As the most eventful century in the history of mankind moves into its eighth decade, that one-half of the world which we call Asia displays the widest conceivable range of trends. Asian states run the gamut from high levels of economic growth and political tranquility to conditions of economic stagnation or retrogression, and perennial conflict. Even within a single state, a precise balance sheet may be complex and difficult to draw with certainty. The hallmarks of the Asian scene are fragility and fluidity.

A similar situation applies to the international relations of the region. Although efforts are being made to give regional cooperation a deeper meaning via experiments like ASEAN (Association of Southeast Asian Nations), and potentially a Pacific Basin Community, conflict over Indochina continues to bring tragedy to millions, and relations among the major Pacific-Asian states remain deeply troubled in certain instances, with militarization rising on all sides.

II

Despite multiple obstacles, economic gains continue to be registered in most parts of Asia, although 1979 was not up to the performances of 1978, with few exceptions. Today, Asian states can be divided into three economic categories: the industrial and semi-industrial nations; the developing societies; and the regions of stagnation. For the first group, the 1970s were a period of spectacular growth, with advances in gross national product (GNP) averaging eight to ten percent per annum. The developing nations also achieved satisfactory growth rates for the most part, especially when compared with late-developing societies elsewhere. Yet their progress was more erratic, often affected by shifting political currents, and overall growth was slower, falling into the four to six percent range. The stagnant societies were hobbled by rigid ideologies and perennial conflict; for them, economic development had a low priority.

Asia's advanced societies are led by Japan, followed by South Korea, Taiwan, Singapore and Malaysia. It is hardly a coincidence that each of these states partakes of the Sinic cultural tradition (Malaysia through the strength of its Chinese community), which bequeathed three legacies of great importance to the drive for economic modernization: a respect for education, experience in complex organization and a strong work ethic.

Such a legacy can be damaged if erroneous policies are pursued, as the case of the People's Republic of China illustrates. Yet none of these states made such mistakes. Their basic strategies have been virtually identical, with the partial exception of Malaysia, a nation richly endowed with natural resources. In each, the government played a prominent role in general planning and control, but the private sector was given strong support, with the premium upon an export-oriented economy, advantage being taken of a high savings ratio, relatively cheap, increasingly skilled labor, managerial talent, foreign-acquired technology and political stability. It is a strategy that has worked brilliantly, and continues to work-but with signs that rising hazards may be at hand unless important changes are initiated.

In 1979, South Korea, Taiwan, Malaysia and Singapore achieved growth rates of seven to eight percent, and Japan-already an industrial giant-improved its 1978 growth, reaching roughly six percent.1 Per capita GNP has risen significantly, as has participation in world trade. For most of the 170 million people living in these societies, a profound social revolution has been taking place as a measure of affluence comes into their lives, although pockets of poverty remain and, with accelerated growth, income distribution has become less equitable in some instances. There are more substantial problems, however. Dependence upon the prosperity and openness of the advanced industrial world, notably the United States, has been high. Now growth rates in the United States and similar nations are slowing and protectionism is threatened. Equally serious, inflation has become a major problem, sparked by steeply rising oil costs.

The need for a more balanced economic strategy, placing heightened emphasis upon the domestic market and expanded social services, together with a greater diversification of markets, is now apparent to most governments. Its achievement, however, will not be easy, nor will it resolve all of the problems. Indeed, governmental expenditures for needed social services must be moderate if inflation is not to be heightened. Meanwhile, the health of the U.S. economy and its international economic policies remain of critical importance.

The second category of states, the developing societies of Asia, are generally experiencing lower growth rates and more serious inflation. Asia's two massive societies, China and India, fall into this category. China's real growth rate in 1979 appears to have been slightly less than five percent (although the data are still inadequate), with steep price increases authorized on various commodities. India's real growth probably did not reach four percent, with inflation running above 15 percent. In the other developing states of southern Asia, growth rates were about five percent, with the exception of Thailand and Bangladesh, where seven percent was attained. Inflation ranged between 10 and 30 percent, with the average around 15-20 percent.

While economic performance among this group of states during 1979 was rarely spectacular, it was at least satisfactory in most cases. Concerning these societies, indeed, one could afford to be cautiously optimistic if the social and political variables-domestic and regional-could be ordered. Increasing use has been made in Asia of the extraordinary scientific-technological revolution of our times. Food production has generally been growing at three to four percent in recent years (more rapidly than in such areas as Africa), and the prospects for population control appear increasingly favorable. The struggle is far from being won. Much of Asia is situated in climatic zones hazardous for agriculture. Dependence upon the weather remains high. And governmental laxness or popular resistance remain obstacles to family planning in certain areas. Yet generally, progress on the food and population front appears underway or in prospect.

Equally important is the availability of an ever larger pool of capable, trained managers and skilled workers. Finally, a new political era has dawned for many Asian societies. Gone are old first-generation revolutionaries who were ignorant of and uninterested in the building of viable economies. Today, a second or third generation of political leaders holds power, individuals generally more pragmatic and development-oriented, with their primary attention focused upon the domestic scene, willing and able to utilize the technocrats and managers that have become increasingly available. Even where segments of the old first generation cling to power, as in China, the learning experience of the past several decades has often been considerable, as current events illustrate. Only in Hanoi do old patterns of thought and behavior persist.

Like the industrial societies of Asia, the developing states have to deal with a rapidly changing global environment. The old economic game plan of extensive reliance upon exports, with a rapid progression from low- to high-technology products, may work less well for latecomers. Resistance on the part of the advanced industrial states is stiffening, with their rate of growth slowing, making it more difficult for them to absorb ever-greater quantities of foreign goods. Asian developing societies depend heavily on the U.S. and Japanese markets, and in 1979 the combination of their own high energy costs and economic problems in the West began to be reflected in the economic statistics.

The economic challenges that lie ahead for Asia seem clear. The most serious problem of the early 1980s is likely to be inflation, an enemy that will respect no political creed. Coupled with this will be recurrent crises for many Asian states in their current account balances, reflecting the mounting pressure for imports as development progresses, including high-cost energy supplies. Lower growth rates in the advanced nations and the propensities for protectionism represent additional hazards.

It is not surprising, therefore, that in various quarters, and especially in Japan and the United States, renewed interest has been expressed in some type of pan-Pacific economic organization. In Tokyo, the Ohira government commissioned a report on a Pacific Basin Community, with Saburo Okita, later to become Foreign Minister, playing a leading role. In Washington, a recommendation for the creation of an Organization for Pacific Trade and Development was forwarded through Senator John Glenn's subcommittee of the Senate Foreign Relations Committee. In various other bodies, public and private, discussions proceeded on the need for a comprehensive, new multilateral approach to the Pacific-Asian economic issues of the late twentieth century.

Opponents argued that the problems involved in launching a new organization-questions of membership and function-rendered its utility dubious. It was also asserted that it would represent an unnecessary duplication of existing bodies such as the OECD (Organization for Economic Cooperation and Development) that take a global approach. The ASEAN states were uncertain in their reactions, not wanting to be swallowed up by a larger body before their own regional cohesion had been well established. It is probable, nevertheless, that because of the growing economic interdependence of the Pacific-Asian nations, the inadequacy of purely bilateral approaches, and the vital linkage between economic relations among states at different stages of development and regional security, the nations of the Pacific rim will grope their way toward some new regional economic institutional structure.

Meanwhile, the importance of the political variable in Asia itself cannot be exaggerated, as an examination of the third category of states, Asia's economically stagnant societies, poignantly reveals. Throughout 1979, Indochina was a nightmare of suffering and bloodshed, with Kampuchea (Cambodia) serving as the extreme example. The old men who dominate Hanoi, and hence control the political-military fate of Indochina at present, continue to place their highest priority upon regional domination. For Vietnam, and hence perforce for Kampuchea and Laos as well, domestic economic development has recently occupied a strictly secondary position. Despite very considerable assistance from the U.S.S.R., therefore, the Vietnamese economy remains in a shambles.

In Kampuchea a cruel irony has unfolded. The Pol Pot government, by draconian measures unprecedented in modern history, had forced all of its people back to the soil. Using the most primitive means and at great human sacrifice, it had succeeded by the end of 1978-according to unbiased Japanese observers-in getting portions of the countryside back into production. At that point, it was driven from power, and with renewed conflict came new waves of migration, abandonment of fields and scorched-earth tactics, reducing the survivors to destitution once again. In Laos, the situation is much less acute, but economic development there is hampered by the departure of most Western-educated experts, the lack of experience among Pathet Lao veterans, continued dissidence within the multi-ethnic communities of this non-nation, and the heavy hand of the Vietnamese overlords.

In Burma, stagnation has seemed to be a deliberate policy as a means of maintaining stability. Defenders of "the Burmese way of socialism" insist that the peasantry, living primarily on a barter economy and given some governmental assistance, are not unhappy. Isolation also helps, since no comparisons are possible. Whatever peasant attitudes may be, dissatisfaction permeates the urban areas, especially among the better educated civilians. They know that the military are a relatively privileged class, that the black market is the only means of obtaining any amenities, and that the price of economic stagnation is not only the physical grubbiness of cities like Rangoon but also the intellectual stultification that robs each successive generation of Burmese youth of opportunities afforded by the twentieth century. Ultimately, the Burmese government will have to acknowledge such resentment by means other than repression, and for several years Rangoon authorities have been cautiously accepting foreign assistance in small amounts. In April, a Burma Aid Group, formed in 1976, met in Tokyo under the aegis of the World Bank with the Burmese Deputy Prime Minister and Minister for Planning and Finance in attendance. Financing for several new projects was tentatively approved. Dramatic changes in Burmese political and economic policies, however, are not likely as long as the Ne Win government is in office.

There is little that the United States can or should do with respect to the stagnant economies. The attempt to bribe the leaders of Vietnam by proffering them extensive economic assistance in exchange for good behavior has been a conspicuous failure in addition to raising a host of ethical and strategic questions. The impetus for change and the construction of a base from which economic assistance can be effective must come from within, and be reflected in deeds, not mere words.

III

If there are dark spots and uncertainties in Asia, a cautious optimism regarding economic progress would seem warranted, taking the scene in its totality. Yet at every turn, sociopolitical variables assume great importance. In general, neither Western-style parliamentary democracy nor Russian-style communism has succeeded in Asia. The search for effective political substitutes, however, has not borne fruit up to the present. Consequently, much of Asia remains heavily dependent upon individuals or small oligarchies to provide immediate direction and a political order. Durable political institutions have yet to be built. As a result, most Asian states are afflicted by periodic succession crises, and the legitimacy and hence the authority of the state is under recurrent challenge. The rule is that of men more than that of law-and all men are perishable.

In East Asia, Japan is the sole nation presently operating a full-fledged parliamentary democracy. Elsewhere, restraints operate in varying degree. In South Asia, three societies-India, Sri Lanka and Bangladesh-are struggling mightily to make parliamentary democracy work, with Pakistan having again retreated from the effort in recent months; but none of the latter societies offers the most propitious socioeconomic environment for a democratic experiment. (That the effort has had even a degree of success casts grave doubt upon the classical Marxist thesis that ties political structure to a nation's stage of economic development.) These societies do have one factor in common, namely, a heritage of British tutelage of the indigenous elites, and that has proven to be highly important. Yet the ultimate fate of parliamentary democracy in South Asia remains in doubt.

