Chapter III. Situation in Each Region and Japan's Relations with Respective Regions
Section 1. The Asia-Pacific Region
Item 1. Situation in the Asia-Pacific Region
1. Overview
The transformation in Europe has begun to deal some impacts to the Asia-Pacific region. However, the impacts on this region will vary from one area to another due to the region's highly complex geopolitic and strategic environment and the fact that political confrontation and conflicts remain unsolved.
On the Korean Peninsula, there has been no change in the basic situation marked by military confrontation between North and South Korea. However, South Korea's rapproachment with the Soviet Union and other socialist countries in East Europe highlighted by the Soviet ROK summit meeting in June 1990 indicates that the basic structure of East-West confrontation, which lay behind the division of the Korean Peninsula, is changing significantly.
China, facing a difficult juncture following the "June 4th" incident in 1989, has internally emphasized stability, while at the same time easing some of the restrictions put in place since the incident. Externally, its posture is one of maintaining its relations with the Soviet Union, looking to the restoration of its relations with the industrialized democracies and attaching greater importance to its relations with the Third World.
In Indochina, the Cambodian problem, which continues to be a destabilizing factor, restricts the development of this area. Positive efforts have been made by the countries concerned for comprehensive settlement of the problem at an early date.
In the Philippines, the political situation has been fluid after a large-scale coup attempt in December 1989. Conditions in other ASEAN countries have been stable.
In Southwest Asia, India has completed the pullout of its troops from Sri Lanka and settled protracted disputes over trade and transit with Nepal in moves contributing to the area's stability. On the other hand, the relations between India and Pakistan, which had shown signs of improving became tense again over the Kashmir problem, future developments of which are open to conjecture.
In Oceania, Australia and New Zealand are endeavoring to solve their difficult domestic economic problems and promote intra-regional cooperation as members of the Asia-Pacific region. Of island nations in the Pacific, political developments in Fiji and Papua New Guinea deserve close observation.
The economic growth in East Asia is contributing to the activation of the world economy. In particular, the ASEAN countries continue phenomenal economic growth.
2. Influences of the Situations in the Soviet Union and East European Countries on Asia
Rapid changes in the Soviet Union and East European countries as well as in East-West relations occurring since 1989 were of such dimensions as to alter the basic framework of the postwar international order. Undoubtedly, such changes have global implications and the time will come when the impact will be felt also in the Asia region. There are two sides to the impact that the situation of the Soviet Union and East European countries will have on Asia.
One is the changes that the pro-democracy and anti-socialism movements in East European countries will bring to the Asian socialist countries.
In Mongolia, one-party rule by the People's Revolutionary Party was renounced in parallel with the developments in East European countries, leaders were replaced and a free election was held. The Republic of Korea has opened diplomatic relations with East European countries, held a summit meeting with the Soviet Union and is ready to resume the North-South dialogue. Furthermore, in the aftermath of the improved U.S.-Soviet relations, the five permanent members of the U.N. Security Council and other countries concerned are continuing their earnest efforts to bring peace to Cambodia.
Apart from such movements, however, few changes are discernible in the Asia region as a whole, changes that reflect the upheavals in the Soviet Union and East European countries and improved East West relations. On the contrary, conservative ideological moves are conspicuous in China, North Korea and Vietnam, which have renewed a call for the path to socialism and leadership by the party.
The other side of the impact is the one that the new East-West relations will have on regional disputes. No visible moves have been made toward the relaxation of tension on the Korean Peninsula where North and South Korea confront each other squarely. No progress has been made in the Cambodian dispute toward a peaceful settlement, although various efforts have been made to bring peace.
The Asia region differs from Europe in terms of its geopolitical situation and strategic environment. Thus, while the recent rapid changes in the Soviet Union and East European countries and in East-West relations will affect Asia in some measure, the changes that will happen in Asia could not be the carbon copies of what happened in East Europe, and will be different from one area to another.
3. Cooperation in the Asia-Pacific Region
The Asia-Pacific region, brimming with economic dynamism, is expected to serve as a driving force for the world economy toward the 21st century. Today, intensive discussions are in progress on the need to construct closer cooperative relationships in the region in order to further cultivate the region's potential contribution to the world economy as well as to peace and stability of the region.
In January 1989, Prime Minister Robert Hawke of Australia proposed a meeting of Ministers of the countries in this region. Following consultations among the countries concerned, the Asia-Pacific Economic Cooperation (APEC)/Ministerial Meeting was held in Canberra on November 6 and 7 in 1989 bringing together 6 ASEAN countries, Australia, Canada, The Republic of Korea, New Zealand, the United States and Japan. The Japanese delegation was led by Foreign Minister Nakayama and the Minister for International Trade and Industry Matsunaga.
On the agenda were (1) world and regional economic development, (2) global trade liberalization, (3) opportunity for regional cooperation in specific areas and (4) future steps for Asia-Pacific Economic Cooperation. As a result, agreement was reached to hold the meeting on a continuous basis as well as Ministerial Meeting to promote the Uruguay Round. Agreement was reached also on the following principles for promoting cooperation in the region: 1) that cooperation is outward-looking; 2) that diversity is respected and cooperation is expanded by stages; and 3) that participating countries stand equal and be mutually beneficial.
The second APEC Cabinet-level Ministerial Meeting was held in Singapore on July 30 and 31 in 1990. Foreign Minister Nakayama and Minister for International Trade and Industry Muto attended the conference.
The meeting agreed to carry out 7 cooperative projects which were review of trade and investment data, trade promotion, expansion of investment and technology transfer in the Asia Pacific region, Asia-Pacific multilateral human resource development initiative, regional energy cooperation, marine resources conservation and telecommunications. It was reconfirmed that the cooperative projects are outward-looking and contribute to the further development of the world economy. They issued a joint communique to express their determination to conclude the Uruguay Round before the end of 1990, and reached a consensus to start talks with China, Hong Kong and Taiwan over the possibility of their joining in the APEC at the Third Ministerial Meeting or as soon as possible there after.
The 3rd meeting is scheduled to be held in Seoul, to be followed by the 4th and 5th meetings respectively in Thailand and the United States. Besides these meetings, the APEC Ministers were scheduled to meet in Vancouver in September and in Brussels in December 1990 for consultations on the Uruguay Round.
Japan, as a constituting nation of the Asia-Pacific region, will make active contributions to the APEC's cooperative projects to enhance the stability and development of the region. The cooperative projects should proceed steadily with due consideration to the wide gapps existing in the level of economic development among the countries and to the cultural and social diversity in the region.
1. Overview
On the Korean Peninsula, the basic structure of severe political and military confrontation between North and South over the demilitarized zone remains unchanged. However, Since the "July 7 Declaration" by President Roh Tae Woo in July 1988, the Republic of Korea (ROK) has been making steady progress in the so-called "Nordpolitik" for improving its relations with socialist countries, concurring with the reforms in the Soviet Union and East European countries. The ROK opened diplomatic relations with six East European countries and Mongolia. It concluded an agreement with the Soviet Union in December 1989 to establish consulates in each country albeit under some limited conditions and the efforts led to an ROK-Soviet summit meeting in June 1990. The rapid rapprochement between the ROK and socialist countries including the Soviet Union bears witness to the transformation of the structure of the East-West confrontation that lay behind the North-South division on the Korean Peninsula after World War II. Such a change is expected to accelerate the flow of international politics in Northeast Asia and eventually exert a favorable thrust to a peaceful settlement of the problem of the Korean Peninsula.
2. The Republic of Korea (ROK)
(1) Political Situation
In the latter half of 1989, corruption cases involving the Fifth Republic under the Chun Doo Hwan Administration and the Kwangju incident developed into major political issues. The political storm subsided after former President Chun testified in the National Assembly in December 1989 and Chung Ho Yong (the former Minister of Defense), who was in charge of the suppression of the Kwangju incident, resigned as an Assemblyman. Moves toward political reformation, which had been simmering beneath the surface, surfaced all at once.
