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U.S. Department of State

Department Seal Stanley O. Roth
Assistant Secretary of State for East Asian and Pacific Affairs

Remarks to the Asia Society
St. Regis Hotel
Washington, DC, January 11, 2001

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U.S. Policy Toward Asia: Where We've Been, Where We Need to Go

It's a great pleasure for me to appear today before the Washington Center of the Asia Society to deliver what I consider to be a "bookend speech." For those of you who don't understand this reference, the initial bookend was the address that I delivered in December 1997 before the Asia Society shortly after assuming the position of Assistant Secretary of State. Now, a little more than 3 years later, at the end of my tenure, I am delighted to have the opportunity to share some thoughts today both on where we've been in Asia policy and where we need to go. I am deeply indebted to Judy Sloan of the Asia Society for having made both speeches possible.

In preparing my remarks today I went back and looked at the statement that I had made in December 1997. And I couldn't help but think what a difference 3 years makes!

In December 1997, Asia was just entering into the financial crisis. The crisis had already struck in Thailand and Korea, and Indonesia was beginning to feel the effects. There was, to say the least, considerable anxiety as to what was going to happen to the rest of the Asia-Pacific region.

Indeed, when one goes back now and reads some of the dire assessments that people were making at the time, it's hard to believe just how wrong they were. All of us can recall predictions of a lost decade, talk about a "lost generation" of Asian children that would be physically stunted by their failure to get adequate nutrition and intellectually stunted because they would be forced to drop out of school in order to work.

In addition to the fears about the economic and social consequences of the financial crisis, there were comparable fears about the potential political consequences. There were nightmare visions of desperate mobs of unemployed workers taking to the streets, overthrowing democratic regimes. In fact, the result was almost directly the opposite, with democratic regimes emerging in many of the countries of the region. We saw Kim Dae-jung come to power in Korea, the Democratic Party come to power in Thailand, and perhaps least expected, the fall of President Suharto and the beginning of a process leading to democratic government in Indonesia.

Happily, we find ourselves today in a very different place than expected only 3 short years ago. We find an Asia-Pacific region that has recovered much faster than expected from the crisis with no anti-democratic consequences.

Of all the issues that I've worked on during my tenure as Assistant Secretary, none gives me greater satisfaction than the role the United States played in helping the countries of the Asia-Pacific region overcome the financial crisis. Without by any means detracting from the enormous role that the countries themselves played -- for example, the leadership of Kim Dae-jung and Prime Minister Chuan -- I think it's fair to say that without the United States, the recovery could not have proceeded in the relatively expeditious fashion which it did.

This U.S. effort took several different forms, including the role we played in the international financial institutions as they helped these countries through this difficult period, and the assistance and advice which we provided directly to some of the affected countries. But it also includes most importantly keeping our own economy growing and keeping our markets open. There's no doubt that, without the United States having served as the locomotive of growth for the region, the economic crisis would have worsened rather than reversed itself as quickly as it did.

While in my remarks this morning I want to make some country specific observations -- and let me take this opportunity to apologize in advance for the fact that I won't be able to make comments on every country in the region -- I thought it would be useful to begin not with individual country analyses, but rather with some broader observations.

It is one thing to take pleasure in the fact that the region avoided serious economic collapse. But that doesn't in any way diminish that the region still faces many economic challenges. There is a widespread expectation that this will be a difficult year for many economies in the Asia-Pacific region. While we all have great reason to be dubious about specific predictions, we can at least identify the factors that are causing these concerns. First and foremost, of course, is what will happen to the U.S. economy itself. There is enormous concern in the Asia-Pacific region that the United States might turn out not to be immune to the business cycle after all and that our economy could turn south, taking Asian economic growth prospects with it.

But there are many other factors that are contributing to Asia's economic anxieties. There is the specter of higher oil prices and what this means for those economies that are dependent on oil imports. Obviously, there were winners in this equation as well -- the oil producers like Indonesia. But for most countries of the region the additional cost coming from higher energy prices will be a drain on their economy. There is also the problem of the current depressed state of the semiconductor market, which has been such an important source of exports for many Asian countries. Finally, there is the more fundamental question of whether countries will remain committed to economic reform policies that were initiated, but not carried out to completion, in 1997 and 1998 at the onset of the financial crisis. It remains to be seen whether Korea can complete the reform of the chaebols, for example, or whether the newly elected government of Thailand will continue down the path of economic reform.

