts. First is the way trade and investment patterns have changed with the globalization of corporate activity, the expansion in service trade the increase in direct overseas investment, and other developments; and second is the structural change in the world economic structure with the progress made toward EC integration by 1992, the economic reforms in the Soviet Union and East European countries, and the emergence of the dynamic Asian economies (DAEs). (Note)
There is also cause for concern in the world economy. For example, the massive external imbalances persist between nations and the rising tide of protectionism as seen in the drift toward unilateralism epitomized by the Super 301 clause of the Omnibus Trade Act and the existence of regionalism that could easily turn into the formation of economic blocs both pose major challenges to the free and multilateral trading system under the General Agreements on Tariffs and Trade (GATT). At the same time, there are calls for further promoting policy coordination among the leading nations in an effort to reduce the external imbalances and to promote stable world economic development.
In seeking to respond to this situation, it is important both that all countries make appropriate contribution from a global perspective and that greater efforts be made for international coordination. Specifically, it is indispensable that all countries cooperate in adept policy management to ensure non-inflationary and sustained growth for the world economy and work on policy issues such as reducing the external imbalances, stemming protectionism, generally maintaining and strengthening the free and multilateral trading system for the 21stcentury. It is of the highest priority for the world economy that the GATT Uruguay Round negotiations scheduled to be concluded by the end of 1990 be successfully concluded.
2. Developments in the Asia-Pacific Region
(1) The recent changes in the Soviet Union and the radical changes in Europe since 1989 have also had an impact on the Asia-Pacific region. The improvement in Sino-Soviet relations, the start of the Soviet military withdrawal from Mongolia and Cam Ranh Bay, the summit meeting between the Republic of Korea and the Soviet Union, and the democratization in Mongolia are all related, directly or indirectly, to the changes in the Soviet Union and Fastern Europe.
Yet the Soviet occupation of Japan's Northern Territories, a result of the same Soviet expansionism that sparked the Cold War, continues, and in the Korean Peninsula, having felt very strongly the impact of postwar East-West relations, the confrontation between North and South remains. In addition, although it is not directly related to East-West relations, there is no solution yet in sight for the Cambodian problem, a major source of anxiety for Southeast Asia. In Southwest Asia, there are fears of an escalation in the conflict between India and Pakistan over Kashmir.
At the same time, while there has been some reduction in Soviet military forces in Asia and the Far East, the Soviet Union persists in modernizing its military systems and retains a massive military capability, including its nuclear force.
(2) The socialist countries of Asia have responded in different ways to the changes taking place in the Soviet Union and Eastern Europe, and there is no unformity of direction such as is seen in the Soviet Union and Eastern Europe. As a result of the rapidly escalating demands for democratization in Mongolia, there was a change in party leadership, a shift to a plurality of parties, and major opposition gains in the Small Khural elections in July 1990. However, other countries have tended to clamp down internally.
The Chinese leadership, while maintaining that reforms and the open-door policy are unchanged, has made the maintenance of domestic stability its priority and is emphasizing political and ideological education and stressing the relationship between the party and the masses. In its foreign relations China has reaffirmed anew the Five Principles for Peaceful Coexistence as governing its relations with other countries and is making a multifaceted diplomatic effort centering on the developing countries. At the same time, moves have been made that would seem to be taking Western opinion into account, including the lifting of martial law and the freeing of demonstrators.
North Korea is said to be increasingly apprehensive about the changes in the Soviet Union and Eastern Europe and feeling increasingly isolated as a result of the Summit Meeting between the Soviet Union and the Republic of Korea. While there have been calls for North-South dialogue, and the remains of some American soldiers have been returned, there are no clear signs of any major change in their foreign policy.
Vietnam and Laos took the lead in promoting economic openness and other reforms even before the changes in Eastern Europe. However both of these countries are still very cautious about implementing political reforms.
(3) Faced with massive fiscal deficits, the United States has started to work on plans to gradually adjust its forces in Japan and elsewhere in East Asia. While the United States maintains that there is no change in its position to fulfill its responsibility for the stability of the region as a Pacific country by pursuing both a forward deployment strategy and by maintaining security treaties with the other countries of the region, it is expected to be increasingly insistent that its allies "share the burden" to maintain this military presence.
In May 1990, the United States government started negotiating with the government of the Philippines on maintaining the U.S. bases in that country. These bases in the Philippines are extremely important to U.S. military operations in the Asia-Pacific region, and the outcome of these negotiations is expected to have a major impact upon the American presence in this region.
(4) As epitomized by the fact that Pacific trade exceeded Atlantic trade in 1985, the flow of goods, services, and capital in the Asia-Pacific region has now become vital to world economic growth. In 1989, the developing countries of this region achieved 5.1% growth, well in excess of the world average of 3.0% (Note) and once again demonstrating why it has been said that the 21st century will be the Asia-Pacific century. This development was sustained by the Asian newly industrializing economies (Asian NIEs) - the Republic of Korea, Hong Kong, Taiwan, and Singapore - and the members of the Association of Southeast Asian Nations (ASEAN). The region's rapid growth has been helped considerably by the fact that these economies have attracted direct investment and expanded their trade in accordance with market principles.
At the same time, these economies' own development bas been helped by the existence of a vast and open American market and by assistance direct investment, and technology transfer from Japan.
The Asia Pacific Economic Cooperation (APEC) ministerial-level meeting made a start in November 1989 to facilitate exchanges among these economies and to further promote their development. At its second meeting, in Singapore in July 1990, APEC announced its determination to do more to promote and expand intraregional cooperation.
Note: DAEs is a term that has come into currency to refer to Hong Kong, the Republic of Korea, Malaysia, Singapore, Taiwan and Thailand.
Note: According to the International Monetary Fund's World Economic Outlook1990.