The ruling Democratic Justice Party, which failed to win a majority in the National Assembly general election in April 1988, was suffering from the so-called "small ruling party and large opposition" situation that put the party in a difficult position to manage the National Assembly and the political situation. The Reunification Democratic Party (President Kim Young Sam) and the New Democratic Republican Party (President Kim Jong Pil) agreed to merge on January 6, 1990, in a bid to come into power after the Roh Administration. The Democratic Justice Party joined the merger on January 22 giving birth to the ruling Democratic Liberal Party with a comfortable majority.
The Party for Peace and Democracy (President Kim Dae Jung), which was left out of the grand coalition of the ruling and opposition parties, was vehemently opposed to the merger. And some Assembly-men of the former Reunification Democratic Party and independent Assemblymen joined hands to start the Democratic Party in February (Assemblymen Lee Ki Taek took office as party president in June). At present, the Democratic Liberal Party has 218 seats, the Party for Peace and Democracy 70 seats, the Democratic Party 8 and independent 3.
The Government party with a stable majority was beset with partisan feuds and mounting public criticism over the three-party merger. As a result, the Democratic Liberal Party lost a by-election in North Chungchong Province held early in April. A public opinion poll conducted at the end of the same month indicated a sharp fall in the approval rate of the ruling Democratic Liberal Party, even below those of opposition parties. The Democratic Liberal Party held the national convention on May 9, and elected Roh Tae Woo as party President for a two-year term and Roh named Kim Young Sam the party Chairman.
The South Korean economy registered a growth rate as high as 12% or so for three consecutive years from 1986 to 1988 helped by falls in the won's value, oil prices and international interest rates, and through export-oriented policies. But the growth rate slowed down to 6.7% in 1989. Its trade surplus decreased from $11.6 billion in 1988 to $4.5 billion in 1989, and the country began suffering from deficits in 1990. Responsible for the turnaround of the South Korean economy were labor disputes that intensified by the democratization process in the country. Wages rose steeply while strikes slowed down production. To make matters worse, export price competitiveness declined by the won's appreciation against the dollar. At the beginning of May, the Korean Government faced the "total difficulties," as it was called, or a situation in which a political impasse was compounded by heaps of problems such as soaring land prices and stock market crash. The South Korean Government has been trying hard to overcome the difficulties: President Roh visited Japan, and materialized a Summit meeting with President Gorbachev of the Soviet Union, and a number of remedial measures were introduced such as the "special complementing measures to control speculative investment in real estate and stabilize commodity prices" and the "stock market stabilizing measures."
(2) Diplomacy
The ROK has made eye-opening progress in expanding exchanges and establishing diplomatic relations with socialist countries under President Roh's "Nordpolitik." The ROK Government agreed with the Soviet Union in December 1989 to effectively begin consular services. And when a delegation led by Chairman Kim Young Sam of the Democratic Liberal Party visited the Soviet Union in March 1990, it is believed that a basic agreement was reached with the Soviets to normalize their diplomatic relations in the near future. Furthermore, a summit meeting between President Roh and President Gorbachev was materialized in San Francisco in June 1990. As for East European countries, the ROK entered into diplomatic relations with Hungary in February 1989, and later opened diplomatic relations with Poland, Yugoslavia, Czechoslovakia, Bulgaria and Romania. In addition, in March 1990, it established for the first time diplomatic relations with Mongolia, an Asian socialist country. China takes a cautious stance concerning opening diplomatic relations with the ROK, taking into account the fact that North Korea promptly supported the Chinese Government's actions regarding the June 4 incident. The ROK Government is showing its strong willingness to improve relations with China taking the advantage of the Asian Games held in Beijing in September 1990.
President Roh visited Europe in November 1989 and the United States in October 1989 and June 1990. Despite trade friction and other problems entailing from its economic growth, the ROK has steadily strengthened its relations with nations in the Free World. An announcement was made in January 1990 that the U.S. forces stationed in the ROK would be reduced slightly. But U.S. Secretary of Defense Cheney, in his visit to South Korea in February 1990, reassured that the commitment of the U.S. forces would remain un-changed. A focal point sticking between the two countries will be perhaps the readjustment of their policies over burden-sharing of the expenses relative to the U.S. forces stationed in South Korea and relocation of the U.S. bases.
(3) Relations with Japan
President Roh's state visit to Japan, postponed twice for reasons on the Japanese side, took place from May 24 to 26 in 1990. He was the second South Korean head of state to visit Japan following former President Chun's visit 6 years ago, in September 1984. President Roh's visit has laid problems arising from past history, and contributed greatly to the building new Japan-ROK relations that promote the two countries, the collaboration from a global viewpoint toward the 21st century.
In reference to the past of the two countries, the Japanese Emperor said at the imperial banquet held in honor of the South Korean President "I think of the sufferings your people underwent during this unfortunate period which was brought about by my country and cannot but feel the deepest regret." And Prime Minister Toshiki Kaifu expressed his "sincere remorse and honest apologies for the fact that there was a period in our history in which Japanese actions inflicted unbearable suffering and sorrow on the people of the Korean Peninsula."
The leaders of Japan and the ROK confirmed that both countries would join hands in promoting cooperation in the Asia-Pacific region, the Uruguay Round, and assistance to the developing countries, and that they would take part in the formation of the new world order. In addition, an agreement on the cooperation in the field of nuclear energy (concerning intensification of cooperation in the field of peaceful uses of nuclear energy) was signed. Japan and the ROK also agreed to promote exchanges in basic sciences between the two countries, including Japan's technological cooperation in the Center for Evaluation of the Performances of New Materials and in the field of prevention of occupational diseases. Furthermore, both countries signed an agreement on maritime search and rescue and emergency refuge of vessels.
The Japanese and ROK Governments continued to discuss the problem of Korean residents (third-generation and after) in Japan (Note) as one of several problems stemming from past relations between the two countries since December 1988, based on the 1965 agreement on the legal status of ROK nationals residing in Japan. The two countries concurred on ways of resolving the problem, concerning their legal status and treatment at the 5th Japan-Korea Regular Consultations of Foreign Ministers on April 30, 1990, As for the problem concerning Korean atomic bomb victims, Prime Minister Kaifu offered to provide medical aid amounting to about \4 billion in total, on the occasion of President Roh's visit. In addition, the "Joint Corporation Body to Support South Korean Residents in Sakhalin," which was established by both the Japanese and Korean Red Cross Societies, is aiding in the visit of South Koreans living in Sakhalin to the ROK for reunion with their relatives.
For Japan, the ROK is the second largest trade partner, next to the United States and so is Japan for the ROK. However, Japan has been registering a surplus with the ROK due to structural factors -Japan's trade surplus in 1989 was $3,570 million, almost the same as the previous year. Both Japan and the ROK are required to make efforts to reduce the imbalance and expand the total trade volume, Many Japanese subsidiaries in the ROK started to withdraw from the country having been unable to cope with steep wage increases and intensified labor disputes. In some instances, the closing Japanese companies were involved in disputes with labor unions over terms of the shutdown. Labor union representatives visited parent companies in Japan demanding the resumption of operation of firms in Korea. At last, these problems have been settled amicably thanks to the efforts by the parties concerned.
With the ROK's liberalization of its people's travel overseas, exchange and flow of people between the two countries have increased since January 1989. The number of tourists between the two countries reached 2 million in total. In light of such a trend, Japan and the ROK signed the "Note on Simplification of Visa Issuance Procedure," on the occasion of President Roh Tae Woo's visit to Japan, which provides for the waiving of a visa fee and the issuance of a multiple-en-try visa effective for a year.
As for the territorial dispute on Takeshima Island between Japan and the ROK, the Japanese Government has repeatedly protested to the ROK Government because it is clear both on legal and historical grounds that Japan has the exclusive rights on the island. Of late, Japan made a protest against the ROK, based on the findings of research conducted by patrol boats of the Maritime Safety Agency in November 1989, and has taken up the problem with the ROK at the Regular Consultation of Foreign Ministers in April 1990 and on other occasions.
