STANLEY ROTH TESTIMONY ON U.S.-ASIA

[moe@xxxxxxxxxxxxx]

Subject: STANLEY ROTH TESTIMONY ON U.S.-ASIA RELATIONS 

Dear BurmaNetters,
                                      I reckon that the following documnet
is something pivotal we can learn about the US Policy toward Asia for the
year 1999.The document discussed about Burma will be posted as soon as it is
released.

Until then,

Peace.

Regards,

Julien Moe
**************
10 February 1999 

TEXT: 2/10 STANLEY ROTH TESTIMONY ON U.S.-ASIA RELATIONS 

(This year will not be a repeat of last year)  (4740)

Washington -- It would be a mistake to believe that 1999 will be a
repeat of 1998, according to Assistant Secretary of State Stanley
Roth.

In testimony before the House International Relations Subcommittee on
Asia and the Pacific February 10, Roth said: "The people of Asia face
a more uncertain future, but, in the long run, not necessarily a worse
future. This period of change has been, and will continue to be,
difficult for some time to come."

Addressing the Asian financial crisis, Roth predicted that each of the
three countries initially most affected by the crisis -- Thailand,
Korea, and Indonesia -- should witness improved economic performance
in 1999. "The most dramatic turnaround is anticipated to occur in
Korea, where the International Monetary Fund -- the IMF -- recently
forecast a 2 percent growth in GDP," he said.

Maintaining this positive trend, Roth said, will depend first and
foremost on what the countries of the region do for themselves. "Asian
economies still face immense challenges in areas such as bank and
corporate restructuring; areas essential for the restoration of
sustained growth. Political instability associated with the June
Indonesian elections or the adverse impact on investor confidence
based on economic developments in other regions -- the contagion
factor -- also immediately come to mind," he said.

"The state of the Japanese economy will be critical as well," Roth
said. "Despite significant steps by the Japanese government to address
its banking crisis and stimulate its economy, it remains unclear if
these measures will be sufficient to lift Japan out of recession. With
the Japanese economy representing more than half of Asia's GDP, the
state of Japan's economic health -- or failure to regain it -- will be
critical to the region's overall economic health," he said.

Roth insisted, however, that given the strength of the U.S.-Japan
security relationship and the convergence of bilateral international

interests on so many issues, it would be incorrect to conclude that
the U.S.-Japan relationship will be characterized solely by economic
issues. "The challenge in 1999 will be to maintain the proper balance
in the relationship. I look forward to Prime Minister Obuchi's trip to
the U.S. in May, and the opportunity it represents to underscore the
robust and diversified nature of this cornerstone relationship in
Asia," he said.

Turning to China, Roth said the Clinton Administration's strategy of
engagement with China, and the political will to implement it on both
sides, has helped to put U.S.-China relations back on a more
productive track. "The exchange of state visits between President
Clinton and President Jiang personified this progress, but it also
provided momentum for movement forward on issues of mutual concern.
Among the successes we can point to are tangible progress on promoting
stability on the Korean peninsula and in South Asia, and resolving the
Asian financial crisis," he said.

Roth cautioned, however, that the United States and China still must
resolve difficult problems such as human rights.

The Administration is deeply concerned about the recent arrests and
prosecution of prominent democracy advocates, he said. "China's
detention, trial, and sentencing of democratic activists is
deplorable. We continue to press for improvements in China's human
rights situation."

Roth added that the Administration raises "individual cases and
systemic issues, including China's ratification and implementation of
key international covenants that it signed over the last two years.
Last month Assistant Secretary Koh held a three day dialogue on human
rights with Chinese officials. Next month we will be working in Geneva
at the UN Human Rights Commission where we also intend to express our
views clearly and forcefully."

"We are pressing for improvements in the human rights situation
throughout China, including in Tibet," he continued. "We continuously
urge the Chinese government to engage in substantive dialogue with the
Dalai Lama and to preserve and protect the unique cultural, linguistic
and religious heritage of Tibet."

Roth's testimony also addressed issues relating to the Korean
Peninsula, Indonesia, and the importance of regional institutions such
as the Association of Southeast Asian Nations (ASEAN) and the
Asia-Pacific Economic Cooperation (APEC) forum.

