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Originally Processed With FOIA(s): FOIA Number: S; 2004-2265-S S FOIA MARKER This is not a textual record. This is used as an administrative marker by the George Bush Presidential Library Staff. Record Group/Collection: George H.W. Bush Presidential Records Collection/Office of Origin: Speechwriting, White House Office of Series: Speech File Backup Files Subseries: Chron File, 1989-1993 OA/ID Number: 13790 Folder ID Number: 13790-002 Folder Title: Seoul n.d. [OA 7565] [2] Stack: Row: Section: Shelf: Position: G 26 22 2 1 Administration of George Bush, 1990 / Apr. 5 to Panama shall Nomination of Wendy Lee Gramm To the U.S.-Japan relationship by resolving on- ken or proceeding Be a Commissioner and Chairman of going trade and economic issues. An agree- ncluded or deter- the Commodity Futures Trading ment has been concluded on supercom- date of this order, Commission puters, and agreements in principle have ding based on any April 5, 1990 been reached on satellites and telecom- e effective date of munications. or duties that ma- The President has nominated Wendy Lee Today the U.S.-Japan SII working group ere incurred prior Gramm to be a Commissioner of the Com- released its interim report on the progress his order. Pursuant modity Futures Trading Commission for the achieved to date. The SII talks represent an 1706) of IEEPA, I term expiring April 13, 1995, and he has he continuation of also nominated her to serve as Chairman of approach that may be unique in the history of bilateral trade and economic discussions. to transactions in- the Commission. This is a reappointment. The talks were designed to identify and re- h the Government Since 1988 Dr. Gramm has served as solve the structural impediments that con- est is necessary on Chairman of the Commodity Futures Trad- tribute to economic tensions between the ng Panama. ing Commission. Prior to this, she served as two countries. Accordingly, the interim effect immediately. Administrator for Information and Regula- report and assessment identifies specific tory Affairs at the Office of Management George Bush areas impeding the adjustment of the trade and Budget, 1985-1988; Executive Director imbalance in both countries. The interim of the Presidential Task Force on Regula- tory Relief, 1986-1988; Director of the report is the first major step in a process Bureau of Economics at the Federal Trade that will include a final SII report in July as Commission, 1983-1985; Assistant Director well as implementation and follow-on. the Federal Regis- 90] in the Division of Consumer Protection at Prime Minister Kaifu and the political the Bureau of Economics at the Federal leadership of Japan have worked long and Trade Commission, 1982-1983; and re- hard to produce the policy commitments search staff member for the Institute for embedded in the SII interim report. Be- of the House and Defense Analyses, 1979-1982. In addition, cause structural problems are deeply in- nate on the she served in several positions at Texas grained in both economies, complete results A&M University, including associate profes- ergency With will not come quickly. However, the SII in- sor in the department of economics, 1975- terim report is an important way station 1979; director of undergraduate programs, along the road leading to a strengthened 1974-1977; and assistant professor, 1970- U.S.-Japan relationship. We believe that the 1975. Mr. President:) Prime Minister will continue to exercise his Executive order, a Dr. Gramm graduated from Wellesley assertive leadership on these issues and that d, stating that the College (B.A., 1966) and Northwestern Uni- this will greatly facilitate the work on re- ically elected gov- versity (Ph.D., 1971). She was born January maining economic and trade issues. Japan's ended the unusual 10, 1945, in Waialua, HI. Dr. Gramm is inputs to the SII interim report have been to the national se- married, has two children, and resides in very positive ones, and we look forward to d economy of the Washington, DC. further cooperation on the final report in osed by the poli- July. For its part, the United States will con- riega regime. The tinue to do its utmost to address the struc- S the Panamanian tural issues identified in the SII interim pril 8, 1988, while report as affecting the competitiveness of and blocking au- the U.S. economy. law. Statement by Press Secretary Fitzwater on the Japan-United States Structural As President Bush has said, the leadership Impediments Initiative Negotiations of Prime Minister Kaifu has brought a new George Bush April 5, 1990 spirit of cooperation to our relationship-a positive, cooperative force which will e sent to Thomas Since the March 2-4 Palm Springs meet- strengthen our security relationship and en- ouse of Represent- ing between President Bush and Prime hance the U.S.-Japan global partnership President of the Minister Kaifu, Japan and the United States while simultaneously facilitating the solu- have been busily engaged in strengthening tion of outstanding economic differences. 531 Administration of George Bush, 1990 / Apr. 4 the first step on I regret that another Passover is here last month. The President expressed his ty to freedom. All with Leonid still in the Soviet Union. I wish conviction that Prime Minister Kaifu de- olemn pride of mil- that he were here with you in America so serves a very large share of the credit for men, and children that he, too, could experience the freedoms settling the specific trade issues and for ommemorate the we enjoy. And we ask that you convey a achieving substantial progress on SII. :y of courage and message to Leonid and all others who still The President emphasized that SII is an am of a better to- await freedom: They are not forgotten. ongoing process and that he hopes both The Nobel laureate-a friend to so many sides will take further steps in the final SII ople all throughout in this room-Elie Wiesel said: "Just as de- report in July and the resulting follow-on 1 that epic journey, spair can come to one only from other phase. Bringing about structural adjust- liberty and peace. human beings, hope, too, can be given to ments will not be easy on either side of the ir struggle for de- one only by other human beings." Zev, you Pacific, but both governments are commit- have given us hope. For that, we admire m for the strength ted to achieving a positive interim SII you. And together, we look forward to the ay for their success. report as well as a more comprehensive fin- day when no nation interferes with the ished product in July. We have had very of rejoicing for the faith of any of its people. substantial success to date, but we must et Jews who have So, thank you all for being here with us continue our efforts because neither the 1 this year. We are on this very solemn and special occasion. Japanese consumer nor the American bing hand, over the And once again, I rejoice in your happiness, public will be convinced until they see con- the historic emigra- and we're so pleased you're here. And now crete results. nion of those who I will sign this. The President emphasized the vital im- eave. The modern portance of maintaining excellent relations for all those who Note: The President spoke at 10:50 a.m. in with Japan not only in, trade but with dom. The United the Roosevelt Room at the White House. regard to security and the growing global 0 open up this life- partnership between the United States and te to do everything Japan. In particular, the President compli- possible for Soviet mented the Government of Japan for its cluding continuing assistance efforts in Eastern Europe and in indirect flights. We Statement by Press Secretary Fitzwater will celebrate the on the President's Meeting With the Central America. In all of these matters, the è're going to keep Special Emissaries of Prime Minister President praised the forthright and asser- hore can join them. Toshiki Kaifu of Japan tive leadership demonstrated by Prime Minister Kaifu and credited him with 3 Exodus, it is my April 4, 1990 having created a new spirit of cooperation e Zev Raiz to the ears of waiting. Zev President Bush met with former Ambas- between the United States and Japan. and your children sador to the United States Matsunaga and opiness together in Deputy Foreign Minister Owada, who are el. For nearly two Special Emissaries of Prime Minister Kaifu u've been a brave of Japan. The Special Emissaries delivered a Remarks at the Presentation Ceremony i. And we acknowl- letter from Prime Minister Kaifu to the for the National Teacher of the Year ud the dramatic President which contained details on the Award place in the Soviet efforts made by the Government of Japan April 4, 1990 the emigration of since the Palm Springs meeting on March ught to leave. But 2-4. The discussion focused on the progress Well, to the Members of the Congress assure you we will made in trade and economic matters. and Senate that are here today, thank you e left behind. Agreements have been concluded on su- all for coming, and welcome to the White welcome Natasha percomputers, satellites, and telecommuni- House. Secretary Cavazos, Senator Pell and ouse. I admire the cations; and substantial progress has been Representatives Lowery and Hunter, and tion that you and achieved in the ongoing SII [Structural Im- Bill Keene and Gordon Ambach, Robert ave shown through pediments Initiative] process. In addition, Gwinn, Norman Brown, and specially to our You have become Prime Minister Kaifu has said that he hopes distinguished Teacher of the Year, Jan ik community, and an agreement will be forthcoming to re- Gabay, Barbara and I are honored to have ve been invaluable solve the forest products issue. The Presi- you all here. onvince the Soviet dent was very appreciative of all of the The kind of people Jan represents are omises. work that has been accomplished over the ambassadors to the most powerful province 521 national ical Fitness and Week Ending Friday, April 6, 1990 :dia Proclamation 6111-United States Naval Reservists, we also pay tribute to Naval Reserve Month, 1990 their families and employers-their gener- 615, 523 March 30, 1990 ous support and encouragement help our reservists to fulfill the dual role of citizen- By the President of the United States sailor. of America In honor of the thousands of Americans of War Recognition A Proclamation who have served this country as U.S. Naval k-528 Reservists, and in grateful recognition of 1 American Week- On March 3, 1915, the Congress enacted those reservists who have given their lives legislation establishing the Federal Navy in the line of duty, the Congress, by Senate e Month-503 Reserve. That act has enabled the United Joint Resolution 266, has designated March States to remain at a high level of military 1990 as "United States Naval Reserve preparedness in times of peace, as well as in Month" and has authorized and requested times of crisis. -543 the President to issue a proclamation in ob- Hundreds of thousands of Americans servance of this occasion. have served this Nation proudly and ably as dential Now, Therefore, I, George Bush, Presi- Naval Reservists. More than 600,000 Naval dent of the United States of America, do ons-510 Reservists rallied to action during World hereby proclaim March 1990, the 75th an- War I. During the Second World War, niversary of the Naval Reserve, as United : Emissaries of Prime when the United States was embroiled in a States Naval Reserve Month. life-and-death struggle to defend freedom 521, 531 In Witness Whereof, I have hereunto set and democracy from the brutal forces of oundation-530 my hand this thirtieth day of March, in the totalitarianism, 80 percent of our Naval per- sonnel were reservists. Whenever the lives year of our Lord nineteen hundred and inister of innocent people have been threatened, ninety, and of the Independence of the United States of America the two hundred Gorbachev-528 whenever any of our other national inter- and fourteenth. ests have been at stake, our reservists have demonstrated clearly their value as part of George Bush America's fighting forces. dent-546 During the Berlin Crisis, the Korean and [Filed with the Office of the Federal Regis- ress releases-546 Vietnam conflicts, the Mayaguez incident, ter, 11:53 a.m., April 2, 1990] se announcements- and in Grenada, the Persian Gulf, and Note: The proclamation was released by the Panama, Naval Reservists consistently the Senate-546 played vital roles in advancing our national Office of the Press Secretary on April 2. objectives. Yet they have also provided in- over and distributed valuable assistance to their country during nonmilitary emergencies. For example, in the aftermath of Hurricane Hugo and the Statement by Press Secretary Fitzwater devastating 1989 Loma Prieta earthquake on the Japan-United States Structural that struck the San Francisco Bay area, Impediments Initiative Negotiations Committee of the Federal hardworking Naval Reservists were on the 37 FR 23607; 1 CFR Part April 2, 1990' front lines of relief efforts. Superintendent of Docu- The men and women of the Naval Re- Prime Minister Kaifu of Japan this morn- ashington, DC 20402. The serve boast a long tradition of courageous cuments will be furnished ing telephoned President Bush to express 5.00 per year ($96.00 for and dedicated service to their fellowman. his interest in resolving issues related to the ribers for $68.75 per year, As we enter a new decade and a new cen- Structural Impediments Initiative. The ments, Government Print- charge for a single copy is tury, their operational readiness will contin- Prime Minister has sent two personal emis- ue to be critical to our Nation's security and saries to meet with the President and ad- publication of material ap- well-being. That is why, as we salute all ministration officials to emphasize the Japa- Presidential Documents. 503 Apr. 2 / Administration of George Bush, 1990 nese Government's commitment to But there was a time when most Ameri- whistlestops. Ameri progress. The two emissaries are former cans knew their Presidents distantly, from and through the p Ambassador to the United States Matsunaga woodcut prints in the weekly newspaper. we share them with and Deputy Foreign Minister Owada. They The circle of democracy in ancient Athens live in a time when arrive at 10 o'clock this morning and will and Rome was even more limited, just to travel reservations meet today and tomorrow with General those within hearing range of the debates flash from Hong K Scowcroft [Assistant to the President for Na- inside the Parthenon or the Forum. But Bonn, Bonn to Bost tional Security Affairs] and Secretary of today, through free, over-the-air broadcasts, eye. State Baker. They will meet with President you have brought millions of living rooms Roam among the Bush on Wednesday. In addition, they will within hearing range; you've made every this convention cent deliver a letter from Prime Minister Kaifu home a part of the American forum. In fact, football fields chock to President Bush concerning trade issues. on this very day, you are providing-for the ets in telecommuni The Structural Impediments Initiative 6,000 foreign broadcasters in attendance, puters and modem: talks begin today in Washington at the State through your international seminars, and optical fibers, satel. Department. The U.S. side will be headed through USIA's [U.S. Information Agency] growing web of WO. by Richard T. McCormack, Under Secretary WORLDNET-a seminar for the world. growing network linl for Economic Affairs; Linn Williams, Television, which began as the American village." The inform: Deputy U.S. Trade Representative; and forum, has become the world forum. And adornment to moder Charles Dallara, Assistant Secretary of the of who and what we so, when a lone, brave man stood up to a Treasury. An interim report on these meet- column of tanks in Tiananmen Square, the mation age. ings will be issued on April 4, with a final world stood with him. When the people of Last May, I disc report produced in July. Europe with the ( Prague sang the first Christmas carols in German city nestled 1 over 40 years, the world sang with them. the Rhine River. An And when the first German took the first there that I apprecia hammer to that wall of shame in Berlin, the expression, "In the Remarks at the Annual Convention of world shared in an historic act of courage. Word." For it was i the National Association of We all know that governments can that the inventor 0 Broadcasters in Atlanta, Georgia censor, governments can silence, but the Johann Gutenberg, fii April 2, 1990 voice of freedom will not be stilled as long of the ages into the as there is an America to tell the truth. knowledge-hungry re Thank you for that welcome. To Messrs. These sounds and images of the Revolution tion made possible a Mays and Fritts, thank you both, and to all of '89 belong to the world. But it was here journals of the Enlig of the rest of the leaders of the NAB that in America that a free people first explored American Revolution, are here today. And also I understand there how to put the airwaves into the service of of Thomas Paine to t are a lot of Members of the United States democracy. Federalist Papers." Y Congress here. In my line of work, you We accept regulation, but we firmly out of that one inver always pay your respects to the Members of reject government programming. We reject idea called America. Congress-[laughter]-in the forlorn hope government ownership of stations. And Today, along with t. that they will do it exactly my way some- most of all, we reject censorship. You see, image: images project day. [Laughter] But nevertheless, I'm glad the freedom that this association enjoys- and evoked by the they're here. probably takes for granted-is a model for while Western democ It is my privilege this morning to be back the world. knowledge broadened before America's family of broadcasters, the In my State of the Union Address, I spoke racy and knowledge I National Association of Broadcasters. And I of the cornerstones of a free society: democ- munist regimes that can't help but marvel at these huge screens racy, private investment, competitiveness, continents. For these as I walked in here. You know, if I were as stewardship. We will see what competitive- something to be twis large as my image-[laughter]-on these ness means just this afternoon; I'm going the brutal hands of a screens, imagine how easy it would be for out to visit a General Electric plant in Cin- beyond recognition. T me to get my way with the Congress. cinnati, where free workers transformed dera calls this time th [Laughter] And this convention is also dis- foreign investment into foreign business. ting," when whole n played, I'm told, on monitors throughout Tomorrow I'm going to Indianapolis, help their heroic histories the arena, and from here, beamed around promote stewardship, where the city works From Havana to Prag the world. I will try to finish each sentence with citizens to cultivate an urban forest. the peoples of these li without a preposition. [Laughter] But these are not what you'd call isolated in to the amnesia, E 504 Apr. 30 / Administration of George Bush, 1990 that you get out of math and spelling. as a sign to the emerging democracies in economies, reclair [Laughter] And I know it won't be easy to Eastern Europe and in this hemisphere that long denied. Eve: understand all the things we're talking free trade is the way of the future. Panama City, the about this morning, but there's one thing Second, let me just say a word about start in the diffic that I'm sure you can understand: You're Japan. All of you know that I did not name building. here because you're important, because Japan a priority country under the Super It's that challen when you grow up you might just run your 301 provisions of the 1988 Trade Act. That you about today, own business, like the people here. Or does not mean that all of our problems with can engage every maybe you'll even run for President of the Japan have disappeared. We know that we you and the instit United States. It may be hard to believe, could sell more American products if proof of the pow but I was once a second-grader just like you Japan's market were truly open. But we've Democracy prospe are now. [Laughter] So, today I want to been working hard on that, and I. think firm foundation 0. challenge all of you to keep working hard with impressive results. Over the past few about that. What it in school. Do your very best, and don't be months, we've made more progress on chief aims of our afraid to reach for your dreams. trade issues with Japan than at any other involve the private And I want to challenge the Chamber of time I can recall. And part of the reason for ty, in the business Commerce as well-that's all the rest of you this success, if you will, is that the Prime That's not to say who are past the second grade out there. Minister, Prime Minister Kaifu of Japan, government to do [Laughter] All of you know that the Gover- shares our commitment to ensuring that ment aid is essenti nors and I have agreed on a set of national trade strengthens rather than undermines days of democracy education goals, goals we must meet by the the friendship between our nations. Now, free government ar year 2000, the year these second-graders we are going to continue to press for here graduate. And I'm delighted at all the That's why we p progress. And keep in mind, section 301 for Poland and Ht Chamber