Thank you very much. Looking to my left and to my right, it is almost as if this is a gathering of the democratization alumni group of the Philippines, circa 1986. Ambassador Rabe, as many of you know, played a remarkable role in that transition. When Ambassador Rabe was Counsel General of the Philippines in Honolulu in 1986 he took an extremely brave stand and public stand, coming out in favor of a transition to the future, that is, to a more democratic future for the Philippines. I think that in many ways we are all greatly in his debt.

Now I would like to say a few words about the United States in Southeast Asia. What I am interested in doing is looking back at the last 30 or 40 years of the U.S. relationship with Southeast Asia and thinking about where have we been and what has been changing. Secondly, I will make some tentative remarks about where are we going? Finally, I will talk about what we should be doing, either as policymakers or alternatively as commentators on the ongoing policy making process.

I think there have been, over the last 40 years, at least five major changes in the U.S. relationship to Southeast Asia and in the development of Southeast Asia itself.

The first major change has been the growing strength of the individual Southeast Asian nations. When one reflects back to the 1950s and the 1960s and even the 1970s, most of the states in Southeast Asia looked a lot more like the Burma of today than the modern Southeast Asia of today. In the 1960s it took months, literally months, for the Government of Indonesia to get information from Jakarta to locations in the Outer Islands. In Indonesia there was no nationwide communication or transport network worth talking about. Times have changed. The governments of Southeast Asia have become more powerful, more able to penetrate beyond the capital cities and into the most far-flung reaches of their respective countries. And the growing strength of each of these states represents a fundamental change, which has had an impact on the way each government deals with the United States. The age of dependency on outside powers is over.

Secondly, there has been a decline in the frequency of attempts to change national borders, and there has been a rise of an organization, called ASEAN, marking the rise of Southeast Asian regionalism. It is important to remember that the world in the 1950s and early 1960s used to refer to Southeast Asia as the Balkans of Asia. It was thought to be the source of so many divisive tendencies that it was expected permanently to be a source of crisis in Asia. This too has changed.

The third major change that I would touch upon is the rise of Southeast Asian economic strength as well as its political consolidation. We are in the midst of an Asian economic crisis, but it is important to remember that even though asset valuations may have declined and a building may be worth less in dollar terms, the building is still there. The bridge is still there. The capital cities are still there. Southeast Asia is still a vastly richer place than it was 30 years ago. And although a profound restructuring process is going on, we shouldn't lose sight of the fact that Southeast Asia has come a long way economically. And it also has come a long way politically. Thirty or forty years ago Southeast Asia was a collection of weak, elitist authoritarian governments. The trend over the past three or four decades is, from an American point of view, in the right direction. That is, weak, elitist authoritarian governments either have given way or are in the process of giving way to more broadly based political structures and governments.

The fourth trend that I would touch upon is the decline of the U.S. military presence in Southeast Asia. From the 1970s onward, there has been a steep downward decline, related to the end of the Vietnam War and also to the end of the American presence in the Philippine bases. When we left the Philippine base structure, the American military presence in the area declined and this will remain true for the foreseeable future.

The fifth major change is the rise of what may be an increasingly assertive China. This is the fundamental challenge that policy makers will face in the future. We must orchestrate the international arena in such a way as to avoid an unsuccessful emergence of China. Because if it emerges as a hostile, aggressive and difficult power this will cause enormous difficulties for all of the ASEAN countries as well as for the United States. The objective is not to contain China but to shape an Asia-Pacific order that will encourage China to emerge peacefully.

Now, where do we go from here with regard to the five trends I just mentioned. With regard to the strength of individual states, there is no way (with the exception of Burma) that we are going to return to broken-backed states of yesteryear in Southeast Asia. Despite all the talk about Indonesian separatism, I do not think that Indonesia is going to come apart. There will be difficulties. There will be difficulties perhaps coming out of the first free elections since 1955, especially if the winning coalition tends to be drawn disproportionately let's say from East and Central Java and Jakarta and the losers tend to be drawn from the Outer Islands and West Java. That was the pattern in the last free election in 1955 and I hope that will not be repeated because it had terrible consequences for the Indonesian political system. It set the stage for the drift toward executive authoritarianism, which was first accomplished by President Sukarno and then re-enlivened and made deeper by President Suharto.

