Chapter III.
Regional Developments

C. Latin America and the Caribbean

In 1998, positive moves toward the stability and prosperity of Latin America emerged in parallel with signs of the downside of globalization. In addition, 1998 was an eventful year that helped to strengthen relations between Japan and the Latin American countries, with moves toward democratization, hurricane damage, El Niño, and anniversaries commemorating amity and migration.

a) Moves toward regional stability and prosperity

With a series of events such as the January visit to Cuba by Pope John Paul II and the March announcement by the United States of measures to relax sanctions against Cuba, the international environment surrounding Cuba and the direction taken by Cuba itself saw a certain degree of positive change. Japan held its first bilateral policy dialogue with Cuba in October. Peru, which has been cracking down harder on narcotics, succeeded in reducing coca cultivation by 40% by 1997 compared to peak cultivation levels, and in November, a meeting of the Consultative Group on Combating Narcotics in Peru was held in Brussels, announcing international community assistance which included 1.44 billion yen in grant cooperation from Japan. On the Peru-Ecuador border conflict, which dates back to the 19th century, negotiations had been conducted since 1995; in 1998, Peruvian President Alberto Fujimori and Ecuadorian President Jamil Mahuad Witt launched direct negotiations toward border demarcation and peace-brokering, with summit-level mediation by four guarantor countries-Argentina, Brazil, Chile and the United States-producing a final peace agreement in October. In November, State Secretary for Foreign Affairs Nobutaka Machimura visited Ecuador, announcing Japan's support for this historic peace agreement and readiness to provide assistance toward its implementation. The Latin American countries also involved themselves actively in international issues, including Latin American participation by Brazil and Argentina in the task-force which met in July and October at Japan's initiative to consider medium- to long-term responses to the nuclear tests conducted by India and Pakistan, as well as the Fourth Session of the Conference of the Parties to the Framework Convention on Climate Change (COP4) held in Argentina in November.

b) Promotion of economic exchange

With regard to economic aspects, at the Second Summit of the Americas, held in Santiago, Chile, in April, concrete negotiations were agreed to be launched toward the establishment of the Free Trade Area of the Americas (FTAA) by 2005, signaling a new stage of the economic integration process of the entire American continent, Latin America included. Against this backdrop, a symposium jointly hosted by the Export-Import Bank of Japan and the Inter-American Development Bank was held in June with the aim of strengthening economic ties between Japan and Latin America. This was attended not only by many Japanese participants, but also by Latin American representatives from political and economic circles, including Peruvian President Fujimori and Uruguayan President Julio Maria Sanguinetti, providing significant momentum toward stronger economic relations. Inter-governmental consultations were also held between Japan and MERCOSUR (which is comprised of Argentina, Brazil, Paraguay and Uruguay) in October in Brazil, as well as bilateral summit meetings with Mexico and Peru on the occasion of the APEC meetings in November, marking progress toward stronger relations between Japan and the Latin American countries through Asia-Pacific cooperation frameworks.

c) Negative aspects of globalization

While initiation of FTAA negotiations was a focal point of the Second Summit of the Americas, participants also noted the negative aspects of globalization, including growing income disparities and the poverty issue, and stressed the importance of the role of elementary and junior high school education in solving these problems. The Americas are therefore seeking a balanced course which makes maximum use of the dynamism of globalization to advance economic liberalization while also working to overcome the negative aspects of globalization. On the other hand, the Latin American countries saw stock prices crash as of August, accompanied by large outflows of capital. These developments were thought to be the result of the Asian and Russian economic crises reducing the credibility of emerging markets as a whole and increasing fears as to the weakness of the economic fundamentals of the Latin American countries (fiscal deficits, current account deficits, plummeting prices for primary products such as oil and copper, the non-performing loan problems of Mexican financial institutions). Hardest hit was Brazil, which instituted a substantial hike in policy interest rates and announced a string of other measures such as fiscal adjustment programs toward a balanced budget. In response, the G7, the IMF and other bodies announced assistance measures for Brazil totaling more than US$41 billion. However, the situation remains unstable, and early implementation of fiscal adjustment programs and reduction of the current account deficit will be vital if the credibility of the Brazilian economy is to be restored. Close attention will need to be paid to developments in the Brazilian economy, which has the potential to destabilize the entire world economy.