of Commerce is doing to advance and other trade law authorities remain continue to urge this great cause of excellence in education, available to the President, and we will use Nicaragua and Pan: but today I challenge you to get involved in all the tools at our disposal to open markets lation to final passa every school and community across Amer- and ensure fair treatment for American is embarrassing. T. ica. Help us make that classroom a place dent Endara of I where miracles happen. products, services, American investments and ideas. I'm confident in Carla Hills, our Senate and the Ho And before I go any further, I want to thank the chamber for its support on an very able and tenacious Trade Representa- islation over a mon issue essential to our nation's economic tive. I'm confident in her ability, and I'm done it. I call on t confident we will achieve lasting results. action in the Sena future. Last week I sent to the Congress a three-point plan for budget reform: one, John Clendenin mentioned in his speech fledgling democrac supporting the Legislative Line-Item Veto the whirlwind of the changes we've seen ragua. Act; two, proposing an amendment to the this past year. And last year I spoke to you It is frustrating to Constitution to provide a Presidential line- on May 1, May Day, by tradition one of the ing its work. Here' item veto; and three, a balanced budget great days of celebration in the Socialist lation, I called for amendment. The chamber, together with world. I said then that even the Socialist exact, and asked tl other organizations in the Coalition for world was coming to see that socialism 5th. In the House, Fiscal Responsibility, has been out there on wasn't just another economic system: it was discretionary sper the front lines of the battle for budget the death of economics. And that much was Senate added anot reform; and I ask you now to push hard for clear. What none of us could have seen on and, in committee this three-point plan. The time has come to the eve of May Day 1989 was how close we abortion provision. put our fiscal house in order. had come to the wholesale collapse of com- can people get so And let me say a few words about my munism. the Congress or administration's trade strategy. First, suc- First in Poland, then across Eastern Panama quite sim) cess in the Uruguay round trade talks is my Europe-one nation after another broke the got to deliver, anc top trade priority. The GATT [General stranglehold of the state and embraced de- when democracy is Agreement on Tariffs and Trade] needs mocracy. And here in our own hemisphere, extends a helping } strengthening. It doesn't cover services, in- in Panama and Nicaragua, the day of the But as I've said vestment, or intellectual property rights. Its dictator gave way to the decade of democ- aid alone is simply rules on agricultural trade are far too weak, racy. These transforming events brought than a matter of fir creating counterproductive pressures to freedom to tens of millions of people, and matter of principle subsidize farm exports. And we've got to with that freedom, new challenges digging we talk about bi strengthen GATT as a matter of principle: out from under the wreckage of ruined simple truth is tl 674 July 2 / Administration of George Bush, 1990 ment on these items, we're going to talk to Q. Are the allies in agreement with you commitments for our allies. That's the way I've tried to do it in the responses that you've gotten to your when implement from the very beginning with NATO, and proposals? economies of both I'm going to continue that. We don't dic- The President. Well, as I say, Jim's going a better life for t} tate; we just say, Here's our views, and then over. We've gotten broad general agree- peoples and a he: represent them as best we can. ment on a lot of issues, but there's still some ship. The progress Q. But your views seem to represent a change. work to be done. That's one of the things 4 months in the : we're talking about in here today. trade discussions The President. Well, we'll wait until we tion for our ovel see what comes out of the NATO meeting; President Gorbachev of the Soviet Union cannot become C we're not going to prejudge it. But I'm en- Q. Have you had any contact with Mr. come; we must er couraged because I think we've got a good Gorbachev going into his party congress? continues to rest position here. You know, the other day The President. No, I haven't talked to The President Marlin [Marlin Fitzwater, Press Secretary to him since he was over here-or been in emphasized that t the President] bawled me out. I said there's telegraphic. Now, maybe Jim has with Mr. United States and nothing earthshaking about all of this. Shevardnadze [Soviet Foreign Minister]. world's greatest t [Laughter] But he and Scowcroft [Brent Secretary Baker. Not since- their full energy t. Scowcroft, Assistant to the President for Na- Q. What are the keys to watch for in an open world tra tional Security Affairs] went into a frenzy, terms of that congress? What are your ex- cessful completior saying, Well, maybe others will interpret it pectations? this year. as this. So, I don't want to understate where The President. Stay tuned to CNN [Cable The President 1 we're going or overstate it, but some will News Network]. [Laughter] We've got to go brief the Prime N look at it as this major change in direction to work. the NATO sum: and others won't. But I want to take this London. The Prim opportunity to get myself off the hook. Q. Have you had any responses from the Note: The exchange began at 8:45 a.m. at dent reaffirmed in allies here? the President's home at Walker's Point. ry year of the sec ing importance of The President. Oh, sure. That's one of the stability in Asia. things I want to hear about from Secretary Japan and the Baker [Secretary of State James A. Baker continue to promo III] today. They've been in close contact. Statement by Press Secretary Fitzwater eration in this era And he'll go off and-what, tonight do you on the President's Meeting With Prime eration with our head off? Minister Toshiki Kaifu of Japan Prior The President WE Secretary Baker. Tomorrow morning. to the Houston Economic Summit Japan's growing is The President. Tomorrow morning, and July 7, 1990 denced by the cor iron out some of the differences before we support of politica get there. President Bush and Prime Minister Kaifu in Eastern Euro Q. Do you expect policy changes to be have just finished 2 hours of wide-ranging America, and made at the summit? discussions on our bilateral relationship and among Japan, the The President. Well, what I expect is a the global partnership of international coop- summit partners document that is unanimously agreed to eration between our two countries. The two goals will form a c that will set the course for the future. And leaders have a very warm, personal rela- be held during th as conditions have changed, NATO will tionship, calling each other by first names. manifestation of t change. And I've addressed myself to that. They agreed that the state of U.S.-Japan leaders committe But some will call it dramatic policy relations today is excellent and that both meeting in Palm S changes, and others won't. And so, I don't countries need to continue to work togeth- The President want to understate it. I don't want to be in er in a spirit of cooperation to strengthen discussed the issu trouble saying, Well, you said there would their bilateral relationship and support de- They had useful be no changes. But there will be some mocracy, freedom, and economic liberty agreed to continu changes, but I don't happen to believe that around the world. the other summit ] it's of a bombshell dimension. Remember The President took this opportunity to Finally, the Pres the last time we went over there we had a thank the Prime Minister for his outstand- ister, looking back troop policy change. And so, I don't want to ing leadership, which contributed so much governments have mislead you, but there will be some very to achieving an excellent joint report in our at the Palm Spri interesting developments out of it. Structural Impediments Initiative (SII). The agreed to continu 1056 Administration of George Bush, 1990 / July 8 greement with you commitments for reform in this report, kind of economic, security, and political re- i've gotten to your when implemented, will strengthen the lationship between our two countries that economies of both our countries and lead to will be appropriate to our two great nations S I say, Jim's going a better life for the Japanese and American in this dramatically changing world. ad general agree- peoples and a healthier economic relation- at there's still some ship. The progress we have made these past Note: The President met with the Prime one of the things 4 months in the SII process and our other Minister at approximately 11:30 a.m. at the re today. trade discussions has laid a firmer founda- Houstonian Hotel's Manor House in Hous- tion for our overall relationship. But we ton, TX. Later, the two leaders were joined the Soviet Union cannot become complacent in the days to by U.S. and Japanese officials and partici- contact with Mr. come; we must ensure that our relationship pated in a working luncheon. is party congress? continues to rest on a solid economic base. haven't talked to The President and the Prime Minister here-or been in emphasized that the time has come for the Jim has with Mr. United States and Japan, as two of the reign Minister]. world's greatest trading nations, to devote Remarks Announcing Canada-United their full energy to securing the benefits of States Air Quality Negotiations and an nce- S to watch for in an open world trading system through suc- Exchange With Reporters in Houston, cessful completion of the Uruguay round Texas What are your ex- this year. July 8, 1990 ied to CNN [Cable The President took this opportunity to er] We've got to go brief the Prime Minister on the results of The President. Well, we're here to com- the NATO summit just concluded in ment on the acid rain agreement. The joint London. The Prime Minister and the Presi- statement that we're issuing today on be- in at 8:45 a.m. at dent reaffirmed in this, the 30th anniversa- ginning negotiations is long overdue. I Jalker's Point. ry year of the security treaty, the continu- know that this is very important for the ing importance of the alliance to peace and Canadian side; and I want to say to you, sir, stability in Asia. I appreciate your patience and understand- Japan and the United States agreed to ing. continue to promote important global coop- Both Houses now in the United States retary Fitzwater eration in this era of great change, in coop- Congress have passed clean air bills, similar ting With Prime eration with our other summit partners. to mine, by huge margins; and the House- of Japan Prior The President welcomed and encouraged Senate conference will begin this week. nic Summit Japan's growing international role, as evi- And I think it will be of enormous benefit denced by the contributions it is making in to both our countries. Bill Reilly, the head support of political and economic freedom of the EPA [Environmental Protection me Minister Kaifu in Eastern Europe, Central and South Agency], plans to be in Ottawa on July 16th 'S of wide-ranging America, and elsewhere. Cooperation and will be prepared to open preliminary il relationship and among Japan, the United States, and their discussions. We should be able to begin nternational coop- summit partners in support of common formal negotiations shortly after that. countries. The two goals will form a central part of the talks to And we've made great progress. And I m, personal rela- be held during the next few days and is a think we ought to both be very pleased er by first names. manifestation of the trialog to which both about that. Great progress has been made, tate of U.S.-Japan leaders committed themselves at their but we still have a long way to go. We nt and that both meeting in Palm Springs. recognize that. And I pledge to my Canadi- e to work togeth- The President and the Prime Minister an friends that we want to do our part, and ion to strengthen discussed the issue of lending to China. I think this clean air legislation-that I hope and support de- They had useful talks on this matter and I'll be able to sign soon-is but one manifes- economic liberty agreed to continue these discussions with tation of that. the other summit leaders. Welcome to Houston, sir. And the floor is is opportunity to Finally, the President and the Prime Min- yours. for his outstand- ister, looking back at the progress our two Prime Minister Mulroney. Thank you, tributed so much governments have made toward the goals Mr. President. oint report in our at the Palm Springs summit last March, I'm pleased to confirm that the President itiative (SII). The agreed to continue to work to build the and I have agreed to begin negotiations for 1057 ASIA thought that the communists will try to keep moan the lack of public ethics. their power by buying up state-owned It has also given him an excuse to pro- shops and factories. The communists have a long the extraordinary session of the Diet Roger's daughter problem, however, since they can no longer (parliament) due to start on August 5th. Mr use state funds for party purposes. Kaifu wants a debate on two pieces of legis- FROM OUR WELLINGTON CORRESPONDENT Their salvation could come from neigh- lation on which he has pinned his hopes for bouring China, fearful of both democracy re-election. One would reform the electoral W HEN Sir Roger Douglas, New and of the possibility of Buddhist activity system to reduce campaign costs (and thus Zealand's then minister of fi- spreading from Mongolia to Tibet. Cer- the reliance on illicit backhanders); the nance, was sacked from the cabinet tainly China has influence. The coalition other would allow Japanese troops to be in 1988, it seemed to some the end of government has demanded that Mongolia's sent abroad in peacekeeping and disaster- New Zealand's brave experiment in Buddhists withdraw an invitation for a visit relief roles. The opposition parties say the economic reform. The Labour Party by the Dalai Lama. Otherwise, China ap- session should last no more than 30 days. was roundly defeated in last year's parently threatened, landlocked Mongolia Mr Kaifu wants it to run for 60. That way he general election. Conventional wis- might find its access blocked to the Chinese will not spend the period before the LDP'S dom said that Sir Roger had gone too port of Tianjin. leadership election in October looking like far, too fast. On July 30th conven- That threat to trade must be taken seri- a lame duck, too wounded to secure the tional wisdom was confounded by ously. Unemployment is rising; power cuts party chairmanship (and the prime the budget of Ruth Richardson, fi- are frequent; and, in a country where live- ministership that goes with it). nance minister in the new National stock outnumber people by ten to one, peo- Meanwhile, Mr Kaifu is keen to discom- Party government. ple queue for three hours to buy their meat fit his rivals, notably the finance minister, Miss Richardson has tackled rations. No wonder in a survey in the Mon- Ryutaro Hashimoto. As a member of the those parts of the economy that Sir gol Messenger only 30% of those questioned LDP'S largest faction, the popular Mr Roger could not reach. The country's had confidence in their government. Hashimoto could be a dangerous candidate health service will no longer provide How long will they and other Mongo- in late October. Last week, however, he was "free" care to all. From next February lians put up with economic hardship and almost persuaded to fall on his sword as the the richest 45% of the population will inexperienced democrats? As if to pre-empt man ultimately responsible for the blind- have to meet the cost of doctors' visits, an awkward answer, America's secretary of and part of their prescription charges state, James Baker, flew in to Ulan Bator on and hospital fees. University and col- July 25th promising aid worth up to $25m. lege students from well-off families Two days earlier he had appealed to rich will be dependent on their parents Asians to help Mongolia: its changes, he until they are 25 (not, as before, 20). said, were "truly democratic". The old suffer too. The National ROSES Party had promised to remove the in- come test on the old-age pension. Japan Miss Richardson complied, only to impose a new test that is in some Clean politics? ways stricter. To add insult to injury, the pension level is held until 1993 and the age of eligibility will be grad- FROM OUR TOKYO CORRESPONDENT ually raised from 60 to 65 years. UST occasionally, it pays to be boringly All this has overshadowed the above suspicion in scandal-plagued Ja- structural changes to the welfare sys- pan. Two years ago the Liberal Demo- tem. The 70,000-odd state-owned cratic Party (LDP) plucked the poor but hon- houses will be sold to a company, est Toshiki Kaifu from obscurity to make eyed supervision of the securities industry. owned by the state but run on com- him prime minister. That was in the wake of To embarrass Mr Hashimoto further, mercial lines. They could well be sold the Recruit shares-for-favours scandal that Mr Kaifu has been calling for a watchdog off. Private and public providers of forced the then prime minister, Noboru body, like America's Securities and Ex- health services will compete for Takeshita, to resign-followed by a sex scan- change Commission, to stamp out practices funds. Patients will be able to opt out dal that sent his replacement, Sosuke Uno, such as compensating big clients for their of the state system, taking their enti- packing as well. Now Mr Kaifu's hopes of a losses at small investors' (not to mention the tlement with them. In education, second term-unthinkable a few months taxpayers') expense or helping gangsters cor- state schools will be able to receive ago-have risen smartly thanks to the new ner blocks of shares. Mr Hashimoto knows lump-sums for their expenses and scandals of Japan's stockbroking world. his officials could never countenance such buy the services they want. Mr Kaifu has been cashing in on the mis- an authority outside their control, and so he These changes are extraordinary. fortunes of Japan's "Big Four" brokerage has to defend the very officials who con- Yet most New Zealanders assume houses (Nomura, Daiwa, Nikko and doned the hanky-panky inside Nomura they are inevitable and react apatheti- Yamaichi). The four have been forced to and other securities houses in the first place. cally. The test will be whether the gov- publish lists of the big clients they reim- The one thing still missing is a political ernment can show a stronger econ- bursed (at the taxpayers' expense) for losses connection to the stockbroking scandal. omy by the next general election at after the stockmarket crashes of 1988 and Uncharitable folk in Tokyo suspect more the end of 1993. The signs are that the 1990. Now 13 middle-ranking stockbroking names have yet to emerge. Who, they ask, economy is stirring from its long stag- firms have handed over their lists of fa- could be so important that big brokers feel nation. Voters with jobs, money in voured clients as well, ensuring that the she- compelled to cover their investment losses? their pockets and cheaper loans may nanigans remain on the front pages for a The answer would seem to be gangsters and conceivably forget the death of a wel- month or so more. All this gives the reform- politicians-but not Mr Kaifu. fare system that cosseted two genera- ing Mr Kaifu a timely opportunity to be- tions from cradle to grave. 