1996 Diplomatic Bluebook

Regional Developments

Asia and the Pacific

The People's Republic of China and Vicinity

China is pushing forward with its reform and open policies under the banner of a "socialist market economy." The country enjoys remarkable economic growth (10.2% in 1995), yet faces a number of problems, including inflation, widening regional gaps, and difficulties experienced by state enterprises and the agricultural sector.

China's foreign policy is based on the understanding that a peaceful and stable international climate and friendly relations with other countries are essential for its economic construction. Relations with the United States suffered a temporary setback after Taiwan's leader, Lee Teng-Hui, visited the U.S. in June 1995, but have since tended to improve, as seen, for instance, in the fact that the leaders of the United States and China held a Summit Meeting in October of the same year.

Prime Minister Tomiichi Murayama visited China in May 1995, which was the 50th year since the end of the war, and this proved an excellent occasion for a frank exchange of views on many subjects. On the margins of various meetings such as the U.N. General Assembly and APEC, the two countries' leaders and foreign ministers frequently met to continue their dialogue and reaffirmed the intention of both countries to develop closer relations, with a view to the future. Still, in light of China's two nuclear tests, Japan made a decision in August to freeze in principle the provision of grant aid to China. With regard to the Taiwan question, Japan has called on both parties to resolve their differences peacefully, to ensure peace and stability in East Asia.

Negotiations between the United Kingdom and China on the question of Hong Kong's return to China showed signs of improvement. Taiwan is moving ahead with democratization, and is using its strong economic position in the world economy as a lever to strengthen its relations with foreign countries and participate in international organizations. Mongolia is making steady progress toward democracy and a market economy.

The Korean Peninsula

There has been no substantial change in the situation of the Korean Peninsula, where the military forces continue to face each other across the demilitarized zone. In June 1995, the Republic of Korea and North Korea agreed that the former would provide the latter with a grant of 150,000 tons of rice, as a first installment. However, delivery of the rice, completed in October, has not yet led to improvement in North-South relations.

With a view to solving the issue of the nuclear weapons development in North Korea, further efforts were made in 1995 to implement the provisions of the U.S.-North Korea Agreed Framework. It is hoped that North Korea's continued cooperation with the Korean Peninsula Energy Development Organization (KEDO), which was established in March, would lead to settlement of the said issue and improvement in North-South relations. (For further reference on North Korea, see Chapter I, Part C.)

In the Republic of Korea, local elections were held in June 1995 and opposition parties and candidates without party affiliation gained considerable ground, bringing difficulties to the ruling party. At the end of 1995, the political scene was marked by major developments. A former president, Roh Tae Woo, was arrested under suspicion of having accepted bribes related to the question of secret funds. Another former president, Chun Doo Hwan, was also arrested in connection with the so-called military purge and coup-d'etat in 1979.

In the second half of 1995, the relations between Japan and the Republic of Korea went through a difficult period in connection with the perception of history. However, the frank exchange of views during the bilateral Summit and Foreign Ministers' meetings, held at the time of the APEC Meetings in Osaka in November, provided an opportunity for the development of forward-looking relations between the two countries.

Southeast Asia

Many of the countries of Southeast Asia, especially the Republic of Singapore, Malaysia, Thailand and Indonesia, continue to enjoy high economic growth, with a corresponding increase in investment opportunities and intra-regional trade. Mainly through activities in the Association of South East Asian Nations (ASEAN), Southeast Asian countries are actively pursuing cooperation and dialogue among themselves and in the wider Asia-Pacific region, particularly within APEC and the ASEAN Regional Forum (ARF). These countries also show a keen interest in establishing new forms of inter-regional cooperation, as is seen in the proposal to hold the Asia-Europe Meeting (ASEM) in March 1996.

Also of note is the ongoing movement to expand ASEAN; in July, Viet Nam joined ASEAN, Cambodia obtained observer status and Myanmar applied for observer status. In December 1995, leaders from Cambodia, Laos and Myanmar joined the rest of the Southeast Asian leaders gathering for the Fifth Meeting of the ASEAN Heads of Government in Bangkok, Thailand - the first time that all ten Southeast Asian leaders gathered for a summit meeting. During the ASEAN summit, discussions focused on the need to further enhance regional cooperation across the broad spectrum of politics, security and economy, etc.