Moving away from the economic realm, I would like to make a few observations on the subject of multilateralism and regional security. From the perspective of U.S.-Asia policy, I think the good news is that the sterile debate over bilateral versus multilateral security arrangements has largely ended. The Administration has demonstrated over the past two terms that it is possible to have robust bilateral security relationships and, at the same time, play actively in multilateral venues. While I'm not the right person to speak for the incoming Administration, I have heard nothing to suggest that it intends to either downgrade APEC and particularly the leadership meeting, or the ASEAN Regional Forum. So, I think that the United States has accepted the need the engage multilaterally with the region.

The bad news, however, is that while the intellectual commitment to multilateralism is there, both in the United States and the Asia-Pacific region, the political will to implement it is weak. Specifically, with the political crises confronting a number of the countries in the region, particularly in Southeast Asia, the ability of these countries to look beyond their immediate borders has diminished. Indeed, I believe that one can see a considerable turning inwards of some of the most important members of ASEAN over the past few years, including Indonesia and the Philippines, perhaps now to be joined by Thailand. While hopefully this is not a permanent condition, we do need to recognize that as long as countries face formidable political challenges at home, they're going to be less likely to engage aggressively in regional institutions. For this reason I believe ASEAN will remain challenged for some time to come. This is not to suggest that ASEAN is doomed -- far from it. Indeed, ASEAN has recently undertaken several initiatives designed to strengthen its capacity to act, including establishing a troika of past chairman, current chairman, and next-chairman to try to deal with emerging issues. ASEAN is certainly not ready to roll over and play dead, but its ability to act effectively may be constrained in the near term.

This leads me to my third point, which is the diverging dynamic between Northeast Asia and Southeast Asia. In Northeast Asia, this is essentially an optimistic moment. This conclusion may surprise those of you who follow events in the R.O.K. closely, and who are aware of the somber mood in the nation at this moment. Nevertheless, I think if one looks at Northeast Asia as a whole, several points stand out. First, economically, it is far stronger than Southeast Asia. Even in the R.O.K., despite the enormous public unhappiness about the economy, we're still looking at growth rates of 4 or 5%, a rate which would be more than welcome in most of Southeast Asia. In China, of course, we're looking at a growth rate of somewhere around 7-8%.

But when I talk about the diverging trends between Northeast and Southeast Asia, I'm talking about more than just the economic differences and the fact that some of the economies are far more robust in Northeast Asia. Specifically, I'm talking about the changing geopolitical situation as a result of the significant developments that have taken place on the Korean Peninsula. While I'll have more to say about the Korean Peninsula later in my remarks, I think it's fair to conclude that, with the North-South Summit that took place last year and the historic visit by Secretary Albright to Pyongyang, the situation is changing dramatically on the Korean Peninsula. As a result of these and other developments, there is a sense of optimism in Northeast Asia that one of the greatest threats to regional peace and security is on the way to being overcome.

Ironically, if in fact the Bush Administration can continue the progress in U.S.-D.P.R.K. relations and if additional progress is made in North-South relations, this may lead to one of the greatest challenges for the new Administration: managing the consequences of success. Specifically, I am referring to the need under these circumstances to address the issue of the forward deployment of U.S. troops in the Asia-Pacific region.

There is one school of thought to which I do not subscribe, which suggests that, if peace or at least serious tension reduction breaks out on the Korean Peninsula, this would be a negative development for the United States. According to this school, the R.O.K. would no longer be able to sustain the political costs of the U.S. military presence and will ask us to withdraw. Japan, unable to bear the pressure of being the last country in Asia with major U.S. military facilities, would then ask us to leave. The result: a dangerous security vacuum in the Asia-Pacific region.

Frankly, I don't buy this scenario. Indeed, I think we have to resist strenuously the tendency to make bad news out of good news. The reduction, or hopefully the elimination, of one of the greatest threats to peace anywhere in the world simply cannot be interpreted as bad news. Instead, the challenge for the Bush Administration is to confront directly the question of what type of reconfigured U.S. forward deployment in the Asia-Pacific region makes sense in the wake of these developments on the Korean Peninsula. I believe there is broad support in most of the Asia-Pacific region, including the Republic of Korea and Japan, for the continued deployment of U.S. forces, provided it can be demonstrated to the people in these countries that our deployment relates to the new post-Cold War reality and is not just a straight-line continuation of the Cold War deployments. This strikes me as eminently doable, but it is going to require serious study and very significant consultation between the United States, its allies, and other friends in the region.