34 THE ECONOMIST AUGUST 3RD 1991 ASIA head of a Hong Kong-based company called one believes their motivation is political: on Tian An China that has a large and success- been no hint. Nor, say most observers, will its business merits, Tian An is a star. there be any: the approvals are handed out ful property-development business in Does it matter? After the Asian Wall by provincial and local officials, most of Guangdong and other parts of southern Street Journal ran a front-page story on the China. They are convinced that Mr Chow whom (in Guangdong anyway) do their ut- subject this week, Tian An's share price helped Xu Jiatun, a former head of China's most to differ from the line taken in Beijing. barely flickered and there was no unusual Xinhua press agency in Hong Kong (which This happens with purely political mat- trading volume. But, says Mr Chow, the ru- serves as its informal embassy in the col- ters as well. Guangdong, comfortably dis- mour about China's displeasure has been ony), escape to America last year. tant from the dour autocrats in Beijing, has current in Hong Kong for three months; To widespread disbelief, Mr Chow long been the most relaxed part of China. It over that period Tian An's shares "should firmly denies this charge; but he also says is by no means free, but a study by John have performed better." that three Chinese government outfits (in- Kamm, a Hong Kong-based American busi- The real danger signal would be trouble cluding the Hong Kong branch of Xinhua) nessman, shows that the clampdown in on Tian An's part in getting the government want to sell their 10% stake in the unlisted Guangdong after the Tiananmen Square approvals that are vital for its developments parent company of Tian An China. Every- killings of June 1989 was far less severe than in China. Of that, says Mr Chow, there has that imposed elsewhere in China: fewer dis- sidents arrested, none executed. Christian Let's make a new start churches are tolerated in Guangdong, for- eign radio broadcasts unjammed. Guangdong's ability to protect its people T HAT contentious couple the Koreas from Beijing is usually credited to Ye have never really stopping loving Xuanping, who was governor of the prov- one another. Their well-wishers are con- ince until he was kicked upstairs to a job in vinced that the separation imposed on Beijing this spring. The well-connected Mr them in 1945 must be coming to an end. Ye (his father was a famous army marshal Such, anyway, was the feeling this week and a close comrade of Deng Xiaoping) has when applications by the South and the refused to stay upstairs. He had his choice of North to join the United Nations came successors in Guangdong and still spends before the Security Council. The applica- most of his time there, making public ap- tions, due to be heard on August 8th, pearances often enough to reassure every- were expected to be approved without one that he is looking after their interests. dissent. In September the North (which In private, Guangdong officials profess got its application in first) should be- eagerness for more political contacts with come the 160th nation to join the UN, Hong Kong. Delegations of civil servants (50 and the South the 161st. or so from the Hong Kong side so far this What then? It may be some time be- year, 30 from Guangdong) ferry between fore Koreans care to don the blue berets these Cantonese cousins. Beijing restricts of UN peacekeeping forces: they are still political contacts to the extent it can. Hong See you at the UN formally at war with each other. Neither Kong should encourage them: given that it bluod will the international buzz of the UN in has to go back to China, it should nestle as to be making a nuclear weapon. Neither New York be a particular lure: both country allows its citizens to have free far as possible under Guangdong's wing. countries are already installed there as contact with each other. This week a observers, although they are not allowed young South Korean who flew to the to vote. Their membership of the world Japan North via Berlin faced arrest if she re- club mainly means that one more obsta- turned to the South. Another student cle to normal diplomatic relations will Pleasures of from the South who dared to attend a have been removed: youth rally in the North was jailed for six Hitherto the North had insisted that years on her return. Clearly the South, summer the Koreas join the UN as one country mindful of the cost of Germany's unifi- under the North's leadership. It could cation, is in no particular hurry to em- FROM OUR TOKYO CORRESPONDENT count on the Soviet Union or China to brace the North veto any move by the South to go it alone. And yet: last year the two countries' T HE new financial scandals to hit Japan But these days the Russians and the Chi- prime ministers met for the first time are likely to prove a particular blessing nese want to be friendly with the wealthy for the opposition parties. The session of the since 1953. Direct trade, with a shipment and innovative South; they agreed not to of southern rice (to be exchanged for Diet that opened on August 5th is going to use their veto. Rather than be left out, the northern coal), started on July 27th. A be so busy tightening up Japan's banking North made its own application when it and securities laws that there will be little North Korean diplomat recently argued saw the way things were going. Other- for a "loose confederation" that would time left for the electoral reform that the op- wise, the North said, "important issues position dreads. tolerate both capitalism and commu- related to the interests of the entire Ko- nism. He pointed out that Koreans of At present opposition parties have an rean nation would be dealt with in a bi- easy ride in a number of multi-seat constit- North and South shared the same cul- ased manner in the UN rostrum." ture, the same language. But have they uencies. Their candidates can get elected to The begrudging tone reflects the di- grown apart since 1945? Probably not the lower house of parliament merely by vide that still exists between North and much. For a people that had been uni- scraping home in third or fourth place. South. Both countries have large armies. fied since the seventh century, a few de- Changes proposed by the prime minister, The South's is supported by American cades apart may merely make the heart Toshiki Kaifu-ostensibly to cleanse the rul- nuclear weapons. The North is believed grow fonder. ing Liberal Democratic Party of its ex- cesses-would end this cosy practice. All the multi-seat constituencies would be replaced 22 THE ECONOMIST AUGUST 10TH 1991 ASIA by single-seat ones. The number of seats in cial Democratic Party of Japan (formerly the the lower house would be reduced from 512 Socialists) has got Mr Kaifu to agree to press to 471. Of these, 300 would go to the winners for an independent watchdog along the of first-past-the-post contests, the rest would lines of the Securities and Exchange Com- be allocated by proportional representa- mission in America. The idea is bound to be tion. The opposition does not relish these resisted by the finance ministry, which tol- competitive refinements to the democratic erates no interference from politicians. process. Mr Kaifu was lambasted by opposition One advantage the reforms have for the leaders after his opening speech on August Liberal Democrats is that the party's enor- 5th. Koshiro Ishida, chairman of the mous appetite for cash would be reduced. Komeito ("clean government party"), criti- At the moment the party has to put up sev- cised the prime minister for devoting less eral candidates in each of the multi-seat than 10% of his speech to the stockmarket constituencies, and then provide financial scandal. The Communist Party's chairman, backing for dozens of semi-independent Tetsuzo Wada, complained that Mr Kaifu candidates whose support it seeks. The cost was seeking to deal with the stockmarket to the party averages ¥1 billion ($7.3m) a scandal too quickly. Makoto Tanabe, the seat. The cost of a seat to an opposition party newly elected chairman of the Social Demo- is reckoned to be less than a twentieth as crats, demanded that the government and much; it would be far costlier for it to fight a the finance minister, Ryutaro Hashimoto, first-past-the post contest. should clarify their involvement in the se- Mr Kaifu sought the 61-day special par- Will Hashimoto bow out? curities scandal. liamentary session that began this week not But the criticism was merely a warm-up only for electoral reform but to get approval ter for another two years. for what is being prepared for Mr Hash- for his plan to send Japanese forces abroad The way things are going, he probably imoto. None of the opposition parties will on peacekeeping and disaster-relief mis- will. But electoral reform may have to wait. be happy until they have been granted a spe- sions. Behind Mr Kaifu's determination to The prime minister may have to be content cial parliamentary committee to investigate be seen as a reformer was the not unrelated with getting just his peacekeeping and di- any financial wrongdoings, and been given thought of looking good during the run-up saster-relief legislation through parliament. a list of the companies and individuals who to the party's leadership election in October. The rest of August and much of September received kickbacks. What they would dearly Getting re-elected as party chairman would is going to be taken up with discussion on like to see is the names of some prominent automatically make Mr Kaifu prime minis- the financial scandals (see page 70). The So- Liberal Democratic politicians involved in the securities scandal-just like the Recruit shares-for-favours affair two years ago. That Shaking in Shibaura scandal led to a conquest of the upper house by the opposition. Rumour has it that some FROM OUR TOKYO CORRESPONDENT two dozen Liberal Democrats. have already been identified by the financial authorities. T HE clubs, discos and other noctur- their handbags, the club earns ¥2m a The hapless Mr Hashimoto has already nal dives in Tokyo are mostly small, month. had his name linked to a scandal in the because of astronomic rents, and are Its clients are not the cool types who headlines. His personal secretary acted as a supposed to close at midnight. Juliana's will soon move on to the next hot spot. go-between for Fuji Bank as part of a deal disco, located in a warehouse in the Rather they are prosperous though not involving ¥260 billion ($1.9 billion) of alleg- Shibaura district on Tokyo's waterfront, particularly trendy yuppies. The success edly illegal loans. Sooner or later, the oppo- is large. The police allow it to stay open of Juliana's shows there are boundless sition parties are going to be demanding Mr until four in the morning, at least at opportunities in Japan to import foreign Hashimoto's head on a plate. Apart from weekends. Juliana's has become the kinds of entertainment adapted to local anything else, that might postpone discus- place to be. tastes. Leisure is a. concept which has sions on electoral reform. After a hype-filled opening night in barely begun to be developed in Japan. May, 22,000 people came through Juli- Yet younger people, especially women, ana's doors in June and spent ¥109m who are increasingly opting to stay sin- India ($800,000). In July 25,000 people spent gle and not be trapped into marriage ¥120m. On its safety-deposit boxes with a constantly absent salaryman, One man's law alone, where Japanese ladies like to leave want lots of entertainment and are pre- pared to pay for it. The admission price at Juliana's is around ¥5,000. FROM OUR DELHI CORRESPONDENT Juliana's is a joint venture between T WO hours' drive from parliament in Wembley, one of Britain's largest leisure- Delhi, Mahendra Singh Tikait runs a management groups, and Nissho Iwai, a government of his own. He declares that all Japanese trading company. It was two politicians are rogues and all policemen are years in the planning and cost ¥1.5 bil- bandits in uniform. In 84 villages surround- lion ($11m). It has high-tech wizardry, ing his own of Sisauli, he claims that author- such as 49 video monitors, which the ity rests with a group of five village elders. In Japanese love. With the yen flowing in, fact, the group is controlled by Mr Tikait. four more Juliana's are planned during Thousands of Mr Tikait's supporters the next two years in Kobe, Osaka, Na- bear guns. Mr Tikait tells farmers not to pay goya and Sapporo. for canal water or electricity for their wells. No state government has dared cut off the THE ECONOMIST AUGUST 10TH 1991 23 ASIA Left to rot in Japan were started and home-made mortars let loose. But those pyrotechnics were the cul- mination of years of preparation for the death of Emperor Hirohito, and the en- thronement of his son, Akihito. It was the swan-song of leftist violence. The tally for this year's violence is expected to be small. The collapse of the Soviet Union affects different Asians in different ways. The next three articles examine the repercussions for Japan, China and India Few Communists have bothered to keep in touch with people's changing views. FROM OUR TOKYO CORRESPONDENT None has addressed such issues as high land prices, the exploitation of consumers and political corruption-the issues of today. Smash the Enthronement Ceremony The Japanese Communist Party is clean, a rare quality in the country's politics, but it makes the mistake of being self-righteous. "Hit the Target Tenno Enemy Revolutionary Urieasy about the gun-toting Communists Workers of China and horrified at the reformers of the ex-Soviet Union, the party believes that it alone now carries the true flame of scien- tific socialism. "We have long held Marx- ism to be the distillation of all human wis- dom," says Kenji Miyamoto, the party's octogenarian leader. "Mikhail Gorbachev is now trying to overthrow this." After being transfixed for two weeks fol- lowing the failed coup in Moscow, the party has now taken to issuing almost daily state- ments. It denounces "the great-power chau- vinism and hegemony" of Soviet Commu- nists under Stalin, Brezhnev and Gor- bachev. "We gladly welcome the end of the party of colossal historical evil," the party's Central Committee has quaintly an- nounced. It welcomed the Soviet Union's recognition of Baltic independence with the words: "The hegemonist error of Stalin It turned out to be a swan-song had not been corrected until now." The Jap- anese of today, apolitical to a degree T BE a Communist in Japan sounds can victors, faced with the problem of turn- like a contradiction. Japan's success as unimagined by their countrymen a genera- ing Japan into a democracy, encouraged the tion ago, merely yawn in response. an economic power is assumed to owe little Communists: at least they were untainted Mr Miyamoto has clung more tena- to Marxism. Yet the Japanese Communist by Japan's militaristic past. ciously to power than many a Marxist dicta- Party has been a considerable force. With its In the mid-1950s the party abandoned tor, notes Takuro Suzuki, a political com- 450,000 members, it is the third largest com- its doctrine of violent revolution: Instead, it mentator. East Germany's Erich Honecker munist party in a democratic country, after would pursue its aims though parliamen- managed only 18 years as leader. Romania's Italy's and France's. Until recently it had 26 tary democracy. The hardliners went their Nicolae Ceausescu lasted for 24 years. Mr members of parliament. But a has-been it own way. But hardliners and democrats looks increasingly like becoming. At the last Miyamoto has wielded absolute authority both had a great time in the late 1950s, when over his party for 31 years. His strict Marxist general election the Communists lost ten of they were a driving force in bitter union bat- orthodoxy and rigid style of management their 26 parliamentary seats, a catastrophe tles with big business, and again in the blamed on the Chinese massacre in Tianan- have stifled dissent and anchored the party 1960s when anti-Americanism grew over in the past. The public has reacted accord- men Square. The disintegration of the So- the Vietnam war. ingly. Even party members were embar- viet Union and the dismantling of its Com- Now even the ageing bomb-throwers of rassed by Mr Miyamoto's warm relations munist party have further rattled the the far left are losing their enthusiasm for Japanese comrades. They fear that after the with Ceausescu and his criticism of the pop- the fight. Some who have taken refuge ular uprising against his regime. next general election they may have no abroad are pleading to be allowed to come. Though a stickler for law and order, the members of parliament at all. home. Among them are five Japanese who. Like the Communists of eastern Europe, party is still watched by the Japanese police. hijacked an aircraft to North Korea in 1970 the Japanese Communists look back nostal- They suspect it is the last remaining breed- and have been there ever since. (Stay there, gically to their great days after the second ing-ground for potential radicals. The uni- says Japan.) The number of violent inci- world war. Anyone known to be a Commu- versities have become conservative. Thirty dents blamed on radicals dropped from 87 nist was jailed during the war. The Ameri- years ago leftist organisations could count in 1985 to 27 in 1989. Last year more fires on four out of five students to join the revo- THE ECONOMIST SEPTEMBER 14TH 1991 35 ASIA lution. The largest of the ultra-left groups, the Chukakuha (Middle Core Faction), used to do most of its recruiting at Hosei Univer- sity in Tokyo. A smaller group, the Kaihoha (Liberation Faction), operated around Meiji University in Tokyo. In today's prosperous Japan fewer than one in 10,000 students gets involved in radical politics. The ultra-left has fragmented into more than two dozen squabbling factions. They spend more time fighting one another than trying to demolish the pillars of Japanese so- ciety. A steady four or five murders a year have occurred among extremists since the 1970s. All the radical factions are believed to have been infiltrated by informers. The Chukakuha has been effectively neutralised since police raids on its hideouts in Kobe and Tokyo unearthed weapons, records and cash. The police hold files on some 35,000 extremists, no more than a third of whom are reckoned to be even remotely active members praises the decision to put down these days. Vietnam's party leader, Do Muoi, and Mr the Tiananmen demonstration. Chinese Members of the once-notorious Japa- Jiang, when normal relations will be re- Communists, says the document, cannot af- nese Red Army are in jail, exile or under sur- stored between the two countries after 12 ford to be weak. Mr Gorbachev is harshly veillance. The group's leader, Fusako Shig- years of enmity. criticised for disbanding the Soviet Com- enobu, is believed to be hiding in the But renewed friendship with Vietnam munist Party, but the leaders of the at- Middle East. The Japanese police set up an does not greatly excite China. Nor does its tempted coup are also blamed for not being anti-terrorist force in January after the Red continued ties with that other heartland of sufficiently steeped in revolutionary tradi- Army threatened to "block" the country's hardline communism, North Korea. China tion. In reassuring tone, it tells China's plan to send military transport aircraft to is really rather attracted by the more tangi- party members that as long as the veterans help out in the Gulf. Nothing happened. ble charms of the South. South Korean tele- of the Long March are in charge, hardline vision reported that Mr Deng had sent a communism is safe. The document is as- message to Seoul calling for full diplomatic sumed to have the approval of China's se- China ties. The South Korean foreign ministry de- nior leader, Deng Xiaoping. nied the report, probably under pressure Power still comes High-ranking officials have been al- from China, which wants to avoid giving lowed to read the document. Others are al- the impression that diplomatic relations lowed only to listen, forbidden even to out of the gun can be bought with mere money. make notes lest news of the contents should slip into the wrong hands. China has scru- FROM OUR BEIJING CORRESPONDENT pulously avoided giving an opinion in pub- India lic about Mr Gorbachev's death blow to So- S UPPOSE there were a revolt against the viet communism. However, with 50m party men who run China, and the army re- Old friends members privy to the sacred words, it is in- ex fused to protect them. The Communist evitable that they should be freely discussed. Party chief, Jiang Zemin, addressed this out of kilter m The document offers no hope of political re- lit question this week. His answer: the army form, instead painting a picture of a party must be told now, firmly, "The party holds preparing for a long battle with the forces of FROM OUR DELHI CORRESPONDENT Ui the gun." "peaceful evolution", otherwise known as Mr Jiang's stern directive, in the People's democratisation. T HROUGHOUT the cold war, the Soviet pe Daily of September 11th, appears to reflect Union was not just India's superpower ye An earlier hastily composed document the party's dismay at the failure of the coup friend but also its biggest trading partner de had praised the Moscow coup. Officials had th against Mikhail Gorbachev. Some officers and supplier of arms. That cosy relationship quickly to withdraw it when the coup col- is disintegrating. With the end of the Krem- ue in the Soviet army disobeyed orders to open lapsed. It is rumoured that China was about fire on opponents of the coup. This, the Chi- lin's global ambition and the collapse of its at to offer military support to the coup leaders. nese believe, unnerved the coup leaders. No authority at home, no one in India now Another rumour, denied by China, is that it such reluctance was evident in the soldiers knows whom to talk to in Moscow. Even if we has given asylum to some Soviet officials who killed students demonstrating in they did, what would they talk about? qui who supported the coup attempt. me Tiananmen Square in June 1989 in pursuit The uncertainty is disquieting. India has Despite giving the appearance of busi- traditionally seen China and Pakistan as the a of democracy. However, it has since become ness as usual, China's leaders are believed to known that many in the so-called People's main threats to its security, and believed po be deeply concerned by their isolation. The that only the old Soviet Union could deter titi Liberation Army feel shame at having fired communist world, after all, seems to be on Chinese citizens. Some units might have China from a military adventure on the dis- tor shrinking by the day. On September 8th the refused to do so. Mr Jiang fears that next puted Indian border. For its part, the Soviet rou Vietnamese foreign minister, Nguyen Union has viewed India as a bulwark lin time the soldiers might hold their fire, or Manh Cam, visited Beijing, journeying even side with the demonstrators. That is against Chinese expansion and American symbolically through Friendship Pass be- what he is determined to prevent. domination of South Asia. The two