Chapter I.
General Overview- The International Community and Japan's Foreign Policy in 1996

A. Overview

In 1989, at the time of the dismantling of the Berlin Wall, the symbol of the East-West Cold War, it was considered that the Cold War structure of bipolar confrontation between East and West which had dominated the international community from the end of World War II had finally ended and the world had entered a new era. It has been seven years since the dismantling of the Berlin Wall and five years since the collapse of the Soviet Union, the leader of the Eastern bloc of the East-West tension, and there are just a few years remaining in the 20th century, a century of upheavals and dramatic change.

While the end of the Cold War has certainly influenced both international relations and the political and economic situations in Japan, it is still difficult to say that a new international order has emerged in place of the Cold War structure. Despite this, the international community seems to be gradually forming its self-image in the new era through a variety of experiences. It is often said that the post-Cold War world is uncertain and fluid. If so, it is even more important to understand the trends and characteristics surfacing in the international community and accurately define foreign policies based on them.

In this process, Japan must remember that international circumstances are not given, but that Japan is deeply involved in their formation and the country's actions have a tremendous impact on construction of the new international order. The fact that Japan was selected by an overwhelming majority in the elections for many leading international organizations in 1996, including the election for a non-permanent member seat on the United Nations Security Council, gives evidence of the high degree of expectations which the international community has for the role it envisions Japan playing in the construction of a new international order.

The ultimate goal of Japan's foreign policy is, of course, to ensure safety, security and prosperity for Japan itself and to realize an affluent and peaceful society for the Japanese people. Meanwhile, in today's world of deepening interdependence, it is impossible for any country to pursue its own security and prosperity separately from the stability and prosperity of the entire world. Within Japan itself, the whole social system of the country is currently being questioned, and the government is seriously engaged in six major areas of reform (administration, fiscal policy, social security, economy, financial system and education). As domestic politics and foreign policy increasingly overlap, Japan must strive toward the achievement of the self-evident, but extremely difficult, goal of realizing peace and prosperity for itself and the world.

In the Overview section of this opening chapter, the foreign policy efforts taken during the year 1996 toward the achievement of this goal will be explained. First, however, the current characteristics of the international community will be briefly reviewed.

1. Basic Understanding of Current International Circumstances

Looking at the current situation in the international community, summarily the following six characteristics can be identified.

a) The Advance of Globalization and the Deepening Degree of Interdependence

One characteristic is the advance of globalization of the economy and the deepening interdependence of the international community.

The world is becoming smaller with the integration of markets through trade, investment and other factors, and through the dramatic advances in communications technology and means of transportation, relationships of interdependence among various types of entities are deepening in a variety of areas, including the economic and military fields. Typical examples or symbols of this are the sharp rise in the share which the total value of trade occupies in the world's nominal GDP (approximately 18% in 1970, 32% in 1980 and 40% in 1995), the financial markets which strengthen the ties among global markets, and the real-time spread of information. In virtually any area and for virtually any entity, including countries, it is impossible to stand aloof from world events.

With advances in globalization and the deepening of interdependence, people can have access to better products at cheaper prices and can learn about most events happening throughout the world in an instant. This is just one example, but that globalization and deepening interdependence give people new opportunities was the shared understanding at the June 1996 Lyon Summit with its theme of globalization.

If globalization and deepening interdependence are basically positive trends, it is necessary to be aware that they do raise new issues for domestic politics, for example, through the intensification of competition, and can lead to international friction and confrontation. The international community needs to create norms and frameworks which tie the deepening of interdependence to world stability and prosperity, rather than to friction and confrontation. Promotion of international exchange in a variety of forms and the development of mutual understanding, collaboration and cooperation among the people of various nations within the international community are among the efforts to satisfy this requirement.

b) The Spread of Liberal Democracy as well as Market Economy as a Governing Principle

A second characteristic is the spread and growing acceptance of the concepts and systems of liberal democracy as well as the market economy as the fundamental principles underlying the governing system, following the end of the Cold War and the subsequent fall of communism as a counter-ideology.