Following is the official text of Roth's testimony:

(begin text)

TESTIMONY OF

STANLEY O. ROTH

ASSISTANT SECRETARY OF STATE FOR

EAST ASIAN AND PACIFIC AFFAIRS

HOUSE INTERNATIONAL RELATIONS COMMITTEE

ASIA AND THE PACIFIC SUBCOMMITTEE


FEBRUARY 10, 1999



Introduction

Mr. Chairman, thank you for the invitation to speak on challenges in
U.S.-Asia policy as the 106th Congress and your Subcommittee begin
your work of this session.

In 1998 we witnessed a period of great change in Asia. Many previously
accepted norms have given way. First, the notion of a permanent "Asian
miracle" -- a notion fueled by years of high growth rates --
evaporated as several key economies contracted sharply and many others
cooled down or slipped into recession.


Second, as the Asia-Pacific region suffered the consequences of the
economic crisis, a demand for new political leadership emerged in many
countries. This included, most notably Indonesia, where President
Soeharto was toppled by street violence after 32 years in power. Only
a year and a half after the onset of the economic crisis, the
previously stable landscape of Asian political leadership has been
altered by the rise to power of many new leaders: in Indonesia,
President Habibie; in Japan, Prime Minister Obuchi; in Korea,
President Kim Dae Jung; in New Zealand, Prime Minister Shipley; in the
Philippines, President Estrada; and in Thailand, Prime Minister Chuan.

Third, 1998 proved to be a challenging year for the regional
institutions of APEC and ASEAN/ARF, which struggled to demonstrate
their relevance in the face of the economic crisis.

The people of Asia face a more uncertain future, but, in the long run,
not necessarily a worse future. This period of change has been, and
will continue to be, difficult for some time to come. But, it would be
a mistake to believe that 1999 will be a repeat of 1998.

In these initial remarks today, rather than attempting to be
comprehensive, I would like to concentrate on two cross-cutting issues
and four country-specific priorities.

The Asian Financial Crisis

Without in any way underestimating the need to deal with the still
serious social and humanitarian consequences from the Asian financial
crisis, it should be recognized that 1999 will be different from 1998.

In each of the three countries most seriously affected initially by
the crisis -- Thailand, Korea, and Indonesia -- 1999 should witness
improved economic performance. The most dramatic turnaround is
anticipated to occur in Korea, where the International Monetary Fund
-- the IMF -- recently forecast a 2 percent growth in GDP.

December IMF figures indicate that the Thai economy contracted by 8%
in 1998. The outlook for 1999 is better, with some Thai officials even
predicting a return to positive growth by the end of the year. Even in
Indonesia, which is less far along in its recovery, the 15% negative
growth rate of 1998 should slow to a less calamitous IMF-estimated
negative 3.4% in 1999 as the economy begins to bottom out.

Asian economies which were, relatively speaking, less impacted by the
financial crisis -- Singapore, the Philippines, Taiwan -- are likely
to continue in that trend. The IMF expects the Philippines to have a
2.5% growth rate; down from its pre-crisis rates, but nonetheless
positive. Singapore, likely to experience continued recession in the
first half of 1999, nevertheless does not expect to drop into negative
growth rates for the year as a whole. Taiwan, whose export led economy
is particularly vulnerable to the overall health of the region, is
hoping to maintain growth rates near last year's 5% level.

Obviously there is much that could disrupt this guardedly positive
outlook. First and foremost will be what the countries of the region
do for themselves. Asian economies still face immense challenges in
areas such as bank and corporate restructuring; areas essential for

the restoration of sustained growth. Political instability associated
with the June Indonesian elections or the adverse impact on investor
confidence based on economic developments in other regions -- the
contagion factor -- also immediately come to mind. The state of the
Japanese economy will be critical as well.

Despite significant steps by the Japanese government to address its
banking crisis and stimulate its economy, it remains unclear if these
measures will be sufficient to lift Japan out of recession. With the
Japanese economy representing more than half of Asia's GDP, the state
of Japan's economic health -- or failure to regain it -- will be
critical to the region's overall economic health.