coun- def tween the two countries. He put the final A document circulating among party tries signed a 20-year treaty in 1971 that fell has touches to a forthcoming meeting between not far short of a military alliance. The treaty cra 36 rin THE ECONOMIST SEPTEMBER 14TH 1991 ASIA The luckiest man in Japan stay on as prime minister for a while. Others in the party have been trying des- perately to prevent that from happening. The party's three other main cabals-those headed by Hiroshi Mitsuzuka, Kiichi Miyazawa and Michio Watanabe-could FROM OUR TOKYO CORRESPONDENT together easily out-vote the Takeshita fac- tion. But to do so would make a fearsome T HE ONCE unthinkable is about to hap- clique headed by Noboru Takeshita. Mr Ta- enemy of Mr Takeshita and his mentor, pen in Japan. Toshiki Kaifu, the mildly keshita had to resign as prime minister after Shin Kanemaru, the godfather of Japanese bungling backbencher who was plucked being implicated, along with other politi- politics. The bosses of all three factions have from obscurity two years ago to act as a stop- cians, in the Recruit shares-for-favours scan- said they will stand for election in October. gap prime minister, is almost certain to get a dal two years ago. By now Mr Takeshita But only Mr Miyazawa means what he says. second term. Mr Kaifu's stint as president of could have expected the public to have He is due to announce his candidacy imme- the ruling Liberal Democratic Party-and pretty well forgotten the scandal, leaving diately after the Diet session ends next week. thus prime minister-comes to an end in him free to reclaim the prime ministership. Mr Mitsuzuka and Mr Watanabe are not late October. He looks like being made pres- But a series of new financial scandals has re- planning to announce their candidacies ident for another year. That would put him minded ordinary folk of the sordid shenani- until a few days before the election on Octo- among Japan's longest-serving prime min- gans going on among the rich and the pow- ber 27th, and may never do so. Both are be- isters in recent years. erful. Mr Takeshita has wisely chosen to lieved to have done deals with Mr Few people thought Mr Kaifu would last keep his head down for a little longer. Takeshita. In exchange for agreeing to an ex- even a few months, let alone a two-year He might have considered putting up a tension to Mr Kaifu's term, Mr Mitsuzuka term, before being forced to hand the reins candidate from his own faction for the top and Mr Watanabe each want a senior party of government back to political heavy- job. However, the two possible candidates post (that is, secretary-general or executive weights within the party. He has survived al- are in trouble. The finance minister, council boss) and later a top ministerial job. most entirely by accident, not skill. Because Ryutaro Hashimoto, is to resign on October Mr Kaifu, they feel, should be given only of his bungling, Japan's contribution to the 18th. He will take responsibility for the fi- one more year in office rather than two- cost of the Gulf operation by America and nancial scandals that happened on his and preferably less than that. its allies was seen, unfairly, as too little, too watch. He is also under a cloud because an In their view, Mr Kaifu should be al- late. His bill to allow Japanese to go abroad aide turned out to be a go-between in a lowed to remain in the prime minister's res- as part of a United Nations peace-keeping banking fraud. The Liberal Democrats' for- idence until next July, when an upper- corps is stalled in the Diet. Three bills de- mer secretary-general, Ichiro Ozawa, a bully house election is due. At present the signed to clean up Japanese politics are ex- albeit a clever one, has had'a heart attack. opposition parties, having done well in the pected to die when the parliamentary ses- Neither man can expect to be rehabilitated, wake of the Recruit scandal, hold the major- sion ends on October 4th. The legislation to politically or physically, for several years. So ity of seats in that house, and have been deal with Japan's scandal-plagued banks Mr Takeshita will let the harmless Mr Kaifu making life difficult for the Liberal Demo- and stockbrokers is not ex- pected to be passed. Yet, despite this catalogue of failure, Mr Kaifu's popu- larity has soared. To the pub- lic, the prime minister is seen as a typically sincere if slightly incompetent Japa- nese salaryman, perpetually harassed by powerful figures behind the scene. That is why the voters have backed him- and, indirectly, the party. Thanks to Mr Kaifu, the Lib- eral Democrats had a popu- larity rating of 55% in August, the highest since it was founded 36 years ago. The party now has a record 5.4m members. Mr Kaifu's luck is the re- sult of others' misfortune. As a member of the smallest fac- tion within the party, he has been prime minister only on the say-so of the powerful Takeshita decides, Kaifu abides 91 THE ECONOMIST SEPTEMBER 28TH 1991 35 ASIA crats. If Mr Kaifu can win back the upper house for his party, it is argued, the Liberal Democrats' problems will be over. Mr Kaifu Putting pep in her handbag could then be packed off to the sleepy FROM A TOKYO CORRESPONDENT backbenches from where he was plucked, and the heavyweights will take over. I T USED to be only the men in Japan Before that happens, though, other po- who needed pepping up. Make-be- litical dramas have to be played out. Mr lieve aphrodisiacs were gulped down by Mitsuzuka and Mr Watanabe are not the the gallon by optimistic Japanese. These only ones talking quietly to the Takeshita days, though, Japan's new generation of faction. Some of the Miyazawa faction's career women are proving to be faster on members have been taking the precaution their feet than teenagers, freer spending S of apologising beforehand to Mr Takeshita than young married couples, and more for having to back their leader's bid for the imaginative than a salaryman. Don't party leadership. Mr Miyazawa will be 72 they need a tonic too? Of course they do. next week and this will be his last chance to Try the pep drink, probably the most stand for the prime ministership. He too expensive dose of caffeine in the world. ¥100 billion this year. For many of the has had to stay away from public office A small bottle costing ¥300 ($2.25) and smaller suppliers, selling little fizzy while memories of the Recruit affair linger. up contains 50 milligrams of caffeine- drinks in one-gulp bottles accounts for Everyone agrees that Mr Miyazawa is about the same as a cup of coffee. Pricier more than half their turnover. But with one of the most talented politicians in Ja- versions contain dubious additives: gin- all the large suppliers-Sankyo, Yama- pan, with a high intelligence, a wealth of ex- seng, royal jelly, even antelope horn and nouchi, Otsuka, Takeda, Asahi Chemi- perience in cabinet and on the interna- tincture of viper, plus a harmless dollop cal-well entrenched, any new entrant tional stage, and, usefully, fluent English. of vitamins. The dedicated career has to search for a niche of its own. But he lacks the common touch, and has lit- woman will cheerfully pay ¥3,000 a swig Women have provided it. One tonic in- tle support outside his own faction. Close for the experience. Her husband, no cludes an ingredient said to improve the friends suspect that Mr Miyazawa will suf- doubt disappointed by aphrodisiacs, skin. Another contains nutrients said to fer a humiliating defeat in the party's presi- may do the same. Hardened pepoholics ward off anorexia. dential race in October. Afterwards, the gulp a bottle at breakfast, another after What next after this market is satu- leadership of his faction may pass to a youn- lunch, and a third before hitting the bars rated? A small Osaka firm, Sanko Phar- ger man. Perhaps some members will defect in the evening. maceutical, thinks it has the answer. For to the Takeshita camp. Mr Miyazawa knows The market for tonic drinks for both ¥200 it is offering little bottles of all this and more, but he has to try for the men and women has been growing since Wanbitan-a tonic said to make the fam- sake of his faction's morale as well as his the mid-1980s. It is expected to reach ily dog wag its tail off with joy. own ambition. Another little drama concerns the length of a prime minister's term of office. Two Lanka that had been cleared of Tiger guerril- come. Mr Premadasa now wanted to negoti- weeks ago a Liberal Democratic committee las by the Indians, and generally to protect ate with the Tigers, not to fight them. To get started discussing the idea of extending the all peaceable Tamils. The Sri Lankan gov- the Tigers to the negotiating table, he or- president's term from two years to three. ernment, under President Ranasinghe dered the Sri Lankan army to assist the Ti- The ostensible reason being given for this Premadasa, had, it seems, other ideas. gers against the Tamil National Army, and previously unheard-of proposal is that two Although the Indians had been invited to provide the Tigers with arms. Little has years is simply too short compared with the to Sri Lanka to fight the Tigers, they had, in been heard of the Tamil National Army 24 four years or more enjoyed by leaders of the government's view, outstayed their wel- since. It is assumed that many of its mem- other industrial countries. A more realistic co reason is that Mr Takeshita and the other ageing bigwigs who will be taking over after Mr Kaifu has served his purpose are deter- mined to remain in office for as long as pos- sible before having to hand over to a new M generation of leaders. Mr Kaifu, though, is probably going to get only one more year, and should count himself lucky to get that. Sri Lanka in Our allies, liai the Tigers lege and W HEN the Indian army sailed away me from Sri Lanka in 1990, it left behind ble a local defence force. This force, called the list Tamil National Army, had been recruited, mo armed and trained by the Indians. Its job be was to hold the areas in north-eastern Sri Indians train the doomed Tamil National Army 36 THE ECONOMIST SEPTEMBER 28TH 1991 THE NEW YORK TIMES MEDICAL SCIENCE TUESDAY, FEBRUARY 18, 1992 C3 THE DOCTOR'S WORLD Every Time Bush Says Bush's electrocardiogram showed no confusion follows. However, the evidence of such an attack. White House has been criticized for, "Most doctors feel I should have adding to the confusion by not issuing. brought him to a hospital, or should a statement from Dr. Lee or having. 'Ah,' Second-Guessers have done this or that," Dr. Lee said. him answer questions about Mr. But to him, the diagnosis was a Bush's condition. straightforward case of gastroenteri- Dr. Lee acknowledged the confu- tis, or intestinal flu, striking Mr. Bush sion, but said he did not issue a state- Of His Doctor Cry Aha!' after hitting others in the Bush entou- ment or speak to reporters because* rage. "I had been living with Presi- "it wasn't a major thing." "If something bad is going to hap- pen, I am going to be obviously out handling various medical problems. there," he said. "I saw no need to" By LAWRENCE K. ALTMAN, M.D. Most comments reflect sincere ef- forts to help, but some come from Practicing hype it, make a big deal out of it. It. was just unfortunate that the guy got: WASHINGTON those out to gain fame or fortune by sick on camera. NY time a President is ill, his consulting in some way on a Presi- medicine in a Despite confidence in the diagnosis, A doctor in the White House is dent's case. barraged with unsolicited In the White House, Dr. Lee heads a fishbowl: the Dr. Lee and other White House offi-: cials on the scene in Japan may not. advice and criticism, mak- staff of doctors, nurses and physi- ing him the most second-guessed doc- cian's assistants who look after the White House. have appreciated the degree of anxi-- ety that Mr. Bush's collapse created, tor in the world. Bush family, the Quayles and other in the United States. It is a case; President Bush's personal doctor, White House personnel. The Presi- where not providing sufficient infor- Burton J. Lee 3d, knows the phenome- dent has a doctor nearby around the dent Bush for 12 days," he said. "I mation and communicating to the non well. In news reports and in an clock. "We disagree very seldom, avalanche of mail to his office in the about the same as any other bunch of know when he is having a serious public in a timely way raised unnec- White House, Dr. Lee has been at- doctors," Dr. Lee said. problem and not having one." essary second-guessing and specula- tion about a President's health. tacked for prescribing the sleeping pill Halcion for Mr. Bush. Dr. Lee was Dr. Lee is well aware why White Last May, Mr. Bush spent nearly three days in a hospital because of an As a doctor working at the heart of also criticized for the way he handled House doctors are watched closely, erratic heart beat and an overactive the Washington establishment, Dr. Mr. Bush's collapse at a state dinner particularly in an election year. Some thyroid. Dr. Lee was criticized for not Lee has an unusual vantage point on in Japan last month. And last year he have played important roles in Amer- having detected the thyroid disorder the debate over health care, and on was harshly criticized for not order- ican history by concealing serious within the first hours of the Presi- this issue, at least, it is he who second- ing a thyroid test as part of Mr. Presidential illnesses and helping to dent's hospitalization or in the annual guesses other doctors. Bush's annual checkup that might manipulate elections. checkup'a few weeks earlier. His medicine is easy to prescribe- have detected Graves' disease before On occasion, Presidents have re- it caused an erratic heart beat. ceived questionable medical care. "We were second-guessed instantly but difficult to take: doctors should on every single thing we did in han- stop bickering and start developing Many doctors would cringe from dling his Graves' disease, and by ex- plans that they could present to Con- attacks on their-skills. But Dr. Lee perts at the big medical schools, none gressional and White House leaders, does not shy from controversy. In of whom were on the scene," Dr. Lee. he said. fact, he closely follows reports of the What rankles Bush's President's health through newspa- said. "Now, doctors ought to know "There are a lot of people of good pers, television and news briefs that physician the most is better than that." will around Washington who are as Such criticism "is a risky business frustrated" by the health care sys- are sent to his office several times a for even the most expert" armchair tem as most doctors are, he said: day. He said he reads every letter he the dispute over a medical observers because they have "They would love to start bartering gets and stashes the interesting ones not examined the President, do not with the medical profession, but SO in his desk. Halcion prescription. know the full test results, and do not far they have not had anyone to bar-- Nevertheless, there are signs that have the intimate knowledge of a ter with except for a bunch of doctors some comments strike a raw nerve. who come around complaining.' Although he is a graduate of the patient that comes from day-to-day When President Eisenhower suffered contact, Dr. Lee said. Dr. Lee said medical colleges and Columbia University medical school a heart attack at night in Denver in But in the wake of the thyroid con- medical centers should unite with the and practiced for 30 years, specializ- 1955, Dr. Howard Snyder told the troversy, Dr. Lee said he has asked American Medical Association to de- ing in lymphomas, at Memorial President's wife, Mamie, to get back experts for a list of tests that they velop new plans. Sloan-Kettering Cancer Center in in bed with her husband to keep him believe should be performed on a For example, he urged that physi- New York City, he said: "Doctors warm and delayed sending Mr. Ei- George Tames for The New York Times healthy 67 -year-old. Although Dr. Lee clan assistants and nurse practitio- from all over the country write and senhower to a hospital for the better Dr. Burton J. Lee 3d, President Bush's doctor, in his White House has long been critical of doctors who ners be trained to perform some:- tell me things: You may not be aware part of a day. office, where he receives an avalanche of mail from others doctors. order too many costly medical tests, tasks now done by doctors. He said" that aspirin can give you intestinal Dr. Max Jacobson, a New York the physician assistants and nurses, bleeding. You may not be aware that advising him on the President's health He says he answers it all politely. he said he would include some sug- doctor, gave President Kennedy gestions in Mr. Bush's next checkup who work in the White House "pick up. there are side effects of this, that and mind-affecting amphetamine injec- the other drug. Where the hell do they in several weeks, though he did not physician errors all the time.' tions before a summit meeting. identify them. The most difficult aspect of re- think I went to medical school? But I Of all the criticism, it is the pre- taken half a Halcion pill the night "I could see it coming 40 seconds forming health care, Dr. Lee said, is write very polite letters back to ev- scriptions of the controversial sleep- before because of difficulty sleeping. before it happened, he said. "I saw Some comments are Instructive in to persuade doctors "to look at it- erybody and say, yes I am aware of ing pill Halcion for Mr. Bush that Last week Dr. Lee refused to dis- these things." his face go absolutely dead white. He other ways. Last week he said he from the point of view of the patient. seems to rankle Dr: Lee most. Al- Although they usually resent criti- cuss the discrepancy, calling Halcion looked like a curtain coming down! I "It bothers me to see doctors driv-) learned of a syndrome, described though Dr. Lee insists he was correct a closed issue. cism of their medical decisions, doc- was out of my chair and trying to get about a decade ago, including left- ing around in expensive Mercedes- in prescribing Halcion, he has said he to him before he went, but I did not handedness, autoimmune disorders Benzes," he said. "It is not that they. tors are well known for second-guess- will try to avoid it for public relations, Even the President himself can get there in time." and certain other problems. The don't deserve them, or they should ing another's work, even if they have not medical, reasons. second-guess his doctor. For exam- no firsthand knowledge of a case. Dr. Lee arrived just after Mr. Bush President, who is left-handed, has not have them, but can't they under- Dr. Lee has repeatedly said Hal- ple, Mr. Bush disregarded Dr. Lee's hit the floor. been treated for Graves' disease, an stand that every person who sees, The second-guessing of a Presi- cion had nothing to do with Mr. advice to skip Prime Minister Kiichi Because Mr. Bush fainted while dent's care comes in a variety of autoimmune disorder. Some people them drive knows that every cent Bush's collapse at the dinner. Dr. Lee Miyazawa's dinner after he became seated, which is unusual, some lead- with the syndrome are dyslexic and paid for the Mercedes came out of forms, from leading professors to said earlier this month that Mr. Bush people who have suffered similar con- ill and had to leave the receiving line ing doctors have speculated that he Dr. Lee speculated that Mr. Bush's somebody's pocket who was sick." had not taken a Halcion for at least a before the event. ditions. Doctors not connected with a collapsed from a transient episode of well-known problems with syntax week before he collapsed. But one President's case freely offer analyses Expecting a medical problem, Dr. a Stokes-Adams attack, in which the might be linked somehow to the other reporter, John Cochran of NBC News, of his ailments, and they write to the Lee said he briefed key aides about heart beats extremely slowly, about conditions. said the President remarked a few The New York Times Magazine Mr. Bush's condition and watched the 30 beats a minute. Dr. Lee said he had White House about their pet ways of Any time a President is suddenly hours before he collapsed that he had President carefully from his table. heard the suggestion but said Mr. taken ill, as Mr. Bush was in Japan, illuminates the news. nis top economic WIII Ammunition Plant, a that the Federal- Reserve was squeezing be confirmed to a new term, Senate government-owned, the U.S. economy by keeping interest rates The inevitability of Greenspan': contractor-operated too high. reflects both his personal credibilit: installation, will lay off up to 190 workers beginning this The president then turned around last fall and any real alternative either to him ( month. Officials of Hercules nominated the man in charge, Fed With Bush and Congress often at 1 NEWS Chairman Alan Greenspan, to a sec- tax and spending policies that car Inc. blamed a declining need ANALYSIS ond four-year term. quickly or easily, the Fed has the 0: for propellants and Both Democrat and Republican members of nomic policy game in town. ammunition in the nation's shrinking defense budget Congress have grumbled that under Greenspan And the ongoing political un coupled with plans to reduce the central bank has insisted on fighting an unnec- Greenspan reflects the limits of the Radford's operating costs. essary war against inflation when it should have See GREENSPAN, E2, ( Wendy's, the fast-food chain parent, said its profit rose 40 percent in the fourth quarter and 31 percent for all of 1991, and its sales hit records. Key Executives View Bush Centel Corp., the Chicago-based telecommunications company that employs 9,000 Trip to Japan as a Success people, put itself up for sale after directors voted to tration and Congress that a cartel of By Stuart Auerbach solicit bids. Japanese competitors has kept it out Washington Post Staff Writer of the commercial glass market, be- AT&T said consumers who While President Bush's trip to Ja- lieves that an agreement between use its telephone calling pan last month has been widely seen Bush and Japanese Prime Minister cards now can leave as a political disaster, key corporate Kiichi Miyazawa to open that market recorded messages for executives who deal with Japan are now gives it a chance of succeeding in people they call when they viewing it as a success that could pro- Japan. get a busy signal or no duce expanded business and create "Without the political effort from answer. The company the jobs for American workers that the president in concluding the agree- charges $1.75 for a the president said he was aiming for. ment, we stood a very small chance of one-minute message. Some business executives, includ- succeeding. It's still an open question Motorola said it is joining ing several who went to Japan with whether we will, but now we have a E forces with Aptronix, a the president, said, in recent inter- chance," said Peter Young, director of a developer of "fuzzy logic" views they are seeing signs the trip international business for Guardian, a software application tools. could help their efforts to sell not only Michigan-based producer of glass -3 Fuzzy logic is a relatively in Japan but also in the rest of Asia. products used in the construction and William J. Wheeler, a corporate automotive industries. 