3. North Korea
(1) Political Situation
In North Korea, the leadership setup with President Kim If Sung at its center has been maintained firmly, and the preparations for succession of power by his son, Secretary Kim Jung II, have been in progress since the 6th party convention in 1980. Recently the evidences have often seen that Secretary Kim Jung If is effectively taking over leadership of the domestic administration across the board. A matter of discussion now is even the timing of the transfer of power. The Supreme People's Assembly held in May following the 9th assembly election in April 1990 reelected President Kim II Sung. About Kim Jung If, it was disclosed for the first time that he had been the First Deputy Chairman of the National Defense Committee. However, Kim Jung II assumed no other positions in state agencies showing there has been no fundamental change yet in the country's leadership structure.
It appears that the North Korean economy is still suffering from difficulties, widening the gap with the ROK. The country's national income per capita is estimated at about a quarter of that of the ROK or about $980 in 1988. President Kim said in his New Year address that the country's economic goal in 1990 was output increases in electricity, coal and metal (steel) industries as well as light industries and in the field of consumer goods. Responding to this, the Party's Central Committee meeting held in January decided to "utilize the existing economy, and increase production and economize in every sector of the people's economy as much as possible" as a priority policy for the construction of economy "Struggle for Output Increases and Economization" was adopted as a slogan.
(2) Diplomacy
North Korea which has been an ally of China and the Soviet Union has traditionally tried to promote close relations with both countries, keeping a balance between them. However, attention is being focused on possible effects of the recent rapid improvement of the ROK-Soviet relations on North Korea's relationship with the Soviet Union. When the realization of the ROK-Soviet summit meeting was announced a spokesman of the Foreign Affairs Ministry of North Korea warned that the summit would create "a serious political problem that may perpetuate the Korean division," but the statement stopped short of directly criticizing the Soviet Union by name.
As for its relations with China, North Korea expressively supported the Chinese Government's action on the June 4th incident in 1989. President Kim If Sung visited China in November. And when Chinese General Secretary Jiang Zemin returned the visit in March 1990, North Korea showed a posture leaning to China emphasizing the solidarity between the two countries "firmly upholding socialism."
In the meantime, although North Korea joined the Treaty on the Nonproliferation on Nuclear Weapons in 1985 it is yet to fulfill an obligation under the Treaty, that is, to enter into a safeguard agreement with the International Atomic Energy Agency (IAEA). This failure on the part of North Korea has given rise to strong concern in the international community, which earnestly desires early signing of the agreement.
(3) Relations with Japan
Japan has called repeatedly for North Korea to agree to hold dialogue in order to improve relations between them and taken various measures to realize it. Although the Japanese intention has been communicated to North Korea via various routes, no forthcoming response has come from North Korea to date. In light of the accelerating flow of international politics surrounding the Korean Peninsula, Japan is ready to make further efforts to improve relations with North Korea in areas including academic and cultural exchanges. Regarding the No.18 Fujisan Maru incident, a major pending problem between Japan and North Korea, the Japanese Government has repeated representations over the last 6 years that North Korea should quickly release its two detained Japanese seamen and allow them to return to Japan. The term of the provisional non-governmental agreement on fishery between Japan and North Korea was extended (effective for 2 years) in December 1989.
1. China
(1) Political Situation
The democracy movement that lasted from April to June 1989 a and its armed suppression at Tiananmen Square (the "June 4th incident") had a large impact on China's domestic policy and social conditions. The series of measures and policies that the Chinese leader-ship took in the internally and externally difficult situation that resulted from the incident were generally introvertive and tended toward tighter control. For example, the occurrences in Beijing and elsewhere before and after the June 4th incident were regarded as challenges to government under Communist Party leadership. With a sense of crisis that these upheavals would obstruct economic construction, the cornerstone of the country's reform and openness policies, the importance of "political stability and unity" and of strengthening the ties between the Party and the people were emphasized (Note).
Attributing the main cause of the June 4th incident to the negligence of ideological and political education in recent years, steps were taken to strengthen ideological and political education in schools and workplaces, to introduce 1-year military training for freshmen of the Beijing University and to reexamine registration of the Communist Party members to weed out undesirable members.
China's international image and standing have been seriously damaged by the June 4th incident. However, in January 1990, martial law was lifted in Beijing, and in May the martial law in Lhasa City that had been proclaimed since March 1989 was also lifted. People who had been detained in connection with the June 4th incident were released in stages, and Fang. Lizhi and his wife, who had been in protective custody in the U.S. Embassy since the June 4th incident, were allowed to leave China. These measures are regarded as China's effort to restore its foreign relations.
Chairman Deng Xiaoping, has given up every position by resigning as Chairman of both the Party's and the PRC's Central Military Commission. However, it appears that he has not completely ceased to exercise political influence yet and will continue to play a certain part in promoting the country's reform and openness policies.
As a result of the economic adjustment policy which has been implemented to control inflation since the latter half of 1988, the Chinese economy has moved toward equilibrium through contraction, decreasing its growth rate sharply (Note). However, due to the strengthened austerity program on money and investment introduced in the latter half of 1989, China faced problems such as growing budget deficits and unemployment, and a fall in real national income as industrial production fell and markets stagnated. To cope with these problems, the Chinese Government started to ease the retrenchment slightly from the 4th quarter of 1989. Furthermore, at the 3rd session of the 7th National People's Congress in March 1990, the Chinese Government revealed a plan to shift its focus of economic policy to sustaining moderate economic growth, concentrating investment in the target industrial areas base,,d on an "Industrial Policy," and improving measures to reform the economic structure, while keeping the policy of economic adjustment.
Externally, China reduced its trade deficit through the drastic reduction imports, brouht about by the economic adjustment policy and a steady increase in exports. However, China's international balance of payments is deteriorating as the flow of loans and direct investment from Western countries diminished and a sharp fall in the number of tourists cut back the hard currency revenue from tourism, both as a result of the decline of international confidence in reaction to China's military crackdown of the June 4th incident.
(2) Diplomacy
China appeared to be increasingly alert about the chances of the rapid changes in the Soviet Union and East European countries spreading to itself, but officially maintained the position of non-interference in domestic affairs of other countries. In April 1990 Premier Li Peng visited the Soviet Union and reconfirmed that China-Soviet relations should be promoted according to the 5 principles of peaceful coexistence. China and the Soviet Union signed 6 documents on practical matters including those concerning economic, technological and scientific cooperation and reduction of armed forces stationed along the border.
China's relations with the United States and West European countries chilled after the June 4th incident and have not been restored yet. However, both the United States and China continued their efforts to restore relations. On the U.S. side, former President Nixon (in October 1989), the former Secretary of State Kissinger (in November) and National Security Adviser Scowcroft (in July and December) visited China; President Bush vetoed a legislative bill of sanctions against China and the Pelosi bill (in November); the decision to extend the Most-Favored Nation (MFN) treatment to China was made (in May 1990). On its part, China accepted the re-stationing of VOA correspondents in Beijing (in December 1989), lifted martial law in Beijing and Lhasa (in January and May 1990, respectively), released those who were arrested in the June 4th incident (in January, May and June), and allowed Fang Lizhi to leave China (in June).
As for the relations with neighboring Asian countries, the relations between the Parties of China and Laos resumed when Prime Minister Kaysone of Laos visited China in October 1989. China normalized diplomatic relations with Indonesia in August 1990. As for North Korea, President Kim II Sung visited China in November 1989 and General Secretary Jiang Zemin visited North Korea in March 1990.
Since the June 4th incident, China has demonstrated a positive attitude to reinforcing relations with the Third World countries. PRC President Yang Shang-kun visited the Middle East, and Central and South America (in December 1989 and May 1990), Premier Li Peng visited the Southwest Asian countries (in November 1989), Foreign Minister Qian Qichen visited Africa and the Middle East countries four times (in July and September 1989 and February and March in 1990). In July 1990, China established diplomatic relations with Saudi Arabia. On the other hand, China immediately broke off its diplomatic relations (in August and October 1989 and April and June 1990, respectively) with Grenada, Liberia, Belize, Lesotho and Guinea-Bissau which established "diplomatic relations" with Taiwan.
In its Political Declaration, the Houston Summit held in July acknowledged some of these recent developments in China and expressed expectations for renewed political and economic reform, particularly in the field of human rights in China. The declaration also stated that although the measures put into place at the Arch Summit would be maintained, as modified over the course of the year, the measures would be kept under review for furture adjustments to respond to further positive developments in China.