d) Democratization in Latin America

In October, Augusto Pinochet, former Chilean President and a life-time senator, was arrested by British authorities during his stay in the United Kingdom in response to a request from a Spanish judge in regard to Pinochet's suspected responsibility for murders and disappearances under the military administration he headed during his Presidency. The Chilean Government has persistently sought Pinochet's early return to Chile on the basis of his diplomatic immunity and the territorial principle applicable to criminal cases. This incident has also intensified animosity between Chilean left- and right-wing factions. In Argentina too, former President Jorge Videla was arrested in June for his involvement in incidents whereby children of left-wing activists who were killed or went missing during military rule were secretly adopted out, one example of moves to censure the suppression of human rights which occurred under past military regimes. The democratization in Latin America needs to be observed closely, especially in countries such as Paraguay, where the treatment of General Lino Oviedo, ringleader of an attempted coup d'etat in 1996, has been a cause of concern; Venezuela, where Hugo Chavez, ringleader of an attempted coup d'etat in 1992, was elected President in the December 1998 elections; and Haiti, where the political situation remains unstable.

e) El Niño and hurricane damage

The Latin American countries suffered enormous damages from natural disasters in 1998. The El Niño phenomenon, which is said to have been the strongest in this century, brought torrential rains to the South American continent and caused massive damage through floods, etc., in Peru, Ecuador, Chile, Argentina and Paraguay. Hurricane Georges hit the Caribbean islands in September. Japan provided a total of around 67 million yen in emergency supplies and US$250,000 in emergency grants to five countries most heavily affected-Haiti, Saint Christopher and Nevis, Antigua and Barbuda, and the Dominican Republic-and sent a Japan Disaster Relief Team (medical team) to the Dominican Republic. Hurricane Mitch, which struck the Central American countries (Honduras, Nicaragua, Guatemala, El Salvador, etc.) in November, caused enormous damage in the form of more than 18,000 dead or missing and more than 6.7 million disaster victims. Japan provided these four countries with a total of around 60 million yen in emergency supplies and a total of US$1.5 million in emergency grant assistance. The Japan Disaster Relief Team (medical team) was sent to Nicaragua, and a Self-Defense Forces unit was sent to Honduras for the first time as international emergency assistance (Japan Disaster Relief Team [medical care and inoculation unit]) based on the Law Concerning the Dispatch of Japan Disaster Relief Teams. This unit examined more than 4,000 patients during the 14 days of its service, while other results included disinfecting virtually all of the old city area of the capital Tegucigalpa, garnering high praise from the Government and people of Honduras. This dispatch was extremely significant in underlining the effectiveness of Self-Defense Forces unit operations as a new form of international cooperation in instances where large-scale disasters occur abroad.

f) Stronger Japan-Latin America ties through amity and migration anniversaries

Japan has been strengthening ties with the Latin American countries through events commemorating amity and migration anniversaries. The year 1998 was the 90th anniversary of Japanese immigration to Brazil, the centenary of friendship with Argentina, the 110th anniversary of amity with Mexico and the centennial of migration to Cuba. In June, Foreign Minister Obuchi attended ceremonies commemorating the 90th anniversary of Japanese immigration to Brazil, held in Rolandia and Sao Paulo with Brazilian President Fernando Hendrique Cardoso and with Foreign Minister Luiz Felipe Lampreia respectively, while in September, Their Imperial Highnesses Prince and Princess Akishino visited Argentina (attending a ceremony commemorating the centenary of friendship between Japan and Argentina), and in December, Argentine President Carlos Saul Menem visited Japan as a state guest.

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