The three countries of former Indochina (Viet Nam, Laos and Cambodia) are promoting economic reforms toward a market-oriented economy, in their attempt to be part of East Asia's dynamic economic development. Recognizing the need to promote well-balanced development in the entire region, Japan hosted the Ministerial Meeting of the Forum for Comprehensive Development of Indochina in Tokyo in February 1995.

In Myanmar, Ms. Aung San Suu Kyi was released in July, after six years of house arrest starting in July 1989. In view of such signs of progress, Japan reviewed part of its economic assistance policy to Myanmar. At the same time, Japan has continued dialogues with the Government of Myanmar and called strongly and persistently on the Government to advance democratization and to improve the human rights situation in Myanmar.

During 1995, Japan continued to promote cooperation with the countries and areas of Southeast Asia. In August, Minister for Foreign Affairs Yohei Kono participated in the ARF Meeting and ASEAN Post Ministerial Conferences held in Brunei, and also visited Thailand and Cambodia. Furthermore, in November, consultations were held during the APEC Meetings in Osaka.

Southwest Asia

There are a number of destabilizing factors in this region, including the Kashmir issue and suspected development of nuclear weapons by India and Pakistan. On a positive note, as a result of economic liberalization policies adopted in India and other countries of the region, economic ties with other regions have been strengthened. India and Pakistan are showing interest in participating in Asia-Pacific regional cooperative frameworks, such as APEC and ARF, and India became an ASEAN Dialogue Partner in December 1995.

Japan is strengthening its relations with the countries of this region. In 1995, the foreign ministers of Nepal, Bangladesh and India visited Japan, and Prime Minister Mohtarma Benazir Bhutto of Pakistan also paid a visit to Japan in January 1996.


The South Pacific Forum (SPF), which is composed of Australia, New Zealand and 14 Pacific Island countries and areas, has consistently expressed strong opposition to the recommencement of France's nuclear testing in French Polynesia. In this way, SPF members have exhibited a strong sense of unity and purpose. Japan's resolute opposition to France's nuclear tests has further enhanced relations between Japan and SPF members, which were already good as a result of Japan's economic cooperation with the region. High appreciation for Japan's contribution was expressed in a communique issued during the SPF Leaders' Meeting in September.

Prime Minister Tomiichi Murayama and Prime Minister Paul Keating of Australia, during the latter's May 1995 visit to Japan, issued a Joint Declaration extolling the enduring and steadfast Japan-Australia Partnership.

North America

As described in greater detail below, both United States and Canadian domestic politics have been confrontational, giving credence to the observation that the political situation in each country is presently in transition. Domestic problems forced both President Bill Clinton and Prime Minister Jean Chreien to postpone their respective visits to Japan. It was notable that their domestic situations had repercussions on their relations with Japan.

In the United States, the 1994 election brought a historic victory to the Republican Party, giving it majority control over both Houses of Congress for the first time in 40 years. However, there were growing concerns among American people that the Republicans were going too far. Support for President Clinton (Democratic Party) began to rise in turn, in part because of such diplomatic accomplishments as the Middle East peace process and agreements on a cease-fire and peace in Bosnia.

When the new Congress convened in January 1995, the Republicans showed unity and the will to act by deliberating and passing, with exceptional speed, legislation related to the Contract with America (announced in September 1994, a list of political agendas proposing small government which were to be carried out in the first hundred days of Congress, once the Republicans had gained a majority in the House of Representatives). In his State of the Union speech at the beginning of the year, President Clinton reaffirmed a moderate approach, while at the same time clearly stating that he would fight Republican policies which he judged were going too far.

During the second half of 1995, the focus of American politics turned to the budget and budget-related legislation. The Republican Party pushed forward with one of its main objectives, achieving a balanced budget in seven years. President Clinton proposed a more moderate approach to balance the budget in ten years. Getting the President to agree on the urgent need to balance the budget was a significant success for the Republican Party. However, confrontation between the two parties deepened when the President and Democratic members of Congress criticized the Republican members for going too far in their attempts to cut the highly popular Medicare (health insurance for the elderly) and Medicaid (medical assistance for low-income persons). With each side refusing to back down, not one of 13 expenditure-related bills was passed before the start of the new fiscal year (October 1995 to September 1996). Debate continued while Continuing Resolutions (short-term spending measures) were passed, but deadlock led to an unexpected situation in which the Federal Government shut down twice (once in November, and once in late December to early January). The Clinton Administration finally agreed to balance the budget in seven years, but no agreement was reached on how this would be accomplished.