The Significance of Regional Institutions

One of the main accomplishments of the Clinton Administration in Asia
has been vigorous support for the establishment and strengthening of
regional institutions. We were the catalyst for the first Leaders
Meeting in APEC, and strongly supported the initiative of the
Association of Southeast Asian Nations -- ASEAN -- to establish the
ASEAN Regional Forum.

1998 was, admittedly, a difficult year for ASEAN. With its most
populous member, Indonesia, preoccupied with internal problems, with
difficulty arriving at consensus with its expanded membership and with
the rise of bilateral tensions between some of its members, ASEAN
certainly appeared less robust than in previous years. These problems
spilled over into the ASEAN Regional Forum (ARF), which had difficulty
bringing attention to bear on security issues such as the South China
Sea.

Some observers, generalizing from these experiences, have been quick
to conclude that ASEAN is permanently weakened. I do not share this
view, and believe instead that ASEAN's deft response to the delicate
1997-98 Cambodian situation is more predictive of its future utility.
I expect to see ASEAN's effectiveness increase as the region's general
vitality returns.

Similarly, cries of the irrelevance of the Asia Pacific Economic
Cooperation, APEC, seem misplaced to me. What APEC is, and will
remain, is the best vehicle through which we can make it easier for
business to do business in the region. Founded on the concept of trade
and investment liberalization, APEC was never intended -- or
structured -- to be an Asian IMF.

APEC leaders did, however, embrace a comprehensive strategy to
strengthen national financial systems, to improve transparency and
accountability, and to help restore sustainable growth in the region.
In addition, at Secretary Albright's initiative, APEC will work to
develop a social framework for growth to help those most vulnerable to
the hardships arising from the crisis. Leaders also adopted the vision
of an integrated gas infrastructure for the region, pushed forward
efforts to promote and facilitate the development of electronic
commerce, and renewed their commitment to advance sustainable
development including programs on sustainable cities, cleaner
production, and protection of the marine environment.

The President's planned participation at the September APEC Leaders
meeting in New Zealand will help to re-affirm APEC's dynamism. So too,

I believe, will our efforts to define a solid work program intended to
highlight APEC's unique ability to promote trade and investment
liberalization.

Japan:  Cornerstone in Asia

It is not an accident that I address Japan as the first of four
bilateral focal points: Japan remains the cornerstone of U.S. security
in Asia. President Clinton's trip at the end of 1998 was successful in
emphasizing this point and in strengthening our bilateral
relationship. 1999 should see further improvements.

We are presently positioned to make good progress on a range of
bilateral security issues in 1999. Senior Japanese elected officials
have assured us of their commitment to passage of legislation to
implement the Defense Guidelines. Recent Okinawa election results bode
well for progress on crucial base issues, including the relocation of
Futenma Marine Corps Air Station. We expect that the Diet will approve
funding for research cooperation with the U.S. on Theater Missile
Defense (TMD.) Perhaps most important, the relevance of our security
relationship in the post cold war period has been amply demonstrated
by our close cooperation -- both bilaterally and trilaterally -- on
Korean peninsula issues.

Our partnership on global issues of mutual concern -- our "Common
Agenda" -- is also faring well. Launched in 1993 by President Clinton
and then Prime Minster Miyazawa, the U.S. and Japan are now working
together around the world -- in more than 200 projects -- to fight
disease, study climate change, and protect the environment.

The strength of our traditional security relationship and our emerging
global issues agenda does not diminish, however, our concerns about
Japanese economic issues. In 1998, the robustness of the U.S. economy
helped to buffer the effects on Asia of the weakened Japanese demand
for goods and services, but clearly, for its immediate neighbors,
there is no substitute for a healthy Japan.

Since coming to power in July of 1998, Prime Minister Obuchi's
government has taken significant steps to address Japan's banking
crisis and stimulate its economy. While Japanese officials believe
that these measures will be sufficient to avoid a banking crisis and
lift Japan out of recession in 1999, persistently sluggish private
demand and worrisome rises in interest rates, give reasons for
concern.

For the fiscal stimulus of this year to translate into sustained
positive growth in the longer term, Japan needs to deregulate and open
its markets further. It has taken some steps in this direction,
notably in the financial sector, but structural changes need to go
broader and deeper. We are looking for positive results this spring in
the second year of our bilateral "Enhanced Initiative on
Deregulation."