(3) Relations with Japan
Japan-China relations have developed smoothly since the normalization of diplomatic relations. But the relations have yet to recover completely after the June 4th incident.
The Japanese Government's travel advisory calling for voluntary restraints on visits to China, issued before and after the June 4th incident, was lifted in August, except for visits to Beijing, taking into account the improvement of the situation in China, and as for Beijing, the advisory was withdrawn in September. In the same month, Masayoshi Ito, a member of the House of Representatives (and Chairman of the Parliamentary Japan-China Friendship Association), visited China and discussed the issue with then Chairman Deng Xiaoping and other Chinese leaders. In December, the 5th Japan-China Governmental Consultation on Cultural Exchanges was held in Beijing.
In January 1990, Chinese State Councillor Zou Jiahua (concurrently State Planning Minister) visited Japan as a guest of the Ministry of Foreign Affairs, and the 10th Foreign Ministry Working-Level consultations were held in Beijing in April. At the end of June, the 6th meeting of the Japan-China 21st Century Committee was held both in Beijing and Tianjin with new Committee members. In addition, State Councillor Li Tieying (concurrently State Education Minister) visited Japan as a guest of the International Garden and Greenery Exposition from the end of June to July.
As for economic relations, total trade volume of Japan and China rose to an all-time high of $19,660 million in 1989. But Japan's trade deficit reached $2,620 million, the largest ever, because of the increase in imports from China and decrease of exports from Japan mainly due to China's economic adjustment measures. In 1990, Japan's exports to China decreased and its trade deficit further expanded due to China's further reinforcement of the economic adjustment policy and the weakening of the yuan. Total exports and imports in the first half of the year dropped by 21% from a year before. The amount of direct investment in China sagged by 26% from the previous year in 1989, but in terms of value the investment significantly increased by as much as 49%, indicating a trend toward large-scale investment. Of industrial sectors, the percentage of investment in manufacturing continues to increase from the previous year. At the end of March, the "Japan-China Investment Promotion Organization" was established by private industries. In July, the first meeting of the governmental Joint Committee based on the Japan-China Investment Protection Agreement was held in Beijing.
China has accounted for the largest share of Japan's ODA since 1982. Japan's assistance to China in total led to about \102.3 billion (technological cooperation not included) in 1989. Japan plans to provide China with the 3rd yen loan package in stages to improve China's standard of living and develop its economy.
2. Mongolia
In December 1989, the democracy movement erupted in Mongolia which had already been undergoing a process of reform and innovation. The Mongolian Government responded to the movement by opening a dialogue with the leaders of the movement. The government leadership was replaced completely, and democratization was promoted; a multi-party system was introduced under the enforcement of the Political Party Act, putting an end to the one-party rule by the People's Revolutionary Party; the permanent legislature (Little Khural) was set up and the presidency was introduced. In July 1990, general elections were held with the participation of opposition parties and new assemblymen were elected. Mongolia promoted an open-door policy and enacted the Foreign Investment Law in March. It established diplomatic relations with South Korea in the same month. In May, Punsalmaagiyn Ochirbat, Chairman of the Presidium of the People's Great Khural, visited China, and also visited the Soviet Union with Gombojavyn Ochirbat, Chairman of the Central Committee of the People's Revolution Party, to try to solve pending problems between the two countries. In August, U.S. Secretary of State James Baker visited Mongolia for the first time.
As for its relations with Japan, then Prime Minister D. Sodonom visited Japan for the first time as Prime Minister of Mongolia at the end of February 1990 (it was the first time that a Prime Minister of Mongolia visited a capitalist country), and had a summit meeting with Prime Minister Toshiki Kaifu. During his stay in Japan, the Japan-Mongolia Trade Agreement was signed.
3. Hong Kong and Taiwan
The Hong Kong "Basic Law" was approved at the National People's Congress of China in April 1990. In October 1989, the Hong Kong Government announced large projects to build infrastructures in and after 1997 ($16.3 billion in total), including the construction of the 2nd international airport. It was part of the measures the Government took to cope with anxiety the people have for the future. The construction of the airport is scheduled to start in 1991.
As for the relations between Taiwan and Japan, Taiwanese who visited Japan in 1989 numbered about 500,000, a 27.8% increase over the previous year. The number of Japanese who visited Taiwan also increased by 7.7% to about 1,010,000. The total value of trade between Japan and Taiwan was $24.4 billion (a 5.6% increase), and Japan's trade surplus reached $6.4 billion (a 14.3% increase).
1. Overview
For more than 20 years since the establishment of the ASEAN, each of the ASEAN countries has achieved relatively healthy economic development and is now playing an important role in the maintenance of peace and stability in Southeast Asia. The relations between the ASEAN and Japan have become closer and expanded with improved relations achieved in various areas including politics, economics and culture.
Traditionally, the ASEAN had not been so positive toward Asia and Pacific cooperation activities. However, in the 21st ASEAN economic ministers meeting held in November and December 1989, it changed the policy and agreed to voluntarily participate in the APEC while maintaining the unity and solidarity of the ASEAN. At the same time, the ASEAN is concerned about the possibility of Western countries including Japan becoming too preoccupied with the changes in the Soviet Union and East Europe, and may neglect the Southeast Asia region. This apprehension hi been voiced by Singaporean Prime Minister Lee. In response, Japan, in its efforts to appease such anxiety, made it known at various opportunities such as Foreign Minister Nakayama's visit to Thailand and Malaysia in January 1990 and Prime Minister Kaifu's visit to Indonesia in May 1990 that Japan's aid to East European countries would in no way affect its support to the ASEAN.
In August 1990, Chinese Prime Minister Li Peng visited Indonesia, a visit which normalized China-Indonesia diplomatic relations for the first time in 23 years. This development is likely to bring a direct impact on some other ASEAN countries which have been dissociating themselves from China and as a consequence influence the political environment of Southeast Asia.
Regarding the Cambodian problem which constitutes an unstable factor in the region, various actions have been taken following the international conference held in Paris in. the summer of 1989, such as positive approaches to Indochina by Thailand and informal meetings held by Indonesia. However, in the process, differences between the parties in the ways to deal with the problem have gradually become visible reflecting the difference in their position.
In July 1990, the ASEAN Foreign Ministerial Meeting and the ASEAN Post-Ministerial Conference were held in Indonesia to exchange views on the Cambodian problem, Indochina refugee problem, security of Asian and Pacific region, etc. Japanese Foreign Minister Nakayama participated in those meetings and reiterated Japan's stand to attach importance to its relations with the ASEAN.
2. Thailand
Under Gen. Chatichai Choonhavan's Premiership the domestic situation of Thailand continued to be stable, based on the good relations between the Government and the military as well as the healthy economic performance. Late in 1989, in the face of the resignation of key Cabinet members, and the surfacing of a bribery scandal, etc., Prime Minister Chatichai attempted to strengthen his position on the domestic political scene by appointing Army Commander General Chavalit Yongchaiyudt as Deputy Prime Minister and Minister of Defense in March 1990. Soon after that, however, Gen. Chavalit resigned from the office in June. In addition, the opposition parties called for a nonconfidence vote against the Cabinet. The administration, though rocked by such problems, managed to overcome the immediate difficulties with the nonconfidence motion having been rejected in the end.
The Thai economy continued to expand thanks to, inter alia, increasing exports and a tourist boom, achieving a two-digit growth consecutively from 1988. On the other hand, increased imports of capital goods, raw materials, etc., due to rapid economic growth in the country led to an enlarged trade deficit and gradual increase of consumer prices.
In the area of foreign policy, Thailand continued to put emphasis on the solidarity of the ASEAN and cooperation with Western industrialized democracies. Regarding the Cambodian problem, Thailand participated in the Paris International Conference on Cambodia, together with other ASEAN countries in July 1989. In 1990, Thailand actively took the initiative for the comprehensive settlement of the Cambidian problem, helping to realize the talk between Prince Sihanouk and Hun Sen in February, and the "Tokyo Meeting on Cambodia" in June.