7! new technology that electronically approximates vice president of Chicago-based FMC Companies are reporting new op- pε Senate Majori and even anticipates human Corp., was in Tokyo a week after the portunities even in the business of -od thought processes in control president left to open a new Asian of- selling U.S.-made auto parts to the u! Si and decision making. fice for his company and said he im- major Japanese producers, a sector mediately noted a new willingness to where American firms are battling AFL- cuts Sony said it is developing buy American products. what they feel is the false-though re- Sony Digital Sound, a new "ase "The trip was a commercial suc- widely held-view in Japan that their technology designed to bring cess," said Wheeler, whose company products are inferior. Labor the i sind compact disc-quality sound to makes a variety of products from ag- John P. Reilly, president of Tenne- motion pictures. It said it ricultural chemicals to massive street CO Inc.'s auto parts unit and head of would disclose the full details sweepers. the government's Auto Parts Adviso- By F reduce Washii of the technology and the "We believe that it created greater ry Committee, who was on the presi- the of timing of its introduction dential trip, reported after revisiting BAL HAR the opportunities. The Japanese are ater this year. oney to clearly concerned about the political Japan this month that Japanese auto- Organized la situation [and] they are going to makers are taking steps to buy Amer- cit. But INSIDE gressional I do something about it. It's going to be ican-made parts for their plants in Ja- also pin coming invol a bit easier to sell. The door is open a pan and the United States. proposal with Preside If the LTV bankruptcy bit. Their uneasiness [about anti-Japa- Reilly said that American parts for the middl process were a soap opera, nese feelings in the United States] is manufacturers have been invited to 01 she past few episodes would likely to translate into some action, as join the design process for 1995 mod- In a policy :ave drawn a lot of outrage, little as they can get away with," said el cars-a crucial step in winning a the AFL-CIC writes columnist Allan Wheeler, who will be stationed in To- big share of orders. labor leade Loan. kyo. On the services side, Maurice R. should recog page 3 Guardian Industries Corp., which "Hank" Greenberg said Bush's discus- dollars in a " has complained to the Bush adminis- See JAPAN, E2, Col. 4 send middle- Photocopy-Preservation not ue commried. statement released by the Eco- should "by no means be the center- the The labor leaders argued there would Policy Institute, a Washington be no guarantee that the tax savings piece of the program to restart the The AFL-CIO policy position puts group financed in part by la- economy." labor somewhat at odds with the resulting from the cuts would be funds, Galbraith and the oth- spent on goods and services. The federation said it would go Democratic leadership in the House, omists said the rise in long- "What a recession-weary nation along with proposals now before Con- which has adopted an economic re- needs-and needs now-is jobs," the gress to provide a temporary, two- covery package that includes tax cuts and the continued wide for the middle class as well as cuts in between long- and short-term statement said. "The only way to cre- year credit of 20 percent of Social Se- both the capital gains tax and corpo- suggest that the Greenspan ate jobs quickly is through a program curity taxes up to $400 per family and rate income taxes. a severe credibility problem." of government fiscal stimulus-prim- a permanent change in the deduction Kirkland said he was not satisfied credibility problem is this: ing the pump with immediate, direct for children to a credit of $800. But with the Democratic plan and hoped it and his Fed have made re- government spending on public works even here, the labor leaders said they could be modified to meet labor objec- nflation and inflationary expec- projects, on education and training, on would go along with such a change tions. He said the AFL-CIO strongly top priority. The markets programs to build new housing for only if the revenue loss were offset by believes that investment income means that the Federal Re- low- and moderate-income Ameri- a tax increase on the richest 1 per- should not be taxed at a lower rate raise short-term interest cans, on aid to state and local govern- cent of Americans. than wages. is any sign of an uptick in ments to forestall further public ser- The biggest problem with middle- which is why long-term While Kirkland had problems with vice cutbacks and on the further class tax cuts, the AFL-CIO said in its not fall and stay down, the some parts of the Democrats' eco- extension of unemployment benefits statement, is that it "threatens to dis- said. nomic program, he made it clear labor to help those who remain jobless ride tract Congress from what should be policy requires a new had no use whatsoever for the eco- out the recession." Reserve chairman, one who is its highest priority-creating jobs nomic recovery plan being offered by AFL-CIO President Lane Kirkland through a short-term dose of fiscal President Bush. be committed to economic -including price stability- later told a press conference that any stimulus and enacting long-term "I think this country needs beef and new tax cuts should be "revenue neu- one with a bias in favor of measures to put the economy on a he's offering us sushi-freeze-dried inflation to the detriment of tral" to prevent further increases in solid footing and make the nation sushi at that," Kirkland said. growth," the economists de- ispan and most other top Fed hakers, however, believe the If they ever let the underly- Key Executives Praise Bush's Japan Trip rate-that is, the rate ex- volatile food and energy pric- JAPAN, From E1 said a senior administration official gether, Bush administration officials to accelerate, prices will who is working with the business sion in Tokyo will allow his New said they are urging Japan's Ministry faster until the Fed is forced council. York-based American International of International Trade and Industry to cool off the economy and he price balloon, they argue. Group Inc. to sell commercial and in- "It needs to be done by the private push the top six Japanese automakers try to keep things under con- dustrial insurance to Japanese corpo- sector. The Japanese corporations to live up to their commitment, made first place, they maintain. rations that now deal only with do- need to open up. They have to during the Bush trip, to continue dis- elieve that price-level stability mestic firms related to them through change their buying policies and in- cussions with the Big Three U.S. car to achieve a maximum sus- interlocking ownerships. crease their purchases of foreign companies. rate of growth over time," Robert Galvin, an executive with II- products," the official said. The U.S. side, which wants these Kelley, another member linois-based Motorola Inc. who has This aims directly at the keiretsu talks, invited their Japanese counter- even-person Federal Reserve more than 30 years' experience in system, the Japanese business prac- parts to Detroit this month to discuss Ne also do not believe there is dealing with Japan, told reporters tice of dealing only with a network of ways to ease the path for American rate of inflation. If you come here last month that American com- companies related by cross-ownership carmakers to sell in Japan. The Amer- a 4 percent to 5 percent rate panies will begin to see an increase in that prevents outsiders from breaking icans have no dealer network in Ja- first thing you know it is Japanese orders as a result of the through. pan, and with most dealerships con- creeping up on you, and 8 president's trip by the end of this Before the council's meeting, U.S. trolled by Japanese manufacturers, 7, or 9" percent. year, but it will take until 1994 for government officials and business ex- U.S. automakers need their competi- was the threat the Fed saw the full impact to be felt. ecutives had said they wanted the tors' cooperation to sell in Japan. ago, Greenspan told sena- To make sure that happens, the heads of Japan's corporate giants at 1988 and early 1989, the After one meeting in Tokyo during was stretched so tight and American side of the U.S. Japan Busi- the U.S.-Japan Business Council the Bush trip, the Japan Automobile ness Council, which met here yester- meeting to agree to a final communi- ployment rate so low that in- Manufacturers Association agreed to day and Sunday, reportedly are press- que that places a new stress on im- accelerating. further sessions. But late last month, he was not at the Fed then, ing their Japanese counterparts to ports. A comminque is to be released Nissan Motor Co. President Yutaka recalls "the 1979-80 epi- end their corporate protectionism and today. Kume, the head of the association, inflation soared and the set specific targets for including U.S. At the same time, government and lashed out at Chrysler Corp.'s Lee Ia- the economy with the companies in their buying plans. business leaders want American cor- cocca, who had sharply criticized the interest rates since the Civil "The U.S. executives are calling on porations to be less shy about devel- Japanese industry, as "outrageous and it under control. Japanese business for a joint program oping an export culture instead of fo- insulting." Kume said he has "no in- not repeat that, to the ex- on trade expansion and open markets cusing on the U.S. market. tention" of attending another auto ability to prevent it," Kelley that is a direct follow-up to the agree- In a move to bring the squabbling summit because they are "legally ments between Bush and Miyazawa," U.S. and Japanese auto industries to- risky" on antitrust grounds. Photocopy-Preservation October 30, 1991 MEMORANDUM FOR SPEECHWRITERS RESEARCHERS FROM: JENNIFER GROSSMAN SUBJECT: ASIA PRE-ADVANCE RESEARCH JAPAN SCHEDULE FRIDAY: --arrival ceremony with Emperor (open press, troop review), then courtesy call on Emperor at Imperial Palace --meeting with Prime Minister Miyazawa at Akasaka Palace --Imperial Banquet, Imperial Palace, after dinner toast SATURDAY: --tennis and breakfast with the Emperor --visit Mita Senior High School (visit geography lab, then nationally televised 5 min. remarks followed by Q&A with students from around the world). -major speech at Japanese Diet, lower house. 15-20 minutes, focusing on the responsibilities of interdependence, and maybe Japan's role in NWO. brief remarks at Kodak R&D plant in Yokohama. First, lunch with U.S. business leaders, Visit Kodak Laboratory, then address to U.S. business leaders and Kodak staff. --one on one meeting with PM, then expanded bilaterals, then joint press statement --welcoming reception at Hotel New Otani with brief remarks to 2000 -- a kind of welcoming committee of business leaders, politicoes, etc. Tone should be real upbeat. --Dinner with PM at PM's residence, after dinner toast SUNDAY: --private breakfast -Emperor makes goodbye call to POTUS -attend church (maybe) -Embassy greetings --AF1 to Kyoto, accompanied by PM -walking tour of Imperial Palace -lunch with PM at Omiya Palace, (Secretary Alexander may simultaneously lunch with Stanford students and JET, Japan English Teaching Program, teachers). Walking tour of Omiya gardens. Brief remarks to American and Japanese students. --may visit Nijo Castle JAPAN POLICY THEMES Torkel Patterson of the NSC has advised me that while the main focus of the President's trip here will obviously be on trade issues, there will be a strong effort to tie in American domestic concerns wherever possible. The context: the global neighborhood; interdependence in communication/technology revolutionized, politically post-modern (Pinkerton) new world order. Two challenges. One: selling a responsible trade policy toward Japan back home, when the protectionist/isolationist harangues from the right and left offer such politically hysterical appeal. Two: eliciting concessions and continued progress from the Japanese at a time when tolerance for continued American Japan-bashing is reaching its limits. A couple of notes on first challenge. Japanese buy more per capita from America than Americans buy per capita from Japan (the "trade deficit" as commonly heralded fails to account for population ration, i.e. far greater U.S. pop than Japan pop). The Japanese buy more from the United States than they buy from the U.K., France, and Italy combined. When addressing trade issues with the Japanese we might stress "the opportunities and responsibilities of interdependence.' We want to challenge Japan to have the most open market by the year 2000. (Incidentally, in technical terms, tariff barriers for instance, Japan's market is more open than ours. Impenetrability more often comes from hidden barriers -- like regulation size paper or car manufacturing standards -- and on Japanese consumer preferences for the familiar.) Anecdote: Japan used to exclude American baseball bats because they didn't carry the right seal, a seal only available to Japanese firms. Encouraging continued Japanese progress on rectifying environmental abuses: While industrializing, Japan was one of the worst environmental offenders internationally. Since then, they have made great strides in cleaning up their act. For instance, all their taxicabs run on natural gas. While the Japanese are generally willing to move forward on environmental issues, intransigence stems from anxiety over "keeping your rice bowl filled,' i.e. concern over loss of jobs in professions with incidental abuse (e.g. fishermen, tortoise shell craftsmen). The Japanese usually ask for "transition time" to retrain, relocate those put out of work by conservation measures, while we want change "now." TOKYO SITES 1) Imperial Palace: I was unable to go on this walk-through but here's what I gather from other sources. The imperial banquet will be held in a room called Homei-Den Hall. From postcards, it looks kind of like a hotel ballroom, with some kind of abstract Japanese painting of clouds on the wall. This, apparently, is the way much of the palace looks. The palace is actually only about 20 years old. The initial greeting will take place in the Asahi-no-ma, or "Room of the Rising Sun." We had bombed the original Imperial Palace in World War II; it was rebuilt in '69. The palace surrounds a huge courtyard. The overriding characteristic of the place is a vast emptiness -- large rectangular rooms with little or no furniture, walls with sliding panels. The dining room table will be a big U-shaped deal. 2) Mita Senior High School: President will tour a couple of classrooms, go to larger room with Mita students where he will deliver brief remarks nationally televised. Then he will field questions from students around the country via a satellite hook-up. FYI: There's a concern that Japanese students, generally not encouraged to participate or ask questions in class, will be so awed by presidential presence that they 11 simply clam up. Perhaps there's some way (joke? comparison to American students?) that we can sensitively circumvent such a scenario. School itself not much different looking from American high schools. 1,100 students. Was founded as a public girls' school in 1923. Became coed in 1950, renamed Tokyo Public Mita Senior High School. In 1977, Mita opened a class for students returning from abroad. On a couple of bulletin boards I saw improvised scrawled student demands manifestos, requesting more interesting classes, more understanding teachers, etc. These were the work of such returning students, who are generally more outspoken and participatory than their colleagues. While part of our purpose is to show admiration for Japanese academic excellence, it's ironic that the Japanese themselves are quite critical of their own system. They in turn look to our institutions for inspiration. The Japanese criticize their schools for their emphasis on rote memorization, aversion to innovation, and lack of encouragement for independent, critical analysis by their students. Recently they even passed legislation to stop Saturday schooling. I suggest we deal with this by stressing a theme of "we have so much to learn from each other, rather than, "we have so much to learn from you. Moreover, we can touch on several non-school factors that account for Japanese academic excellence -- strong family support, recognition of the link between learning and success, early engendered work ethic, etc. 3) Japanese Diet, lower house: parliamentary amphitheater style hall with large balcony. Rich wood detailing and carving. POTUS to address reps from podium. 500 Diet members. See pictures. In the entrance hall/lobby, there are four pedestals in each corner. Three support statues of great Japanese statesmen/historical figures, the fourth is left empty as a symbol of hope, i.e. looking forward to the great statesmen to come. 4) Kodak, Yokahama: POTUS will see several gee-whiz high tech developments in progress, like a super high definition TV. Brief remarks to Kodak staff. Kudos; America can compete; appreciation for their hard work and investment; POTUS is taking steps to improve America's competitiveness. 5) Prime Minister's residence: unable to go on walkthrough. CONTACTS: --Blair Hall of AmEmbTokyo, (03) 3224-5336 --Hiroshi Furusana, MOFA 3581-3802 KYOTO SITES 1) Kyoto Imperial Palace (FYI, I don't think there are any remarks) : Originally built as the Emperor's second palace, Kyoto Imperial Palace was used as the Imperial Palace from 1331-1867 after the original main palace burnt down. The Imperial Throne and the August Seat of the Empress, still used for coronations, are located here. Each rests on a platform, and is covered with an octagonal canopy, decorated with a large phoenix and eight small phoenixes. The last "Ceremony of the Enthronement of His Majesty the Emperor at the Seiden" took place in the Imperial Palace on November 12, 1990 2) Omiya Palace: remarks to students should focus on building bridges between our two countries through education, facing the future together. See proverbs. Some of the students are with the Stanford Japan Center, established by Stanford University, "for the purpose of educating future generations of Americans about Japan. The Center also will provide an institutional link between American and Japanese research in science, technology, and social science with the aim of opening up crucial channels of information and by embarking on new cooperative initiatives in research between the two nations." 2) Nijo Castle (again, no remarks) : The castle was originally built in 1603 to be the official Kyoto residence of the first Tokugawa Shogun Ieyasu, and it was completed in 1626 by the third Shogun Iemitsu. The lavishly decorated castle stands as a symbol of the power of the Tokugawa military government. It contains the famous "Nightingale Corridor," whose floors are designed to creak with birdlike noises when tread upon, thus foreboding an enemy approach. JAPANESE COLOR: 1) Finding humor is difficult. Most people I've spoken to say that the Japanese aren't big on jokes, humor. Moreover, they will not know to laugh if POTUS tells a joke. 2) The "Japan Series" (similar to our 'world series') in baseball has just started. This years favorites are the Hiroshima Carp and the Seibu Lions. 3) Sumo wrestling is Japan's national sport. Recently an exhibition tournament was held in London. Two very popular wrestlers are a pair of American brothers from Hawaii -- Konishiki, who's the biggest Sumo wrestler (600 lbs), and Ake Bono, who's the tallest. Who knows, maybe we could make a joke about "gross national products" to an American audience -- large American exports. 