In particular, the collapse of planned economy systems has given way to a market economy system as the only viable option capable of ensuring good living standards for citizens, and even socialist countries such as the People's Republic of China and Viet Nam are promoting economic development based on the principles of market economy. At the same time, in order for the market economy to function well, it is essential to ensure the rule of law, which includes the guarantee of property rights and civil liberties. History has demonstrated a close relationship between the development of market economy systems and the spread of liberal democracies. Therefore, it is expected that the system of liberal democracy paired with a market economy will further enhance legitimacy and universality. On the other hand, it is also necessary to be always aware that the introduction process and institutionalization of this system will vary for each country and that the danger of a backlash exists in situations in which the introduction of those principles does not proceed smoothly.

c) The Multi-Tiered and Multifaceted Structure of International Politics

A third characteristic is the multi-tiered and multifaceted nature of the international political architecture.

The Cold War structure was clearly bipolar, with the United States and the former Soviet Union as the two players. Today the debate is still open on whether the post-Cold War world is a single-pole structure centered on the United States or a multi-pole structure with significant presences in the United States, Europe, Asia and elsewhere, as well as on the role which international agencies such as the United Nations must play in this type of world. Furthermore, diversification is also progressing within developing countries which used to be categorized simply as the "South," blurring the distinction between "North" and "South." Regional integration and regionalism are also gaining strength.

Although the real world is much too complex and diverse to capture in a single point of view, it is also true that some trends have been observed: international society consists of a multi-tiered and complementary interweaving of (1) global frameworks such as the United Nations, World Trade Organization (WTO), G-7 and Organisation of Economic Co-operation and Development (OECD); (2) regional frameworks such as the Asia-Pacific Economic Cooperation (APEC) meeting, ASEAN Regional Forum (ARF), European Union (EU), North Atlantic Treaty Organization (NATO), Organization for Security and Co-operation in Europe (OSCE) and North America Free Trade Agreement (NAFTA); (3) interregional cooperation frameworks such as the Asia-Europe Meeting (ASEM) and the New Atlantic Agenda; and (4) bilateral cooperation frameworks between major countries such as the relationship between Japan and the United States. Today, within such a multi-tiered structure, a system seems to be emerging in which several leading countries with a certain amount of power cooperate to build and maintain an international order. Reaffirmation of the importance of the Japan-U.S. Security Arrangements during President William Clinton's visit to Japan in April 1996 and the significance of the NATO expansion issue, which is expected to be among the most important global foreign policy issues in 1997, can be viewed as part of this trend.

d) The Increasing Importance of Global Issues

The fourth characteristic, also closely related to the first characteristic of the advances in globalization and the deepening interdependence of the international community, is the quantitative and qualitative rise in interest in global issues. At the Lyon Summit in June 1996, in addition to economic and political issues, global issues were much more extensively discussed and the Chairman's Statement stated, under the category "Global Issues," that "major issues need to be treated at a global level...we are committed to cooperate actively among ourselves and with other partners to deal with these global issues in a spirit of efficacy and solidarity."

There is no clear definition of what constitutes a global issue, but issues such as global warming and other global environmental problems, new types of infectious diseases such as AIDS, drugs, international crime, terrorism, nuclear safety and refugees have in common a global or wide-ranging impact and the need for international cooperation beyond national borders to find an appropriate solution. It can also be noted that in this shrinking world, the distinction between regional and global issues itself is increasingly difficult to define.

Reasons for the growing importance of global issues include (1) a shift in interest to problems which previously had difficulty gaining recognition as issues for the entire international community during the Cold War period when attention was focused on the East-West confrontation; (2) the collapse of the Cold War structure itself, contributing to the aggravation of issues such as the proliferation of weapons of mass destruction, worsening regional conflicts, and a surge in refugees resulting from these regional conflicts; (3) the increasing tempo of economic activity, raising concerns about energy, the environment and other areas, although they may not have a direct relationship to the collapse of the Cold War structure; and (4) changes in the structure of international politics explained above, requiring the building of a global cooperative structure capable of effectively dealing with such change.

e) Rise in Nationalism

A fifth characteristic is the rise in nationalism following the end of the Cold War. The conclusion of the East-West confrontation has eliminated ideological disputes as a driving force in the international community, and in its place, it seems the influence of ethnic consciousness has been growing. It is widely pointed out that regional conflicts which have occurred frequently following the end of the Cold War are largely traced to ethnic or religious confrontations. And while nationalism can sometimes work in favor of patriotism, the examples of the former Yugoslavia and the former Soviet Union demonstrate that in the case of states with multiple ethnic groups and no clear principles to unite the people, nationalism erodes the state and can lead to its unraveling. With the influences of the Cold War structure gone and growing contact among different ethnic groups caused by deepening interdependence, continued attention should be given to events related to rising nationalism.