Russian-style communism has fared scarcely better, despite the apparent gains in Indochina and Afghanistan. Dissatisfaction with prevailing as well as past policies now runs deep among both elites and masses in China, with few institutions above searching criticism. In North Korea, under the label of communism, one man has assumed absolute power. But will Kim Il Sung leave behind him more than an all-powerful military and a faction-ridden party reminiscent of classical Korean politics? Similarly, in Indochina, the traditional patterns of authoritarianism may have been revitalized in more pervasive form via the Communist Party, but what past political system caused hundreds of thousands to risk their lives in flight?

It is clear that the range of political options for most Asians at this point is between a quasi-authoritarian system that permits some degree of political competition and a substantial amount of pluralism, and a heavy authoritarianism finding its ideological base in a one-party dictatorship and aiming for a maximum degree of monolithism. Certain states organized on the former basis may come perilously close to the latter, and certain states committed initially to the heavy authoritarian system may be drawn into deviation in the face of massive troubles. Up to this point, however, the quasi-authoritarian states have shown far greater capacity for change, either through evolution or upheaval.

American human rights policies, whether governmental or those of private groups, have taken slight cognizance of these facts. Official policies, while unquestionably helping select victims in states where the United States has some leverage, have generally been applied very erratically, depending upon an evaluation of national interests and other criteria. There has been no serious effort in Washington, moreover, to establish complex, sophisticated criteria against which to distinguish categories and degrees of violation of human rights-and concern for human welfare. In addition, the American government and media alike pay most attention to the nations where they have greatest access or leverage, thereby distorting reality by tending to escalate criticism as any liberalization process appears and conspicuously failing to provide balanced comparisons. As long as these conditions prevail, current U.S. human rights policies will be both less ethical and less effective than their ardent proponents claim.

One final troublesome element encompassing the Asian scene is strife across racial, religious and regional lines. In many Asian societies, nation-building continues to make progress as universal education takes root, transport and communications expand, and general economic advances are registered. Yet most Asian states remain very heterogeneous in racial-ethnic composition, and differences of religion and culture abound, sometimes within the same ethnic group. Progress in bridging such differences is negligible at present. Indeed, retrogression is taking place in some instances. The Islamic revolt in the Philippines, the Karen separatist movement in Burma, the increase in Indian communal struggles, and the seemingly intractable regional problems of Pakistan provide examples. It is precisely these problems, moreover, that solicit the involvement of external forces, as we shall have occasion to note. The connection between domestic and international politics is a more intimate one today than at any time in history.

To pursue the above generalizations, let us turn to specific trends within the key societies and regions of Asia. Since the American-Japanese relationship continues to be hailed as the cornerstone of our respective foreign policies by the leaders of both nations, it is logical to commence with Japan.

IV

What significant trends characterize the Japanese scene that are germane to an analysis of American policies? Three developments were underscored by events during 1979: a movement toward coalition politics at the same time that a generational change in political leadership is taking place; somewhat less dynamic economic growth; and a reassessment of Japan's security policy.

Japanese coalition politics is not yet of the type characterizing Western Europe, namely, multiparty government. It is now clear, however, that the ruling Liberal Democratic Party needs the help of the political center both to win elections and to govern effectively. In the April local elections, the conservatives did extraordinarily well, capturing all of the 15 prefectural governorships at stake, including that of Tokyo, because they had constructed effective coalitions; they did equally well in securing prefectural assembly seats.

In October, however, Prime Minister Ohira failed in his effort to bolster the thin LDP margin in the lower house of the Diet. He had dissolved the Diet and called a national election in spite of strong protests from rival factions of his own party as well as from all opposition parties. When the LDP gained only 248 seats in the 511-seat Diet (despite rising from 41 to 44 percent of the vote), Japan's most serious political crisis since the 1950s ensued, with anti-Ohira LDP factional leaders coalescing around former Prime Minister Fukuda, who was unwilling to support Ohira when the Diet voted on the prime ministership. Only the refusal of the center parties to participate in any coalition with the Communists or to vote for Ohira's rivals (they abstained) prevented the toppling of the government.

The chances of a leftist government coming to power in Japan remain very slim. The Socialists polled less than 20 percent of the vote in the October elections, and dropped from 117 to 107 seats. Their ideological rigidity, heavy dependence upon Sohyo, the leftist labor federation, and internal factionalism continue to be major obstacles to further gains. The Japanese Communist Party (JCP) more than doubled its Diet strength, going from 19 to 39 seats, the highest in history. Yet it polled only 10.4 percent of the total vote, precisely the same as in the 1946 elections. In recent years, the Communists have shown an affinity for a Eurocommunist brand of pragmatism combined with strong organizational abilities. Their strength is greatest in Japan's metropolitan centers, especially Kyoto and Osaka, where they polled 22 percent of the vote in October. But this is still well below communist totals in Italy and France, and JCP reestablishment of closer ties with Moscow is not likely to help them.

The political center may also have reached a plateau. In 1979 as in 1976 the Komeito polled about ten percent of the vote, but placed its candidates so as to win 57 seats, and the Social Democrats remained at slightly less than seven percent of the vote, with 35 seats. With nearly 100 seats in the Diet, however, and sufficient strength in many regions to spell the difference between success and failure for moderates, these parties occupy a strategic position of rising importance.

While the moderates will govern Japan in the years immediately ahead, the 1980s will see a new generation of leaders come to the fore, individuals whose advanced education came after the 1930s, whose careers have been principally in politics rather than the bureaucracy, and who are likely to differ from their predecessors in political style, if not in basic political commitments. Such a transition may be overdue. Voter apathy reached a new high in Japan in 1979, and between one-fourth and one-third of all citizens of voting age decline to identify themselves with any political party. The successful Japanese politician of the future will have to pay greater homage to public opinion and the media, and to a set of interest groups beyond business and labor.

Whether this will benefit American-Japanese relations remains to be seen. Some observers believe that Japan's "pure politicians" are less internationalist in their outlook than the ex-bureaucrats who have usually held top office in the past. It may also be that Japanese public opinion will increasingly reflect the stronger nationalist tides that appear to be running in the younger generation. In any case, there is a premium upon Americans widening the circle of their contacts, both official and private, looking toward the growing complexity of the Japanese political scene.

On balance, 1979 was a favorable year for Japan economically, but it was also a year of fairly dramatic fluctuations. Industrial production rose throughout the year, and for the first time since 1975 investment in manufacturing plants and equipment increased. A real GNP growth rate of approximately six percent was testimony to the strength of the nation. Inflation in consumer prices remained low, although wholesale price increases were above the double-digit level at the end of the year, stimulating concern about the future. The rise in oil prices and a strong domestic demand for goods caused a major shift in Japan's current payments account by the early part of the year, with the multibillion-dollar surplus of 1978 moving into deficit. Yet exports were rising rapidly by the year's end as the fall of the yen made Japanese goods cheaper abroad.

In August, the Economic Council submitted a revised seven-year economic and social development plan for the fiscal period 1979-85. One key theme was the need to sustain economic growth through greater emphasis upon an expansion of the domestic market and sizable increases in public works investment, with less concentration upon foreign export earnings. The growth target was fixed at an annual rate of 5.7 percent, with inflation to be held to 5 percent for consumers and unemployment reduced from the present 2.2 to 1.7 percent. A major drive to develop alternative energy supplies as quickly as possible was also signalled. The new budget for fiscal 1980, however, placed an emphasis on austerity in an effort to reduce heavy government deficits, and aimed at a real growth rate of only 4.8 percent for 1980.

Whatever Japan's future economic course, it is clear that the economic problems which have strained American-Japanese relations will not disappear. Once again, Japanese exports to the United States are rising, and the 1979 bilateral trade imbalance, while reduced somewhat from the $11 billion-plus figure of 1978, remained massive. If the new Japanese seven-year plan is effectively implemented it will help, but resolute American action is critical if heightened friction in American-Japanese economic relations is to be avoided. We must draft and execute a tough-minded conservation program, and, like Japan, embark upon a sustained drive to develop alternative energy sources. Through these and other measures, inflation must be brought under greater control. In addition, an international economic policy consciously designed to promote more effective competition on the part of American industry for foreign markets must be created, and we must also have policies at home that assist in the replacement of obsolescent industries and in the improvement of labor productivity. The American economy, in sum, requires revitalization.2

Japanese responsibilities include finding ways to give American producers greater access to Japanese markets, and moving rapidly to share the costs of defense more fully. Equally important is the development of areas of American-Japanese cooperation such as the creation of new energy sources and programs of economic interaction with developing societies.

Another area vital to American-Japanese cooperation is security and relations with the other major powers. Here too, trends during 1979 were complex. Ever-broader discussions of Japan's defense needs took place, stimulated by the development of increased Soviet military strength in East Asia, including Russian maneuvers in the vicinity of Japan, the expansion of military installations on the disputed northern islands, and the reported arrival of Backfire bombers in the Far East. An August white paper on defense stressed the Soviet threat. Japanese experts have come to the conclusion that the Soviet Union is en route to achieving military parity with the United States in Northeast Asia.

Open cooperation with the United States in military planning and joint exercises was accelerated, and there was a display of interest in regional security problems. In July, the Director General of Japan's Self-Defense Agency conferred with defense officials in Seoul, and the following month he visited the U.S. Yokota Air Force Base in Japan, two unprecedented actions of considerable symbolic importance. The fact that neither elicited significant political protest was equally noteworthy. In November it was announced that Iwo Jima, one of Japan's Bonin Island possessions, would be developed as a military training site.

At the same time, there is no evidence that Japan is in the process of changing the basic character or role of its defense force. Present plans are to keep the force small (approximately 270,000 men) and to concentrate upon a qualitative upgrading, defensive in nature. Defense spending in the new 1980 budget was raised by less than the ten-percent increase in the total budget, and remains fixed at 0.9 percent of GNP (1.5 percent if the NATO formula which includes pensions is applied). Japan remains in seventh place among defense spenders, but manpower costs are heavy, making comparisons difficult. The five-year defense plan does not call for major increases in expenditures. The emphasis is upon adding destroyers and submarines to the naval force, with the air force getting F-15 Eagle fighters, antisubmarine aircraft and early warning planes. Above all, no plans exist to seek constitutional changes that would permit direct participation in regional defense, nor are there plans to sell armaments to third parties, although this is being advocated in some quarters. The sentiment against nuclear weapons also remains extremely strong.

Unquestionably, the future will depend heavily upon international developments, especially in East Asia. Some combination of perceived threat and further decline in American credibility might cause a basic shift of policy. But at present there are few indications that Japan intends to play a major security role in the region or become a formidable military power.