The presidential election in November 1996 has a strong bearing on this political situation. With primaries in individual states to select the presidential candidates for each party to begin in early 1996, election campaigns are heating up for the challenging Republican candidates and for President Clinton in his bid for re-election. Also noted is the movement to establish a third party and attempts to move beyond the bounds of the two party system.

Elections for the House of Representatives and the Senate will be held at the same time as the presidential election. Of interest here is whether the Republicans will maintain their majority, or whether the Democrats will win back control of at least one of the two Houses. As a record number of incumbent Senators (eight Democrats and four Republicans as of the end of 1995) have announced that they would not seek re-election, it is difficult to foresee the results of the elections.

The U.S. economy faltered somewhat in the first half of 1995, but has expanded moderately in the second half of the year. Employment has also expanded gradually. Consumer prices have generally remained stable. The favorable economic situation has boosted tax revenues. That, coupled with efforts to cutback government expenditures, has lowered the deficit for FY1995. The deficit has gone down for three consecutive years, the longest consecutive decline in the deficit since the era of President Truman. However, as stated above, the confrontation between Congress and the Administration over the budget continues.

During 1995, the United States played an active role in a number of foreign policy issues, the most notable of which included the quest for peace in Bosnia and the Middle East, Northern Ireland, policies with regard to Viet Nam, and indefinite extension of the Nuclear Non-Proliferation Treaty. U.S. foreign policy has four main pillars (Secretary of State Warren Christopher's testimony to Congress): 1) maintaining U.S. involvement and leadership in the international community; 2) building constructive relations with other major powers of the world (Western Europe, Japan, China and the Russia Federation); 3) strengthening institutions required to build an open society and market; and 4) the protection of democracy and human rights.

In 1995, key persons within the Clinton Administration have often stressed the importance of U.S. leadership in foreign affairs. A number of U.S. diplomatic successes resulted from that leadership. The Clinton Administration stated with pride that 1995 was the best year since the end of the Cold War (Secretary of State Warren Christopher). On the other hand, the Administration had more friction with Congress, controlled by a Republican Party that was becoming more inward-looking, over how multilateral diplomacy should be conducted and how the United States should address post-Cold War issues

In Canada, the Liberal Government led by Prime Minister Chreien focused on what it termed the country's two most important issues, job creation and deficit reduction. This approach has been well received by the public and has brought stability in the political arena. One controversial issue was that of Quebec. In the provincial referendum held at the end of October 1995, voters rejected the call for sovereignty of Quebec, but by only a slim margin. Thus the Quebec question will inevitably continue to smolder in Canadian politics. In the foreign policy area, Canada hosted and chaired the G-7 Halifax Summit in June. During the Summit, it was agreed to hold the Ministerial Meeting on Terrorism in Ottawa. Canada hosted this meeting in December.

Latin America and the Caribbean

Since the beginning of the 1990s, the Latin American region has witnessed progress in three important areas: promotion of democracy; furtherance of economic reforms based on market economy principles; and advancement of regional cooperation such as economic integration. Progress in these three areas was even more evident in 1995, though some difficulties were experienced along the way.

Presidential elections were conducted smoothly in 17 Latin American countries between 1993 and 1995. A coup d'etat had placed Haiti under another period of military rule in 1991, but democratic government was reinstated with international support, and elections were conducted peacefully in 1995 for members of the legislature, local governments and the presidency. This underlines the fact that democracy has gained further ground in Latin America.

Latin America's steady economic reform has had a number of positive effects in each country - inflation has been curbed, government deficits are declining, and economic activity is being stimulated. Thanks to these advances, Latin America has become a fast-growing center in the world economy, along with East Asia.

Contrary to such positive developments, the Mexican peso crisis at the end of 1994 overshadowed the economies of other Latin American countries and the global economy as a whole. The world also became aware of a danger which could be caused by an increase in current account deficits of developing countries accomplishing rapid economic growth, as well as by a sharp rise in short-term international capital movements. However, Mexico and other Latin American countries quickly adopted adjustment policies befitting their own circumstances, and almost managed, with the support of the international community, to prevent the crisis from worsening or spreading.