2. The Change of the Role of the State

The previous sections described five characteristics of the international community, and what these characteristics jointly reflect is a change in the significance of the state, or state sovereignty, and a growing erosion of the absolute nature of the state. Of course, even today, the state continues to have unparalleled influence in people's lives, and the relationships between sovereign states still dominate international relationships. How to handle relations with other countries, and neighboring countries in particular, continues to be the most pressing issue for nearly all countries.

At the same time, as mentioned above, advances in globalization, the increasing importance of global issues and the rise in nationalism in some areas sometimes result in a change in the meaning and role of the state from its former absolute and unchallenged position to a more relative one. This change in the meaning and role of the state can probably be seen most prominently in Europe, where unification centered on the integration of markets is proceeding and a single currency and common foreign and security policy are now being discussed as specific goals. The question of what function and role each state should play in a unified Europe is a central topic of discussion on European integration. This effort which has been progressing in Europe, both the originator of the sovereign state system and the scene of repeated brutal wars among these nation-states, offers valuable insight for the paradigms of international society in the 21st century. Meanwhile, there are some areas of the world, including certain African countries, in which states are still struggling to establish themselves. The evidence of these areas further complicates the situation surrounding the state in today's world.

3. Japan's Foreign Policy in 1996

The characteristics of the international community of today are summarized above from six different perspectives. The next section looks at what kind of foreign policy Japan should pursue within this type of international community and what role it should play, while taking into account the significance these characteristics have for Japan's foreign policy program.

In the following section, in accordance with this chart, the foreign policy items pursued by Japan during 1996 are reviewed.

Chart

4. Japan-United States Relationship

The bilateral relationship with the United States, Japan's counterpart across the Pacific Ocean and a country which shares such values and systems as freedom, democracy and a market economy and maintains an undisputed lead in national strength, is the axis of Japan's foreign policy. Japan and the United States are linked by tight bonds in the areas of political and security affairs and have strong interdependence in the economic area. Recently, the two countries have been cooperating on global issues through a partnership called the Common Agenda.

1996 was a year of substantial efforts directed at enhancing this relationship. In particular, it was marked by President Clinton's visit in April, which was of considerable significance. The visit reconfirmed the immeasurable importance of the cooperative relationship between Japan and the United States, not only for the two countries themselves but also for stability and peace in the Asia-Pacific region, as well as for the entire world. The visit also defined various directions and plans toward further strengthening of the bilateral relationship. Two documents which define the future Japan-U.S. relationship were issued by the leaders of the two countries during this visit. The "Message from Prime Minister Hashimoto and President Clinton to the Peoples of Japan and the United States" clearly communicated the determination of Japan and the United States to cooperate in building a better world. Also, the "Japan-U.S. Joint Declaration on Security" reconfirmed the important role played by the Japan-U.S. Security Arrangements not only for Japan's security but also for the stability and peace of the Asia-Pacific region, and represents the starting point for future bilateral cooperation in the area of security. This Joint Declaration stated that, with the aim of further building upon the close working relationship between the two countries, the review of the current "Guidelines for Japan-U.S. Defense Cooperation," compiled in 1978, would be initiated, and the two Governments are proceeding with the intention of completing the review by the autumn of 1997.

In conjunction with this review, as part of domestic efforts and consistent with the Guidelines review, work is being undertaken to fully study and examine the necessary measures to be taken by the Government in response to a crisis affecting Japan or the threat thereof, based on various scenarios. Specifically, the ministries and agencies concerned are cooperating to study (1) protection of overseas Japanese citizens; (2) measures to deal with mass refugee situations; (3) protection and security of coastlines, key facilities and others; and (4) measures for cooperation with the United States.

Furthermore, the Government is dealing with various issues concerning U.S. facilities and areas in Okinawa as one of the top-priority issues, with the basic view that the burden being borne by the people of Okinawa Prefecture should be borne equally by all Japanese people. While the Special Action Committee on Okinawa (SACO) Interim Report was issued in April and the SACO Final Report-which contained concrete plans and measures for the return of U.S. facilities and areas, including the full return of Futenma Air Station-issued in December marked the end of a chapter, it is necessary to continue addressing this situation seriously, including through steady implementation of the Final Report.