In contrast to this optimistic assessment of Northeast Asia, the mood at the moment is gloomier regarding Southeast Asia. The enormous problems currently confronting Indonesia, the impeachment battle in the Philippines, the growing concern about Malaysia, and the change of government in Thailand have all created a perception of instability in the region. Unfortunately these concerns about political stability in at least some of these countries have started to impact upon the economies, both in terms of foreign direct investment and exchange rates. As a result of this combination of political and economic problems Southeast Asia is looking less dynamic in the short term as an integrated region.

With these overarching thoughts in mind, let me now turn to the promised tour d'horizon of individual countries. I'm going to break with my usual practice for this final speech. Instead of starting with Japan as I have always done, I will begin with the Korean Peninsula, because of the enormous change that has taken place during my watch on the Korean Peninsula.

We could spend a lot of time arguing about what North Korea's motives are and why it has changed its pattern of behavior. But I don't think we'd spend any time arguing that there has been a dramatic change in behavior. Indeed, in looking at North Korean activity, one would have to say that over roughly the past 2 years the "hermit" kingdom has become the "hyperactive" kingdom. We've seen North Korea move from almost total isolation to an aggressive policy of normalizing relations with a series of countries, including every country in ASEAN, a number of European countries including Italy, Australia, Canada, and many others. In addition, we've seen dramatic progress in terms of high-level contacts with the United States, and we've seen less dramatic but still significant high-level talks with Japan. And dwarfing all of these in significance, of course, was the extraordinary, historic summit meeting that took place last year between the two leaders on either side of the Peninsula.

At the same time that we've seen this flurry of diplomatic activity, we've also seen better North Korean behavior on several issues of extreme importance to the United States. For example, the missile moratorium has been extended without the frequent threats to rescind it that marked policy in the past. We've also seen a very easy negotiation leading to the second visit of the suspect site, a marked change from the arduous negotiating process for our initial access to the site.

This is not to suggest that the millenium has arrived in terms of the new relationship with North Korea. There are still many significant issues on the table. For all the change that has taken place, for example, there's been absolutely no change thus far on the conventional forces side of the equation.

I believe it would be a serious mistake, however, to insist on progress on every front with North Korea simultaneously, rather than dealing with those issues where we can advance U.S. national interests readily and then defer until later those issues that are more difficult. For example, we already established the precedent in the first term of the Administration with the Agreed Framework that we could significantly minimize the nuclear threat as a result of that landmark agreement. Even though it was not a comprehensive agreement -- it certainly didn't end the conventional threat to the South or the missile threat -- it nevertheless was a significant advance in U.S. security.

If the next Administration can codify a missile deal with the D.P.R.K. -- and I believe that such a deal is obtainable -- this would be another major step forward in advancing the security interests of the United States and its allies. In my judgment, it would be a serious mistake to deny the benefits to U.S. national security from achieving such a deal, solely because a conventional agreement may not be achievable in the same time period.

Going beyond the narrow issue of a missile deal, the Bush Administration will have an opportunity to find out if North Korea is actually willing to transform its relationship with the United States, which is certainly what Kim Chong-il suggested to Secretary Albright during her visit to Pyongyang. And if by reaching an agreement on missiles, one can then create an environment where it is possible later to make more progress on the conventional side of the equation and to facilitate a better relationship between the South and the North, it strikes me as self-evident that we should seize the opportunity rather than waiting for a comprehensive deal.

Finally, before leaving the subject of the Korean Peninsula, about which much more could be said, let me simply note that I believe it's wrong to conclude that the conventional threat remains as great as it has ever been. True, as I mentioned previously, there have been no force reductions or force redeployments, nor a reduction in exercises. Nevertheless, looked at from a larger perspective, one would have to conclude that deterrence has increased. First, the economic weakness of the North, particularly its ongoing dependence on the international community for food and fuel, suggests that it is not in a position to initiate a conflict. Second, the leadership of the D.P.R.K. appears to have made the decision that it needs to engage with the R.O.K., the United States, and the rest of the world in order to rescue its economy. Under these circumstances, it's very hard to imagine the scenario where the North would use force. On balance, I believe the successes of Kim Dae-jung's sunshine policy combined with the improvements in U.S.-D.P.R.K. relations over the last year have strengthened, not weakened, deterrence and reduced the conventional threat.