4) American movies, rock, and rap music are very popular. Disneyland opened in Japan 6 years ago; Japanese love Mickey Mouse. 5) Karaoke is a popular Japanese social activity. Literally meaning "empty orchestra," karaoke bars play music without lyrics so that the patrons can star on vocals. Maybe there's a joke about Barbara wanting to go Karaoke. 6) Women control the finances in Japanese families -- when to buy the car, when to invest, etc. The husband often asks his wife for money for his expenses; this allowance is called "Kozu Kai. Maybe POTUS can say, "I wanted to buy some souvenirs, but Barbara cut my kozu kai. 7) Of all their qualities, Japanese are proudest of their perseverance, endurance, called "gamman." They rate harmony as highest on their scale of social values. 8) Relevant to Omiya in Kyoto: a handbook called A Look into Japan tells us "The Japanese garden is designed to be a faithful representation of nature and to impart a sense of simple, unspoiled beauty." 9) December 23 is the Emperor's birthday. 10) The speechwriting god (Curt, sit down) : Benten, one of the seven deities of good fortune, is the goddess of eloquence, music and wisdom. 11) "Banzai," literally meaning 'ten thousand years, is the Japanese equivalent of 'three cheers.' It's usually expressed at the high point or end of a celebration. 12) Japanese proverbs: "The past is not to be blamed." (Ki-o wa togamezu) English parallel would be: "let bygones be bygones." "The lantern-bearer should go ahead." (Chochin-mochi wa saki ni tate) Meaning, he who bears the light, whether material, intellectual, or spiritual, should lead the way. "A treasure decaying in one's hands." (Takara no mochi- kusare) Meaning, those with talent or money should but them to good use, or else they will rot away. "To the upper hand there is an upper hand.' (Uwate ni wa uwate ari). In other words, everyone has to answer to someone. Maybe there's a first lady joke in here. "Seven falls and eight rises.' (Nana-korobi-ya-oki) Perseverance will win in the end. "There are no national frontiers to learning." (Gakumon ni kokkyo nashi) i.e. scholarship knows no boundaries. "To study penmanship at eighty. (Hachiju no te-narai) Meaning, it's never too late to learn. Could apply to lifelong learning, or joke on POTUS computer lessons. "Books are preserved minds." (Shomotsu wa hozon-sareta kokoro nari) Reminiscent of Highet quote, 'Books aren't lifeless lumps of paper, but minds alive on a shelf.' KOREA POLICY THEMES Korea wants to have its cake and eat it too. On one hand, it wants to have a close relationship with U.S., play the big league with the big boys. On the other hand, it claims the fragility of a developing economy to justify protectionist policies. We think they're strong enough to forgo such a handicap, with ultimately hampers true growth on both sides. (Note: GB visited Korea after he went to Hirohito's funeral) Politics: Korea only recently became democratized. We want to encourage democracy, praise them for ongoing efforts and progress in that direction. (War) Heads up: North Korea is developing a nuclear weapon. There are fears of his becoming the region's Saddam Hussein. This issue requires some delicacy because a) we support reunification and b) South Koreans regard their northern neighbors as brethren. Kim Il Sung, the 82 year old "Great Leader" of North Korea, will pass the reigns to his son, Kim Jung Il, widely regarded as less than competent. Fears of a military coup against the latter complicate the situation. POTUS SCHEDULE SUNDAY: --AF1 to Korea for 3:30 arrival --wreath laying ceremony at National Cemetery, no remarks --American community greetings at Collier Field House --private dinner with President Roh at the Blue House MONDAY: --breakfast with US and Korean business community at Hotel Shilla, 5-10 min. remarks (themes similar to Kodak speech: U.S. can compete, we're working together to expand trade, importance of GATT --Arrival ceremony at Blue House --one on one with President Roh, expanded bilaterals, joint press statement at Blue House --State Luncheon at Blue House hosted by Korean President, after lunch toast --Address to the National Assembly, 15 minutes --travel to Camp Casey, press the flesh with American soldiers, 5 min. remarks. Jovial, what a great job you're doing, last of the front lines type speech. Acknowledge difficulty of 1 year unaccompanied tour SITES 1) Blue House: not on walkthrough, but the scoop as far as I know is that the Blue House is the official residence of the President of ROK. The Blue House was constructed in 1927 as the Japanese government's residence for its Governor- General. It occupies the grounds of the Yi-Koong palace of the Koryo Dynasty. In '48, when ROK was established, the building was designated the Presidential Residence. After the student revolution of 1960, it was renamed Chong Wa Dae (Blue Tile House), a name derived from its unique blue roof tiles. 2) National Assembly: not on walkthrough, but apparently it's your usual, rococo, elaborate parliamentary style. I'm told there's a large symbol behind where POTUS will be standing: the Flower of Eternal Life framing a Korean character. The Assembly building is located on Yoido, a large island on the Han River. Completed in 1975, it houses offices, meeting rooms, and the Assembly's library. The current National Assembly is composed of 299 members from two political parties. It is the thirteenth National Assembly since the founding of the Republic in 1948. The Assembly Speaker is Park, Jyun Kyu. 3) Camp Casey: not on walkthrough, but this base houses U.S. servicemen on a one-year unaccompanied tour. Their duty is an uneasy vigil at one of the world's last front lines. Part of their work is to patrol the DMZ (demilitarized zone) often camping out in no man's land. While we honor the returning heroes of Desert Storm, we should remember also courage and commitment of our men in Korea -- whose courage and commitment often go unacknowledged. POTUS should recognize the difficulty of a one year unaccompanied tour; Camp Casey is what is commonly referred to as a "hardship post." CONTACTS: --AmEmbSeoul, 82-2-732-2106 COLOR 1) Koreans, I'm told, like the Japanese, would have trouble knowing how to respond to a joke by POTUS. One way, however, to break the ice and establish rapport, would be to mention family -- his family, the American family, family values, whatever. 2) POTUS was here in '89, and also in '82 as vice president. SINGAPORE POLICY THEMES Singapore is the only ASEAN country we'll visit -- therefore we'll want to touch on issues common to those countries. (ASEAN is made up of Singapore, Malaysia, Indonesia, Brunei, and the Phillippines.) Singapore is our strongest ally in the region. Singaporeans welcome us as a balance to Japanese investment. They have a longstanding fear that Japan eyes them with military interest. We'll want to talk about South East Asia and Cambodia, setting the stage for future dealings with Viet Nam. Instability in the region: Thailand just had a coup, Burma has a dictatorship. Cambodia, however, is soon to have UN sanctioned elections. Ultimately, we'll want to resolve the POW/MIA question -- an issue some unscrupulous people in the are have exploited for profit. Resolution will require that Viet Nam be completely open so we can scrutinize all the records. Until we get to the bottom of POW/MIA, we can't really say that Viet Nam is truly over. I believe there are also some human rights concerns in Singapore itself. POTUS SCHEDULE MONDAY: --AF1 to Singapore TUESDAY: --Breakfast meeting at Raffles with U.S. ambassadors to ASEAN countries, no formal remarks --Arrival ceremony at Istana Palace --POTUS makes courtesy call on President and Mrs. Wee Kim Wee at the Istana Palace --meeting with Prime Minister Goh Chok Tong, then expanded bilaterals --15 min. speech at lecture series to the Singapore/American Business community, held in Westin Hotel (Security and Trade: U.S. engagement in the region; importance of working together towards the future) --Business Roundtable meeting at Hewlett-Packard, no formal remarks --groundbreaking ceremony for new American Chancery, embassy greetings type remarks --courtesy call on Senior Minister Lee Kuan Yew. --State Dinner at Istana Palace hosted by President Wee Kim Wee, after dinner toast WEDNESDAY: -view static display at Changi airport --AF1 to Australia SITES 1) Raffles Hotel (just FYI, no formal remarks planned at this point). Wrote Rudyard Kipling, "Feed at Raffles when visiting Singapore." Established in 1887, the hotel symbolizes the exotic charm and colonial nostalgia often associated with the area. The hotel was named after Sir Stamford Raffles, founder of modern Singapore in 1819. Celebs who added their aura to Raffles': Joseph Conrad, Charlie Chaplin, Douglas Fairbanks, Somerset Maugham, Nowel Coward, and sundry sultans, kings, and politicians. Raffles embodied colonial high life: tea-dances, Charleston, jazz bands, and billiards. Raffles is the birthplace of the Singapore Sling. In 1902, the last tiger to be shot in Singapore was pursued in Raffles, and finally dispatched under the Bar & Billiard Room. The hotel was declared a protected monument in 1987. 2) Westin Hotel: the hotel is supposedly the tallest hotel in the world. The lecture series in which the President takes part is designed to give political, academic, and financial eminentoes the opportunity to visit Singapore and mouth off. Singapore gets to bask in their wisdom. The series, inaugurated in 1980, is organized by the Institute of Southeast Asian Studies. Previous speakers include Henry Kissinger, Milton Friedman, Brian Mulroney, Raymond Barre, and Giscard D'Estang. 1,500-2,000 will attend speech. 3) Groundbreaking ceremony for new American Chancery: this event will basically take the place of Embassy Greetings/American community remarks. Projected completion for new embassy is 1995-6. 150-200 embassy staff, loads of Singaporean schoolchildren. 2,000 guests in all. Site is basically just a hill. Use your imagination. Building metaphors applied to broader scope of U.S.-Singapore relations might be appropriate. The U.S. Ambassador in Singapore is Robert Orr. DCM is Arthur Kobler. 4) Istana Palace: previously called Government House, the Istana was built in 1869 to house the British Governor of Singapore. The grounds had been the nutmeg estate of Charles Robert Princep. A statue of Queen Victoria was installed in the drawing room to mark her jubilee in 1889. Queen Elizabeth and the Duke of Edinburgh stayed there in February 1972. The edifice itself looks like a cross between a mini-Versailles and a southern plantation. Adorning the entry foyer are a matching set of tusks presented by the Sultan of Singapore to the British government. The staff of the President, the Cabinet Office, and a section of the Prime Minister's office work at the Istana. CONTACTS: --DCM, AmEmbSingapore, Arthur Kobler, 338-0251, ext. 217 --USIS, Dennis Donahue, 244-5233 COLOR 1) Singapore is a country of many races, languages and cultures. The population is made up of Chinese, Malays, Indians and Eurasians. Harmonious multiculturalism. One often hears the phrase, "many races, one people." Maybe we can make some "E Pluribus Unum" connection. 2) The first American consul in Singapore, Joseph Balestier, came to the area in 1834 and took up his post in 1837 -- inaugurating 154 years of diplomatic relations. His wife, Maria Revere Balestier, was the daughter of Paul Revere. Balestier's memory lives on in a bell, now in Singapore's National Museum, cast in Boston's Revere Works. Mrs. Balestier, presented the bell to the original Church of St. Andrew. 3) American Embassy Singapore suggests a Pearl Harbor footnote to our Singapore stop: POTUS will be at Pearl Harbor on Saturday, commemorating the 50th anniversary of the Japanese attack, and honoring the resultant 2,400 Americans dead or missing. We might also remember that on the same day, but on Singapore's side of the international dateline, the war began for the Philippines, for Thailand, for Malaysia, and for Singapore. Bombers appeared over Clark Field and over Singapore. Ground troops landed at Songkhla and Pattani (Thailand) and at Kota Baharu (Malaya). Singapore did not then have an army (British and Australian forces were there) ; Singaporeans who were either killed or injured were civilians. 4) Singaporean suffrage is universal and compulsory. 5) Orchids are a major Singaporean product (and they're beautiful). 6) While there is no compulsory education in Singapore, attendance is 94% and the literacy rate is over 87%. 7) POTUS and FLOTUS visited Singapore when Bush was Vice President. 8) When the President called Orr to offer him the ambassadorship, one of his selling points was to tell the future ambassador how comfy the Residence is. (Orr was previously Governor of Indiana). 9) Quayle was here on May 22. 10) The origin of the name "Singapore" comes from the 13th century's appellation of "Singapura," meaning "Lion City." AUSTRALIA POLICY THEMES The last President to go down under was LBJ, 21 years ago. Australia feels left out. They've been a strong ally -- there in WWII, there in Nam, there in the Gulf. The Australians have been very grateful to us for saving them from the Japanese in WWII. But those warm feelings are now being tried by their anger over trade policies (agricultural subsidies). Oops on EEPS: Our Economic Enhancement Programs (an American domestic subsidy so that we can export our products abroad at a lower price) and the EC's strict protectionist policies have left Aussies demonstrably furious -- riots, strikes. Need some stroking action. POTUS needs to show himself as a champion of free trade, "that's why the Uruguay round is so important, blah, blah. Hopefully we'll have GATT progress we can highlight by that time. Generally, stress "harmony/kinship with the Australians." CANBERRA POTUS SCHEDULE WED. DEC 4: --arrival ceremony THUR., DEC 5: --Embassy greetings, hosted at Ambassador Sembler's residence --luncheon hosted by Prime Minister in Australian Parliament Building's Great Hall. Toasts after lunch; PM's toast/speech will be 5-10 mins., intro POTUS for 3-5 mins. (may have to stretch if PM's speech is longer). --15-20 min. remarks to Australian Parliament --meeting with Australian academic community; talking points (don't know if we're responsible) --Australian War Memorial --Governor General Hayden's State Dinner at the Government House --RON Canberra SITES 1) Embassy Greetings: The Ambassador's Residence is 50 years old, as are formal Australian-American diplomatic relations. The ground lease for the mansion was signed while the Japanese were bombing Australia. The house was built during the war, and completed in 1943. Mrs. Roosevelt had a personal interest here, and came out after the building's completion to plant a tree. The current Ambassador to Australia is Mr. Mel Sembler. Ambassador and Mrs. Sembler are from Treasure Island, Florida. In addition to the Embassy in Canberra, the U.S. has three Consulates General in Australia -- one in Sydney, Melbourne and Perth -- and a Consulate in Brisbane. There is also a Consular Agent in Adelaide. 2) Address to Australian Parliament: The building itself is a striking postmodern palace, designed by Roman Giurgola, and completed for the Australian Bicentennial in 1988. The structure incorporates many symbolic features which strive to reflect certain Australian values, and resonate with Australian history, geography, and culture. For instance, on one side the earth, rather than meeting the building at a right angle, runs gradually from a distance and at an angle right up to the buildings peak flagpole. This design twist represents the accessibility and accountability of Australian government -- that the government are subservient to those they serve. Another example: in the forecourt of the Parliament, along the walkway POTUS will follow, is a mandelic mosaic design called "Meeting Place" which represents a meeting place for all races and cultures. The work also celebrates Australia's earliest settlers, so it is appropriate that an Aboriginal artist, Michael Nelson Tjakamara, was asked to create the centerpiece. It's pointillist strokes are reminiscent of his tribes sand paintings. Also neat: one of the original copies of the Magna Carta is housed in the Parliament building. POTUS will be greeted by the PM, walk up to the mosaic in the middle, walk over and shake some Australian hands. He then goes to lunch (check) in the Great Hall with the ugly tapestry. Parliament speech: POTUS starts out, "Thank you, Mr. Speaker." (Speaker is Leo McLeay. Speech is not teleprompted. House of Representatives: amphitheater- like, modern, bathroom-tile-green. NOTE: this will be the first time a foreign head of state has addressed a joint session of parliament -- ever (POTUS should stress what a great honor it is). VERY IMPORTANT: We were going to do an event with the Australia/USA Parliamentary Group which has now been cut -- so a specific reference should be included as to who they are, what they do, kudos. The group is not a standing committee or anything like that, just an association of upper and lower house parliamentarians working to promote US-Australian friendship ties. The group was formed under the auspices of the Inter-Parliamentary Union, Australian National Group in May '88. The bipartisan group is the most active of all Parliamentary Friendship groups. For more info, contact: Nonda on MP Eamon Lindsay's staff at 077- 724844. 3) Australian War Memorial: (No remarks, just FYI) Built roughly in the shape of a Byzantine church, the memorial is the most popular tourist attraction in the nation's capital. Event will take place in the rectangular, central courtyard, which includes a commemorative stone, a pool of reflection, the Eternal Flame, a commemorative area, and then, enclosed, the Hall of Memory. The dome inside the Hall bears a radial pattern which represents the spirits of the war dead rising towards the central circle (heaven). The memorial also contains a museum, whose galleries evoke and explain the Australian experience of war. Australians in combat: New Zealand (1860), Sudan (1885), South Africa (1899-1902), China (1900-01), WW1 (1914-18), WWII (1939-45), Korea (1950-53), Malaya (1950-60), Malaysia (1963-66), Vietnam (1962-72), Persian Gulf (1991) -- we might remember that the Aussies responded immediately in the Gulf, needing no prompting. Plaque in memorial reads: "The Australian War Memorial commemorates those 100,000 Australians who have died in war and recalls the service and sacrifice of all Australians in wartime." Also, museum holds a mini-copy of Eugeni Vouchetich's famous statue, "Beat the swords into ploughshares." NOTE: Australian repatriation hospitals are still treating men wounded in WWI. 496 Australians died in Viet Nam; 2,398 were wounded. 4) (no remarks, just FYI) After dinner, when POTUS toasts, the only thing he says is: "Ladies and Gentlemen, Her Majesty the Queen of Australia," in response to the Governor General's "Ladies and Gentlemen, the President of the United States of America." Hayden is Queen Elizabeth's representative; there is a such a representative in each of the 6 Australian states (Australia is a commonwealth). Governor Generals are Australian citizens; their posts are purely ceremonial. Hayden is Australia's former Foreign Minister. The Government House is an old cattle "station," or property. It is a simple, classical mansion on the rim of Lake Burley Griffin. CONTACTS: --Lew Luchs, Media Counsellor, AmEmbCanberra, 270-5872 --Ray Burson, USIS, (062) 705966 --Marilyn Meyers, DCM, 270-5000 --AmEmbCanberra, after hours, 270-5900 SYDNEY POTUS SCHEDULE FRIDAY (DEC. 6th) : --noon arrival at Sydney airport (QANTAS Jet Base) --Sydney Convention and Exhibition Centre: 12:30-12:45 pre-lunch reception with South Wales Premier Grenier's 50 guests, 1:00 p.m. State Luncheon with remarks after remarks and intro by Premier, 15-20 mins., 1,000 guests --post-lunch reception with Australian American Coral Sea Commemorative Council --visit Australian National Maritime Museum, visit American Gallery, brief remarks in dedication of museum. --harbor cruise on John Cadman III to Sydney Opera House --press conference at Sydney Opera House --over to Kirribilli House for dinner? --RON Sydney SITES 1) State Luncheon at Convention Centre: Both anthems played, grace said, lunch served. After lunch, Premier Grenier speaks then intros POTUS. Audience will be a cross-section of the New South Wales Community. Centre is beautiful, yet modern and antiseptic. Themes focus on our trade, joint longterm commitments, the global marketplace, the coming century, thread of education, etc. If we touch on Asian topics, we might note that, for more than a year, Australia has taken a leading role in seeking a comprehensive solution to the Cambodian conflict under UN auspices. 2) Australian National Maritime Museum: Present are Prime Minister and Mrs. Hawke, Chairman and Mrs. Doyle, Premier and Mrs. Grenier, Ambassador and Mrs. Sembler. The event serves as the official opening and USA Gallery Dedication. 