In relations with Japan, Princess Galyani and Foreign Minister Siddhi informally visited Japan in October 1989, followed by Princess Chulabhorn in December. In 1990, Prime Minister Chatichai made an official visit to Japan in April and Princess Maha Chakri Sirindhorn visited Japan as a guest of the International Garden and Greenery Exposition in June. In the meantime, Japanese Foreign Minister Nakayama visited Thailand in January 1990. The "Tokyo Meeting on Cambodia," the idea of which originated from the Japan-Thailand Summit Meeting held during Prime Minister Chatichai's visit to Japan in April and was carried out as a joint project of both countries, is regarded as an epoch-making event in the history of their bilateral relations.
In trade, Japan's exports to Thailand which mainly consisted of capital goods continued to increase in 1989 and Thailand's trade deficit with Japan reached about $3.3 billion. Japanese investments in Thailand seem to be reaching their peak.
3. Indonesia
The domestic situation of Indonesia basically remained stable in spite of controversy over presidential succession, and student demonstrations over the issue of land appropriation, etc. In 1990, the issue of presidential succession came to the fore again and movements demanding correction of disparity in wealth and democratization are underway.
In the area of economy, a series of deregulation packages to promote the export of non-oil and gas products have begun to show their effects. The economic growth rate (GDP growth rate) in 1989 was 7.4% compared to 5.7% in 1988. The value of exports in 1989 was $22.2 billion (the export of non-oil and gas products was $13.5 billion, an increase of $2 billion from 1988) and the value of imports was $16.4 billion. The amount of foreign investment in Indonesia reached $4.7 billion, a 7% increase over the preceding year. The countries and organizations which participated in the Intergovernmental Group on Indonesia (IGGI) meeting held in June 1990 expressed their intentions to extend assistance amounting to $4.5 billion.
In the area of diplomacy, President Suharto continued to be active and visited countries including Yugoslavia where he attended the 9th nonaligned summit conference (September 1989) and the Soviet Union (September). Indonesia also held the 2nd informal meeting at Jakarta in February 1989 in an effort to solve the Cambodian problem.
In 1990, the Indonesian President attended the Conference of Ministers and Governors of the Group of 15 Countries (G15) on South-South consultation and cooperation held in Malaysia in June. In efforts to normalize the diplomatic relations with China, Foreign Minister Alatas visited the country after Japan in July and the diplomatic normalization formally took place on August 8.
Japanese and Indonesian VIPs continued to exchange visits frequently. Prime Minister Kaifu visited Indonesia and had a summit meeting with President Suharto in May 1990, and Foreign Minister Alatas visited Japan in June. As a result, the relations between the two countries have made steady progress.
Japan's imports of manufactured goods grew steadily in response to Indonesia's policy to promote the export of goods besides oil and gas products. As a result, Japan's imports reached $2.2 billion in 1989, a 60% increase over the preceding year. Japan's investment in Indonesia chalked up about $770 million, a 300% increase over the preceding year, placing Japan as the largest investor in Indonesia.
4. The Philippines
As to the domestic situation of the Philippines, the Aquino Administration has completed the process of establishing a democratic political system which started with the promulgation of the new Constitution in 1987 and followed by the reinstatement of the bicameral Congress. In 1989, the Administration continued efforts to reconstruct the economy which was the most urgent problem but it encountered the most serious problem since the start of the Administration caused by a large-scale coup d'etat attempted in December. The Administration tided over the critical situation with support of the U.S. Forces and is continuing efforts to prevent the recurrence of coups after December 1989 and reconstruct the economy based on the declaration of a state of emergency on December 6 and the Law of President's Emergency Powers enacted in cooperation with the Congress (became effective as of December 21 and expired in June 1990).
Economically, the Philippines registered a relatively high growth of 5.7% again in 1989 following 1988, mainly due to the healthy growth of the manufacturing and construction industries. As a result, imports and exports as well as investments from abroad sharply rose. Although the Aquino Administration has been making steady progress in the economic reconstruction of the country, it also has problems such as the slow rate of infrastructure development and frequent power failure due to shortage of electricity supply. Moreover, it still has such economic difficulties as an enormous amount of outstanding external debt, shortage of hard currency, a high unemployment rate, and a great disparity in wealth.
The attempted coup in December 1989 was the 6th and largest one since the inauguration of the Aquino Administration. It was, therefore, said to have a negative psychological effect on foreign investors although the effect is expected to become a reality from late 1990. In addition considerable amounts of time and money are required to recover from the damage caused by a major earthquake in July 1990,further aggravating the country's economic problems.
In the area of diplomacy, a preliminary meeting was held in Manila in May 1990 to decide on treatment of the U.S. military bases in the Philippines after 1991, :which was currently the largest issue pending between the U.S. and the Philippines. The meeting paved the way for a settlement for the time opening the way to formal talks. In the meantime, the Philippine Government was active in foreign relations diplomacy; President Aquino visited Brunei (August), the U.S. and Canada (November) in 1989, and U.S. Vice President Quayle visited the Philippines (September). After December, however, the diplomatic activities lulled as foreign tours of Government officials were suspended on account of the unstable political situation in the country, triggered by the attempted coup.
Japan has maintained the policy of extending the maximum assistance to the Aquino Administration for its nation-building efforts. During the abortive coup attempt in December 1989, Japan expressed its support to the Aquino Administration on the day of the event (December 1). Again on December 7 when the situation was brought under control, Prime Minister Kaifu notified President Aquino that Japan would continue to support her Administration. At the Meeting of the Consultative Group for the Philippines held in Tokyo in July 1989, Japan expressed its intention to provide the Philippines with ODA totaling about \135 billion for fiscal 1989 to realize the Multi-lateral Assistance Initiative (MAI) and fulfilled the promise.
In the private sector, trade and investment between Japan and the Philippines have been steadily growing in value. In particular, Japan's investments in the Philippines jumped by more than 70% in 1989 over the preceding year placing Japan first among countries investing in the Philippines.
5. Malaysia
The crisis related to the existence of United Malay National Organization (UMNO), the leading party in the coalition of majority parties (Note), was overcome under the leadership of Prime Minister Mahathir (President of UMNO), and Malaysia's internal politics remained stable in 1989. The Communist Party of Malaya, (CPM), which had been a threat to the public peace and order since before independence as it undertook guerrilla warfare, was active only in the border area between Malaysia and Thailand in recent years, and agreed to end its armed conflicts according to the agreement between the Malaysia and Thai governments and CPM.
Malaysia has designated the year 1990 as 'Visit Malaysia Year" and is trying to attract foreign tourists by holding various events.
Economically, Malaysia's trade surplus was reduced because of a sharp increase in imports. On the other hand, the actual GDP growth in 1989 continued at a healthy rate of 8.5% thanks to expanded foreign investments (increasing by 69% in 1989) and domestic demand. As the year 1990 falls on the last year of the new economic policy which sets forth two major objectives of eradicating poverty and restructuring the society, an economic advisory committee organized by representatives of various sectors and ethnic groups is currently preparing a report on economic policies for 1991 and after for the Government.
Malaysia was active in the area of diplomacy as a non-permanent member of the United Nations Security Council (term: 1989-1990) and as the host country of the British Commonwealth summit meeting held in October 1989 and the G15 summit meeting held in June 1990.
In January 1990, Foreign Minister Nakayama visited Malaysia. In response to the "Look East Policy" (Note), Japan has been actively cooperating with Malaysia by accepting students and technical trainees.
Japan is also the largest trade partner and investor in Malaysia. Particularly, aided by the Malaysian Government's policy to attract foreign investment, Japanese investment in Malaysia has been growing significantly (a 90% increase in 1989 over the preceding year according to a Malaysian source).
6. Singapore
Regarding internal politics, Prime Minister Lee Kuan Yew announced that he would vacate his post in favor of First Deputy Prime Minister Goh Chok Tong by the end of 1990 and movements of internal politics relating to the change of regime should be watched.
In the economic area, while export demand sagged at the start of 1989 due to economic stagnation in developed countries. The manufacturing sector was sluggish but banking and service industries registered healthy performance. All told, Singapore achieved economic growth of 9.2% for the entire year of 1989.