How does this affect U.S.-Japanese relations? As noted, cooperation on security matters has never been closer, and Japan now assumes $770 million of the maintenance costs for U.S. bases in Japan. Yet doubts regarding American credibility remain, notwithstanding changes in American policies within the past two years. (Public opinion polls indicate that nearly one-half of the citizenry question whether the United States would come to their defense if Japan were attacked.) And on the American side there is continued questioning whether Japan is bearing its fair share of the defense burden, especially in the light of the increasing military costs being shouldered by an economically troubled United States.

There is a more fundamental issue that now looms ahead, namely, the character of Japanese and American relations with the two large communist states. In the course of 1979, Japanese relations with China experienced several shocks at the outset, notably a temporary freeze which Beijing (Peking) placed on plant importation from Japan and then the Chinese incursion into Vietnam. Each produced visible unhappiness in Tokyo, and forwarded a more realistic appraisal of the People's Republic. By the end of the year, however, Sino-Japanese trade had reached a new high point of over $7 billion, and Ohira's visit to Beijing in December was made memorable by the initiation of a government-to-government loan program. More than any other nation, Japan has assumed a critical role in China's drive for economic modernization.

Japanese relations with the Soviet Union, on the other hand, remain deeply troubled in spite of occasional Soviet statements suggesting that the time is ripe for improvement and modest advances in economic relations. The U.S.S.R. has been urging Japan to sign a friendship treaty with it similar to that concluded with the PRC, setting aside the controversy over the northern islands. Indeed, Moscow insists that no territorial issues remain to be resolved. This approach has been bluntly rejected in Tokyo, and no issue has so thoroughly aroused Japanese nationalist sentiment since the controversy over Okinawa reversion.

The long-term strategy of the Soviet Union with respect to Japan seems clear: an economic carrot and a military stick. Judging it likely that the international economic environment for Japan will become less favorable and that U.S.-Japanese economic relations will again worsen, the Russians feel that Tokyo will show an ever-greater interest in the vast resources of Siberia, thus combining help for Siberian development with its fueling of the Chinese industrial revolution. The alternative, Moscow expects to demonstrate, is confrontation with heightened, close-in Russian power-which it justifies augmenting by proclaiming the rise of Japanese militarism and the unfolding of an American-Korean-Japanese military bloc which China may soon join.

Soviet policies continue to be rejected, and the U.S.S.R. remains a most unpopular nation insofar as Japanese public opinion is concerned, a reflection of the unalleviated harshness that has characterized Soviet policies toward Japan for decades. Tokyo's tilt, like Washington's, remains toward China. At the same time, Japan does not wish to adopt a high-risk, high-cost foreign policy. Hence, it does not choose to be the spearhead in an anti-Soviet united front. In the longer term, most Japanese leaders hope to achieve a relationship with Beijing and Moscow that will permit the growth of economic relations with both while reducing the risks of confrontation with either. Consequently, there is resistance to those individuals in the PRC and in the United States who urge a united front strategy and apply pressure in an effort to get the Japanese aboard.

Tokyo's leaders would like to play a more prominent political role in the world, especially in Asia. They are aware of the criticism that Japanese foreign policy, including its programs of economic aid, is in reality selfish and market-oriented, and that whether the issue be the acceptance of refugees or involvement in measures to forward the peace and security of its region, Japan shrinks from accepting a role corresponding to its power. The strong U.S. criticism of the sharply increased Japanese purchases of Iranian oil during the hostage crisis at the end of 1979 constitutes a recent example. The Japanese government was quick to take remedial action in this instance, and to counter broader criticisms Tokyo has promised to expand its programs of assistance to developing nations, has sought to serve as counselor in crisis situations, and even to utter public warnings, as it did after the Vietnamese invasion of Kampuchea.

On the other hand, Japanese leaders remain ever mindful of past disasters and present dependence upon the widest international access. Japanese culture, moreover, continues to underwrite a certain insularity and aloofness among the citizenry at large, and there are mounting signs of a revived nationalism among the younger generation that appears to flow in the direction of independence rather than alignment. Whatever these trends may portend, current Japanese foreign policies remain dedicated to primary reliance upon the United States for protection; to keeping channels open to Russia as well as China; to accepting greater economic responsibility for the developing states, while hoping that multilateral programs can grow in importance; and to separating economics from politics to the maximum possible extent, and keeping access to all markets and raw materials sources.

The future of U.S.-Japanese relations promises to be one of competition and cooperation. Despite its vital importance, our harmonious cooperation can no longer be taken for granted. If American-Japanese ties are to remain strong, they must be cultivated with care, not ignored until some new crisis forces action, as has happened too frequently in the past. Perhaps the new U.S.-Japanese "council of wise men," set up in late 1979 in an effort to communicate regularly on an unofficial basis on the full range of issues involving the two peoples, will be of assistance. In any case, complacency is not warranted.

V

Across the narrow Tsushima Straits from Japan lies the Korean peninsula. Few peoples in history have had to endure the travails of the Koreans and 1979 produced its full share of trauma, climaxed by the assassination of South Korean President Park Chung Hee. In his 18-year rule, Park had presided over a Korean industrial revolution and South Korea has gone from an incredibly poor, backward society to a middle-level economic and military power. By the end of 1979, Korean per capita income had reached $1,550, and GNP had moved toward $50 billion. Total foreign trade came to some $34 billion, of which nearly $9 billion was in two-way trade with the United States.

Like Japan's before it, South Korea's economic development has frequently been labeled a miracle. In fact, it has been the product of a receptive domestic environment, sensible economic policies, political stability, and international prosperity, especially in the United States and Japan. In recent years, however, substantial economic problems have emerged, contributing to higher political tension. An overheated economy, combined with the rise in oil prices and other factors, led to serious inflation, with a peak of 25-35 percent. When the government's stern measures to combat this produced growing unrest in the urban centers, tighter political controls were instituted. At an earlier point, Park had been persuaded to experiment with parliamentarism, at a time when the United States was strong and credible in his eyes. With the decline of American influence in Asia and the opening of negotiations with North Korea, Park moved in an authoritarian direction in 1972 in an effort to cement national unity around him.

Under the Yushin Constitution, the President's tenure was practically assured for life. Emergency decrees restricted civil liberties, including the right to advocate constitutional revision. South Korea remained a pluralist society, however, and the political opposition continued to express itself vigorously. In the December 1978 National Assembly elections, indeed, the opposition New Democratic Party polled more votes than did the government's Democratic Republican Party, primarily because of public unhappiness over inflation. Only by virtue of the one-third of its members who are presidential appointees was government control of the assembly assured.

At the end of May, the NDP elected a new leader by the narrowest of margins. Kim Young Sam, the victor, pledged that he would take a more militant stance against the government and from this point confrontation steadily mounted, with neither side wishing to show weakness. By the fall, Kim had been removed as NDP leader by a Korean court on charges that his election was illegal. With unexpected unity, the NDP assemblymen boycotted the National Assembly in response, and national politics came to an impasse. Various demonstrations, primarily student-led, took place and in two southern cities martial law was declared.

The United States observed developments with mounting concern. In August, Washington officially criticized the Korean national police for brutality in breaking up a sit-in of young textile workers who had lost their jobs and were being sheltered in NDP headquarters, obviously for political reasons. With the ouster of Kim, Ambassador William Gleysteen was called home for consultations, returning shortly. While the crisis was still unresolved, Park was killed on October 26 by the head of the Korean Central Intelligence Agency, under circumstances that are still not fully clear.

As 1979 came to a close, the future of South Korean politics remained unpredictable, with two separate, possibly incompatible, currents flowing. On the one hand, civilian government continued to function, and liberalization measures were enacted or pledged. Choi Kyu Hah, previously Prime Minister, was elected as the tenth president of Korea on December 7 under the old constitution, and immediately proclaimed the removal of Emergency Decree Number Nine, the decree aimed at banning all "antigovernmental political activities," including criticism of the Yushin Constitution. A large number of political detainees were subsequently released from prison, and both Kim Dae Jung and Yun Po Sun, leaders of the democratic dissidents, were given full freedom of movement. In his inaugural address, moreover, Choi promised that constitutional reform would take place in one year, followed by national elections. It is widely assumed that Choi himself will be merely a transitional figure, since he lacks any strong political base or personal following. The selection as Prime Minister of Shin Hyon Hwack, a veteran economic specialist, emphasized the priority accorded economic policies.

Meanwhile, Park's longtime close colleague, Kim Jong Pil, was chosen president of the Democratic Republican Party, and hence is in a powerful position to become South Korea's leader if he can acquire and hold military support along with that of a coalition of conservative-moderate elements drawn from the business community, the rural areas and the now-numerous middle class. Kim Young Sam remains leader of the opposition, but in many circles it is believed that Kim Dae Jung, who ran strongly for the Presidency in 1967 and 1971, will eventually emerge as the real leader of this group, since no one equals him as symbol of the Korean liberal movement today.

However, trends within the military continue to be crucial to the Korean political scene. Under martial law, the military have the ultimate authority, and as 1979 ended, a struggle for power within their ranks was still unfolding. On December 12, a coup inside the military was led by Major General Chon Too Hwan. General Chung Seung Hwa, martial law head, was arrested as were a number of the senior military figures. Chung and his colleagues were subsequently charged with having taken money from Kim Jae Kyu, Park's assassin, with the implication that they were involved in the plot, although the facts remain obscure. Chon and his group, many of whom come from the Military Academy class of 1955, are regarded as tough young nationalists, strong supporters of Park and not likely to look with favor on rapid liberalization.

Given its geopolitical position, its political culture and its current stage of development, can the Republic of Korea (ROK) successfully operate as a full-fledged Western-style parliamentary democracy? The Korean liberals say it can, and they were strongly opposed to the selection of Choi under the old system, demanding immediate constitutional reform. Demonstrators on behalf of such measures were arrested when they defied the martial law order banning unauthorized political meetings. Many other Koreans believe that Western-style democracy will not work in Korea unless it is modified in some degree, and they want to stretch out the interim period while the fundamental issues are carefully considered. Instant democracy, Western-style, they feel, will merely lead to failure, crisis and complete military control.

The events of 1979 in Korea eloquently reveal the dilemma of American policy. The U.S. effort has been to balance a concern for human rights with a firm commitment to the security of the South Korean people. There are those who argue that Park should have been repudiated much earlier and more forcefully by the U.S. government, to demonstrate our democratic commitments. Others assert that the rising antagonism between Park and Washington over political issues after mid-1979 contributed to the traumatic events that followed by encouraging Park's opponents to consider diverse ways of ousting him. Behind the latter question is a more basic one: Does the United States in an effort to support its political way of life elsewhere, contribute on occasion-if unwittingly and unwillingly-to conditions that ultimately produce more, not less, extremism and repression?

One point is clear: the human rights issue can easily deepen the involvement of the United States in the internal politics of another nation. Both the Korean government and the opposition sought to utilize that issue throughout 1979. Prior to Carter's visit to Seoul in June, some political detainees were released, and at various other times releases were promised or delivered as a part of the U.S.-ROK bargaining process. But the Park government also sternly criticized U.S. policies in the latter half of the year as attempts to interfere in internal Korean affairs, making its appeal to the Korean people along nationalist lines. Kim Young Sam, meanwhile, like Kim Dae Jung before him, played upon eager American media to call upon the American people to cease support for the Park government.