Another notable progress is the furtherance of the regional cooperation in both political and economic spheres.

At the political level, the Organization of American States (OAS), the Rio Group (comprising 14 major Latin American and Caribbean countries) and others have held wide-ranging discussions on the situation in Haiti and other important issues. A border dispute broke out between Peru and Ecuador in January 1995, but it was calmed shortly through mediation by neighboring countries, and negotiations are now proceeding with a view to reaching a permanent settlement.

At the economic level, economic integration has been in progress, which would further liberalize intra-regional trade. One example is the inauguration in January 1995 of the Common Market of the South (Mercosur), which is a customs union consisting of Brazil, Argentina, Paraguay and Uruguay.

Foreign policies of Latin American countries in recent years are marked by their growing interest in developing stronger relations with the Asia-Pacific region, especially Japan. The Presidents and some cabinet ministers of Mexico and Chile (two APEC member countries) participated in the APEC Meetings held in Osaka in November 1995. Five Heads of State and eleven foreign ministers from Latin American countries visited Japan during 1995. As another illustration of growing ties, the 100th anniversary of the signing of the Japan-Brazil Treaty of Amity, Commerce and Navigation was marked throughout 1995 by frequent visits of important people between Japan and Brazil, and by the holding of a wide variety of events.

Japan is well aware that the stability of the entire international community depends in good part on Latin America's ability to maintain and foster favorable political and economic conditions, and to secure long-term stability within its own region. From this standpoint, Japan places the primary importance in its policies to Latin America on support for democracy and market economic reforms. For example, during 1995 Japan dispatched personnel as election monitors to Peru, Haiti and Guatemala under the auspices of the OAS and the U.N.

In light of the fact that Latin American countries are playing an increasingly constructive role in the international community, Japan is enhancing policy dialogue with the region. Since 1989, the Foreign Ministerial Talks were held annually between Japan and Rio Group countries during U.N. General Assemble meetings. In addition, the Consultation of the Ministers for Foreign Affairs of the Rio Group Troika Countries and Japan was held in Tokyo in May 1995. (During 1995, the Rio Group troika (presiding) countries were Ecuador, Brazil and Bolivia.) Also noteworthy was a Ministerial Meeting which brought together the foreign ministers of Japan, Panama and five other Central American countries during the U.N. General Assembly in 1995. During this Ministerial Meeting it was decided to establish the Japan-Central America Forum for Dialogue and Cooperation as an instrument to promote a regular exchange of views. The Forum's first meeting was held in El Salvador in November 1995.


European countries are progressing towards political and economic integration within the European Union (EU). In addition, fora such as the North Atlantic Treaty Organization (NATO), the Organization for Security and Co-operation in Europe (OSCE), and the Western European Union (WEU) are closely examining possible frameworks for European security in the post-Cold War era. As the movement toward a new European order gathers force, an increasingly united Europe is gaining more weight in the international community.

European Integration

The EU continues to enlarge and to deepen integration as part of its drive to becoming the pivotal force within Europe. It was further enlarged on 1 January 1995, when Austria, Sweden and Finland joined the EU, raising the number of member countries to 15. Also during 1995, a number of neighboring countries of the EU (Romania, the Slovak Republic, Latvia, Estonia, Lithuania and Bulgaria) applied for membership one after the other. Integration was deepened through steady implementation of the Maastricht Treaty (the Treaty on European Union), which came into effect in November 1993.

At the European Council in Madrid, the decision was made to hold first meeting of the Inter-governmental Conference (IGC), in March 1996, with a view to reviewing the Maastricht Treaty in order to start discussions on reforming organizational structure, enhancing Common Foreign and Security Policy, and strengthening relations between the EU and its citizens. The IGC is expected to play an important role in the process of deepening integration and enlargement within the EU and establishing a new European order.

Seeking a New Security Order

Since the end of the Cold War, fora such as NATO, OSCE, and WEU have continued efforts to establish a new security framework for Europe. This process was given extra momentum in November 1995, with achievement of a peace agreement in the former Yugoslavia.