Turning now to Japan where events have admittedly been less dramatic than on the Korean Peninsula, I nevertheless feel a sense of satisfaction that the relationship is being handed over to the new Administration in excellent shape. The year 2000 was a very productive one in U.S.-Japan relations, as evidenced not only by President Clinton's participation in the very successful G-8 meeting in Okinawa, but also by the personal gesture on the part of President Clinton to attend the funeral of the late Prime Minister Obuchi.

Reflecting back on the many different Japan issues I've worked on in three different Administration jobs, I'm struck by how much attention is focused on what I would call the nits of the security relationship: the issue of a heliport or dealing with an incinerator outside a U.S. military facility. All of these are significant issues that need to be worked. But at the same time, these are hardly the issues that capture the special relationship between two great countries and allies. And when one looks at the foreign policy side of the agenda, one finds that there has been very close cooperation on the vast majority of foreign policy issues. Without giving a long laundry list, let me just mention a few examples where we've worked very closely and well with the Government of Japan: on Cambodia, on Indonesia, facilitating the UN referendum in East Timor, on the Common Agenda, on the Middle East peace process, and on the Balkans. We've also made significant progress in taking an issue that formerly had been a source of contention -- policy on the Korean Peninsula -- and through the innovation of the Perry process of trilateral diplomacy, made that into a major source of coordination and cooperation as well. When the new team comes in, I am confident it will find that U.S.-Japan relations are in far better shape than it sometimes appears from the outside.

Let me now move to China. I'm pleased to say that the bilateral relationship is significantly better than I had imagined it could be only 24 months ago. If you think back to the issues that bedeviled us in 1999 and in 2000, including coping with the tragic accidental bombing of the Chinese embassy in Yugoslavia and all the difficulties associated with obtaining the PNTR agreement, it appeared that U.S.-China bilateral relations were on the ropes. Management of these issues was made harder given the difficult domestic environment in the United States, including the Cox Commission Report.

I feared that the U.S.-China relationship was going to be a major campaign issue in the Presidential election and that the new Administration would have to regroup from the all-too-familiar China bashing of the campaign. Much to my pleasant surprise, I was wrong and China policy did not figure prominently during the election campaign. Meanwhile, dramatic progress was made on bilateral issues, including the extension of permanent normal trade relations as part of our agreement for China's accession to the WTO. The other important fact, albeit a temporary one, in stabilizing U.S.-China relations, was the decision by President Clinton to defer a decision on national missile defense.

But having acknowledged the obvious -- that the relationship is in much better shape than it was a year or two ago -- I should also add my assessment that the bilateral relationship is still not inherently stable. There is a complex set of issues confronting the new Administration, any one of which could pose serious challenges to the bilateral relationship and any combination of which could seriously derail it. There is an entire set of Taiwan-related issues including ones that the new team will have to address early on, such as arm sales, the Taiwan Security Enhancement Act, and the question of transits by current and former leaders of Taiwan. At the same time, there's the difficult set of issues associated both with national missile defense and theater missile defense.

Beyond these two sets of issues, there are numerous human rights issues including the publication of the annual State Department Human Rights Report and the question of what to do about a resolution at the March UN Human Rights Commission meeting in Geneva. There's also the question of China's implementation of the recent agreement on nonproliferation, particularly whether there are any serious test cases which cast doubt upon the willingness of the government of the P.R.C. to implement it in good faith.

This is a daunting set of issues to be sure, but not necessarily an unmanageable one. But as the Bush Administration sets about managing them, it needs to keep two important facts in mind. First, China itself is entering a succession process looking toward a change of leadership in 2002-2003. This will impose significant policy constraints on President Jiang Zemin and may make it more difficult for him to moderate the hard-liners on some issues, particularly with reference to Taiwan. I say this not to justify future bad Chinese behavior but simply to suggest that the Administration is going to have to take the domestic political environment into account as it manages China policy.

A second, perhaps less obvious point, is that the way the Administration manages these and other issues will have a major influence on Chinese attitudes toward the United States at a time when many in China are conflicted. On the one hand, most of China's top leaders, and especially President Jiang, value their relationship with the United States. Indeed, each time I sat in on a meeting between President Clinton and President Jiang, President Jiang always enumerated the importance that he attached to his personal friendship with President Clinton and the importance that he attached to the fact that they were meeting face-to-face.