Despite the tension over human rights, the United States and South Korea drew closer together on matters of security and foreign policy. Following Carter's June visit, it was announced that American troop withdrawal from Korea had been suspended until at least 1981. Much earlier, the Carter Administration had come to the realization that its initial policies were mistaken, having lowered confidence in American policy throughout East Asia. At the same time, American assistance in the upgrading of the Korean air and naval forces continued, as did coordination in the planning and execution of military operations. In March, a 17-day joint exercise involving over 150,000 Korean and American personnel was conducted, the largest of its type yet staged in South Korea. U.S. air strength in Korea, moreover, has been increased.

Both with respect to relations between North and South Korea and between South Korea and the major communist states, 1979 was a disappointing year. North-South negotiations were briefly revived in 1979, but ended in failure by midsummer. Pyongyang insisted that discussions be conducted by representatives of all political parties and public organizations in both parts of Korea, preparatory to convening an All-Korea Conference at which such delegates would establish a federated government. It was an old strategy aimed at matching the North's monolithism against the South's pluralism. The South insisted that negotiators had to acquire their position through the official appointment of their respective governments.

At the time of President Carter's visit in mid-year, a proposal for trilateral discussions involving the United States, South Korea and the North was advanced jointly by Carter and Park. It was quickly rejected. Kim Il Sung continues to insist that bilateral discussions be inaugurated with Washington on a peace agreement, excluding Seoul except as an observer, and that reunification be addressed in bilateral discussions with Seoul-after his terms have been met.

Nothing would be more foolish than for the United States to accede to North Korea's demand for bilateral negotiations without the full participation of the South. It would be widely and correctly interpreted as a major victory for Kim Il Sung, increasing his rigidity and reopening the thorny question of American reliability toward allies, an issue by no means absent from the Asian scene. In point of fact, South Korea's approaches to the issues of reunification and international relations remain realistic and reasonable in striking contrast to the North Korean positions. Seoul has long proposed a step-by-step approach to reunification, starting with visits and efforts to unite divided families, progressing to barter trade, and leaving the most difficult political-military problems until some legacy of cooperation and trust has been built. It has also signalled its willingness to recognize any government prepared to have diplomatic relations with it, and to sit in the United Nations with the North until peaceful reunification has been achieved. North Korea, in contrast, denounced Seoul's position as a part of "the two Koreas plot," although it sits in U.N. auxiliary bodies and accepts cross-recognition from a number of countries.

Whether Park's death will produce any change in North Korean strategy remains to be seen. An overt military attack upon South Korea appears most unlikely as long as the American commitment remains credible. Kim would surely not wish to risk the massive destruction of his state again, and neither Moscow nor Beijing wants another Korean war. On the other hand, any serious political chaos in the South would inevitably encourage some form of Northern intervention, and Kim has a Viet Cong-type organization in existence, the so-called Revolutionary Party for Reunification-presently a Northern-based creature but one always seeking to establish itself in the South.

The North continues to cultivate relations with Japan and the United States. It also continues to oppose any ties between either the U.S.S.R. or the PRC and the Seoul government. To date, neither large communist state has been particularly helpful, each claiming privately that it is limited in taking initiatives because of the other. For some years, the North has tilted toward Beijing. Within the past year, however, there are some indications that the Soviet Union, long cool to Kim, is seeking to compete more actively with the PRC for influence over the Democratic People's Republic of Korea (DPRK).

Thus, the Korean peninsula remains a potential trouble zone. In the North, an aging dictator wields absolute power in a fashion reminiscent of the Stalin era. Maneuvering on the succession question is reportedly in evidence, with family members involved-in true dynastic style. The DPRK economy appears to be improving but most estimates suggest that growth will not exceed six percent per annum, lower than the eight to nine percent anticipated in the South. Thus, the economic gap between South and North is likely to increase, with the South's military power also rising. Kim faces a dilemma. If he chooses to wait, his relative strength may decline. If he chooses to move, he risks devastation. Every major power in the region has a stake in a political solution. From an American standpoint, the case for emphasizing the importance of the Korean issue to our general relations with the PRC and the U.S.S.R. is strong, as is the need for close American-Japanese cooperation.

VI

In China, 1979 was another fascinating period, combining select economic gains and massive problems yet unresolved, new plans and rapid, confused changes. In a major address in April, Premier Hua Guofeng provided a broad outline of China's current economic situation, and the tasks that lay ahead. His basic message was that the Chinese economy needed a fundamental overhauling, past policies having been either intrinsically defective or overly ambitious. Thus, the three years ahead are to be devoted to "readjusting, restructuring, consolidating and improving the national economy." With remarkable frankness, Hua listed some of the major problems: the low quality of production; poor coordination among the various sectors of the economy; and one-fourth of the state industrial enterprises operating at a loss.

Perhaps the most basic difficulties lie in the impact which past policies have had upon management and the labor force. China's second-generation problem extends into every facet of the society, encompassing politics, the economy and higher education. Individuals in their forties and fifties who should now be taking the helm in such fields lack training, experience and self-confidence as a result of the disastrous policies of the last 15 years. Lack of managerial skills, along with the obsolescence of industrial plants, is a serious obstacle to rapid growth. Similarly, the work ethic has been badly damaged by policies that provided no incentives for individual performance.

In an effort to remedy the most critical shortcomings, PRC leaders are seeking to pursue two approaches. First, having scaled down their goals for the period immediately ahead, they are putting into effect a series of pragmatic policies designed to stimulate production and remove the most serious bottlenecks. The priorities have been fixed upon agriculture, followed by light industry, with heavy industry getting a lesser emphasis for the present along with military modernization.

Second, China continues to turn to the advanced industrial world in an effort to acquire as rapidly as possible the skills, technology and capital with which to advance China's four modernizations. Thus, legislation has been enacted, such as the law on joint ventures adopted on July 1, with the hope of encouraging foreign investors, and negotiations have taken place with respect to both private and government loans, culminating in some agreements, with the Japanese government loan announced in December the first of its type. While present plans are less ambitious-hence, more realistic-than earlier ones, they still represent a monumental effort to carry a billion people through an agricultural and industrial revolution in what Chinese leaders hope will be a few decades.

It is much too early to predict the outcome of these new measures. Undoubtedly there will be a process of trial and error, with continuous experimentation and alteration. Confusion is one prominent feature of the current scene. In the longer run, trends in agricultural productivity will be a key to success or failure, and of nearly equal importance will be the ability to increase productivity in the coal, petroleum and power industries, areas vital both to the domestic economy and to the strength of China's foreign reserves.

The present effort to slow population growth is also critical. Here, the goal is extraordinarily ambitious. Hua has called for a reduction of growth to one percent within the next year, and to 0.5 percent by 1985.3 No precise figures for current population growth have yet been given, but outside experts believe that there are nearly one billion people in the PRC today. Some observers expect China's GNP to average five- to six-percent annual growth in the years immediately ahead. This would be neither spectacularly good nor abysmally bad, but lower than what is required for real health.

As regards U.S.-PRC economic relations, the past year saw some removing of obstacles to economic intercourse and further explorations of possibilities on both sides, with modest results. The old euphoria about an instant massive China market is gone, and caution is dominant within the American business community. In the spring, then Secretary of the Treasury W. Michael Blumenthal reached a broad agreement relating to claims and assets, and this went into effect as one of the six accords initialed by Secretary of Commerce Juanita Kreps during her visit to Beijing in May. Other results of the Kreps trip included provision for scientific and technological cooperation, a marine accord, a meteorological agreement, and an accord on trade exhibitions. In July, a trade agreement was signed, to be submitted to Congress for approval, which granted China most-favored-nation (MFN) status, enabling lower tariffs to be applied, despite the failure to reach an agreement curbing Chinese textile imports. Subsequently, quotas on some textile items were imposed by Washington unilaterally. Congressional approval of MFN status, while expected, was still pending at the end of 1979.

Some 30 American companies have been exploring joint ventures, but certain important issues such as profit repatriation remain to be resolved. Meanwhile, it became clear that China hoped for large-scale loan and grant assistance from Japan and the OECD nations as a developing state. Beijing has thus far been slow to draw upon the $25-30 billion in trade credits acquired from various sources, despite the massive industrial orders earlier promised. In these trade credits, the United States plays a small role, but $3 billion was made available in August by way of the U.S. Export-Import Bank. U.S.-PRC trade totaled close to $1 billion for the first six months of 1979, suggesting a final figure of slightly less than $2 billion. This represented a sizable increase over 1978, but far below the $7-7.5 billion Sino-Japanese trade figure, or U.S. trade totals with Taiwan.

Chinese politics presented a complex, often enigmatic tableau. De-Maoization advanced, even as Hua proclaimed "the brilliant leadership" of Mao (and Zhou Enlai) and those few who attempted to repudiate Mao publicly found themselves in deep trouble. Another prominent characteristic of this era has been the strenuous effort to present a picture of political unity at the top to the Chinese people. Those in disgrace or under attack are removed from power but not from office.

The relative power of Hua versus that of Deng and the military veteran, Ye Jianying, remains a matter of speculation, but there was no indication that Deng had lost any of his influence. Collective leadership may apply in considerable degree, but to Chinese as well as outsiders Deng remains the symbol of supreme authority. And since Deng and Ye are 77 and 81 respectively, with many of their Politburo colleagues in the same age group, the issue of succession steadily assumes more importance. One question among many is whether Hua can build a secure institutional base before the powerful men around him pass from the scene, or whether a power struggle will ensue upon their departure.

Individuals are at least as important as institutions to Chinese politics, but during 1979 major efforts were made to reform various institutions in an effort to reduce the cynicism and indifference with which the average citizen views the communist order. The restoration of "socialist legalism" was proclaimed, in a fashion not dissimilar to what took place in post-Stalinist Russia. New penal codes were enacted, and respect for "democratic rights" was promised. The class struggle and other conflictual aspects of pre-1976 ideology were played down.

Thus, the China of 1979 witnessed some unusual political occurrences: a stream of big character posters on Beijing's Democracy Wall and elsewhere; a protest march by several thousand Beijing People's University students; the publication of various "underground" journals; and peasant protesters camping in the capital, demanding a better livelihood.

Why was this degree of openness permitted? Discipline has broken down in China under the weight of past policy failures, and limited public protest in various forms serves as a safety valve. It is also clear that a thorough condemnation of the past is in line with the views-and the political interests-of top leadership. There is no intention, however, of sanctioning liberalism. Present leaders, including Deng Xiaoping, have indicated that they will not tolerate criticisms that go to such fundamentals as the dictatorship of the communist party, the socialist system, or other basic tenets of Marxism-Leninism.

As 1979 drew to a close, there were signs that even the present level of political openness was deeply troublesome to a portion of the political elite. In December, it was announced that posters could no longer be put up in the area known as Democracy Wall, but had to be placed in a less visible area. And the 15-year sentence given to Wei Jingsheng, editor of one of Beijing's boldest underground journals, was intended to serve as a clear warning. In recent years, the United States had observed most political developments in China with official silence. After the sentencing of Wei, the State Department was moved for the first time to voice its criticism.