2-3 min. remarks required, after brief remarks by Prime Minister. The building occupies a waterfront site on an arm of Sydney Harbor, described by Mark Twain as "the darling of Sydney and the wonder of the world." The sweeping curves of the museum's white painted roof are reminiscent of waves, clouds, and sails. It's interior is kind of split-level, post-modern white. Almost warehouse looking, with hanging mobiles and high ceilings. Out front, next to the museum's sign, is a large mobile with fluctuating signal flags, the kind used for intership communication. In one section is a model of the Endeavor, presented as a gift by Queen Elizabeth. The Endeavor was the ship commanded by Captain Cooke when he discovered Australia. Also, there's a section with surfboards (joke material?) The American Gallery was our 1988 bicentennial gift to Australia. Here, POTUS will unveil a plaque and then briefly tour the gallery. The opening exhibit is called: "Linked by the Sea," and that name is carved into the wall. It explores the similar origins of our two countries. We might use that as a theme, touching upon how our two maritime traditions, among many other bonds, help contribute to our mutual sense of kinship. One of the most powerful links: The Australian and US navies fought side by side to turn back the Japanese military advance in WWII. Five months after the outbreak of war in the Pacific, the Battle of the Coral Sea in May 1942 was a crucial strategic victory for the allies, and the first reverse for the Imperial Japanese Army. FUN FACTS: *Australia has a long maritime heritage, going back at least 50,000 years to the probable arrival of the first humans from Asia. *There were three Americans on board Endeavor when Cook discovered the east coast of Australia in 1770 (but they were British loyalists). *The first foreign merchant vessel to arrive in New South Wales was a US ship with a welcome cargo of rum and other supplies. *The first person to ride a surfboard in Australia was a Hawaiian -- Duke Kahanamoku. ****Note: The exhibit houses two periscopes, one of which is from the same class of submarine as the one which collected the President after he was shot down in WWII. More information is on the way via fax. CONTACTS: --Margaret Eubank, Public Affairs Officer (USIS) 261- 9244 --Consulate General (after hours) 963-1209 --Ian Wilcock, Asst. Sec. Americas Branch, Australian Dept. of Foreign Affairs and Trade, (06)261-2711 --John Wade, Sr. Curator, Australian National Maritime Museum, (02) 552-7728 AUSTRALIA COLOR (among other materials, files include extensive info on above sites, speech excerpts from American Ambassador Sembler GENERAL 1) Australians in film: Errol Flynn, Mel Gibson, Paul Hogan (one of screenwriters and main actor in "Crocodile Dundee), Dean Semler (cinematographer of "Dances with Wolves.") 2) Australians in music: Olivia Newton John, Men At Work, Bee Gees. 3) Washington Post cartoonist Patrick Oliphant is from Australia. 4) James Tuckey, a lieutenant aboard the ship which took the first unwilling settlers into Port Phillip Bay (the future Melbourne) in 1803 wrote: "I beheld a second Rome rising from a coalition of banditti. I beheld it giving laws to the world, and superlative in arms and in arts, looking down with proud superiority upon the barbarous nations of the northern hemisphere." 5) Maybe POTUS could do a joke about vegemite, or vegemite sandwiches. There's potential for humor in the fact that Australians love the stuff while we think it's yucho. Maybe at a luncheon, "Despite our many similarities, Americans have never really developed a taste for your vegemite. In fact, when I asked about today's menu, I was assured -- no vegemite. \ Actually, I was worried about the broccoli. 6) On Australian TV there's a very famous show called, "Skippy the Bush Kangaroo." Everyone knows about Skippy, he's kind of equivalent to our Lassie. Maybe a joke about, "I hear that here in Australia, you have 'Skippy the Bush Kangaroo.' Well, back home we have 'Millie the Bush Canine. (Tony Mauro: Millie the Bush Scoobydoo). Or, "I was a little nervous about playing golf here, what with all the kangaroos running around. \ Fortunately, I've got Skippy on my side.' " 7) In May 1836, President Jackson appointed J.H. Williams as the first American Consul in Australia. The "Colonist, " a newspaper of the day, welcomed his arrival, praising America thus: "Scarcely is there a sea which their ships do not plough, or a port in which they do not ride " (maybe for Maritime Museum?) 8) "The Australians did not seem to me to differ noticeably from Americans, either in dress, carriage, ways or general appearance." --Mark Twain, 1895. 9) Another link between Australia and the United States during the 19th century: from 1897-1898, Herbert Hoover, later to become the 31st U.S. President, worked in Western Australia as a young mining engineer. 10) "Next to our own nation we place our kindred in America." --Alfread Deakin, 1905 (Australian statesman?) 11) In September 1918, Australian and American troops fought alongside each other in the main attack on the Hindenburg Line which ended World War I, a battle experience to be shared again in WWII, Korea and Vietnam. 12) In 1969, an Australian radio telescope and an American antenna brought us the historic television pictures of the first manned landing on the moon. The picture everyone remembers -- Neil Armstrong's leg searching for the surface -- was first seen in a tracking station briefing room near Canberra. As a compliment to Australia, NASA in 1971 named Apollo 15 "Endeavor after Captain Cook's Endeavor. 13) Australia's coat of arms consist of a shield containing the badges of the 6 states. The supporters are native Australian fauna -- a kangaroo and an emu. A yellow- flowered native plant, wattle, also appears in the design. 14) Note: Australia taxes capital gains. (Individuals and companies pay at different rates) 15) Bush has called the Australian-American relationship "an intimate partnership between two peoples." 16) In the Persian Gulf, the first combined boarding to enforce UN resolutions was by the USS Brewton and the HMAS Darwin. 17) 300,000 US tourists visit Australia annually. 18) "It will be a very poor day when little Australia won't be able to summon up its traditional impudence by looking at the U.S. and saying, 'What do you mean, you big stiff?'" --Sir Robert Menzies in the Sydney Morning Herald, 27 June 1964. (Possible rejoinder: "Well, Australia is not all that little, and I hope that America is not all that stiff." Could be relevant re. trade disputes) 19) "You must be the most beautiful people in the world." --Duke Ellington, in the Sydney Morning Herald, 7 Feb. 1970. 20) Every year, America sends a high level delegation to participate in the Coral Sea Commemoration. Dan Quayle was here in '89 and Bush was here in '82. 21) Rugby and Cricket are Australian national pastimes. Rugby's World Cup will be over by the end of October. It will be the first time an American team has participated. 22) One of the most popular Australian television shows is called "The Flying Doctor." Joke potential? LA Law is the most popular American TV show here. The Civil War series was also very popular. CANBERRA 1) American architect Walter Burley Griffin designed Australia's capital. Griffin was from Chicago; studied under Frank Lloyd Wright. 2) Canberra is known as "The Bush Capital." I think there is joke potential here, e.g. 'I know Australians and Americans are close, but you didn't have to name your capital after me.') 3) Canberra's detractors often refer to the capital as "Monumentsville," "a city without a mind," "the city of the gray flannel mind,' and "a great waste of sheep country." Canberra's fans call her "the garden city of the Commonwealth" or "the front window of the nation." They also say that "to know Canberra is to love it." 4) The name "Canberra" comes from "Canberry," an Aboriginal word meaning "meeting place." 5) In Canberra, the kangaroos have a habit of falling people's swimming pools (don't worry, they don't drown) joke potential? 6) Australia has the 10 most popular snakes in the world, starting with the Death Adder. 7) POTUS visit coincides with the annual advent of fly season. Aussies are constantly waving off the insects, a gesture so common it's nicknamed the "Australian Wave." Maybe POTUS can joke: "Australians have a reputation for warmth and hospitality. In fact when I got off the plane, I told Barbara how flattered I was that they were all waving to me. She said, 'Sorry to burst your bubble, George, but it's fly season. 8) Kangaroos abound on tennis courts, golfing greens. Maybe there's a joke about POTUS asking PM what kind of penalty you get for hitting a roo. SYDNEY 1) In the bay cradled by Darling Harbor stands a little rook named Fort Denison. It was built in the 1840's to keep Americans away at a time when the colonists in Sydney were concerned about possible American aggression springing from Anglo-American contention. It's a cute, little-known fact, which reflects the loyalty of the early Australian colony. 2) During World War II, Japanese submarines actually made it in to Sydney Harbor. This illustrates what a mortal threat Japan posed at the time, and provides a sharp contrast with present relations. 3) Looking out upon Sydney Harbor, the eye is drawn to the Pacific horizon. Given our policy themes, we might want to talk about Australia's "window on the Pacific," geographically as well as politically and economically. 3) Aside from the Sydney Opera House, the Sydney Harbor Bridge is also considered a famous symbol of the city. 4) On the state crest of South Wales appear a latin motto that translated means: "Newly Risen, How Brightly We Shine." HONOLULU THEMES: The stop centers around the 50th Commemoration of Pearl Harbor. We want to recognize the sacrifice of those who lost their lives and those who lost their loved ones on December 7, 1941. Lt. Gen. Fields talked of creating a realization for the American people that the attack changed America forever. We went from being an isolationist nation to an international superpower. POTUS SCHEDULE FRI, 12/6: --evening AF1 to Honolulu SAT, 12/7: --7:30 helo to naval base, barge to USS Arizona for memorial ceremony. Presidential honors, brief remarks by Admiral Larson, Rear Admiral White, Moment of Silence, ship whistle, missing man flyover, national anthem, flag raising, 5 min. remarks. --8:20 depart for K-8 (Kilo 8, it's like a pier), honors arrival, Joo intros POTUS, remarks 15-20 mins. --9:00 depart for Hickam AFB, proceed to Kenney Conference room for brief remarks to Asian Ambassadors (in Honolulu attending annual meeting of Chiefs of Missions Conference). --depart Honolulu SITES 1) USS Arizona: The memorial itself is a bier-like structure, white, with open windows on the sky. Supported above the water, it straddles the midsection of the sunken Arizona, whose bow and stern are marked by buoys. Toward the back of the memorial is a chapel-like enclosure housing a wall with all the names of Arizona's drowned. POTUS's back will be to this wall, in front of him is a cutaway section in the memorial's floor, where one can peer down on the submerged starboard. Remarks here are brief, as they are part of a larger, hour-long ceremony. Here, as in the longer speech, acknowledgments are key: both sites are far too small to accommodate the vast number of veterans, families, and guests. POTUS will be introduced by a survivor. Acknowledgements should be handled with care to make sure that no group (particular ship vets, vet organizations, etc.) are slighted. In particular, while the memorial is for the Arizona, mentions should be made of USS Utah. The two downed ships are the only that have people entombed in them (1, 177 went down with the Arizona, 58 went down with the Utah). Also, while the longer speech contains a more general Pearl Harbor focus, the memorial speech should be more specific to those who went down with the Arizona and other ships, more of a naval aspect. Notes on the Arizona: *One-third of all those who died at Pearl Harbor went down with the Arizona. *USS Arizona is still commissioned. *USS Nevada, there during the attack, will be in port to take part in the ceremony. *Over 34 sets of brothers were killed on the Arizona. *While I was there, I saw old women throwing leis in the water; they were crying. I'm told Japanese visitors also make their own pilgrimage to give leis. *There is still oil leaking from the wreck; its viscous iridescence coats the water under and around the memorial. *In the same harbor as the memorial is the Bowfin -- the sister submarine to the one that picked up POTUS when shot down. *It's possible that commemoration will include the same vintage plane that POTUS flew in WWII. *Sec. Cheney might take part in the day's events. To come: I'm having faxed extensive detail on the memorial, a history of the attack, letters sent by those aboard Arizona shortly before it was bombed, letters written by family members of the fallen, letters written by contrite Japanese, survivor quotes on reconciliation, and more. Research: get book, The Day of Infamy. Also, look for recent Approach magazine with Bush on cover; it has a detailed description of his involvement in WWII. 2) Major speech at K-8: Kilo 8 is a fairly nondescript pier, though apparently they'll fix it up for the commemoration. These longer remarks will be teleprompted. POTUS will be speaking with his back to the water, historical battleship row, and then Ford Island. Behind his right shoulder is the Arizona, behind his left, the Missouri. Note: look at above, Arizona info for color, etc. 3) Remarks to Asian Ambassadors: Conference room within AFB administrative building. Building exterior retains strafed pocks of Japanese attack. Remarks are kind of wrap up of themes and policy objectives of whole Asia swing. Asst. Secretary for East Asia Solomon is the host of the ambassadors, but he probably won't be in on meeting. Remarks are brief; wouldn't be surprised if talking points get substituted.1 SEA OFJAPAN 80 KORAI KOREA * Pyongyang 81 KORAI KOREA SEA OF JAPAN Seoul YELLOWSE The Korean Democratic People's When the Exclusion Doctrine, which Republic sees the white in its flag as closed the country to foreign inter- a symbol of purity, strength, and course, was ended in 1876, Korea dignity. White has, however, been the recognized the necessity of a national traditional color of the Korean nation flag. The flag hoisted in August 1882, for centuries. The blue stripes rep- THIXTOI when the first envoys were sent to resent a commitment to peace, while Japan, became official on 27 January the red indicates that the nation is on 1883. It differed from the present flag the path to socialism. STATE ARMS only in minor details. STATE ARMS Officially adopted 25 January 1950. 1:2 2:3 Officially adopted 8 September 1948. The star is a symbol of the leading From 1910 to 1945 Korea was under role played by the Korean Workers Japanese occupation, followed by Party in creating the new economic, three years of American and Soviet social, and political structure of the administration. In 1948 the Republic Vladimir Lenin-Communist country following World War II. of Korea reestablished the t'aeguk theoretician and leader of the Because Korea is basically an agricul- flag which was given its present form Russian Revolution, which led to tural nation, sheaves of rice surround two years later. the establishment of the first the coat of arms adopted by the Its white field stands for peace and Communist state in the world- Korean Democratic People's Republic in 1948. The sheaves are bound by a PRESIDENTIAL FLAG the white clothing Koreans have 2:3 was well aware that the success traditionally worn. of his undertaking would not be red ribbon bearing the name of the The t'aeguk in the center resembles complete until it affected the state. At the center is a landscape the yin and yang of Chinese philo- everyday lives and beliefs of reflecting the country's determina- sophy and expresses the diversity of individual citizens. His statement tion to industrialize. A hydroelectric forces in the universe and their inter- that "Communism is Soviet station and dam, perhaps the one action. The kwae on either side power plus electrification of the built on the Amnokan River, figure correspond to the four cardinal direc- whole country" is reflected in the prominently. tions, the seasons, and the sun, moon, design of the arms of the Korean earth, and heaven. Democratic People's Republic. 2:3 118 119 KANGWON KOREAN PROVINCES NORTH CHUNGCHONG MEDITERAL 82 KUPROS/KIBRIS NORTH JONLA CYPRUS Nicosla * SOUTH JONLA CHEJU Composed partially of Greek and par- AC: tially of Turkish populations, Cyprus chose a flag of neutral design and colors when it became independent. 1960 The yellow color of the island is said to stand for the copper, mined since Roman days, which gave Cyprus its name. The olive branches below are STATE ARMS for peace and prosperity; essentially Officially hoisted 16 August 1960. III DJON-L PUK 3:5 2t HO НП NORTH JONDA the same symbolism is reflected in offici In the coat of arms. The Cypriot national flag is rarely DIONLA NAM seen in the north of the island where SOUTH JONLA the Turkish Federated State of Cyprus Officially holsted 31 July 989. exists under the protection of troops from Turkey. 2:3 TURKISH FEDERATED STATE OF CYPRUS FLAG #23 (above) AND ARMS (right) 1975 Certain parts of Cyprus known as W the Sovereign Base Areas remain mm KANCAWON under the control of the former 1960 Offici IN tober 962 colonial power, Great Britain, and fly only the Union Jack. 20 121 The Kyōngbok Palace Seoul stands at the foot Pugak. The palace was the Yi dynasty, which governed built united 1910. Korea from 1392 © AL MICHAUD/FPG SEOUL, sõl (Korean: Soul, se-ool), the political, and shopping centers. Only in the north was the economic, and cultural center of the Republic of city's growth restricted. There the Pukhan Korea (ROK), or South Korea. Completely re- Mountain massif rises to 2,743 feet (836 meters). built and, modernized since the Korean War (1950-1953), the ROK capital is one of the that leads to Üibőngju. compressing urban spread into a narrow valley world's largest cities. The City Center. The heart of Seoul is the The government's ambitious postwar pro- ancient capital of the Yi dynasty state of Choson grams of economic development attracted mil- (1392-1910). Traces of the old walls remain on lions of workers to Seoul. Nearly half of the the Yi city's mountain rim. Although skyscrap- ROK's factory employees make their livelihood ers crowd historic sites, the central city retains in the city, and Seoul provides the national econ- the layout of the royal capital, which was de- omy with a quarter of all value added by manu- signed according to traditional Chinese princi- facturing. Leading industrial products are tex- ples of urban planning. Main streets run north- tiles and clothing, machinery and electronic south and east-west. Chong-no, "Bell Street," equipment, chemicals, and food. The city is also extends from the East Gate to where the West the financial and publishing center of the ROK. Gate once stood. At the foot of Mt. Pugak in the Modern highway and rail systems connect north is Kyōngbok Palace, the primary royal com- Seoul with all corners of the ROK. Kimp'o Air- plex of the Yi dynasty, overshadowed by the port on the western edge of the city handles an former Capitol Building, which is now in use as ever-increasing volume of traffic with the world. the National Museum of Korea. From the palace Nearby Inch'on, on the Yellow Sea, is the city's entrance the broad Sejong-no, "(King) Sejong seaport, but expressways permit Seoul to make Street," leads down to the old city's South Gate. efficient use also of the distant port of Pusan. South Mountain (Nam-san) marks the southern limit of the Yi capital. 1. Setting and Description of the City Several other palace areas are prominent Seoul is situated on the lower Han River in within the central zone. Tōksu Palace, original- the west-central part of the Korean Peninsula. ly a detached villa, is next to City Hall Plaza. The Korean War left the capital only 35 miles (55 Not far away is a complex of royal sites that km) from the Demilitarized Zone established be- includes two more palaces, Ch'angdōk and tween the South and North in 1953. anggyöng, a royal park of great scenic beauty The city has a monsoonal climate character- called the Secret Garden (Piwon), and the ances- ized by cold, dry winters and hot, moist sum- tral shrines of the Yi dynasty (Chong-myo). mers. Mean monthly temperatures range from Nearby, on the grounds of Songgyun gwan Uni- 23.2°F (-4.9°C) to 77.7°F (25.4°C). Rainfall is versity, is the old Confucian Academy and shrine heavily concentrated in the summer. Spring and to Confucius. autumn are the most pleasant times of the year. City Hall Plaza is the hub of much of the From its historic core in a mountain bowl ROK's economic life. Converging on it are two north of the river, Seoul has expanded in every subway routes and streets lined with large corpo- direction, going up valleys, over hills, and rate office buildings, banks, hotels, and depart- around mountains. On the south, for example, ment stores. Beyond lies the fashionable where in 1950 the city was bounded by the Han, Myöngdong shopping district, noted for its bou- the municipal limits now include extensive areas tiques and restaurants. Myöngdong and adja- beyond the river. Yoido, an island in the river, cent streets east of City Hall Plaza are the center and Kangnam, on the south bank, have be- of night life in downtown Seoul. come major population centers, complete with Outlying Areas. Seoul is divided into wards high-rise apartment complexes, office buildings, (ku), two of which encompass most of the old roy. 562 background notes South Korea United States Department of State April 1991 Bureau of Public Affairs (1988)-of those eligible, 99% attended Natural resources: Limited coal, middle school, 94% attended high school. tungsten, iron ore, limestone, kaolinite, and Literacy-98%. Health (1987): 1 doctor/ graphite. 