But at the same time one hears these expressions of friendship one also hears many expressions of concern about the United States. There is certainly growing suspicion in China about the intentions of the United States. One frequently hears the phrase "sole hegemon" accompanied by a long list of activities that theoretically prove the United States is intent either on containing China or on even dismantling it. For example, an unlikely conglomeration of issues such as NATO expansion, Kosovo, the bombing of the Chinese Embassy in Yugoslavia, the passage of the Japan security guidelines, President Clinton's visits to India and Vietnam, the conclusion of the visiting forces agreement with the Philippines leading to the resumption of ship visits with that country, and of course a whole host of Taiwan-related activities are usually cited as "proof" that the United States is indeed intent on containing China.

From an American perspective, this is ridiculous. Far be it from anyone here to connect the dots between NATO expansion and the President's trips to Vietnam or India, for example. But in the P.R.C. this type of thinking is real. As it formulates its China policy, it will be important for the Bush Administration to take into account that there are some in China who want to see the United States as the next enemy, just as there are some in the United States who want to see China as the next enemy. Managing the issues between us needs to be done in such a way as to try to reduce the clout of those in China who seek to portray the United States as an enemy and maximize the influence of those who want to engage with the United States and continue to build upon the bilateral relationship.

With some trepidation, let me offer a few thoughts on cross-Strait issues, a topic which can't be covered appropriately in only a paragraph or two. I am worried about the prospects for cross-Strait relations. The reason I am worried is because I believe that neither side fundamentally understands the other. The P.R.C. does not appear to recognize the window of opportunity that opened with the coming to power of a different political party in Taiwan. Instead, based upon its own perception of traditional DPP policies which of course reflect a pro-independence position, the P.R.C. has done everything it can not to deal directly with the new regime. It has insisted on a one-China principle and has essentially embarked upon a very clumsy united front strategy, seeking to bring over elements of the opposition parties and key business leaders to the mainland side and to ignore the government currently in power. To my mind, this is a serious mistake. If there is going to be progress in cross-Strait relations, the government of the P.R.C. has no choice but to deal with the current authorities in Taiwan and to undertake any initiatives directly with them, not around them.

At the same time, it isn't clear to me that the new government in Taiwan fully understands the sensitivities of the cross-Strait issues on the Mainland side. There is still a tendency to believe that economic issues can outweigh political issues. For example, the recent decision to open up the three small links between the offshore islands and the Mainland is an obvious trial balloon for full-fledged implementation of the three big links. But it seems to ignore the fact that the Mainland is unlikely to play this game until it has persuaded itself that Taiwan is willing to abide by what Beijing calls the one-China principle.

Against this pessimistic background there have been some positive developments, including the significant formulation by Vice Premier Qian Qichen to the effect that the P.R.C. and Taiwan are both parts of China. This formulation certainly leaves room for compromise. But it isn't clear to me that either side is actually prepared at this moment to engage and to reach agreement to resume cross-Strait dialogue based upon this formulation.

My successor will undoubtedly receive all kinds of advice as to what U.S. policy should be with respect to cross-Strait issues. I know I did. But I believe the beginning of wisdom is to acknowledge that it's the parties themselves that are going to have to resolve this dispute and that the United States should not seek to throw itself in the middle. Indeed I believe the next Administration would do well to adhere to the same three pillars of policy that the current Administration has followed: adherence to a one-China policy, insistence of peaceful resolution of the dispute, and an emphasis on the resumption of cross-Strait dialogue between the two parties.

Let me now turn my attention to Southeast Asia. When I assumed this job in August 1997, I made a conscious decision to try to give Southeast Asia a higher profile within the EAP Bureau. Understandably, an enormous amount of time is necessarily taken up on the China, Japan, and Korea accounts. Nevertheless, I felt that not enough attention had been given to Southeast Asia, despite the fact that the United States has enormous interests and several treaty relationships in that region of the world. Therefore, on my first solo travel to the region as Assistant Secretary, I was sure to include both Indonesia and the Philippines on the itinerary.

There is not much good news coming out of Indonesia these days, and I am very conscious of just how easy it is to descend into gloom and doom. It is thus important to start with a reminder of how much has changed for the better in Indonesia over the past 4 years. First, Indonesia is a democracy. There is a vibrant parliament and a free press. We have opposition leaders as president and as vice president. We're beginning to see political institutions function rather than mob rule. Rather than having successions decided in the streets, we actually saw succession in the designated institutions of the Indonesian Government. We've seen responsible behavior by key opposition political leaders including Vice President Megawati and Parliamentary Speaker Akbar Tanjung. We've seen a diminished role for the military -- although one can argue just how much of a diminished role -- and the separation of the police from the military.