In the realm of foreign policy, meanwhile, China and the United States appeared to be working in ever greater harmony. After normalization was realized at the very end of 1978, Deng's visit followed in January, and took on the proportions of a media spectacular, with millions of Americans viewing this veteran actor as he played different roles with consummate skill. On the whole, it was a highly successful trip from Deng's standpoint, but China's "punishment" of Vietnam immediately afterward strongly suggested that it was China which had played the American card, not vice versa. U.S. recognition of the PRC had made the Vietnam invasion vastly easier from Beijing's standpoint, American warnings against such action notwithstanding. The breakthrough on the American front went far to offset psychologically the Soviet threat and raised China's prestige globally, and the timing avoided the delay in U.S. recognition of the PRC which would surely have ensued had the Vietnam invasion occurred first.

Continued deterioration of American-Soviet relations, moreover, advanced the united front cause, despite the President's statement that the United States intended to pursue an "even-handed" policy toward the U.S.S.R. and the PRC. It is no secret that within the Carter Administration itself an equilibrium strategy, symbolized by Secretary of State Vance, sought to prevent movement toward alignment with China, and at various points reiterated the theme of "evenhandedness." Those sympathetic to a Sino-American-Japanese entente directed against "Soviet expansionism," symbolized by National Security Advisor Brzezinski, however, have been in the ascendancy. The tilt toward China has been conspicuous and consistent throughout 1979.

Current trends are well illustrated by the Beijing University speech of Vice President Mondale on August 27, during his China visit. Among Mondale's remarks, these were of particular significance:

Any nation which seeks to weaken or isolate you in world affairs assumes a stance counter to American interests. This is why the United States normalized relations with your country, and that is why we must work to broaden and strengthen our new friendship. We must press forward now to widen and give specificity to our relations. The fundamental challenges we face are to build concrete political ties in the context of mutual security. . . . Today the unprecedented and friendly relations among China, Japan, and the United States bring international stability to northeast Asia.

After the revelation in early October that a secret Pentagon staff study had recommended U.S. arms sales to China, Secretary Vance strongly insisted that the United States had no intention of changing its arms sales policy. This position was reiterated on the occasion of Secretary of Defense Brown's January 1980 trip to China. Yet the trend of events causes continuous speculation within the United States and abroad. The Soviet incursion into Afghanistan is certain to strengthen the argument of those Americans who favor military ties. During his visit Brown discussed Sino-American cooperation in strengthening Pakistan's defense and offered China access to the U.S. Landsat-D photo reconnaissance satellite system-a system valuable for weather predictions, hence agriculture. He also called for "parallel actions" by the United States and China to meet the Russian incursion into Afghanistan, and indicated that the next steps in Sino-American relations would be exchange visits of military personnel and the increased sale of high-technology products to China. Although U.S. sales of military equipment continue to be ruled out, the momentum is clearly in that direction. Chinese conversations with French and British authorities regarding arms sales have been taking place for some time with American approval, although there is no clear indication of contracts or deliveries.

Meanwhile, a new chapter was opened in Sino-Soviet relations. In April, PRC authorities notified the U.S.S.R. that they were abrogating the 1950 Sino-Soviet treaty of friendship and alliance, while offering to enter into negotiations that might lead to an improvement in state-to-state relations. The Soviet Union accepted the offer and in September a Chinese delegation headed by Deputy Foreign Minister Wang Youping arrived in Moscow. As of the end of 1979, the indications were that little progress had been made, but a dialogue has recommenced that will undoubtedly continue. The Soviet Union, in a major tactical shift, dropped its earlier opposition to any use of the term "hegemonism," and is now urging the PRC to sign several general agreements which would pledge both nations to outlaw the use of nuclear or conventional weapons against each other and to avoid the practice of hegemony in any part of the world. China, however, is insisting that certain specific acts be taken prior to any discussion of general agreements, reportedly including the withdrawal of Soviet military forces from Mongolia and an end to Soviet military assistance to Vietnam. The gap would thus appear to be very wide, although some Soviet authorities profess optimism about longer range prospects.

Barter trade between the PRC and the U.S.S.R is increasing, and reached $516 million in 1978. Each side has shown caution in provoking the other in certain respects, although the Indochina situation remains explosive. And the propaganda war continues particularly vehement on the PRC's part. China's cultivation of Western Europe, moreover, was illustrated by Hua Guofeng's fall trip to a number of European nations. Chinese support for NATO and a strong, united Western Europe remains as vigorous as in the past. On balance, therefore, it is difficult to find signs that the Sino-Soviet cleavage is in the process of being healed, at least in the short term. A wide range of variables will influence the longer term trends, not least among them Chinese perceptions of the strength and reliability of American foreign policies.

VII

There is, of course, another China-or more accurately, an independent Taiwan. Economic growth in Taiwan apparently reached the 8-8.5 percent target set for the year, and foreign investment increased over 1978, boosting morale. Some evidence suggests that the illegal flight of domestic capital has grown, but the problem does not yet appear to be serious. Inflation, however, did prove to be a severe challenge toward the end of the year, with consumer prices running about 14 percent higher than in 1978. Oil costs, declining growth rates in the industrial societies and the threat of protectionism were factors of concern, and Taiwan authorities were also worried about increasing competition from the PRC in the U.S. market after most-favored-nation status was granted to Beijing. Nevertheless, on balance, economic conditions were good.

Political issues were cause for more uncertainty. Two questions stood out. First, how should Taiwan respond to the "soft line" being taken by the PRC? Immediately after recognition, Beijing offered to open communications, trade and negotiations that would lead to an autonomous Taiwan. Promises were made that Taiwan could have separate economic, political and even military structures, at least for the time being. The quid pro quo was that the Republic of China flag must come down, with PRC sovereignty being acknowledged. While Taipei's response was sharply negative, it was recognized that the government ran the risk of appearing rigid. Signs multiplied, moreover, that there were differences of opinion within the country over this and related issues, with many favoring a flexible posture. As the year progressed, permission was given in a number of instances for citizens going overseas to have unofficial contacts with their PRC counterparts at international conferences and universities. At the end of the year, moreover, economic contacts with East Europe were authorized, with signals also that trade with the PRC via Hong Kong was acceptable. Taiwan, however, continued to lose ground in its battle to be considered China. In October, the International Olympic Committee Executive Board recommended to IOC members that Taiwan should not be permitted to use the name "China," its national flag or anthem in Olympic activities.

The second issue related to the revitalization of the nation's political institutions and the rescheduling of the elections postponed at the time of U.S. derecognition. The national legislature and other bodies purporting to represent the whole of China were increasingly anachronistic as the mainland refugees commenced their fourth decade in Taiwan and the process of Taiwanization accelerated. New publications appeared, some of them openly supportive of basic changes leading to a Republic of Taiwan, and public forums were also held, with discussions ranging over subjects long taboo. Yet the immediate changes which the government had in mind were modest ones, and the idea of a new Taiwanese Republic was anathema to Kuomintang conservatives and PRC communists alike. Thus, at the close of the year, Formosa, a journal essentially supportive of this cause, was suppressed, and after a major political disturbance in Kaohsiung, a number of arrests occurred. In the aftermath of having been derecognized as a de jure government by the United States, Chiang Ching-kuo's administration was certain to face increasingly troublesome political problems at home.

The ROC government also evidenced a growing concern over certain U.S. attitudes and actions toward the end of the year. Despite the promise that all existing U.S.-ROC treaties and agreements except the Mutual Security Treaty would remain in effect, Washington abrogated the civil air agreement without consultation and upon demand from Beijing. Taiwan's worry about American policies regarding arms sales after lapse of the Mutual Security Treaty on January 1, 1980 was somewhat alleviated just after that date when the State Department announced that $280 million worth of weapons would be made available to Taiwan. ROC officials continue to be unhappy, however, over being denied certain weapons, particularly late-model aircraft.

VIII

Whatever the future might hold for Taiwan, China's attention, like that of the other major nations, has been focused primarily upon Indochina. In the past 12 months, the tragedy of the Indochinese people, and especially the Khmer, has reached indescribable proportions. It has been estimated that between two and three million of the seven to eight million Cambodians have perished since the communist victory of 1975, although an accurate count is impossible. Shot, beaten to death, starved, brutalized-few people in modern times have been subjected to such barbarism.

The year began with the "liberation" of Phnom Penh by invading Vietnamese forces. The Pol Pot forces retreated into the countryside and jungles as Hanoi established a new Kampuchean government under Heng Samrin, labelled the Kampuchean National United Front for National Salvation. Throughout 1979, Vietnam and the U.S.S.R. strove to obtain recognition for the Heng regime, but with virtually no success. Almost all nations except those within the Soviet bloc regarded the new Kampuchean government as a creature of outside forces, lacking any independence. Neither the Nonaligned Conference nor the United Nations was willing to admit the Heng government to its ranks. But given its record, the Pol Pot group was anathema everywhere, embarrassing even to its Chinese sponsors. Toward the end of 1979 it was derecognized by the United Kingdom in an act that encouraged Hanoi and Moscow to hope that eventually there would be no alternative to recognition of the new Phnom Penh government.

The future of Kampuchea, however, is far from settled. One month after the large-scale Vietnamese invasion, the Chinese commenced their "punishment" of Vietnam, striking in force across the northern border of Vietnam. The world held its breath, worried lest the widening struggle produce a Sino-Soviet conflict. The Soviet Union had consummated its alliance with Vietnam in 1978, bringing Hanoi into its economic orbit as a member of COMECON as well as cementing close political and military ties. China, indeed, now viewed Vietnam as Russia's "Cuba in Asia," and saw Vietnamese actions as a part of Soviet efforts to encircle it with hostile Soviet satellites.

In the most basic terms, developments in Indochina during 1979 should have been predictable. If the Vietnamese communists won the war against the Americans and South Vietnamese, it was inevitable that they would seek hegemony over Kampuchea and Laos, where their armies had long been stationed and their political roots deeply planted. Only the timing and the means were uncertain. It was equally inevitable that China would oppose the emergence of a Vietnamese empire to its south, even if that empire had not had Soviet backing. With such backing, Chinese hostility was destined to be more intense still.

The Sino-Vietnamese conflict of February 1979, however, settled nothing. China failed to secure its primary objectives, namely, the withdrawal of Vietnamese forces from Kampuchea and relief for the Pol Pot forces sufficient to make them a formidable army once more. Although it boasted that its military strike did not result in a Soviet attack, moreover, Beijing was forced to limit its action with the Russian threat in mind, and in the end the Chinese incursion served to strengthen the Soviet position in Vietnam, including the use of bases there. On the other hand, Vietnam suffered heavy destruction in its northern border area; more important, it was now forced to regard the Chinese threat as long-term, with the possibility of recurrent hostilities.