In addition to macroeconomic policy, trade issues remain a very
serious concern. In 1999, the U.S. trade deficit with Japan could
reach a new record of over $66 billion. I know that the members of
this committee follow trade issues -- such as our discussions
concerning deregulation and competition policy, Japanese steel exports
to the U.S., Japanese government procurement, and WTO related concerns

-- closely. In each of these diverse areas the U.S. is not seeking
undue access or special treatment. Rather, we seek a level playing
field. And in doing so, it should be emphasized -- as President
Clinton did in his trip to Japan -- that Americans will not be the
primary beneficiaries of a more open Japanese market place.
Ultimately, it is the Japanese consumer who will benefit from greater
selection, greater competition, and lower prices.

Given the strength of our security relationship and the convergence of
our international interests on so many issues, I think it is incorrect
to conclude -- as some have argued -- that the U.S.-Japan relationship
is, or will be, characterized solely by economic issues. The challenge
in 1999 will be to maintain the proper balance in the relationship. I
look forward to Prime Minister Obuchi's trip to the U.S. in May, and
the opportunity it represents to underscore the robust and diversified
nature of this cornerstone relationship in Asia.

U.S.-China Relations

Many experts consider China the greatest foreign policy challenge
facing the U.S. today, and with good reason. China's remarkable
economic achievements, increasing diplomatic prominence and growing
military strength over the course of the past decade have made the
utility of constructing a cooperative relationship with China all the
more pressing.

Before turning to U.S. China policy, I would like to set the context
with a few observations about internal developments within China. The
bottom line is that 1999 will be a difficult year. The Asian financial
crisis is beginning to have a noticeable impact on the Chinese
economy. Implementation of previously announced reforms, including
privatization of state economic enterprises and getting the military
out of the economy, have not been fully achieved. The banking system
continues to experience considerable difficulty. The cumulative impact
of all of these factors has been a marked slowdown in growth, which in
turn has affected social stability as evidenced by protests by laid
off workers and hard pressed farmers. Recent terrorist activities in
border provinces associated with separatist movements have contributed
to leadership anxiety. The overall picture, then, is of a China that
is experiencing considerable problems in its ongoing path towards
modernization.

The Administration's China policy must deal with this complex reality.
Our efforts are geared to facilitate the emergence of a China that is
stable and non-aggressive; that cooperates with us to build a secure
regional and international order; that adheres to international rules
of conduct; that has an open and vibrant economy; and that works to
protect the global environment. We work to achieve these goals by
engaging China.

Engagement, as Secretary Albright has often noted, is not the same as
endorsement; it is not about turning a blind eye to practices at odds
with our principles or about forsaking democratic ideals in the name
of political expediency. Engagement is quite simply a way to move
beyond the sterile shouting match which had characterized US-China
relations after Tiananmen by establishing an overall strategic

framework based upon the growing intersection of shared interests,
thereby increasing opportunities for cooperation and improving the
prospects for resolving differences.

This strategy, and the political will to implement it on both sides,
has helped to put U.S.-China relations back on a more productive
track. The exchange of state visits between President Clinton and
President Jiang personified this progress, but it also provided
momentum for movement forward on issues of mutual concern. Among the
successes we can point to are tangible progress on promoting stability
on the Korean peninsula and in South Asia, and resolving the Asian
financial crisis.

We are encouraged by China's serious study of membership in the
Missile Technology Control Regime. We look forward to productive
cooperation towards a Biological Weapons Convention Protocol and
implementation of the Chemical Weapons Convention and we are pleased
with the substantial steps China has taken in recent years to bring
its nuclear non-proliferation practices into line with international
norms.

The strategy has also helped create a positive environment for the
resumption of discussions between Taipei and Beijing. In the past
year, we have welcomed important developments in cross-strait talks
that have enhanced the prospects for peaceful resolution of
cross-strait issues. The October 1998 visit of the top Taiwan
negotiator, C. F. Koo, to Shanghai and Beijing and the upcoming visit
of the PRC negotiator to Taiwan are both positive and promising
developments.