NATO decided to send the Implementation Force (IFOR) to Bosnia and Herzegovina to ensure implementation of the peace agreement there. NATO has thus assumed a new post-Cold War role, namely that of dealing with regional conflicts (for example, establishing and monitoring cease-fire zones), in addition to its conventional role of providing collective defense. As to the issue of NATO expansion, in September 1995, NATO adopted the report entitled Study on NATO Enlargement, and is promoting cooperation through the "Partnership for Peace" (PFP) program. However, Russia still opposes enlargement of NATO.

The OSCE is conducting lively discussions on ways to strengthen its executive functions and on the "Common and Comprehensive Security Model for Europe for the Twenty-First Century." The OSCE has been given an important role in the implementation of peace in the former Yugoslavia, being entrusted with conducting elections and monitoring human rights conditions, exercising control over weaponry, and promoting disarmament. The OSCE Ministerial Council decided in December 1995 to dispatch a mission to Bosnia. For its part, WEU is exploring ways to enhance its operational capability, future relations with the EU, and other issues.

The Economy

Europe's economy began recovering in 1994, and has shown signs of continuing growth in 1995. The European Commission released figures showing that the real GDP growth rate for the EU as a whole was 2.7% for 1994, with the real economic growth rate for 1995 estimated also at 2.7%. This upturn appears to be caused mainly by increases in exports and corporate revenues against a backdrop of expanding economic activity outside the EU and loosening of monetary policies within the region. However, the current surge in economic growth may be destabilized by several less favorable factors, such as fluctuations in exchange rates (especially vis-a-vis the dollar) and falling confidence in the efficiency of efforts taken by several countries to improve their fiscal situations. Unemployment also remains a serious problem - 1995 predictions indicated an average unemployment rate of 10.7% for EU countries.

Economic and monetary union (EMU) goals were advanced during the European Council held in Madrid in December 1995, with the affirmation that the EU would move to the third stage of union on 1 January 1999, and the decision to proceed toward establishment of the European Central Bank and introduction of a single currency (the Euro). Still, it will not be easy for all member countries to fully meet the convergence criteria (Note 17) set out in the Maastricht Treaty. It is their task to ensure sustainable economic growth and job creation, while making efforts to cut their deficit and control inflation for participating in the EMU.

Developments in Central and Eastern Europe

While Western Europe maintains its efforts toward integration, countries in Central and Eastern Europe continue their democratic and market economy reforms while at the same time seeking ways to participate in the EU and NATO, or at least strengthen their relations with these bodies, with an eventual aim of integrating with Western Europe. Dissatisfaction with domestic reforms has resulted in the rebirth of governments identifying with older ways in Hungary, Bulgaria and Poland. However, even these countries are keeping to their basic orientation towards democracy, market economy and closer association with the countries of Western Europe.

On the whole, the economic situation in this region is stabilizing - for the first time, the GDP of all the countries indicated positive real growth rates in 1994, and a similar situation was forecasted for 1995.

Like other countries in Central and Eastern Europe, the Baltic States (Estonia, Latvia and Lithuania) are pursuing their courses towards democracy and market economies, with a view to integrating with Western Europe. In June 1995, this process was furthered through signing of the Europe Agreement, which calls for stronger cooperative relations with the EU in political and economic areas.

Japan-Europe Relations

As Europe moves closer towards integration, it takes on even greater weight in the world at large. It is thus of growing importance that Japan and Europe enhance their dialogue and cooperation in addressing various issues - not only global issues, such as reform of the U.N., disarmament, non-proliferation and management of the global economy, but also regional issues which have significant global implications, such as the situation in the former Yugoslavia and the issue of North Korea's nuclear development. In keeping with the 1991 Japan-EC Joint Declaration, Japan and Europe are promoting dialogue and cooperation in political, economic, social and other areas. The Japan-EU Summit is also held periodically (once a year, in principle). In June 1995, the Summit was held between Prime Minister Tomiichi Murayama, French President Jacques Chirac (with France acting as Chair) and President of the European Commission Jacques Santer.

Japan has been given a special status as a "Partner for Cooperation" within the OSCE, and participates in various OSCE functions, including activities in the former Yugoslavia. In regard to the relations with the countries of Central and Eastern Europe, Japan maintains its support for their reform efforts.