Beijing authorities have made it clear to American visitors and others that the struggle over Indochina will be a protracted one. China has no intention of accepting the status quo, although it is deliberately leaving its options open in deciding how to mount its challenges. Aid to various dissident elements in Laos, continued support to the Pol Pot guerrillas and to other Khmer guerrillas as well, attempts to cultivate divisions within Hanoi's governing elite, renewed military strikes-all are possibilities and some are presently being pursued.

Chinese forces were withdrawn from Vietnam in early March, after Beijing proclaimed its mission accomplished. Subsequent Sino-Vietnamese negotiations, however, have resulted in virtually no accommodations, and each side continues to allege serious border violations. Sizable military forces are grouped on either side of the border, along the Laotian as well as the Vietnamese frontier, with both parties warning that an attack by the other appears imminent. Meanwhile, some 200,000 Vietnamese troops remain in Kampuchea, with an additional 50,000 in Laos, despite the overwhelming support given an ASEAN-sponsored U.N resolution in November calling for their withdrawal. As might have been expected, Hanoi ignored this resolution and has hinged any withdrawal on the liquidation of its Khmer opponents and international recognition of the Heng regime.

Militarily, Hanoi appears to have done well. The Pol Pot guerrillas seem to have been reduced to an active force of no more than 25,000 at present, with certain non-communist guerrilla forces comprising an additional few thousand fighters. The Vietnamese hope to wipe out these elements, most of which are clustered near the Thai border, by the spring of 1980. Full success, however, is doubtful, and there is a distinct possibility that Hanoi-and behind it, the Soviet Union-will be embroiled in an unending guerrilla struggle, low-level but taking its toll over a protracted period of time. Hanoi faces a dilemma. It realizes that the Chinese are dedicated to precisely such a course, and that they are supplying all anti-Hanoi Khmer forces with assistance, most of it through Thai territory. To the Vietnamese, Thailand represents a "privileged sanctuary," and they are very familiar with the utility of such a strategy. Whether they will at some point strike into Thailand is likely to be a recurrent issue. Such an action could well trigger a major Chinese response, and then the Soviet Union would be faced with a dilemma-and the United States as well.

Is a political solution acceptable to all parties feasible at this time? The prospects are dismal. Under the pressure of a deteriorating military situation and the prodding of Beijing, the Pol Pot group has repeatedly called for a united front of all anti-Heng forces, and in December Pol Pot reportedly relinquished his prime ministership to Khieu Samphan in an effort to make the Khmer Rouge more acceptable (although he retained command of the armed forces). Yet while there were limited military accommodations in the jungle between the Pol Pot guerrillas and such non-communist forces as those led by Son Sann, former Prime Minister under Lon Nol and earlier counselor to Prince Norodom Sihanouk, there is no political collaboration. On the contrary, Son Sann vigorously denounces "the barbarous and stupid genocide" practiced by the old Pol Pot government.

Nor does a neutralized Kampuchea under Sihanouk appear realistic, at least under present conditions. From Paris, Sihanouk is seeking to advance a Confederation of Nationalist Cambodians under his leadership, and he has called for the convening of an international conference, similar to the Geneva Conference of 1954, which would ratify Kampuchean neutralization. Sihanouk, however, is bitterly critical of the Pol Pot group, and Son Sann, dubious of Sihanouk's credentials, has declined to align his forces with the Prince's movement. Most important, as Sihanouk himself admits, as long as they are winning militarily the Vietnamese will not accept any such formula, especially since they deeply distrust Sihanouk.

The immediate future for Indochina thus seems bleak, with the suffering of the people and the dangers for the world continuing. According to most accounts, economic conditions in Vietnam have reached a new low, especially in the south, accompanied by highly repressive political policies. The speculation prior to 1975 that the Vietnamese communists would accommodate non-communists in a popular front government after victory has proven to be as mistaken as predictions that Hanoi's primary attention would be directed toward internal development. These conditions, coupled with a campaign directed against Vietnamese of Chinese origin, resulted in a massive refugee flow out of Vietnam during the first months of 1979 that engendered a crisis throughout Southeast Asia.4 By June, there were over 300,000 refugees crammed into camps in Thailand, Malaysia, Indonesia and Hong Kong. Thousands were dying at sea. Since a high percentage of the Vietnamese refugees were of Chinese ethnic origin, racial tensions in Southeast Asia rose, together with the resentment of indigenous peoples over the economic drain involved. Various governments of the area announced that no more refugees would be accepted. Many refugees were towed back to sea, or in the case of those coming into Thailand by land, pushed back over the Cambodian border.

A Geneva conference involving 65 nations was convened in July, and some results were obtained. Vietnam, severely condemned by almost all except the Soviet bloc, agreed to halt the flow. Various nations led by the United States (which doubled its refugee quota to 14,000 per month for one year), promised to accept more refugees or assist financially. As the year closed, therefore, the exodus from Vietnam had been reduced to a few thousand per month. Yet there were more refugees than ever in Southeast Asian camps, the total being some 520,000, largely because of the arrival of more than 200,000 Khmer in Thailand during the fall. Indeed, as the year progressed, the Kampuchea situation took on ever more ominous proportions. Several hundred thousand refugees-intermingling with various guerrilla forces-gravitated to the Thai border, with larger numbers in the immediate rear, totalling 700,000 or more. All accounts indicated that starvation and disease threatened the devastation of these people. Various relief efforts were mounted, and on November 5 a conference under the aegis of the United Nations, with over 50 nations represented, was convened. Pledges of $210 million in aid were given, and by the end of the year, food and medicine were coming into Kampuchea in rising quantities, from both public and private sources.

However, the issue of relief was entangled in political controversy. The Vietnamese-dominated Phnom Penh government asserted that efforts to provide relief for the peoples near the Thai border were "imperialist schemes" to aid the guerrilla forces, and insisted that all relief supplies be channeled through them. They admitted that the food problem was serious, but frequently sought to play down the magnitude of the problem, particularly in the West, and pointed to Soviet assistance which according to communist sources totalled some 200,000 tons of food by the end of 1979.

Opponents charged that the Vietnamese and their Khmer protégés were prepared to see the people in zones outside their control die rather than risk any aid reaching guerrilla forces. Fully 60 percent of the remaining Cambodian population, it was asserted, lived in areas not accessible to any of the supply routes authorized by the Heng government. In December, moreover, the operations director of the International Red Cross program charged that very little of the 33,000 tons of goods and medicine delivered by mid-December through approved routes had actually been distributed. The Heng regime, in addition to its political reservations, appeared to be massively understaffed and inefficient. Thus, by year's end, the misery of the Kampucheans continued, although the peak of starvation was probably past-its toll measured in the hundreds of thousands of dead and dying.

In Laos, life is less harsh except for such mountain people as the Hmong, whose struggle against Laotian domination continues-as it has for centuries. Numerous refugee accounts reported the low-level strafing of Hmong villages and the use of toxic gas against them. Even for the lowland Laotians, political dissent has been suppressed, political detainees are numerous, including the former King, and economic development is strongly handicapped by the earlier flight of educated and skilled Laotians and the inept policies of the Vientiane government. With an estimated per capita income of $90 per year Laos remains one of the poorest states in the world. Food production is low, state enterprises are operating at only 30 percent of capacity, and a barter economy flourishes because Laotian currency has little value. As in Kampuchea, the government, headed by the veteran communist Kaysone Phomvihan, is under heavy Vietnamese influence.

American policies toward Indochina during 1979 were dominated by two considerations: a deep compassion for the tremendous human suffering throughout the region, and a strong distaste for Hanoi's policies and alignments. The United States played a prominent role in the developments leading up to the Geneva conference, and in the decisions of the conference itself. The American willingness to double its refugee quota was a key element in reducing tension. In the latter part of 1979, moreover, the visits of congressional delegations and Mrs. Carter focused attention on the plight of the starving Kampucheans. The U.S. governmental pledge for humanitarian aid totalled $69 million by the end of the year, supplemented by many private relief operations.

Some Americans continue to argue for the establishment of diplomatic ties with Vietnam, holding that U.S. recognition would reduce Soviet influence; would serve to guide the Vietnamese toward more constructive policies, with an emphasis upon economic reconstruction; and would aid in the ultimate settlement of Sino-Vietnamese hostilities. None of these arguments is very plausible. In point of fact both Moscow and Hanoi want American recognition, and with good reason. Such an act would not only enhance the prestige of the Vietnamese government, but could also create problems in Sino-American relations. The Russians do not fear American competition, since we are not likely to render support even remotely equivalent to Soviet aid (which may be running as high as $3 million per day). On the contrary, Moscow would be grateful if Washington were prepared to share the burden. Nor have past efforts to encourage Hanoi to turn to economic development by proffering American assistance proved successful. As for aiding in the resolution of regional crises such as the Sino-Vietnamese dispute, the United States benefits enormously from its absence in a region where the Sino-Soviet conflict is to be seen in its purest form today. A plausible case for U.S. recognition of Hanoi or the Heng government in Phnom Penh which is its creation has yet to be made. In any case, neither public nor congressional opinion will permit recognition of Vietnam at present.

The Indochina crisis has posed serious problems for Thailand and has also encouraged divisions within the ASEAN community. The problem for Thailand is not a full-fledged Vietnamese invasion. No one expects such an occurrence. It is rather the economic and political strains that threaten if a lengthy guerrilla war ensues, with hundreds of thousands of refugees, repeated border incidents, and communist external movements affecting the internal Thai political scene. After American withdrawal from the region, the Thai turned to China for support against Vietnam; more recently, there has been some caution regarding this policy, although Hanoi still regards Bangkok-Beijing ties as close and menacing.

During the repeated crises of 1979, moreover, it was apparent that there is no real identity of views among the ASEAN nations, although on various occasions they succeeded in working out a common front. Whereas the Thai government worries most about Vietnam, Indonesia continues to be most concerned about the long-term influence of China in Southeast Asia. Thus, it is not totally unhappy with an Indochina buffer, although it does not want to see Hanoi's influence spread beyond Indochina. Singapore shares some of Indonesia's concerns about the PRC, but has favored a very tough stance against Hanoi on the refugee issue. Malaysia-always concerned about the Chinese problem, internal and external-has favored a softer approach. The Philippines remained preoccupied with its internal difficulties.

ASEAN remains an extremely useful but fragile instrument of regional communications. Its principal value thus far has been in enabling the leaders of the region to become better acquainted with each other and to understand each nation's perspectives. The organization has also facilitated some bilateral agreements. Its multilateral accomplishments, economic and political, have been modest, although the process of speaking in a collective voice to such large economic units as Japan, the United States and the EEC bloc may prove meaningful in the future.

Within the ASEAN community, leadership remains heavily dependent upon a few individuals-Marcos, Kriangsak, Suharto, Lee and Hussein Onn. The overall situation in the Philippines is perhaps the most fragile. President Ferdinand Marcos is now into his eighth year as ruler under martial law, with promises that the current political restrictions will be relieved, beginning with local elections. His opponents-whose numbers have been growing-insist that Marcos is not providing the solutions pledged. Economic conditions were rather unsatisfactory in 1979, with the foreign debt having mounted to some $9 billion, foreign investment sluggish, inflation running at 20 percent and production lagging. Two insurrections sputter on with no end in sight. The Islamic revolt encompassing sizable portions of the southern Philippines is currently the more serious, but the Maoist-oriented New People's Army remains active in enclaves of northern Luzon and Samar, led by young urbanites who have turned to rebellion as committed communists.