We've seen a resumption of economic growth, admittedly facilitated by the high price of oil but also reflecting an export boom. We've also seen some efforts by the Indonesian Government to deal with its various regional crises in a political fashion, as evidenced by the recent understanding on Aceh. I wouldn't want to overstate this point and I am particularly concerned with respect to the current situation in Papua. But the negotiation of the first humanitarian pause and now a cease-fire in Aceh is a significant development. And finally, we've seen some initial steps toward accountability for the abuses of the past, albeit more with respect to corruption than with respect to human rights abuses. For example, we've seen the resumption of the investigation of former President Suharto and the indictment of his son Tommy. Much, much more needs to be done in the accountability area but it's a start.

When viewed in its totality this is an impressive list and one which needs to be kept in mind even as we consider all the things that haven't gone as well as we might have hoped since President Gus Dur assumed power. This is one of those cases where I fear that I have been accurate in my assessments. I have frequently argued that free and fair elections were a necessary but not sufficient condition for the resolution of Indonesia's problems. Even with democracy, Indonesia is still going to face enormous challenges in dealing with the pent up problems that accumulated over more than 50 years of dictatorship. Consequently, I expect Indonesia will continue to be a roller coaster for the foreseeable future as it attempts to deal with it daunting problems.

One of the key issues in Indonesia is political stability. To put it frankly, there is none. For reasons that I don't quite understand, President Gus Dur did not seek to put together a coalition government when he formed his second cabinet. As a result, his administration basically survives as a minority government. This suggests that if his key opponents decide to try to replace him, they'll stand a reasonable chance of success, particularly if they can put together a coalition. It is understandably hard to govern, much less govern well, when most of the time must be taken up in fighting for survival.

This doesn't mean that anyone should underestimate President Wahid. Most people, myself included, failed to predict that he would assume the presidency. He is an adroit politician and I, for one, think it would be foolish to assume that he will be forced out by one or more of his opponents. But the important point is not what actually happens but rather that the prospect of continued political infighting makes it significantly more difficult to govern Indonesia well.

The economy remains another huge problem for Indonesia. Despite the resumption of economic growth, the bottom line is that Indonesia has made relatively little progress along the path of economic reform. Compared to some of the other countries of the region there has been very little restructuring either of the banking system or of corporate debt. The Central Bank remains mired in controversy and IBRA hasn't been able to accomplish nearly as much as had been hoped.

Another area of concern regards the military. My concern is not that the military will attempt to regain power through a coup. I don't see that as a likely prospect in the foreseeable future. My concern rather is a growing sense that the military is not under complete civilian control. In fact, it's not even clear that the military is under central military control. Increasingly, regional and local commanders seem to have much of the authority in their own hands and don't seem to be subject to the policy directives of the central government. We've seen this in Papua with the military's refusal to release a key pro-independence leader. We've certainly seen it in Timor with the military's refusal to disarm and disband the militias. And we've seen it in Aceh with clear efforts by elements of the TNI as well as the police to undermine the recent humanitarian pause.

The evolving role of TNI will certainly complicate the life of the next Administration as it tries to figure out if there is a basis for a resumption of military-to-military relations between our two countries. On the one hand, they will face the obvious absurdity of a situation where the United States has minimal contact with one of the most important institutions in the country. On the other hand, they'll have to address valid concerns. TNI is once again beginning to engage in serious human rights abuses, and is still part of the problem in West Timor.

The failure of the Indonesian Government to resolve the Timor refugee issues over the past 16 months ensures that the Bush Administration will have to continue to give priority to this issue. It is long-since past the time when the Indonesian Government should have taken the steps either to provide for transmigration for those individuals who don't wish to return to East Timor or to provide the safe conditions for refugee screening that would allow those who do want to return to do so. The Bush Administration will find that the Congress remains as seized of this issue as ever and that it'll be necessary to make significant progress in this area before the overall relationship with Indonesia can move forward.

In the interests of time I won't add additional thoughts either about the situation in Aceh or Papua, although I would be happy to address these topics in the question and answer period. But I would like to make just a few observations about U.S.-Indonesian relations. If I have any advice at all for my successors on this most frustrating of accounts, it would be: Stay the course! Under Secretary Albright's leadership, the Clinton Administration has given enormous priority to Indonesia as part of its overall focus on promoting and facilitating the success of new democracies. This priority should be maintained, even if Indonesian performance -- whether on economic, political, or military issues -- occasionally disappoints. We need to keep our eye on the long term and do more to educate the American public about Indonesia's strategic importance.