In the area of foreign relations, Singapore announced in August 1989 that it was ready to accommodate U.S. military facilities if it would contribute to the continued presence of the U.S. military bases in the Philippines. The announcement received mixed reactions from countries concerned including its neighboring countries. In October, the Singaporean Government revealed that it had agreed with the U.S. on an increased use of the military facilities in Singapore by the U.S. armed forces. The prevailing views are that other ASEAN countries will approve of the agreement in that it only allows the U.S. forces to expand the use of Singaporean military bases beyond the current use.
The relations with Japan continued to be favorable, highlighted by constant high-level official dialogues including Second Deputy Prime Minister Ong Teng Cheong's visit to Japan in May 1990 and Foreign Minister Nakayama's visit to Singapore in July to attend the 2nd APEC meeting.
7. Brunei
The domestic situation remained stable thanks to healthy economic conditions. Nevertheless Brunei Government realizes the vulnerability of Brunei's economy which depends solely on oil and natural gas production and is considering an effective use of natural resources and development of various industries.
Brunei's diplomacy has been centering on relations with ASEAN countries. It has been making efforts to strengthen relationship with the other ASEAN countries, for instance, by inviting heads of ASEAN countries to the coming-of-age ceremony of the first prince held in August 1989.
The relations with Japan remained stable, and H.M. Sultan Haji Hassanal Bolkiah paid an unofficial visit to Japan in August 1989.
8. Vietnam
Regarding its internal situation, Vietnam continued to pursue its "renovation (Doi Moi)" policy, centering on economic reforms. This included the abolishment of the subsidy system introduced under the socialist government, an attempt to cut back the accumulated budget deficit. Vietnam also succeeded in containing its astronomic inflation by adopting tight monetary policy as well as the introduction of a floating exchange rate system, etc. Activities in the private sector and some other areas were vitalized as a result of its deregulation and open-door policy, while some national enterprises have been compelled to suspend operations due to obsolete technology, on the other hand, discharge of military personnel due to reduction of military forces has created a serious unemployment problem in the country. Faced with the changes in the Soviet Union and Eastern Europe on the one hand, and the monopoly of power by the Communist Party on the other, it made very clear that political pluralism cannot be tolerated in Vietnam. Vietnam stuck to the one-party rule by the Vietnamese Communist Party and continued to refuse political pluralism, while maintaining the "renovation" policy. In this context, at its Plenum held in March 1990, the central committee of the Vietnamese Communist Party removed Tran Xuan Bach as a member of the Party's Politburo and, Secretary of the Party, who advocated the introduction of political pluralism after the democratization in Eastern Europe.
In the area of external relations, Vietnam announced that its troops had completed withdrawal from Cambodia by the end of September 1989, but it is yet to be verified internationally. In early 1990, China showing a more conciliatory attitude toward the improvement of Sino-Vietnamese relations, the third meeting at vice-minister level was held in Beijing in May, followed by the first visit by a high-ranking Chinese official (Assistant Minister for Foreign Affairs) to Vietnam since 1979 for the fourth bilateral meeting in July. Nevertheless, the settlement of the Cambodian problem continued to constitute the key to improvement of Vietnam-China relations, and no positive progress has been observed yet. In addition, the changes in the Soviet Union and Eastern Europe have necessitated the adjustment in party-to-party relattions as well as government-to-government relations between those socialist countries and Vietnam.
Vietnam's relationship with Japan has been stagnant since the military invasion of Cambodia by Vietnamese troops at the end of 1978. There has been, however, a steady rise in the exchange of visitors, not only at a government level for political dialogue but also in the field of culture and science. Trade between the two countries has grown steadily in recent years, albeit at a low level. Vietnam's exports to Japan expanded to a level twice its imports from Japan.
9. Laos
In terms of the internal situation, Laos continued to place the greatest emphasis on its economic reconstruction and various economic reforms were promoted. The first plenary session plenum of the Lao People's Supreme Assembly following the general elections held in June 1989, the Criminal Law, Criminal Procedures Law, People's Court Law and People's Judiciary Institute Law were enacted in November. The drafting of a new constitution has been expedited to complete it in time for its promulgation by the end of 1990. At the 9th plenary session of the 4th Party Central Committee held in January 1990, the central committee of the Lao People's Revolutionary Party, while expressing its surprise with the radical changes in the Soviet Union and Eastern Europe, confirmed to continue implementation of various reforms under the party's leadership.
In the area of foreign policy, there has been no change in the country's basic policy to strengthen relations with Vietnam, Cambodia (the Heng Samrin Administration), the Soviet Union, and other socialist countries. Its relations with Thailand and China were improved .Chairman of the Council of Ministers, Kaysone Phomvihane visited China in October 1989 and Princess Maha Chakri Sirindhorn of Thai-land visited Laos in March 1990. At the same time, Laos made efforts to improve its relations with advanced democracies including Japan and signs of improvement were rated in relations with the U.S.
Relations with Japan remained stable, centered on economic cooperation. In particular, Prime Minister Kaysone's visit to Japan not only marked this first visit to Japan since the establishment of the new Lao Administration but his first visit to an advanced democratic country. In August 1990, Foreign Minister Nakayama visited Laos as the first Japanese Cabinet member to do so since the founding of the Lao People's Democratic Republic.
10. Myanmar
After taking over full power in a coup d'etat of September 1988, the Saw Maung regime pledged to hold general elections under a multi-party system and made necessary preparations including the enactment of the election law. General elections were held on May 27, 1990, as promised.
A total of 2,296 candidates representing 93 parties ran for the elections and staged vigorous election campaigns. National League for Democracy (NLD) led by Aung San Suun Kyi (Note) won far more than a two-third majority (392 out of 492 seats) helped by the overwhelming popularity of the leader throughout the country. On the
other hand, the National Unity Party (NUP), formerly the Burma Socialist Program Party which was the only party under the Ne Win regime, suffered a crushing defeat.
The Government has repeatedly announced that when a new constitution is established and a new government is organized based on the constitution, it will yield power to the new government. However, the regime has presented neither a timetable nor a modality as to when and how a new government shall be created, thus the outlook is still uncertain. Japan welcomed the holding of the general elections and expressed its hope for smooth transfer of power at an early date.
Japan recognized the Saw Maung Government in February 1989 and resumed economic assistance to Myanmar step by step, starting from feasible projects which had been already started and were suspended afterwards under the nation-wide unrest of the country in 1988, while awaiting the extending of new assistance for the time being.
1. Overview
Notable among various developments during the past year was the spread of changing tides in the international community, i.e., changes in East-West relations to South Asian nations, which was compelling their responses. In the background of the recent Kashmir situation and a rise of democratization movements in Nepal, for example, exists the influence of the progress in East-West relations accompanied by the progress of East European movements for democratization and the upsurge of democratic movement in the republics with in the Soviet Union. Amid the progress in the West toward the integration of the EC scheduled for 1992 and the development in the east of the Asia-Pacific cooperation and the progress of the ASEAN South Asian nations seem to have apprehensions about being left behind of the new international tides and are groping for ways to respond.
Such transformation in the situation surrounding South Asia has produced changes in a widely recognized traditional pattern of confrontation between the coalition of India and the Soviet Union versus that of Pakistan, China and the United States. The visit of then Prime Minister Rajiv Gandhi of India to China in December 1988 (the first visit by an Indian Prime Minister in 34 years) was one indication of such changes. Both India and Pakistan have been subtly changing their relations with the United States, China and the Soviet Union. Also the significance of Pakistan as a front-line country of the West is lessening as the Soviet Union completed withdrawal of its troops from Afghanistan in February 1989. In 1990, tensions intensified between India and Pakistan over the Kashmir problem, the biggest pending issue between the two countries since their independence. This, together with concern over the capability of the two countries to develop nuclear weapons, raised concern of the international community. India and Pakistan are now holding dialogue on this issue, and its future development warrants attention. (See Chapter II, Section 1, Item 3 for the Kashmir problem.)