In the economic area, the Japan-U.S. Framework Talks play a key role in managing the economic relationship between the two countries. Both countries have already progressed to the stage of implementing the content of conclusions in various areas reached under the Framework Talks. Japan and the United States enjoyed a basically sound economic relationship in 1996, benefiting from the excellent condition of the U.S. domestic economy and the significant decline of the U.S. trade deficit with Japan, as well as from the resolution of specific issues such as those regarding semiconductors and insurance.

Additionally, the Japan-U.S. Common Agenda provides a basis for expanding and strengthening the latitude of the relationship between the two countries. The Common Agenda is a joint effort by the governments and private sectors in Japan and the United States to deal with global issues such as narcotics, population, HIV-AIDS and children's health, and it is now regarded as the world's most successful partnership for bilateral cooperation.

The formation of stable, bilateral relationships of mutual understanding with Asia, where Japan is located, is essential to securing Japan's safety and prosperity as well as securing peace and stability for the entire Asia-Pacific region.

Within Asia, the relationships with the People's Republic of China and the Republic of Korea are among the most important ones for Japan, and despite having various outstanding issues to resolve with each of these countries, as sometimes happens with neighbors, it is vital that these issues be settled and that friendly, cooperative relationships be fostered.

5. Japan-China Relationship

There were a number of difficult situations in regard to the relationship with the People's Republic of China in 1996, including temporary tensions over the Taiwan Straits situation related to Taiwan's presidential election; Japan's protest against nuclear testing by China; the situation involving the Senkaku Islands; China's concern regarding Japan's recognition of past history; and China's suspicion over the reconfirmation of the Japan-U.S. Security Arrangements. However, both governments share the recognition that the Japan-China relationship should continue to develop, considering the importance of this bilateral relationship not only to both countries but to the entire Asia-Pacific region. At the Summit Meeting held at the Philippines APEC Meetings in November, both leaders confirmed the commitment to developing the Japan-China relationship based on this shared recognition.

A number of important domestic events in the People's Republic of China, including the return of Hong Kong in July and the Party Congress fall assembly, are scheduled for 1997. It is essential for Japan that China maintain its reform and open policies and play a constructive role in the international community. Therefore, Japan must encourage China to take such a constructive stance. Furthermore, stable relations among Japan, the United States and the People's Republic of China are vital for peace and stability in the Asia-Pacific region, and from this perspective, Japan welcomes the positive advances seen in the U.S.-China relationship since the latter half of 1996.

6.The Korean Peninsula

Japan is working toward the achievement of peace and stability on the Korean Peninsula on the basis of its friendly and cooperative relations with the Republic of Korea. The situation in North Korea, where shortages of food and energy are reported, deserves continued attention. Japan is vigorously participating in the activities of the Korean Peninsula Energy Development Organization (KEDO), a key framework for solving the nuclear weapons development issue, together with the United States and the Republic of Korea, and has consistently supported the Four-Party Meeting proposed by the United States and the Republic of Korea in April from the point of view that North-South dialogue is vital to the realization of peace and stability on the Korean Peninsula. At Summit Meetings with the Republic of Korea in March (at the margin of the ASEM), June (Cheju Island, the Republic of Korea) and November (at APEC), it was confirmed to further develop the friendly and cooperative relations between the two countries. Also, in addition to discussing their bilateral relationship and the situation on the Korean Peninsula, the importance of cooperation by the two countries in the international community was acknowledged, especially considering that both Japan and the Republic of Korea will be non-permanent members of the Security Council in 1997 and that the Republic of Korea acceded to the OECD in 1996.

7. Regional Cooperation in the Asia-Pacific Region

The Asia-Pacific region, particularly East Asia, has exhibited dynamic economic growth, and this has deepened interdependence for the entire region and contributed to overall political stability. Furthermore, the progress of developing countries in this region is historically significant in the robustness which it displays, which defies the conventional view of a "rich North, poor South." To achieve a further consolidation of these positive trends, and deal with latent causes of instability, it is important that recent progress in regional cooperation be promoted further.

8. ARF

In the area of securing peace and stability, the ASEAN Regional Forum (ARF) plays an important role in confidence-building in the region, and at the Third Ministerial Meeting in July, following a frank and lively exchange of views, a unanimous view was reached on implementation of concrete cooperative measures. Japan has continued to work to promote the development of ARF through the implementation of a variety of concrete cooperative measures, including the co-hosting of government meetings on confidence-building measures in January and April with Indonesia.