This is a depressing moment to be talking about the Philippines as it remains mired in the impeachment struggle against President Estrada. At this point, it's all but impossible to predict how the process will turn out and I won't try. The point that I wish to emphasize, however, is that for all of the problems associated with this impeachment process (not the least of which is the opportunity cost for the Philippine economy) it has all taken place within a democratic context. Philippine democracy has not been threatened thus far in the impeachment process and there's every indication that the process will play itself out along constitutional lines. While I've resisted making too many predictions about how the Bush Administration will behave, I confidently predict that it will recognize the results of Philippine constitutional processes and continue the excellent relationship which the United States has with whatever Philippine government emerges at the end. In this regard, we should not lose track of the significant progress that has been made in U.S.-Philippine relations over the past few years, including the negotiation of the visiting forces agreement which enables the United States to resume naval ship visits and military exercises with Philippine forces.

Having taken my last official trip as Assistant Secretary to Vietnam, where I was part of President Clinton's delegation, I would like to share just a few thoughts about U.S. relations with the countries of Indochina. First, the normalization process with Vietnam has been a surprisingly slow one. I never envisioned when I accompanied Secretary Christopher to the signing of the normalization agreement in August 1995, for example, that it would take virtually 5 years to negotiate a bilateral trade agreement. But it did. Nevertheless, the signing of that agreement this past year was a huge accomplishment and my hope is that over time it will help to transform the Vietnamese economy and hopefully open up the society as a whole.

As a result of the active diplomacy of the past 4 years, which has seen two visits to Vietnam by the Secretary of State, a visit by the Secretary of Defense, and of course the historic state visit by President Clinton, I believe that U.S.-Vietnamese relations are finally normalized in the true sense of the term. I hope it will be possible in the next Administration to move more aggressively on economic assistance programs for Vietnam, which in the final analysis remains one of the poorest countries in the Southeast Asia area.

If Cambodia can stay on the democratic path as it approaches the upcoming elections, then I think prospects for Cambodia and for U.S.-Cambodian relations are bright as well. The recent agreement reached with the United Nations on the tribunal for the Khmer Rouge is a very significant accomplishment. I hope it will lead to a changed attitude toward Cambodia in the U.S. Congress. If, as I mentioned previously, Vietnam is one of the poorest countries in Southeast Asia, Cambodia is in even worse shape and it would certainly be gratifying to see an increase in the size of U.S. assistance programs to that country. But as we saw in the last election campaign in Cambodia, democracy is not yet firmly entrenched in that country. And I believe that the international community will need to focus considerable attention upon the Cambodian electoral process in order to try to facilitate a free and fair election.

Finally, I would feel remiss if I didn't say at least a word about our friends from Down Under. I don't feel the need to say a great deal about U.S.-Australian relations, primarily because the bilateral relationship is so strong. The Bush Administration will have ample opportunity to demonstrate its appreciation of this longstanding alliance during the course of this year as we celebrate the 50th anniversary of ANZUS.

Perhaps on a more controversial note, I can suggest that the next Administration continue the forward momentum that's been achieved on U.S.-New Zealand relations. Admittedly, the nuclear issue remains as unfinished business. And until such time as that issue is resolved, there is broad consensus within the Congress and the country that there should not be restoration of a full-fledged military alliance with New Zealand. But having said that, there is much that can be done to work closely with New Zealand on a broad range of international issues. In particular, New Zealand's commitment both to liberal free trade policies and to international peacekeeping has been extraordinary. I believe it is both possible and desirable to maintain close working relations with New Zealand even if they remain one step short of an alliance relationship until such time as the nuclear is resolved.

Having reached the point where both this speech and my tenure as Assistant Secretary have come to an end, I'm tempted to conclude by quoting the immortal words of an American cartoon character: "That's all, Folks!" But of course it's not. Assistant Secretaries for East Asia come and go. But Asia policy endures. If history is any guide, the transition on Asia policy will be characterized more by continuity than by change. But as I can testify from my own experience, just managing the changes is more than a full-time job. I have enjoyed my opportunity to serve and I wish the new team the best of luck as it enters the fray and begins working on the most important region of the world.

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