But even as the U.S. and China find new ways to move forward with such
strategic cooperation, we must also make progress on resolving
difficult problems. Human rights is an important case in point.

The Administration is deeply concerned about the recent arrests and
prosecution of prominent democracy advocates. Secretary Albright
recently addressed the heart of our concerns when she said:

"I could not fairly represent [the American people] if I did not
emphasize America's belief that organized and peaceful political
expression is not a crime or a threat; it is a right that is
universally recognized and fundamental to the freedom and dignity of
every human being. Accordingly, we are profoundly distressed by the
unjustified prison sentences recently imposed upon a number of Chinese
who tried to exercise that right."

China's detention, trial, and sentencing of democratic activists is
deplorable. We continue to press for improvements in China's human
rights situation. We raise individual cases and systemic issues,
including China's ratification and implementation of key international
covenants that it signed over the last two years. Last month Assistant
Secretary Koh held a three day dialogue on human rights with Chinese
officials. Next month we will be working in Geneva at the UN Human
Rights Commission where we also intend to express our views clearly
and forcefully.

We are pressing for improvements in the human rights situation
throughout China, including in Tibet. We continuously urge the Chinese
government to engage in substantive dialogue with the Dalai Lama and
to preserve and protect the unique cultural, linguistic and religious

heritage of Tibet. We were disappointed that there has not been PRC
follow-up to President Jiang's overture to the Dalai Lama at the June,
1998 summit. We urge the Chinese authorities to establish a meaningful
and productive dialogue with the Dalai Lama or his representatives.

Turning to economic issues, in 1998 the U.S. trade deficit with China
-- second only to the U.S. deficit with Japan -- was $58 billion.
Against this backdrop, we have begun to see new Chinese protectionist
measures. Long-standing trade irritants over agricultural products --
wheat, meat, citrus -- remain unresolved. I hasten to add however,
that the news is not all negative. U.S. exports to China last year
rose 11% and U.S. companies increased their market share compared to
their foreign counterparts.

The Administration believes the best way to address these problems and
to give American businesses fair access to China's markets -- just as
China has access to U.S. markets -- is to bind China to the rules and
standards of the World Trade Organization. We are working hard to move
China in this direction by negotiating a commercially meaningful
agreement with them.

The Administration is also very mindful of the issues raised in the
Cox Committee's report. Clearly, we need to maintain effective
measures to prevent the diversion of U.S. technology and prevent
unauthorized disclosure of sensitive military information. We welcome
the committee's recommendations on ensuring effective export controls
and strong protections in the context of our national security,
foreign policy, and economic objectives.

The Korean Peninsula 

There is no greater threat to peace and stability in the Asia-Pacific
region than the situation on the Korean Peninsula. The combination of
the discovery of a suspect underground facility and the August 31 test
of a Taepo-dong missile has raised tensions in the region and raised
questions about the viability of the Agreed Framework if these issues
are not satisfactorily resolved.

In response to these developments, the Administration has held several
rounds of negotiations with the DPRK concerning the suspect facility.
We have made several points absolutely clear:

-- unless this issue is resolved the Agreed Framework will be at
serious risk;

-- this issue can only be resolved by full access to this suspect site
and that one visit won't be sufficient; and

-- the United States will not "buy" compliance with the Agreed
Framework.

In every negotiating session with the DPRK, we also make it clear that
a second long-range missile test would have serious consequences and
could jeopardize KEDO funding and other aspects of our relationship.

At the same time we have reiterated our intention to continue to
supply food aid to North Korea in 1999 on a humanitarian basis, in
response to World Food Program appeals.

While our most recent discussions in Geneva on the suspect facility
showed some movement, they have not yet come to closure, and we expect
to hold another round of talks in February.

The DPRK has been less forthcoming on missile talks. The
Administration is pressing the DPRK very hard on this issue. We expect

another round of talks soon.

As we continue to seek progress on these two issues the United States
and our two key allies have agreed that funding for KEDO should
continue. The termination of such funding while negotiations are
underway would only provide an opportunity for the DPRK to leave the
negotiating table, on the grounds that we were not fulfilling our
obligations under the Agreed Framework.