Russia and the New Independent States


The Chechnya problem caused great concern in Russia during the first half of 1995, while in the second half, the political sphere went through a process of reorganization in preparation for parliamentary and presidential elections. The health condition of President Yeltsin was another factor creating further uncertainty in Russian politics. Elections held in December for members of the Lower House (State Duma) gave the Communist Party a much stronger presence, but not a simple majority of seats. The June 1996 presidential elections will have great bearing on Russian politics in the future.

a) The Domestic Situation

After the deployment of Russian military forces to deal with the situation in Chechnya, many people, including civilians, fell victim to the hostilities. ThisEprompted many countries, including Japan, to severely criticize the Russian Government. At the end of July 1995, the Russian Government reached a military agreement on peace negotiations with the Dudayev Party and other Chechnya elements. In December, Russia concluded a political agreement with the pro-Russian government of Chechnya, giving the republic of Chechnya broad powers of autonomy but keeping it as a constituent part of the Russian Federation. However, Chechnya terrorism and other incidents delayed implementation of the military agreement, and hostilities have continued without a settlement.

Russian politics were further enlivened when preparations for parliamentary elections began in the spring of 1995. There were a series of disagreements among the reformists on the Chechnya problem, while on another front, new parties and groups were established with the aim of the unification of groups yearning for centrism and stability. Campaigning began in earnest in the middle of July, once the election day had been announced. Electoral blocs and a number of political bargaining alliances were actively made.

President Yeltsin was hospitalized and underwent treatment for heart disease on two separate occasions, in the middle of July and the end of October. This caused considerable concern in Russia and abroad, especially because his illness occurred at an important period before the year-end parliamentary elections and the 1996 presidential elections.

In the elections for members of the State Duma, held on 17 December, the Communist Party made considerable headway due to dissatisfaction on policies of the Government, however it was unable to gain a simple majority. Even a combination of Communist Party seats with others from conservative and nationalist camps did not yield an absolute majority in the State Duma. As a result, the parliament ended up composed of members from a plethora of political parties, similar to the situation experienced after the previous elections. These circumstances will undoubtedly influence the choices made by various political groups as they draw up strategies in preparation for the presidential elections.

b) Economic Reforms and the Economic Situation

Four years have passed since Russia embarked on fundamental economic reforms in 1992. In 1995, the Government took measures to foster a sound fiscal situation in line with agreements made with the IMF, and the annual inflation rate in 1995 dropped to over 200% from over 300% of the previous year. The FY1996 budget approved in December embodies plans to shrink the deficit. Adding to this favorable situation was a slight halt, finally, to the decline in production in the mining and manufacturing sectors, aided by expanding exports. Even so, the Russian economy remains in a difficult situation, with real income falling since the beginning of 1995, corporate debt accumulating, and the addition of other serious problems as well, such as an increase of inter-enterprise arrears and unemployment.

Reform of Russia's trade system made some progress during 1995. However, the situation was not satisfactory with regard to progress in tax reforms, changes in legislation governing the private land-holding system and foreign investment.

c) External Relations

As nationalist sentiment within the country has grown stronger, in the area of foreign affairs, Russia tends to state its position more assertively as a major power. This tendency became even more prevalent after the beginning of 1995, in keeping with the atmosphere fostered prior to the parliamentary elections in December. Russia, in particular, strongly opposed the enlargement of the North Atlantic Treaty Organization (NATO). Disagreements over this matter between Russia and the United States with European countries were observed.

With regard to its relations with other members of the Commonwealth of Independent States (CIS), Russia has strongly stated the necessity of CIS integration, taking such measures as issuing the September presidential decree on "Strategic Course of Russia on Member-States of CIS."

Moreover, Russia is eager to expand its arms exports, and is strongly promoting its relations in the field of military technology with the Republic of Korea, China, India, Iran, Israel, South Africa and other countries.

d) Relations with Japan

The Tokyo Declaration on Japan-Russia Relations was signed at the time of President Yeltsin's visit to Japan in October 1993, thereby establishing a new basis for the development of bilateral relations. When Foreign Minister Andrei Kozyrev met with Japan's Minister for Foreign Affairs during the former's visit to Japan in March 1995, both sides affirmed a common recognition of the need to further promote Japan-Russia relations on the basis of the Tokyo Declaration. Then in September, when the fifth Working Group on a Peace Treaty Between Japan and Russia met, and Japan Russia working-level consultations were held, Japan conveyed the contents of a verbal message from Prime Minister Murayama to President Yeltsin (mindful of the fact that 1995 was the 50th year since the end of the war), stressing once more the need to indicate to the peoples of both countries that definite progress was being made in settling the territorial issue.