9. APEC

In the area of maintaining and securing economic prosperity, at the November APEC Ministerial Meeting in the Philippines, each member economy, including Japan, submitted an individual action plan for achieving free and open trade and investment, moving the APEC liberalization process into a phase of action. As the 1997 APEC Ministerial Meeting in Canada approaches, each member economy is expected to move forward with steady implementation of its action plan and make even further improvements. Japan should actively participate in this process. It is also important to address issues such as furthering cooperation with the private sector and strengthening economic and technological cooperation, including conservation of the Pacific Ocean marine resource environment and infrastructure development.

10. ASEM

Moreover, dialogue which goes beyond the Asia-Pacific region is progressing. In March, 26 leaders from Asia and Europe gathered in Bangkok for the first Asia-Europe Meeting (ASEM) with the aim of strengthening the relationship-which has been relatively weak compared to those between Asia and the United States and the United States and Europe-between these two regions. ASEM symbolizes the enhanced international status of East Asia, which has been bolstered by its economic success. At the meeting, it was confirmed that Asia and Europe should enhance mutual understanding of and benefit to both regions through dialogue and cooperation, and that they would cooperate for the realization of a new international order. Japan, having contributed to the success of ASEM by proposing various specific follow-up activities and other actions, must continue to play a constructive role in ASEM, recognizing that deepening the understanding and cooperation between Asia and Europe will bring benefits to Japan as an advanced democracy, as well as contributing to the construction of the new international order Japan is aiming for in the post-Cold War world.

11. Cooperation with Latin American Countries

The Latin American region, which is considered to be the strongest growth center in the world after East Asia, is expected to play a major role in the development of the Asia-Pacific region and in the solution of global issues, and Prime Minister Hashimoto's visit in August to five countries in the Latin America region was based on this view. While the seizure of the Japanese Ambassador's Residence in Peru which occurred at the end of 1996 was a very regrettable event, Japan continues to place a strong emphasis on the long-term stability and development of Latin American countries and intends to strengthen its support for resolution of the various issues faced by these countries.

12. Global Efforts

While consolidating its key bilateral relationships and promoting Asia-Pacific regional cooperation, Japan needs to cooperate actively to resolve common issues facing the international community, including global issues which have assumed greater importance in recent years. In the section below, trends involving the United Nations are described first, and then the initiatives pursued by Japan, taking into account recent events in the international community, are reviewed in three areas.

13. United Nations

1996 marked the 40th anniversary of Japan's admission to the United Nations. Since admission, Japan has consistently defined its commitment to the United Nations as one of the fundamental ele ments of its foreign policy and has contributed to UN activities in all fields.

In the election of non-permanent members of the Security Council held on October 21, Japan was elected with 142 of 180 valid votes (120 votes were required to be elected). Behind this overwhelming support for Japan is the international community's respect for Japan's participation in a wide range of areas of UN activities, from UN finance to peace-keeping operations, disarmament and non-proliferation and development, as well as expectations for Japan's future role. In order for Japan to meet these expectations, it must play an even more active role in strengthening the functions of the UN and resolving regional conflicts as a non-permanent member of the Security Council. With regard to reform of the Security Council, Japan is actively involved in the discussions of the United Nations Open-ended Working Group on this issue, and has voiced its stance of being prepared to discharge its responsibilities as a permanent member of the Security Council, with the endorsement of many countries and the understanding of the Japanese people, in accordance with its basic philosophy of non-resort to the use of force prohibited by its Constitution.

14. Securing Peace and Stability

a) Promotion of Arms Control, Disarmament and Strengthening of the Non-Proliferation Regime

The issue of disarmament and non-proliferation of weapons of mass destruction is one of the key issues facing international society today. A noteworthy event in this area in 1996 was the adoption of the Comprehensive Nuclear Test Ban Treaty (CTBT) with the overwhelming support of the international community at the United Nations General Assembly in September. Japan has called on the international community to address the nuclear disarmament issue in earnest, based on its own recognition that, to realize a world free of nuclear weapons, it is important to steadily build up realistic nuclear disarmament measures. From the negotiations at the Conference on Disarmament in Geneva to adoption of the CTBT at the United Nations General Assembly, Japan played an active role in bringing the negotiations to a conclusion by, for example, encouraging support for the treaty from many countries and acting as one of the co-sponsors of the draft treaty resolutions in the General Assembly. Furthermore, in terms of disarmament of conventional weapons, Japan has worked together with concerned countries toward the establishment of a universal and effective ban on anti-personnel landmines. Japan has also taken initiative in the area of de-mining and assistance to victims by holding the Tokyo Conference on Anti-Personnel Landmines, at which guidelines on this issue were discussed.

b) Regional Conflicts

On the other hand, looking at trends in regions strapped with circumstances causing instability, 1996 was a mixture of progress and standstill.