The second point concerns the prospects for redrawing borders. I don't think that we are going to regress. Using force to redraw borders in Southeast Asia, is permanently passé, we are not going to return to "the Balkans of Asia."

Third, what about the decline in Southeast Asian economic strength that we have all witnessed since July 1997. The first thing to remember is that decline is relative. The second thing to remember is that a huge economic revolution is taking place in Southeast Asia, as each of the Southeast Asian governments (sometimes slowly and sometimes rapidly) confronts the need to prevent the economic decline from becoming permanent.

Even in the weakest of the Southeast Asian economies, Indonesia, I think you will eventually see a shift away from free-wheeling, relationship-oriented, state-directed capitalism toward a system in which much more attention will be paid to credit analysis than relationship banking and in which the role of government may shift in the direction of being a regulator rather than a participant in dubious investment decisions.

The fourth trend I talked about was the decline of U.S. military presence. I believe this is a reality that is probably not going to change, unless potential difficulties with China become real difficulties. At this time, there is not a great need for a massive or even a large U.S. military presence in Southeast Asia. However, obviously one has to contemplate the possibility of that becoming a necessity and therefore the transformation marked by the Visiting Forces Agreement in the Philippines is welcome. Having a Visiting Forces Agreement provides us all with a card to play if the international environment were to turn sour. Likewise, the American presence in Singapore plays the same role. It is a hold-card.

Finally, the fifth thing I touched on was the whole question of China. From the passage of the law in 1992 making a territorial claim to virtually all of the South China Sea, to all of the various moves of China with regard to Mischief Reef, to the missile firings and exercises in the Taiwan Straits in 1996, I think policy makers and commentators must confront the possibility that China will be more assertive and less pacific than we would like. And I think this requires that we try to remain engaged with China, but we must do so with our eyes open. I do not think American policy simply should say well, China is a big country of 1.2 billion people and it is a rising economic power and therefore if China begins to throw its weight around in Southeast Asia we should simply ignore it. I do not think this is in the long-term interests of the United States and I know it isn't in the long-term interests of Southeast Asia.

What does this require as we look forward if these five trends are real? What should we be thinking about as we look into the future? From the point of view of American policy I think there needs to be more attention to both ASEAN and APEC, rather than less. Secretaries of State must fully attend meetings. United States policy must reflect a greater understanding of the fact that the United States has a long run interest in cohesive ASEAN.

Secondly, the ASEAN Ten has a very special responsibility for orchestrating, to some extent, the political changes that are taking place in Indonesia. ASEAN unity was only made possible by the role played in the regional international system by Indonesia from 1966 to the present. I think ASEAN can encourage the new Indonesian foreign policy elite to continue to play that role.

Third, I would contend that the United States must pay more, rather than less, attention to its bilateral defense relations in the Pacific. Obviously, the U.S.-Japan defense relationship has just been strengthened. I would contend that there has been a strengthening going on in the U.S.-Philippine defense relationship. I would advocate the complete restoration of IMET for Southeast Asia. I would advocate more rather than less contact between the United States military and the various Southeast Asian militaries so that these militaries can make the transition from being, in a sense, political armies to being fully professionalized national security establishments.

The fourth thing I think needs to be done is to pay more attention to India. Pay more attention to the world's largest established democracy. If the United States is going to have a truly supportable, defensible policy in Asia, it can only do so as the leader of a coalition of democratic societies. This is going to be especially important if China becomes more difficult. If China becomes more nationalistic and more assertive, which I certainly hope it will not, only a full coalition of democracies will prove capable of moderating Chinese behaviors.

Fifth, and finally, I think the United States in its relationship with Southeast Asia must pay more attention to the long-term strategic goal of binding together U.S. interests and ASEAN interests. If we march forward in the 21^st century together, rather than moving in ten or eleven different directions, we have a much greater prospect of maintaining the peace and prosperity of all of Asia and the Pacific.

[End of Document]