During 1995, Russian national border guard vessels continued enforcing restrictions on the waters around the four northern islands, and in late September, there occurred an incident of seizure and shooting in the Soya Strait. The Governments of both countries began negotiations on a framework for Japanese fishing vessels to operate in the waters around the four northern islands, and conducted four negotiation sessions.

In economic relations between the two countries, it was agreed to establish the Japan-Russian Federation Inter-Governmental Committee on Trade and Economy. Subsequently, three sub-committee meetings were held in Moscow in November.

A major earthquake struck the northern end of Sakhalin Island on 28 May 1995, killing about 2,000 people. The Japanese Government provided shipments of emergency relief supplies on six different occasions, and admitted into Japan four children who had lost legs in the disaster, to provide them with medical treatment and rehabilitation.

The New Independent States

The new independent states (NIS) which had, along with Russia, comprised the former Soviet Union, continued to experience economic difficulties in 1995. Many of these countries still face political instability as a result of such factors as ethnic problems and the weakness of their governments' power bases.

In this situation, these countries defined their stance towards the stabilization of their political power during 1995. This was true especially in Central Asia: what happened in Turkmenistan in 1994 (the extension of the president's term of office) was repeated in Uzbekistan (in March) and in Kazakhstan (in April), while Kyrgyz held a presidential election in December, maintaining the democratic and reform-oriented course. In Europe, too, there have been moves to strengthen presidential powers in Belarus. In pursuit of stability, Kazakhstan and Belarus have shown their clear determination to strengthen their relations with Russia.

In Ukraine, too, at a time when the country is beset by economic problems, attempts were made during 1995 to strengthen the powers of the president. Maintaining a policy of keeping its independence from Russia, Ukraine took steps towards fundamental economic reform. During President Kuchma's visit to Japan in March, Prime Minister Murayama expressed support for Ukraine's economic reforms, and the two leaders issued a joint statement on the basic framework for future bilateral relations. It was confirmed at the Halifax G-7 Summit to encourage Ukraine to continue its reform efforts.

The three Caucasus countries (Georgia, Armenia and Azerbaidjan), Tadzhikistan and Moldova are still facing not only economic confusion, but also the remaining influence of regional conflicts. But the cease-fire agreements have been kept, and these conflicts did not degenerate into dangerous situations during 1995. More efforts for a conclusive resolution of these conflicts are expected.

The Middle East

The recent situation and the visit by Prime Minister Tomiichi Murayama

Approximately 80% of the crude oil that is imported to Japan comes from the Middle East region. Not only is the Middle East a vitally important region for Japan in terms of securing a long-term, stable energy supply, but achieving peace and stability in the region is of extremely great significance for the entire international community. Recognizing this, Japan intends to further strengthen its relations with the nations of the Middle East region and to positively contribute to the peace and stability of the entire region.

With this in mind, from 12-19 September, Prime Minister Murayama visited Saudi Arabia, Egypt, Syria, Israel, the Gaza Strip, and Jordan, where he had exchanges of views on the situation in the Middle East with the leaders there, and stressed the importance of building even more multi-faceted and multi-tiered relations. (For more information on the Middle East peace process, refer to Chapter II, Part A, Section 2.a.)

Iraq and Iran

The situations in Iraq and Iran, along with the issues regarding Middle East peace discussed earlier, are additional factors of instability in the Middle East.

As a result of United Nations sanctions that have been under implementation for more than five years, Iraq is facing a serious domestic situation, including shortages of goods and high inflation, and the Government of President Saddam Hussein has called upon the people of Iraq to persevere as the Government implements measures to strengthen the country's controlled economy. The defection to Jordan in August of former Minister of Industry and Minerals Hussein Kamel, who was the son-in-law of President Hussein and a powerful member of the Government, led to various speculations in the international community regarding the stability of the Hussein Government. However, in October, President Hussein held a national vote-of-confidence on his presidency, which received close to 100% support, indicating that the President is in de facto control of the country. Japan believes that, in order to secure the peace and stability of the Gulf Region, Iraq, a major regional power, must immediately comply with all relevant United Nations Security Council resolutions and thereby return to the international community. To this end, Japan has repeatedly called on Iraq to fully comply with all of these resolutions.