In the Middle East, a region of vital importance to the Japanese economy because of Japan's heavy dependence on Middle East energy resources, as the Netanyahu administration came to power in Israel following a series of terrorist incidents in February and March, the Middle East peace process came to a standstill despite its steady progress since 1991. Additionally, the situation continues to be severe in regard to conflicts in Central Africa and the resulting mass displacement of refugees. In the former Yugoslavia, while some progress was achieved in peace implementation, namely the peaceful holding of national and local elections in Bosnia, there are still many important issues that remain unresolved, including the return of refugees and internally displaced persons and holding the postponed municipal elections. Some events occurred in the region around Japan, including the tension over the Taiwan Straits related to the March presidential election held in Taiwan and the intrusion of a North Korean submarine into Republic of Korea territorial waters in September.

The prevention and resolution of regional conflicts are naturally vital for areas such as the Middle East which are directly linked to Japan's interests; they are equally vital in other areas which may not have a direct impact, from both a humanitarian perspective as well as the perspective of building a post-Cold War international order, and hence Japan is providing continued cooperation to such regions, including those that are geographically distant. Acknowledging, in particular, the effectiveness and significance of United Nations Peace-keeping Operations, Japan dispatched Self-Defense Forces to participate in the United Nations Disengagement Observer Force (UNDOF) operating in the Golan Heights in February. Japan also makes personnel and material contributions, for example, shouldering nearly 15% of the expenses for UN Peace-keeping Operations. Furthermore, in order to facilitate and improve the efficiency of its cooperation in this area, Japan is working on its domestic systems, for example, by moving forward with considerations on revising the International Peace Cooperation Law.

The sharp increase in refugees-now numbered at nearly 30 million-caused by the frequent outbreaks of regional conflicts is both a serious humanitarian issue and a major issue in terms of world peace and stability, as evidenced by the mass displacement of refugees in the Central Africa region. As the native country of Ms. Sadako Ogata, United Nations High Commissioner for Refugees (UNHCR), Japan is dealing with the refugee issue as one pillar of its contributions to resolving regional conflicts. In respect to the severe refugee situation in the Central Africa region, Japan is assisting the efforts of the UNHCR and Organization of African Unity (OAU) and making concrete contributions in a variety of areas such as the prevention and resolution of conflicts in this region, humanitarian and refugee assistance, reconstruction and democratization.

15. Ensuring a Prosperous World Economy-Promoting Development and Cooperation in the World Economy

a) Development Issues

Immediately following the end of the Cold War, there was an expectation in some parts of the international community that a "peace dividend" of resources previously spent on the East-West conflict would be freed and utilized for the development of developing countries. However, the reality is that while many developing countries continue to suffer from problems caused by poverty and slow development, developed countries are beginning to experience "aid fatigue." This situation makes ensuring the healthy development of developing countries all the more pressing an issue for the international community.

Taking into account Japan's historical, political and economic circumstances, the provision of Official Development Assistance (ODA), which capitalizes on the strengths of Japan's economy and technology, is the most important area in which Japan can contribute. The post-war development of Japan's economy was not achieved entirely through its own effort, but rather benefited greatly from the steadfast political and economic support of the international community, particularly the United States. Today, Japan's duty as one of the world's leaders, recognized as such by Japan itself and other countries, is to be on the side providing assistance to the international community with active leadership and responsible action, and it is through such action that Japan will succeed in increasing the number of friends who understand and support Japan's position. Japan must continue to press ahead with even more efficient and effective ODA, and its contribution to maintaining and securing peace and stability for the international community through the accumulation of such efforts will lead to benefits for Japan itself, given its heavy reliance on the international community, including developing countries, in terms of trade and other areas. Furthermore, ODA is not only extremely important for developing countries faced with severe poverty, but also plays a significant role for some developing countries already making positive advances by helping them deal with expanding gaps between rich and poor; educational and medical issues for people left behind by growth; and environmental issues related to industrialization.