In addition to secular critics, elements of the powerful Catholic church including Cardinal Sin have recently become more vocal in demanding that martial law be ended. Marcos is now engaged in a series of conciliatory overtures and concessions, coupled with renewed efforts to strengthen his political organization so as to outmaneuver his opponents as local elections approach.

Irrespective of the political course ahead, it seems likely that a consensus will be difficult to achieve in the Philippines. Can any of the old liberals establish themselves again, or will the much-enhanced military play the key role at the time of Marcos' departure? Few expect his wife Imelda to capture and hold the top post despite her current power.

Although the Marcos government has not had good rapport with the Carter Administration, U.S.-Philippine relations were generally satisfactory, even improved in 1979. Just one day before the new year commenced, an agreement on the renewal of U.S. bases in the Philippines was accepted by both parties, providing for unrestricted U.S. use of a reduced land area, but with all essential facilities retained-and in exchange, an American agreement to make available over a five-year period a total of $500 million in economic and military aid, the latter in the form of sales of modern military weaponry.

Later, the Philippines offered to provide a facility for the temporary housing and processing of Indochina refugees, and continued to support ASEAN and American proposals with respect to the Indochina problem. Within the Philippines, however, the United States came under crossfire from the government and its critics, with the latter demanding that Washington pressure Marcos to call for free elections, and the government insisting that no interference in internal affairs could be tolerated.

Thailand presents problems scarcely less complex, many of them stemming from the conflict that has raged on its borders, others from international economic trends. While economic growth in 1979 was good, Thailand faced a serious balance-of-payments problem and an inflation rate running at between 15 and 20 percent by the end of the year. Attacks by the political opposition upon the Kriangsak government for its economic policies naturally mounted. Former Prime Minister Kukrit Pramoj's Social Action Party, victor in the April elections, cannot overthrow Kriangsak due to prevailing rules allowing the Prime Minister to make appointments to the National Assembly, but from Left and Right the pressures grow.

The Indochina conflict, as we have noted, adds greatly to Thai difficulties. Reversing its earlier policies, Bangkok agreed to open its borders to refugees in mid-1979, a laudable humanitarian act but one that could increase the risk of the war spilling over into Thailand. In addition, 10-12,000 Thai communist guerrillas now operate within the country or in the near vicinity. Long attached ideologically to the Chinese and under Sino-Thai leadership, the Thai Communist Party now exhibits some confusion as to affiliation due to recent PRC policies and the Sino-Vietnamese conflict. That does not necessarily make it less troublesome for the Thai government, however, as the recent history of the Kampuchean communist movement should indicate.

The United States attempted to lend Kriangsak a helping hand during 1979. In the aftermath of the Vietnam War, American troops were withdrawn from Thailand, military assistance ceased and economic aid was reduced. In January 1979, however, cognizant of Bangkok's growing nervousness due to Vietnamese military activities in Kampuchea, President Carter spoke of America's interest in the integrity of Thailand. A visit by Kriangsak came in February with Carter making reference to the 1954 Manila Pact, which called for the United States and other signers to consult and act jointly to stop aggression. Plans to sell the Thai government new military equipment were announced in March, with rapid deliveries promised and carried out. The United States had thus involved itself once again in the defense of a Southeast Asian nation, although few expect the dispatch of American military forces.

The question of whether Thailand is ultimately to be another domino worried all the ASEAN states, particularly Malaysia and Singapore. Indonesia, meanwhile, remained torn between its continuing concern over the long-range problem of China and the more immediate problem of Vietnam. The Indonesian political scene was basically quiescent during 1979 with the Suharto government, and behind it the Indonesian military, in seeming firm control. The struggle was on the economic front. In the aftermath of currency devaluation in late 1978, inflation surged forward, being 25-30 percent for 1979. Through rational economic policies and ample resources, including oil, the Indonesian economy may move upward in 1980, and this will be crucial to continued political stability. Meanwhile, the legacy of the abortive coup of September 1965 was finally liquidated in the main, when the government released over 15,000 political detainees in 1979-the final group from more than 500,000 incarcerated as a result of the 1965 upheaval. By Christmas, authorities asserted, there would be only 23 detainees left in custody.

U.S.-Indonesian relations remained friendly but not intimate. Like many other governments of the region, Jakarta's leaders were unhappy about the lack of consultation on the part of Washington on such crucial issues as normalization with the PRC, and uncertain about future American intentions and capacities.

IX

Southeast Asia thus represented a multicolored tapestry in 1979, and one seeming to mock the argument of earlier years that this was a region of scant importance to the United States. To the west lay another great portion of the Asian continent. Like China, South Asia-comprising India, Pakistan, Bangladesh, Sri Lanka and Nepal-represents one of the most densely crowded regions of the world, with a total population approaching 850 million.

Three broad trends were to be seen in South Asia during 1979. First, in general, economic policies continue to be characterized by a retreat from socialism, or at a minimum, efforts to streamline government while seeking to provide greater opportunities for the private sector. Second, much of the region is affected by the rise of religious fundamentalism, particularly Islamic, but in some settings Hindu as well. Finally, political instability remains a prominent feature. The era when a single party, drawing support from all sectors of the society, can achieve unchallenged political dominance, on the basis of a nationalist consensus, is over.

India remains a nation of differentiated economic-political units. The Punjab, for example, has made the green revolution work, spawning an emergent middle class, while Bihar appears stifling in its poverty. Madhya Pradesh is governed by regionalists who are moderates whereas those in power in West Bengal are self-proclaimed Marxist-Leninists, albeit power-holders who seem to shy away from either revolution or radicalism. Generalizations regarding India, therefore, must be advanced with both caution and caveats.

National economic trends have on balance been discouraging during the past year. After several years of bumper crops, a severe drought forced the use of 10 million of the 20 million tons of grain reserves. Bottlenecks in industrial production also remained, blamed variously upon bureaucratic interference, nationalistic resistance to foreign investment, and labor-management disputes. Even so, the earlier thrust toward socialism appeared to have come to a halt, with the balance between the public and private sectors stabilized. The search for oil was rewarded with modest success, and plans for development of nuclear and solar power progressed-all vital in view of the impact of oil prices on the Indian economy. Inflation rose to an alarming level, topping 20 percent by the end of 1979.

Some observers have argued that the statistics of recent decades indicate that internal crisis actually benefits the Indian economy, distracting politicians from interfering with natural development, enabling civil servants to function more effectively and allowing greater innovation at the local and state levels. The immediate future may prove or disprove this thesis.

American-Indian economic relations, meanwhile, presented a mixed picture. Two-way trade during 1979 reached approximately $2 billion, virtually equal to U.S.-PRC trade. American aid continued to creep up, and while modest, was applied to such critical fields as rural development and solar power. In general, however, the American business community shunned investment in India, finding national policies essentially hostile, bureaucratic restrictions excessive, and political trends difficult to predict.

Whatever the correlation between political weakness at the center and regional economic gains, 1979 represented a year of recurrent crises in New Delhi. By the summer, the precarious unity that had marked Morarji Desai's Janata government-a unity resting largely upon opposition to Mrs. Gandhi and her 19 months of authoritarian rule-had vanished. The Charan Singh government managed to survive only weeks before it was deserted by Mrs. Gandhi, requiring the government to call for national elections and assume a caretaker status.

Mrs. Gandhi had seemed politically dead in June, enmeshed in court battles, faced with splits within her party, the so-called Congress-I, and with her son Sanjay a severe political liability. Yet political fortunes are fickle, and as the year wore on her strength advanced. It culminated in a landslide victory in the elections of early January 1980. Gaining approximately two-thirds of the seats in the new Indian Parliament, she was assured of dominance for the near-term future.

Mrs. Gandhi's victory would appear to promise a stable government at the center, hence a capacity to act decisively on pressing economic and social issues. It is quite possible, however, that the strengthening of certain state governments will continue, with a diversity of policies being pursued. Indian federalism is now well implanted.

Meanwhile, one cannot omit the continuing, some would assert rising, communal problems with which India must contend. Caste, religion and language combine to affect Indian social and political life at every point. The rise of a militant Hinduism in north India seeking to counter secularism and the Islamic tide has represented an important segment of Janata. The issue of language remains a divisive one, especially in south India, and caste is still a formidable obstacle to integral unification.

The United States has always confronted India with ambivalence, desiring that nation-as "the world's largest democracy"-to succeed, and at times giving significant aid, but finding certain Indian policies anathema and over time coming to regard South Asia as a region of secondary importance to American national interests.

Fundamentally, this situation has not changed. The old effort to support a balance between India and Pakistan on the subcontinent was earlier abandoned, and there is virtually no chance that it will be revived. The United States has accepted India as the dominant society in South Asia. More than this, it also has accepted in the recent past the very considerable role played by the Soviet Union in providing military and economic assistance to India, a role that was not disturbed by the transition from Mrs. Gandhi to Desai to Charan Singh-and now back to Mrs. Gandhi.5 The United States has not sought to compete with the U.S.S.R. in India despite numerous indications by the Indian government that it would prefer a more equidistant position. In part, this is due to the lower priority assigned South Asia, and in part to the fact that India has acted in concert with the Soviet Union on many issues, notwithstanding its claim to nonalignment. Yet it is not aligned in the fashion of a Bulgaria, and the Russians have exercised little influence on the internal politics of this huge society.

Throughout 1979, certain specific issues served to make American-Indian relations more thorny. Of these, nuclear proliferation was the most serious. Under the terms of the Nuclear Non-Proliferation Act of early 1978, U.S. fuel shipments to India are scheduled to cease as of March 1980 because New Delhi refuses to give permission for the international inspection of all of its nuclear facilities.6 In 1974, India detonated a nuclear device, and while each successive Indian government has stoutly denied that construction of nuclear weapons is intended, pro-bomb forces have been growing in strength. Almost certainly, if Pakistan goes ahead with its current nuclear weapons work, those forces will become unstoppable. Thus, proliferation is very possible in this highly volatile part of the world, and to date, U.S. policy has not been able to devise a solution. In a broader sense, American-Indian relations may well face a rocky road in the immediate future, since Indira Gandhi has previously exhibited a strong anti-American bias, and military aid to Pakistan will now reopen a delicate issue.

The nuclear issue relates directly to Pakistan as well. In late 1978, the Carter Administration announced that it had convincing information that Pakistan was secretly acquiring the ability to produce bomb-grade enriched uranium. In March, when no satisfaction was obtained via discussions, most American economic and military assistance to Islamabad was halted. As 1979 came to a close, the dilemma remained. Mohammed Zia ul-Haq, Pakistan's leader, continues to insist that his nation had no intention of developing a bomb, but in Washington this message is not regarded as credible.