I want to assure the Committee that the Administration is fully aware
of the provisions in the legislation enacted last year conditioning
KEDO funding on progress with respect to both the suspect facility and
the missile talks. Beyond the legal requirements, the point I would
like to stress is that the Administration shares the same concerns as
the Congress. The Agreed Framework and KEDO are not ends in
themselves; their purpose is to freeze the DPRK's existing
graphite-moderated nuclear reactors, the reprocessing facilities, the
spent fuel storage, and other related facilities at Yongbyon in order
to stop a serious proliferation threat. Unless our concerns about the
suspect facility are addressed, we will have to address the question
of whether the Agreed Framework is working.

It is for precisely this reason that Dr. William Perry, the former
Secretary of Defense, has been asked to undertake a comprehensive and
thorough review of our North Korea policy. I am confident that his
close consultations with Congress, outside experts, our allies in
Seoul and Tokyo and other countries, will result in a meaningful
contribution to our North Korea policy.

Indonesia  

Indonesia, the fourth most populous country in the world, has been the
hardest hit by the Asian Financial crisis. The country straddles vital
international shipping and air lanes, has vast natural resources, and
wields significant influence in Southeast Asian politics. All this
makes it of strategic importance to the U.S. Although many reasons for
concern remain in Indonesia, much has been accomplished since
President Soeharto's forced resignation last May.

The most dramatic and welcome development in Indonesia in 1998 was the
rapid emergence of many aspects of democratic government, including a
free press and the right to organize political parties. The upcoming
June elections have the potential to be the first truly democratic
elections in Indonesia in more than 40 years. Or, putting it another
way, that makes these elections the first since 1955 where the outcome
is not known in advance.

The success of the elections constitutes our highest short-term
priority for Indonesia, since they constitute a necessary, if not
sufficient, condition for the restoration of political stability and
economic recovery. The newly passed election laws have been accepted
by all of the major opposition leaders in Indonesia as sufficient to
allow for free competition. The growing spectrum of diverse political
parties -- all of which currently believe they will win in the
elections -- is another indicator of a healthy political process.

Nonetheless, there are any number of challenges facing the elections
including the possibility of manipulation, boycotts, and discontent

with the retention of un-elected parliamentary seats by the military.
Working with USAID, we have allocated more than 20 million dollars
towards supporting the elections. But this is far short of the amount
needed and we are working closely with other potential donors to
ensure that additional necessary monies are made available to
Indonesia on a timely basis.

Another positive change under President Habibie has been the
willingness of the Indonesian government to participate in serious
negotiations for a political resolution to the East Timor situation.
The two major proposals offered by the Indonesian government,
broad-based autonomy and independence, certainly provide a basis for
negotiation and potentially for resolution of the issue, although
other outcomes may well emerge in the UN-sponsored negotiations.

However, it should be emphasized that any viable solution in East
Timor must seek to avoid the type of bloodshed that occurred in 1975
when Portugal withdrew. For this reason we are deeply concerned by
numerous reports that the Indonesian army has been arming
pro-integration militia groups. When I met with Defense Minister
Wiranto in Jakarta last week to express this precise concern, he
indicated that he supported a proposal by Xanana Gusmao to disarm all
paramilitary forces on East Timor. While I welcomed his statement,
implementation remains key.

Even as I emphasize several important areas of positive change in
Indonesia, I do not mean to ignore the numerous difficult problems
that remain. First and foremost, is the problem of containing the
violence that has arisen in so many parts of Indonesia, including but
by no means limited to East Java, Aceh, Ambon, and East Timor. The
Indonesian government is obligated to protect the lives and well-being
of all of its citizens, including those of Chinese descent.

A second set of issues revolved around the economy, which experienced
15% negative growth last year and will continue to contract this year,
albeit at a slower pace. Indonesia must do its share to continue its
implementation of its economic reform program agreed to with the IMF,
World Bank, and Asian Development Bank, and which is essential to
restoring confidence and growth to its economy. At the same time, it
is crucial that the international community remains committed to
seeing the economic recovery process through and to addressing social
safety net programs to help Indonesia's poor.

Conclusion

I know that this Subcommittee has great interests in Cambodia, Burma,
Malaysia, and other countries in the region which I have not
highlighted in these opening remarks. I look forward to discussing
these with you.

(end text)