In Iran, policy decisions are made through a process of opposition and compromise between the pragmatists, who focus on the importance of economic reconstruction, and the conservatives, who stress strict adherence to the tenets of Islam. There are concerns in the international community regarding Iran's activities, including its opposition to the Middle East peace process and its alleged involvement in terrorism. In particular, the United States has adopted a policy of "dual containment," to strictly contain Iran as well as Iraq. In contrast, many of the European countries have adopted policies of so-called "critical dialogue" with Iran. Japan's stance is that it is undesirable to isolate Iran, and Japan continues to strongly urge Iran to take concrete action to dispel the international community's concerns and to adopt pragmatic policies.

Gulf Cooperation Council (GCC) countries

Japan depends on the six Gulf Cooperation Council countries -Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain - for close to 70% of its crude oil imports. Japan believes that it is important to work to further strengthen broad-ranging relations going beyond energy transactions with this region. During his September visit to the Middle East, Prime Minister Murayama visited Saudi Arabia and had a frank exchange of views on peace and stability in the Gulf.


In the political sphere, some countries in Africa have made progress in firming up the process of democratization and effecting political reform. Progress has also been observed toward peace concerning some conflicts which erupted after the end of the Cold War as a result of such factors as ethnic tensions. In the parliamentary elections held in January in Niger, the opposition party gained a majority and a new Cabinet was formed peacefully. In Ethiopia, where an interim Government had ruled since the end of the civil war in 1991, general elections were held in May of 1995, a new constitution was promulgated and a new Government was established in August of the same year. In Guinea, for the first time since the introduction of a multi-party system, general elections were held in June of 1995, and in Tanzania, presidential and parliamentary elections were held in October of 1995.

With the deployment of the Third United Nations Angola Verification Mission (UNAVEM III), progress has been made in the peace process in Angola, and in Liberia, positive developments have been achieved with the August peace agreement among the parties to the conflict. Still, there remain many countries in which the process of reform and other factors intensified domestic strife and resulted in conflict. The situation remains uncertain in countries as Somalia, Rwanda and Burundi.

In the economic sphere, many African countries are moving forward with the implementation of structural reform measures composed primarily of efforts for introducing market economic principles and rationalizing and increasing the efficiency of government bodies, though achievements vary from country to country. Further, many challenges should be met in order to alleviate poverty and ensure sustainable growth, such as improvement of infrastructure, invigoration of the private sector and expansion of education.

Japan, as a responsible member of the international community, recognizes that, in order to solve the many problems faced by the African countries, it is important to provide each country as much assistance as possible for its self-help efforts. From this viewpoint, it has supported political and economic reforms of the African countries, while at the same time actively taking part in the efforts to solve conflicts. In particular, Japan is cooperating with South Africa to overcome the greatest challenges the country faces, which are economic development and correcting domestic socioeconomic inequality. Toward this end, Japan invited President Nelson Mandela to Japan as a State Guest to deepen dialogue, and made clear Japan's positive intent to assist in the nation-building process taking place in the new South Africa.

In the area of assistance for democratization, Japan dispatched election monitors and extended financial cooperation for the purchase of material necessary for the holding of elections to Cote d'Ivoire, where presidential elections were held in October of 1995 and parliamentary elections were held in November of 1995, as well as to Tanzania.

Further, in July of 1995, Japan hosted a regional workshop in Harare, Zimbabwe, attended by eastern and southern African countries, with the goal of promoting economic reform by making use of the experiences of Asia within the African context and promoting Asia-Africa cooperation. Japan has also provided a wide range of assistance for structural reform, human resource development, infrastructure development and environment.

As part of its efforts to solve conflicts, Japan has provided humanitarian assistance for the peoples of countries plagued by conflict and their neighboring countries, and has also strived to prevent conflicts by conducting policy dialogue with countries for which there is concern of destabilization and their neighboring countries.

Japan has also made intellectual contributions through co-sponsoring with the United Nations and the United Nations University the High-level Symposium on Peace and Development - Problems of Conflict in Africa in Tokyo in October, where discussion focused on the causes and nature of conflict in Africa and measures to prevent and solve conflicts.

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