Given these circumstances, the "New Development Strategy," which offers a paradigm for development in the new era, was adopted by the OECD Development Assistance Committee (DAC) in May and was welcomed at the G-7 Summit in Lyon. Japan played a leading part in establishing this New Development Strategy, which emphasizes the primary role of developing countries in their own development; establishes as a key principle cooperation between industrialized countries and developing countries as partners; and defines output-oriented goals such as halving the percentage of the world's population living in poverty by 2015, reducing the infant mortality rate, spreading primary education and formulating national strategies for environment conservation. It is important that developing and industrialized countries work together to realize this strategy.

Furthermore, while some developing countries in Asia and Latin America are showing signs of rapid economic development, the development issue in Africa remains an urgent and crucial concern. Japan is also taking this situation seriously, with Minister for Foreign Affairs Yukihiko Ikeda announcing "Japan's Initiatives on Assistance to Africa" at the United Nations Conference on Trade and Development (UNCTAD) held in the Republic of South Africa from the end of April to early May. He noted Japan's plan to hold a Second Tokyo International Conference on African Development (TICAD II) in 1998 and a preparatory meeting for this in Japan in 1997, with the aim of maintaining the momentum generated by the Tokyo International Conference on African Development (TICAD I) held in Tokyo in 1993, cosponsored by Japan with the cooperation of the United Nations and the Global Coalition for Africa.

b) The International Economy

Maintaining and advancing a healthy international economy is the foundation for international peace and prosperity, and the creation and maintenance of a multifaceted and fair framework is essential to ensure that the deepening economic interdependence of the international community links to global stability and prosperity. Japan must continue to work to invigorate the Japanese economy through economic structure reform efforts such as deregulation and further market access improvements, while bringing the Japanese economy further into harmony with the global economy. Internationally, the first Ministerial Conference of the World Trade Organization (WTO) was held in December, not only securing the steady implementation of the Uruguay Round Agreement but also a commitment to further liberalization through the Agreement on the Elimination of Tariffs on Information Technology Related Products (ITA), a core industry for the 21st century. Additionally, participants were unanimous in regard to establishing working groups and beginning activities in the new areas of Trade and Investment, Trade and Competition Policy and Government Procurement Transparency, which have gained importance with the globalization of economic activities. Japan played a major role in this process, and it is important that Japan take leadership in coordinating among the interests of the various related countries toward the formulation of multifaceted and fair rules when the results of the WTO Ministerial Conference are actually implemented.

c) Securing Well-Being on a Global Scale

In 1996, growing interest in this area focused on policies related to counterterrorism and nuclear power safety.

With respect to terrorism, responding to frequent terrorist incidents, the Sharm el-Sheikh Summit (March), the Lyon Summit (June), the Ministerial Meeting on Terrorism by the G-7 countries and Russia; and other high-level international meetings were held to confirm a commitment to strengthening further international cooperation in counterterrorism. In order to prevent the recurrence of terrorist acts, the international community must work together and take a resolute stand against terrorism. At the same time, efforts to overcome poverty, narcotics and other factors which lead to terrorism must be taken by the countries facing these problems, and specific international cooperation measures must address these issues as well. Japan has taken a strong interest in the terrorism issue, holding a seminar on counterterrorism in December to which experts from the Asia-Pacific region were invited. It should be recognized that vigorous participation in such international efforts is also meaningful in ensuring Japan's own security. The hostage-taking incident at the Official Residence of the Japanese Ambassador to the Republic of Peru in December is dealt with in the next section.

In the area of nuclear safety, the Moscow Summit, which was held in April, recognized the importance of international cooperation in enhancing the safety of civil nuclear reactors in the former Soviet Union and Eastern Europe and in ensuring safe management of nuclear materials and radioactive waste. Japan held the Tokyo Conference on Nuclear Safety in Asia in November with the aim of confirming the Moscow Summit principles and taking specific measures in the Asian region, which is actively introducing nuclear power generation.

Another area of significant progress in the same vein is the "Initiative Toward a Caring Society" proposed by Prime Minister Hashimoto at the Lyon Summit. Since social security is an issue of great importance to the governments of countries throughout the world, Prime Minister Hashimoto's initiative to share the experience and knowledge of each country in this area to establish more effective systems was supported by G-7 leaders. As a step toward effecting this initiative, Japan held the East Asian Ministerial Meeting on Caring Societies in Okinawa on 5 December and intends to promote it further at the 1997 Denver Summit and other international fora, including the OECD.