Meanwhile, economic and political conditions in Pakistan had serious fluctuations. Islamabad remained strongly dependent upon Western aid, with the Pakistan consortium pledging $670 million in assistance, but faced the prospect of having to refinance a debt estimated at between $5 and $7 billion, of which some $3 billion is owed the United States. Pakistan's oil costs were nearly $1 billion in 1979, and production still suffered from a variety of problems.

Politically, the ongoing crisis over former Prime Minister Zulfukar Ali Bhutto culminated in his execution in early April. He had been found guilty of complicity in a 1974 political murder, and despite global appeals-and the prospects of long-term internal political fissures-Zia finally refused to grant clemency. There followed a period of preparations for national elections, with vigorous organizational activities. In October, however, President Zia canceled the elections scheduled for November 17, asserting that he would not allow the nation to be destroyed in the name of democracy. Hundreds of individuals were arrested including the widow and daughter of Bhutto. It was probable that had the elections been held the Pakistan People's Party, led by Bhutto's daughter, would have won, and that undoubtedly would have led to a frontal clash with Zia. The President insists that he will uphold democracy, but in what form? As 1979 drew to a close, there was increasing discussion of an Islamic state based strictly on the Koran, different in structure from the secular Western system. Zia himself has long been committed to such a state, reflecting the strong Islamic surge that has swept over the entire region from the Middle East to South Asia.

The struggle to Pakistan's west, in Afghanistan, epitomized the current crisis. By the end of 1979 the Soviet Union was pouring troops into that conflicted nation in an effort to crush a powerful Muslim-led revolt against still another Kabul government. The large-scale Soviet intrusion, already involving 50,000 troops with modern tanks and armored personnel carriers at year's end, and still growing, followed a Moscow-supported coup on December 27, which resulted in the overthrow and execution of Afghan President Hafizullah Amin, and his replacement by Babrak Karmal. This action further exacerbated U.S.-U.S.S.R. relations, and at the same time posed a potentially serious threat to Pakistan. Some 200,000 Afghan refugees were living in western Pakistan, with Kabul's Marxist regime earlier having charged that Islamabad was harboring and supplying guerrillas who were intent upon establishing an Islamic state. The controversy was made the more complex by the continuing tribal problems in Baluchistan and Pakhtunistan, Pakistan's border territories. In truth, the struggle to make Pakistan a nation is unresolved, and a further dismemberment, while not likely, cannot be ruled out.

Up to the point of the Soviet incursion into Afghanistan, American-Pakistani relations had gone downward in 1979, with the burning of the American Embassy on November 21 symbolic. Even as the attack upon the American Embassy was being launched as a result of false rumors whipped up by radical agitators about U.S. involvement in the seizure of the Grand Mosque in Mecca, 120 Pakistani military officers were visiting Khomeini in Qum. Although Zia apologized and it seems clear that the government had no part in fomenting the attack, the atmosphere has been bad. The Zia government has resented the fact that no U.S. economic sanctions have been contemplated against India despite its earlier moves toward the bomb. In broader terms, Islamabad has felt increasingly drawn toward the Islamic world as Western-style democracy-and American support-faltered together. The United States remains critical to Pakistan's future military strength and to its economic development also, but doubts regarding U.S. credibility have been deeply implanted as a result of the events of recent years.

However, Soviet actions in Afghanistan may now produce dramatic changes in the South Asian scene, including a revitalization of American military support for Pakistan in concert with China and others. In January 1980 a $400 million U.S. military assistance program was being prepared, and Congress would be asked to waive earlier restrictions imposed over the nuclear issue. Meanwhile a growing conflict is likely in India between those prepared to stand by the Soviet Union and those antagonized by the invasion of Afghanistan.

To the east, Bangladesh has shown the most remarkable resilience of any South Asian state. How many observers wrote that this desperately poor, disaster-wracked society was a basket case! Yet in 1979, the economy moved upward, aided by good crops, including jute, Bangladesh's chief export. Dacca was still strongly dependent upon foreign investors and multinationals. The old, unsuccessful experiment with socialism was abandoned, with hope being placed on the private sector, domestic and foreign. Like many other Asian nations, Bangladesh faced the prospect of increased inflation and slower development as 1979 came to a close, due to mounting oil prices. But while the nation remained extremely poor, the situation no longer seemed hopeless.

In politics also, some startling developments took place, led by dynamic 44-year-old Major-General Ziaur Rahman who has served as President under four years of martial law. The Bangladesh Nationalist Party won a two-thirds majority in the February 1979 elections, seeming to augur a period of political stability. As he promised, Ziaur removed martial law. Political factions in Bangladesh run a great gamut, and future violence cannot be ruled out. Some 500-600 political prisoners remain under detention, and nearly 30 parties make for potential turmoil. Current trends, however, are truly remarkable.

The American posture toward Bangladesh is sympathetic but not deeply involved. In general, as can be seen, the United States has maintained a relatively low posture throughout South Asia. Its interest in the Indian Ocean has sharply increased, and over the opposition of most indigenous governments, the United States has augmented its naval force there, establishing what in effect are permanent units. On the subcontinent, however, the United States showed no indication throughout 1979 of increasing its commitments or its presence. South Asia, in sum, has not had the priority accorded East Asia in American foreign policy, though indications mount that the events taking place in Afghanistan may produce many changes in the months to come.

X

In any survey of American interactions with the peoples and governments of Asia, three trends have significance. First, the importance of the Pacific-Asian region to the American future continues to advance. U.S. trade with Asia has consistently topped that with Europe in recent years, with no change in sight. Of equal significance, this is the region in which all of the major powers come into intimate contact with each other, together with many of the middle powers. No region harbors more war/peace issues, or international controversies with long-term significance. Nor should one neglect the extraordinary cultural interchange that is building between Asia and the United States. Every American's life has been touched by the extraordinarily rich and varied Asian civilizations.

A second trend relates to American policies. The United States has recently been in the process of trying to reestablish its credibility in this vital region of the world, devising strategic, political and economic policies that can create an atmosphere of confidence and be conducive to a process of self-strengthening in and among those nations with which the United States identifies most closely. This effort has had mixed results. Many Asian governments have a somewhat more positive evaluation of American foreign policies at this point, partly because of their rising concern about the policies of other governments. A stronger desire for an American presence exists as a result of diverse problems and threats in the area. Yet concern now focuses upon the problems of the American domestic scene. Will the American economy and U.S. political institutions permit it to exercise international initiatives and play a sizable role in the task of resolving global problems? Doubts here have not been resolved.

Finally, attention must be directed toward the policy debate that lies under the surface of all discussions relating to American strategy in the Pacific-Asian region. Strategic withdrawal, once an option with considerable support in Washington, has been repudiated by the Carter Administration, although it is difficult to measure the continuing public support accruing to neo-isolationist policies. Today, however, the principal choice is between "united front" and "equilibrium" strategies, to put the alternatives in their most straightforward terms. Shall the thrust continue toward an American-Japanese-Chinese entente directed against the Soviet Union, as has characterized recent trends? Or shall a strategy which seeks to achieve a rough balance in relations with Russia and China be pursued, recognizing that the nature of these relations will perforce be different, Russia being a global power, China a regional one? The latter policy would eschew a sustained tilt toward Beijing, seeking rather to negotiate with each major communist state on an issue-by-issue basis, with American national interests and those of our closest allies kept squarely in mind. It would attempt to keep the door open to American-Soviet détente, and to maximum unity of policy among the United States, West Europe and Japan while at the same time encouraging an outward-looking, economically developing, and independent China.

The arguments advanced on behalf of the united front strategy are relatively simple. The Soviet Union, it is noted, is the only nation that can do physical damage to the United States. Moreover, it is in the process of military and political expansion in Asia as elsewhere, and that expansion threatens a number of critically important nations, Japan and China included. It is highly appropriate, therefore, in the eyes of the united front advocates to bolster the latter nations militarily as well as economically, and draw them more closely together in company with other threatened states. No formal alliance is envisaged, but the essence of the united front strategy lies in developing a web of relations encompassing security as well as economic and political ties.

The supporters of the equilibrium strategy insist that a united front of the type outlined has grave weaknesses. First, in an age when continuous negotiations between the world's two global powers, the United States and the Soviet Union, are crucial to survival, it will render such negotiations increasingly difficult, if not impossible, and lead irrevocably to cold, possibly hot, war on a global scale. The Soviet Union, it is asserted, is not likely to accept the development of an Asian NATO or even a reasonable facsimile thereof without strenuous counter-measures, some of which are already to be seen. Consequently, whether the issue be arms control or cooperation in areas of regional crisis, only an impasse or deterioration can be expected.

It is also maintained by the united front opponents that to build up China as a rapidly modernizing military power will not result in that power serving to restrain the Soviet Union. No matter what the degree of military assistance provided China, Beijing will continue to be militarily weak vis-à-vis Moscow for this century and beyond, especially in offensive capacity. Thus, a united front involving Japan and China, directed against the U.S.S.R., greatly increases American military responsibilities without corresponding gains in collective military strength. A stronger China, moreover, may choose to exercise its power against other Asian states, as indeed has already occurred. Nor can one rule out the possibility of a limited Sino-Soviet détente, one falling far short of mutual trust and friendship, but serving to liberate some of the power which each nation now trains upon the other, enabling it to be applied to other purposes.

Finally, equilibrium adherents point out that neither Japan nor Western Europe is prepared to support a united front strategy, as recent statements, public and private, have made clear. Thus, any effort by the United States to push further in this direction will risk discord and weakness, not strength.

Whatever the merits of these latter arguments (and this author believes that they are considerable), the current trend is strongly in the direction of a united front. Neither strategy is likely to be adopted in its pure form, to be sure, but the imbalance in American relations with China and the Soviet Union is greater today than at any time in the recent past, and it is growing. One can ascribe this in considerable degree to Soviet policies, both specific and general: specific in such places as northeast Asia, Indochina and Afghanistan; general in terms of the Soviet determination to be accepted as a global power, at a minimum co-equal to the United States. To what extent are specific policies a logical consequence of the latter commitment and the new targets of opportunity presented (some of which require an escalation of response once entered upon if failure is to be avoided)? To what extent are they an opening Soviet response to the united front thrust? These matters can be debated, but there can be little doubt that if present trends continue, the 1980s will be a risk-filled era for Asia and for the world.

1 Economic data are available from the Asian Development Bank Annual Report, United Nations Statistical Yearbook, the World Bank Report, the International Monetary Fund Survey of Current Business, and various "white papers" published by individual countries.

3 Report by Hua Guofeng to the second session of the Fifth National People's Congress, June 18, 1979.

6 As of mid-January 1980, it seems probable that in view of the Afghan crisis the Carter Administration will reverse its earlier position and approve new shipments of nuclear fuel to India despite continued Indian refusal to accept full-scope safeguards, so as to provide at least a measure of balance in U.S. policies toward India and Pakistan.

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  • Robert A. Scalapino is Robson Research Professor of Government, and Director of the Institute of East Asian Studies at the University of California, Berkeley. He is Editor of Asian Survey and the author of Asia and the Major Powers, The Communist Revolution in Asia and other works. He traveled throughout Asia during the summer of 1979.
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