In his visit to Asian countries from April 28 to May 6, 1990, Prime Minister Toshiki Kaifu visited India, Bangladesh, Pakistan and Sri Lanka (also visited Thailand and Indonesia before and after his visit to South Asia respectively) and exchanged views on various issues with the leaders of each country, achieving significant results. As a visit by the Japanese Prime Minister to South Asia, it was the first in 6 years for India and Pakistan, the first in 33 years for Sri Lanka, and for Bangladesh the first ever since its independence. The Prime Minister made a policy speech before the Indian Parliament, and declared that Japan intended to continue its support for political stability and economic development of South Asia through dialogue and cooperation, and that Japan would aim to give further depth and breadth to its relations with South Asian countries as a fellow country in Asia by implementing the "International Cooperation Initiative" in concrete terms for the region, etc.
Furthermore, Prime Minister Kaifu strongly called for a peaceful solution of the Kashmir problem through self-restraint and dialogue in his meetings with the Indian and Pakistani leaders respectively. Both countries, basically, showed readiness to make further efforts for improving the relations between the two countries. Prime Minister Kaifu also appealed to the leaders of the two countries to become party to the Treaty on the Non-Proliferation of Nuclear Weapons.
2. India
In November 1989, India held a general election for the Lower House, House of the People. Then ruling party, Indian National Congress (Indira faction) led by Prime Minister Rajiv Gandhi was defeated, and the National Front, a coalition of opposition parties led by V.P. Singh came into power. The defeat of the ruling party was attributable to successful coordination in fielding candidates by the opposition parties and a decline in popular support by alleged bribery in the Government over defense procurement, inept response to the confrontation between Hindus and Muslims over the Babri Masjit problem (Note) and a sharp rise in consumer prices.
The Singh Administration set forth a foreign policy to improve relations with neighboring countries and a policy to maintain economic liberalization of the preceding administration, and to give priority to agriculture and small-scale industries. While it has successfully improved relations with Nepal and Sri Lanka, many of the economic policies are still to be developed and implemented. Meanwhile, the foundation of the National Front Administration is not solid, as power struggles occasionally surface within Janata Dal, the core party of the National Front, and furthermore, the National Front does not hold the majority by itself in the House of the People and obtains support in the form of outside-the-Cabinet cooperation from the right-wing Bharatiya Janata Party (Hindu supremacist party) and left-wing communist party (advocating command economy).
Also, the Kashmir problem as well as activities of Sikh extremists demanding independence of Punjab present India with many difficult issues.
3. Pakistan
The Benazir Bhutto Administration, which started in December 1988, enjoyed expectation from the people in the beginning. It reinforced friendly relations with China and the United States, both of which traditionally enjoyed close relations with Pakistan, and successfully secured U.S. assistance in FY1989 despite the foreseen difficulty due to Pakistan's alleged possession of nuclear weapons. Regarding relations with India, the Bhutto Administration created conducive environment for better relations with India by building personal trust with Indian Prime Minister Gandhi. Furthermore, in October 1989, Pakistan was able to realize its long-standing wish to join the Commonwealth of Nations with the consent of India.
However, Prime Minister Bhutto's Pakistan People's Party (PPP) did not possess the majority in the National Assembly. Also, both the government and assembly of the influential Punjab Province, which accounts for nearly half of the total population as well as half of the agricultural output, the main industry in Pakistan, were controlled by the opposition party, Islamic Democratic Alliance (IDA). All these made the management of domestic affairs difficult all the time. In terms of economic policy, the administration could not hammer out effective policies on reducing fiscal and trade deficits and on rising unemployment. Although a vote of nonconfidence against Prime Minister Bhutto motioned by the opposition parties in November 1989 was rejected by a small margin, her political base was reportedly becoming all the more unstable through events such as confrontation with the opposition-controlled provincial governments such as in Punjab, antagonism with the military over the delegation of authority as uprisings in the Sind Province intensified, and tension with India over the Kashmir problem. In addition, there were views that public distrust for politics was deepening due to alleged bribery among the Prime Minister's close associates and senior officials of the government and the party.
Under these circumstances, President Ishaq Khan dissolved the National Assembly in accordance with constitutional procedures to dismiss Prime Minister Bhutto and her cabinet, announced to hold a general election on October 24, and appointed Mustafa Jatoi, the leader of the Combined Opposition Parties (COP), as Prime Minister of an interim government.
The interim government announced the intention to investigate alleged wrongdoing such as bribery by the former Bhutto Administration. On the other hand, former Prime Minister Bhutto expressed her intention to file a lawsuit claiming that the measures taken by the President were unconstitutional, while announcing her confidence in the victory of the PPP if a general election would be held.
4. Nepal
Since 1961 , Nepal was governed by the King based on a system called the rastriya (national) Panchayat without political parties. However, since January 1990, the Nepali Congress and communist parties, etc., intensified their movements demanding democratization. On April 6, a mass demonstration with reportedly more than 100,000 people took place in the capital city of Kathmandu. Under such circumstances, King Birendra announced a constitutional amendment to delete the provisions banning activities of political parties. As a result, in place of the cabinet under the national Panchayat, the Bhattarai Government was formed by a coalition of the Nepali Congress and communist parties, etc. This is an interim government whose main objectives are to draft a new Constitution and to hold a general election. The introduction of party politics is a fundamental political change in Nepal. How this democratization proceeds hereafter in concrete terms, including roles and functions of the imperial household under the new Constitution, warrants attention.
Meanwhile, the Indo-Nepalese treaties on commerce and transit expired in March 1989 after negotiations to revise these treaties came to a deadlock, producing adverse effects for Nepal such as difficulty in obtaining essential commodities. In June 1990, after the Bhattarai Government came into being, Nepal reached an interim agreement with India to restore status quo ante in their relations including commerce and transit issues, thus improving its relations with India.
5. Sri Lanka
In May 1989, reconciliation was reached between the government and Tamil extremists, the Liberation Tigers of Tamil Eelam (LTTE). Against this backdrop, the Sri Lankan Government requested the withdrawal of Indian troops which had been sent for keeping security and suppressing radical groups. India, in response, completed the withdrawal of its forces at the end of March 1990. The government and the LTTE were engaged in dialogue until June, when armed conflict between the two resumed in the northern and eastern provinces of the country and is still under way. The issues which need to be addressed hereafter include an early settlement of the conflict, adjustment of relations with India according as the situations in the northern and eastern provinces worsen, and the conclusion of a peace and friendship treaty with India which defines a framework of relations between the two countries. Also, international concern is expressed on human rights over the suspicion of the government's extrajudicial crackdown on the People's Liberation Front (JVP), a Sinhalese radical group, and how the situation improves attracts attention.
6. Bangladesh
With no signs of coalition developing among the opposition parties, there seems to be no political power challenging the Ershad Administration. In March 1990, all opposition parties took part, albeit informally, in an election for chairmanship of Upozila (county) councils, and this was perceived as a relatively free and fair election both at home and abroad. From now on, attention will be focused on how domestic politics, including activities of the opposition parties, will develop toward a presidential election scheduled most likely in May 1991 and a parliamentary election in March 1993 upon expiration of the current term.
1. Australia
Between 1988 and 1989, the Australian economy recorded healthy growth fueled by strong primary commodity markets and other factors. However this economic growth was achieved largely by domestic demand, and as a result, serious economic problems such as large deficits in the current account and an increase in external debts have surfaced. Furthermore, a prolonged strike of domestic airline pilots that started in August 1989 considerably reduced revenues from tourism, which was the largest hard currency. earning sector in 1988. Thus the loss of revenue in this sector dealt a real blow to the entire economy. The Hawke administration tackled these problems by implementing a policy package to boost economic efficiency and improve competitiveness of export as well as import substitution industries, including control of domestic demand by a high interest rate and tight money policy, stabilization of exchange rates, and reduction of labor costs. However these measures hurt the well-being of people, and public discontent over deteriorated living standards has alienated longtime supporters of the Australian Labor Party (ALP).
As a prelude to the federal general elections, general elections were held in South Australia in November 1989, and in Queensland in December. The ALP won both of the elections. However, the ALP faced an uphill battle in South Australia where the federal government's economic policy and high interest rates became major election issues.