The paragraphs above cover activities in the areas of counterterrorism, nuclear power safety and welfare in 1996. The year 1997 is expected to be the year of the environment, with many key international meetings in the area of the global environment, a classic global issue, including the United Nations General Assembly in June and the Third Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto in December, and there will be much room for Japan to play a significant role.

These are the various foreign policy initiatives which Japan conducted during 1996. Many countries have growing expectations of Japan, and the international community is scrutinizing Japan ever more closely to determine whether it is satisfying these expectations. Japan must be even more active in its initiatives, with a clear awareness that it is an important leader of the new international order.

16. Seizure of the Japanese Ambassador's Residence in Peru

In closing the Overview, we would like to touch upon the seizure of the Japanese Ambassador's Residence in Peru, an incident which occurred at the end of 1996.

Since the outbreak of this incident on 18 December (Japan time, as are all dates given below), the consistent stance of the Government of Japan has been to devote every effort to the earliest possible peaceful resolution of the incident and the release of all hostages, placing maximum priority on human life without giving way to terrorism, and trusting the efforts of the Government of Peru toward a peaceful resolution. This position concurs with the thinking of the Fujimori administration and also with that of the international community as a whole.

An emergency headquarters was established within the Ministry of Foreign Affairs (MOFA) immediately after the incident occurred, and this has been engaged on a 24-hour basis in monitoring the situation and in gathering and analyzing related information, keeping in contact with the crisis headquarters in Lima. Close contact has also been maintained with the crisis office established within the Prime Minister's Office on the day that the incident occurred; the day after the incident outbreak, a crisis headquarters headed by the Prime Minister was also established, with meetings held as necessary. The MOFA headquarters has endeavored to keep in close contact with the families, companies and other persons related to the hostages. Minister for Foreign Affairs Yukihiko Ikeda left for Lima the day after the outbreak of the incident to establish firmly the Japanese crisis headquarters, communicate the basic thinking of the Government of Japan to Peru, coordinate views on the situation among major related diplomatic corps and meet with Japanese nationals and concerned Peruvians of Japanese descent. Having achieved these objectives, he returned to Japan on the evening of 23 December.

International responses in relation to the incident have included a press statement by the President of the Security Council of the United Nations on 19 December and the 27 December Chairman's Statement of the G-7 and Russia. During Prime Minister Hashimoto's visit to the ASEAN countries in early January, ASEAN leaders expressed their complete support of the Peruvian Government's response and of Japan's stance, and were also positive about the construction of a network for the exchange of information and views as a Japan-ASEAN response to terrorism and to ensure the safety of the lives of their peoples. In addition, at the ASEAN Foreign Ministers' Meeting on 15 February 1997, a Chairman's Statement was adopted which strongly condemned the Tupac-Amaru Revolutionary Movement (MRTA).

Japan has continued to exchange information with the Government of Peru, including President Alberto Fujimori and Minister of Education Domingo Palermo, through the local crisis headquarters. Prime Minister Hashimoto and President Fujimori not only met in Toronto on 1 February to discuss the issue but have also kept in close contact and exchanged information over the telephone. In addition, Ambassador to Mexico Terusuke Terada, advisor to the local crisis headquarters and an observer on the Commission of Guarantors, has also been providing support, together with members of the Commission, in promoting preliminary dialogue between the Government of Peru and the MRTA. Moreover, Parliamentary Vice Minister of Foreign Affairs Masahiko Koumura visited Peru, Cuba and the Dominican Republic on 17-23 March; in Peru he requested that President Fujimori accelerate dialogue and received Peruvian understanding on this, also obtaining the unofficial consent of the leaders of Cuba and the Dominican Republic in regard to the asylum of MRTA members.

Preliminary dialogue, implemented on the basis of the Toronto meeting between Prime Minister Hashimoto and President Fujimori, has been conducted 10 times between 11 February 1997 and the end of March, with efforts continuing by the Government of Peru and other parties toward a peaceful resolution.

Combating terrorism is a major task for the international community in the wake of the end of the Cold War era. The incident in Peru has served as a test of the international community's consistent and unbending opposition to terrorism. It is extremely regrettable that as of March 1997, the Peruvian incident has yet to be resolved, but the Government of Japan intends to continue to spare no effort toward the peaceful resolution of this issue, supporting the efforts of the Government of Peru.

Postscript: In the early morning hours of 23 April, Peruvian Special Forces carried out a rescue operation. As a result of this operation, although one hostage and two members of the Special Forces lost their lives, 71 hostages, including all the Japanese hostages, were rescued.

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