Under these circumstances, Prime Minister Hawke decided to hold the federal general elections to take advantage of differences among the opposition parties in major issues such as public health and confusions in personnel affairs, as well as sharply declining popular support for opposition coalition leader Peacock. In the elections held on March 24, the ALP emerged victorious helped by lack of effective alternative policy proposals by the opposition parties as well as lack of effective leadership on the part of opposition leaders. As a result the Hawke administration has become the second longest government in the history of Australian politics.
As a primary goal of the government in its fourth term, Prime Minister Hawke has set forth further advancement of the ongoing economic structural reforms. The government has embarked on industrial restructuring, development of flexible labor markets, and other progressive reforms to reinforce international competitiveness of the Australian economy.
In the area of diplomacy, the Hawke Government has been maintaining solid relations with the U.S. founded upon the ANZUS Treaty and is making efforts to expand relations with Japan - its largest trade partner - and other countries in the Asia-Pacific region, while making efforts for the maintenance of stability in the South Pacific region through economic and defense assistance to the Pacific nations.
In particular, the country has recently been stepping up its effort to reinforce relations with Asian countries, and in November 1989, the "Garnaut Report" to propose measures to reinforce relations between Australia and Northeast Asian countries was prepared at the request of Prime Minister Hawke.
In addition, Australia has actively taken various initiatives in diplomacy. In September 1989, the country hosted the Government-Industry Conference against Chemical Weapons bringing together about 70 countries. It was the first conference reduction of chemical weapons attended by Government officials and industry representatives. Also in November, the Asia-Pacific intergovernmental conference initiative proposed by Prime Minister Hawke in January was realized as the first ministerial meeting of the Asia-Pacific Economic Cooperation (APEC) which was held in Canberra with participation of Japan, the Republic of Korea, ASEAN countries, the U.S., Canada, and New Zealand. Then in November 1989, Australia submitted a new proposal for a peaceful settlement of the Cambodian problem.
Regarding relations with Japan, following the agreement to develop a "constructive partnership" at the 10th Japan-Australia Ministerial Committee held in January 1989, the scope of cooperation between the two countries has expanded steadily, ranging from cooperation in assistance to the Pacific island nations, cooperation in the Cambodian peace process, to Japan's participation in the Government-Industry Conference against Chemical Weapons and the ministerial meeting of APEC. Also the bilateral relations at the grass-roots level has been growing as seen in a "Japan-Australia Lifestyle and Cultural Exchange Initiative," the first-year implementation of which took place in Japan in the autumn of 1989.
Finally, in the area of human exchanges, rapid growth in the number of Japanese tourists to Australia and frequent visits of high-level Government officials between the two countries have been observed, and they also point to steady development of Japan-Australian partnership.
2. New Zealand
In August 1989, Prime Minister David Lange resigned as a result of discord within the Labor Party over economic policy, and was succeeded by Deputy Prime Minister Geoffrey Palmer. Although the new Prime Minister is making efforts to reunite the divided ruling party while following the ongoing economic reform policy, not much improvement has been seen in high unemployment rates and other economic problems. Despite the reshuffling of the Cabinet in February 1990, the ruling Labor Party has been lagging far behind the opposition National Party at public polls, except for a short period of time immediately after appointment of the new Prime Minister, and attention is required for an outcome of general elections scheduled for October.
In the area of diplomacy, New Zealand promoted trade liberalization with Australia by implementing full liberalization of manufactured goods in all sectors by June 1990, far ahead of the originally scheduled 1995 under the agreement on closer economic relations with Australia. Also, New Zealand decided to purchase two frigates from Australia, indicating its intention to step up security relations with Australia.
While Prime Minister Palmer acknowledged the continuation of the previous administration's "non-nuclear" policy, he bas been making efforts to ease strained relations with the U.S. and in March 1990, a meeting between External Relations and Trade Minister Moore and U.S. Secretary of State Baker was held for the first time in four years. Nevertheless, the United States is still suspending its security commitments to New Zealand due under the ANZUS Treaty.
In the area of foreign trade, New Zealand places top priority on trade liberalization of farm products. At the GATT Uruguay Round negotiations, as a member of the Cairns Group which represents agricultural export countries it has been vigorously advocating trade liberalization such as reduction of subsidies.
As for relations with the Pacific island nations, a review was conducted following a task force report on policies toward Pacific island nations published in June 1990.
Regarding relations with Japan, while criticism was aired in news media on account of the driftnet fishing issue in late 1989, Prime Minister Palmer made an official visit to Japan in July 1990 - the first visit by a New Zealand Prime Minister in nine years - and the two countries agreed on further advancement of friendly and cooperative relations, including the exchange of visitors and cooperation in the field of environment.
3. Pacific Island Nations
The Pacific island nations are still vulnerable in economic and social areas because of their geographical setting, with some political fluidity as seen in disturbances in Bougainville Island of Papua New Guinea, and domestic problems in Fiji after the proclamation of a new Constitution.
The island nations are strengthening their solidarity under regionalism and taking unified stands on fishery issues. In particular, in the issue of driftnet fishing for albacore tuna on the high seas in the South Pacific, they and Australia and New Zealand drafted the Convention for the Prohibition of Fishing with Long Driftnet in the South Pacific (which is not yet in force as of July 1990). Some of the countries actively criticized Japan and Taiwan for their driftnet fishing. Japan's position has been that countries concerned should cooperate for the conservation, management and effective utilization of albacore resources on scientific grounds. From that position, Japan has been making efforts to obtain understanding of Pacific nations on Japan's driftnet fishing, and has been actively participating in the Consultations on Management Regime for Southern Albacore Resources with the countries concerned. (The first meeting in November 1989, and the second meeting in March 1990). Then in July 1990, Japan decided to suspend driftnet fishing in the South Pacific from the 1990/91 fishing season (around November 1990 through April 1991), one year in advance of the date of cessation of the driftnet fishing in the South Pacific stipulated in the U.N. Resolution as no later than July 1, 1991. (Note)
Japan made this decision, taking into account, in particular, grave concerns the South Pacific island countries still had with the driftnet fishing in the region, as these countries, whose economic base depended, to a large extent, on marine resources, had strong intentions to develop the albacore fishery for their own economic developments in the future. Through this decision, Japan wished to further promote good relations with the South Pacific island countries.
Regional cooperation through international organizations such as the South Pacific Forum (SPF) and the South Pacific Commission (SPC) has been contributing much to the peace and development of this region, and Japan has been actively participating in the Post-Forum Dialogue between SPF and non-member countries which started in 1989.
Note: Third-generation South Korean residents in Japan are those ROK nationals who were born after January 17, 1971, and who have since lived in Japan. They are descendants of South Koreans who were ensured to live in Japan permanently based on Article 1.2 of the Agreement on the Legal. Status of South Korean Residents in Japan.
Note: The "decision on reinforcement of relations between the Party and the people" was adopted at the the 6th plenary session of the 13th Central Committee of the Chinese Communist Party in March 1990, and Prime Minister Li Peng also stressed stability in his report on the government's activities at the 3rdsession of the 7th National People's Congress (March to April).
Note: GNP growth rates dropped from 10.8% in 1988 to 3.9% in 1989.
Note: The UMNO had its legal position as a political party negated by a court in a lawsuit over the election of party leader in February 1988.
Note: The policy was proposed by Prime Minister Mahathir in 1981 to develop human resources by learning from the development, in particular work ethics of Japan and of the Republic of Korea.
Note: Daughter of General Aung San who is a founding father of the nation and thus national hero among the people of Myanmar. She has been under house arrest since July 1989 because of alleged violation of the national law and regulation. She was not allowed to run for the general elections as she was disqualified for the candidacy.
Note: Controversy was aroused by the plan to construct a Hindu temple on the site of Babri Masjit, an Islamic mosque.
Note: This measure will be continued until such time as appropriate conservation and management arrangements for South Pacific albacore tuna resources as referred to in the U.N. Resolution are entered into, and appropriate regulatory measures for driftnet fishing are established under such arrangements by the parties concerned.