1,000 persons. Infant mortality rate Agriculture, including forestry and (1988)-6/1,000. Life expectancy (1988)- fisheries (9% of 1990 GNP): Products-rice, men 67 yrs., women 73 yrs. Work force barley, vegetables. Arable land-22% of (17 million, 1988): Agriculture-21%. land area. Industry-28%. Services-50%. Mining and manufacturing (35% of 1990 GNP): Textiles, footwear, electronics, shipbuilding, motor vehicles, Government petrochemicals, industrial machinery. Type: Republic with powers shared Trade (1990): Exports-$65 billion: between the president and the legislature. manufactures, textiles, ships, electronics, Independence: August 15, 1948. footwear, steel. Major markets-US, Japan, Constitution: July 17, 1948; last revised European Community, Middle East. 1987. Imports-$70 billion: crude oil, food, Branches: Executive-president (chief machinery and transportation equipment, Official Name: of state). Legislative-unicameral National chemicals and chemical products, base Republic of Korea Assembly. Judicial-Supreme Court and metals and articles. Major suppliers- appellate courts, Constitutional Court. Japan, US, Middle East. Subdivisions: 9 provinces, Official exchange rate (December PROFILE 6 administratively separate cities (Seoul, 1990): 715 won=US$1. Pusan, Inchon, Taegu, Kwangju, Taejon). Fiscal year: Calendar year. Geography Political parties: Government party- Democratic Liberal Party (DLP). Membership in Area: 98,500 sq. km. (38,000 sq. mi.); about Opposition parties-New Democratic Union International Organizations the size of Indiana. Cities: Capital-Seoul (NDU) and Democratic Party (DP). Official observer status at UN; active in many (10 million). Other major cities-Pusan (3.5 Suffrage: Universal at 20. UN specialized agencies (FAO, GATT, IAEA, million), Taegu (2 million), Inchon (1.4 Central government budget (1991): IBRD, ICAO, IDA, IFAD, IFC, IMF, IMO, ITU, million). Terrain: Partially forested Expenditures-$38 billion. UNCTAD, UNDP, UNESCO, UNICEF, UNIDO, mountain ranges separated by deep, narrow Defense: $11 billion, about 4% of GNP in UPU, WHO, WIPO, WMO, WTO) and other valleys; cultivated plains along the coasts, real terms and 29% of government budget; international organizations (Economic and particularly in the west and south. Climate: about 650,000 troops. Social Commission for Asia and the Pacific, Temperate. Flag: Centered on a white field is the Geneva Conventions of 1949 for the Protection ancient Chinese symbol of yin and yang; at of War Victims, Asian Development Bank, each corner of the white field is a different INTELSAT, the Administrative Council of People trigram of black bars. the International Telecommunications Nationality: Noun and adjective- Council, International Whaling Commission, Korean(s). Population (1988): 43 million. Interparliamentary Union, INTERPOL); Economy Annual growth rate: 1%. Ethnic groups: official observer status in African Develop- Korean; small Chinese minority. Religions: GNP (1990 est.): $224 billion. Annual ment Bank (member of Africa Development Buddhism, Christianity, Shamanism, growth rate (1965-86): 7%; (1986-88): 12%; Fund), International Labor Organization, Confucianism. Language: Korean. (1990 est.): 9%. Per capita GNP: $5,500. and Organization of American States. Education: Years compulsory-6. Number Consumer price index (1990 avg. of students-11,182,000. Attendance increase): 9%. 126 Yangdog up Wonsan 128 130 million), Japan (700,000), the United Onch'on 'yongyang South Korea States (1.2 million), and the Soviet Union Korea Yonsan Kosan, T'ongch'on Bay Songnim * National Capital (500,000). Name o D NORTH KOREA Kuūm-ni Railroad Demarcation Line Sariwon and Demilitarized Zone Ich'ane Expressway Sinch'on yonggang Kansong Road Changyon-up P'yongsan's Language Hwach'on Haeju Yonch'on Injeup Kaesong Yangyang -38 Korean is a Uralic language, remotely Ongins anmunjom 0 25 Munsan Ch'unch'on 50 Kilometers related to Japanese, Hungarian, Finnish, Kengnöng 0 25 50 Miles Vijongbu Kukobon and Mongolian. Although dialects exist, Hongch'on Kimp Ullüng-do the Korean spoken throughout the Seoul Yoyang-ni Pukp'yöng-ni then on Yangp yong peninsula is mutually comprehensible. Wonju Yoju Suwon Hwangji-r Chinese characters were used to write Pyongtaek Ansöng Chungru Chech'on Korean before the Korean Hangul Tanyang alphabet was invented in the 15th Ch'onan Sosan Yongju century. These characters are still in Yech'on, Ch'ongju Chomch'on Yongyang Hangsong Sea limited use in South Korea, but the North Poun Sangju Andong Kongju Uisong Yongdok Taech'on Taejon... of uses Hangul exclusively. Many older Yellow Kimch'on Japan people retain some knowledge of Sea Bngdong Japanese from the colonial period (1910- 36 'ohang 36 Kunsan Iri Yongch 45), and most educated Koreans can read Chönju Kyongju Taegu Chinan English, which is taught in all secondary Anui Ulsan schools. Hyöpch'ön Chongup Onyang Namwon Namji Yonggwang Yangsan Kwangju Chinju Masan Chinhae Religion Posan D Yongsanp'o Sunch'on Samch'onp's Korea's traditional religions are Mokp Posong DO Do YOSU Western Kōje-do Channel Strait Shamanism and Buddhism. Although Kohang Buddhism has lost some influence since Kangjin HÜKSAN- Shushi Chindo the 15th century, it still commands the 0 CHEDO Tsushima Chin-do Wando Korea Eastern Channel greatest number of adherents of any faith-about 20% of the population. 34 34 Shamanism (traditional spirit worship) Iki Cheju-haehyōp is still practiced in some rural areas. Fukuoka Although Confucianism remains the Cheju dominant cultural influence, its religious JAPAN Cheju-do Kyushu adherents are few and tend to be elderly. Christian missionaries arrived in Sasebo Boundary representation is Omuta 126 Korea in the 19th century and founded not necessarily authoritative 128 130 schools, hospitals, and other modern institutions throughout the country. PEOPLE efforts in the comparatively Today, nearly 7 million Koreans, or 16% underpopulated and resource-rich north, of the population, are Christians (about Korea was first populated by a Tungusic resulting in a considerable migration of 78% Protestant)-the largest figure for branch of the Ural-Altaic family, which people to the north from the southern any East Asian country except the migrated to the peninsula from the agrarian provinces. This trend was Philippines. There are estimated to be 4 northwestern regions of Asia. Some also reversed after World War II, when more million adherents of Chondogyo, a native settled parts of northeast China than 2 million Koreans moved from the religion founded in the mid-19th century (Manchuria); Koreans and Manchurians that fuses elements of Confucianism and north to the south following the division still show physical similarities-in their of the peninsula into US and Soviet Christianity. height, for example. Koreans are racially military zones of administration. This and linguistically homogeneous, with no southward migration continued after the sizeable indigenous minorities, except HISTORY Republic of Korea was established in 1948 Chinese (50,000). and during the Korean war (1950-53). South Korea's major population About 10% of the people in the Republic According to Korean legend, the god-king centers are in the northwest area of Tangun founded the Korean nation in BC of Korea are of northern origin. With 43 Seoul-Inchon and in the fertile southern million people, South Korea has one of the 2333, after which his descendants reigned plain. The mountainous central and over a peaceful kingdom for more than a world's highest population densities- eastern areas are sparsely inhabited. millennium. By the first century AD, the much higher, for example, than India or Between 1925 and 1940, the Japanese Korean Peninsula, known as Chosun Japan-while the territorially larger colonial administration in Korea ("morning calm"), was divided into the North has about only 20 million people. concentrated its industrial development kingdoms of Silla, Koguryo, and Paekche. Ethnic Koreans now residing in other The Silla kingdom unified the peninsula in countries live mostly in China (2.6 2 AD 668. The Koryo dynasty (from which firestorm of protest in South Korea. A year later, on June 25, 1950, North is derived the Western name "Korea") Trusteeship was unacceptable to Korean forces invaded South Korea. The succeeded the Silla kingdom in 935. The nationalist leader Syngman Rhee and UN, in accord with its charter, engaged in Yi dynasty, which supplanted Koryo in other rightist Korean leaders associated its first collective action by establishing 1392, lasted until the Japanese annexed with the provisional government the UN Command (UNC), under which 16 Korea in 1910. established in Shanghai in 1919 by Korean member nations sent troops and Throughout most of its history, nationalists living abroad. It was also assistance to South Korea. At the Korea has been invaded, influenced, and opposed by groups within southern Korea request of the UN Security Council, the fought over by its larger neighbors. who had established local self-governing United States, which contributed the Korea was under Mongolian occupation bodies after the Japanese surrender. largest contingent, led this international from 1231 until the early 14th century and The US military government initially effort. was devastated by a large number of relied on the advice of conservative After initially falling back to the Chinese rebel armies in 1359 and 1361; elements but later tried to put together a Pusan perimeter, UN forces conducted a the Japanese warlord Hideyoshi launched moderate coalition to provide it with a successful surprise landing at Inchon and major invasions in 1592 and 1597. In the broader base of political support. In rapidly advanced up the peninsula. As the mid-19th century under the Yi kings, December 1946, the military government main UN force approached the Yalu Korea adopted a closed-door policy to established an interim legislative River, large numbers of Chinese "people's ward off Western encroachment, earning assembly to draft legislation and volunteers" intervened, forcing UN Korea the name of "Hermit Kingdom." appointed moderates to half the seats. troops to withdraw south of Seoul. The Although the Yi Dynasty paid nominal (The others were indirectly elected seats battle line seesawed back and forth until fealty to the Chinese throne, Korea was, that went to rightists.) But the July 1947 the late spring of 1951, when a successful in fact, independent until the late 19th assassination of a prominent leftist in the offensive by UN forces was halted to century. At that time, Japanese, Chinese, coalition and the decision of a coalition enhance ceasefire negotiations prospects. and Russian competition in Northeast moderate to enter into unification talks The battle line thereafter stabilized north Asia led to armed conflict. Japan defeated with the north led to the demise of the of Seoul near the 38th parallel. its two competitors and established coalition effort. Armistice negotiations began in July dominance in Korea, formally annexing it The joint Soviet-American 1951, but hostilities continued until July in 1910. The Japanese colonial era, which commission provided for by the Moscow 27, 1953. On that date at Panmunjom, the lasted until the end of World War II, was conference met intermittently in Seoul military commanders of the North characterized by tight control from Tokyo but became deadlocked over the issue of Korean Army, the Chinese People's and ruthless efforts to supplant Korean free consultations with representatives of Volunteers, and the UNC signed an language and culture. Korean resistance all Korean political groups for establish- armistice agreement. Neither the United to such colonialism, notably in the 1919 ment of a national government. The US States nor South Korea is a signatory of Independence Movement, failed. submitted the Korean question to the UN the armistice per se, though both adhere At the April 1945 Yalta Conference, General Assembly for resolution in to it through the UNC. No the United States and the Soviet Union September 1947. comprehensive peace agreement has agreed to establish a joint trusteeship for replaced the 1953 armistice pact, which Korea. The trusteeship was intended as a remains in force. Thus, a condition of temporary administrative measure Korean Conflict belligerency still exists on the divided pending democratic elections of a Korean The Soviet Union and the Korean peninsula. A Military Armistice government. The US proposed-and the authorities in the north ignored the UN Commission (MAC), composed of 10 Soviet Union agreed-that Japanese General Assembly resolution of members, five appointed by each side, forces surrender to US forces south of the November 1947, which called for UN- supervises implementation of the 38th parallel and to Soviet forces north of supervised elections throughout Korea. armistice. that line. Elections, nonetheless, were carried out In April 1954, an international In the north, the Soviets initially under UN observation in the south, and conference on Korea met in Geneva but transferred the administrative powers of on August 15, 1948, the Republic of Korea ended without agreement or progress the former Japanese colonial government (ROK) was established. Syngman Rhee, after 7 weeks of futile debate. to "people's committees," and later to a 5- became the republic's first president. On province administrative bureau under the September 9, 1948, the Soviet Union nationalist, Cho Man-Sik. Cho was later established the Democratic People's Postwar Developments purged by the Soviets for opposing the Republic of Korea (DPRK) in the north Syngman Rhee served as president of the decision of allied foreign ministers at the under Kim Il Sung, a former anti- Moscow Conference in December 1945 for Republic of Korea until April 1960, when Japanese guerrilla who served with the university students forced him to step a 5-year trusteeship, during which a Soviet Army in the Far East during down. A caretaker government was Korean provisional government would World War II. established, the constitution was prepare for full independence. Guerrilla fighting between southern amended, and national elections were held In the south, the US military and northern forces intensified during government in Korea (1945-48), headed in June. The opposition Democratic Party 1948-50. During this period, although the by Lt. Gen. John R. Hodge, was marked easily defeated Rhee's Liberals, and the US provided modest military aid to the by uncertainty and an unclear US policy new National Assembly named Chang south, it planned and executed a toward Korea. The Moscow conference's Myon prime minister in August. Chang's withdrawal of its occupation forces which decision for a trusteeship also generated a democratic but ineffectual government- was completed by June 1949. 3 the Second Republic-lasted until May broad legal powers to control dissent. An 35 seats for Kim Jong Pil's New 1961, when it was overthrown in an army active and articulate minority of students, Democratic Republican Party (NDRP), coup led by Maj. Gen. Park Chung Hee. intellectuals, clergy, and others remained and 10 for independent candidates. After 2 years of military government critical of the Chun government and The new opposition-dominated under Park, civilian rule was restored demonstrated against it. Demonstrations national assembly quickly challenged the with the advent of the Third Republic in at Inchon in May 1986 and at Konkuk president's prerogatives. In July 1988 it 1963. Park, who had retired from the University in fall 1986 were marred by turned down President Roh's choice for army, was elected president (and was violence. chief of the Supreme Court. In the fall, reelected in 1967, 1971, and 1978). In April 1986, the president the assembly conducted the first In 1972, a popular referendum responded to a signature campaign by the government audit in 16 years and began approved the Yushin (revitalizing) opposition New Korea Democratic Party televised hearings into practices and constitution, greatly strengthening (NKDP), which called for direct election policies of former President Chun's Fifth presidential and executive branch of the next president by amending the Republic. By late November, Chun was powers. Key provisions included indirect constitution. The NKDP soon split into forced to make a public apology to the election of the president, presidential two opposition parties-Kim Dae Jung's nation, turn over his personal wealth to appointment of one-third of the national Peace and Democracy Party (PPD) and the nation, and go into internal exile in a assembly, and presidential authority to Kim Young Sam's Reunification Buddhist temple. In December, the issue decrees restricting civil liberties in Democratic Party (RDP). They agreed government and the assembly for the first times of national emergency. Park on eight demands for reform including time worked together to pass the budget, subsequently issued several such decrees; constitutional revision, repeal or revision which the government had previously the best-known of these, EM-9, banned of onerous laws, and release of political handed down. discussion of false rumors, criticism of the prisoners. After months of speculation and constitution or advocacy of its reform, and President Chun, who could not demands from the opposition that political demonstrations by students. succeed himself, pledged in early 1987 President Roh hold the interim The Park era, marked by rapid that he would step down at the end of his assessment on his administration that he industrial modernization and term in February 1988. Chun suspended had promised while campaigning, Roh extraordinary economic growth, ended all discussion of constitutional revision in decided in March 1989 to postpone the with his assassination in October 1979. June 1987, and the ruling Democratic evaluation indefinitely, citing the unstable Prime Minister Choi Kyu Ha assumed Justice Party approved Chun's hand- political situation. Labor, farmer, and office briefly (the Fourth Republic), picked successor, Roh Tae Woo. Students, student unrest continued despite Roh's promising a new constitution and and then the general public, took to the promises of further reforms. presidential elections. In December 1979, streets to protest Chun's suspension of In April 1989, the government began Maj. Gen. Chun Doo Hwan and close constitutional revision. On June 29, in a cracking down against leftist elements it military colleagues removed the army surprise move, presidential candidate maintained were destabilizing the chief of staff and soon effectively Roh Tae Woo distanced himself from country. The nation was shocked by the controlled the government. President Chun by announcing that he deaths of seven policeman in Pusan in a University student-led demonstra- would implement democratic reforms if confrontation with students. This was tions spread in the spring of 1980. The elected. The constitution was revised in soon followed by the illegal visit of 71- government declared martial law in mid- October to include direct presidential year old dissident Rev. Moon Ik Kwan to May, banned all demonstrations, and elections and a strengthened National North Korea. Rev. Moon embraced North arrested many political leaders and Assembly consisting of 299 members. Korean leader Kim Il Sung while in dissidents. Special forces units in the city In December 1987 Roh Tae Woo won Pyongyang and was arrested upon his of Kwangju reacted harshly to any who with 37% of the vote in the first direct return to South Korea. In July, student ignored the ban, setting off a confronta- presidential election since 1971. The two activist Yim Su Kyong made an tion which left 200 civilians dead. This leading opposition leaders, Kim Dae Jung unauthorized visit to the North to attend incident left a wound that has proven and Kim Young Sam, unable to agree on a Pyongyang's World Youth Festival and slow to heal. By September 1980, single candidate, both ran and lost. Kim was arrested. In August opposition leader President Choi had been forced to resign, Dae Jung, Kim Young Sam, and former Kim Dae Jung was indicted in connection and General Chun, by then retired from prime minister Kim Jong Pil polled 27, 28 with unauthorized visits to North Korea the army, was named president. and 10%, respectively. by one of his party members, Suh Kyong In October 1980, a referendum The new constitution entered into Won. In October the government approved a new constitution, beginning force in February 1988, when President acknowledged that 1,315 people had been the Fifth Republic. This document Roh assumed office. Elections for the arrested in the first 9 months of 1989, retained key features of earlier ones, national assembly were held on April 26. including 284 for security violations. including a strong executive and indirect In a stunning upset, President Roh's South Korean politics have changed election of the president, but limited the ruling Democratic Justice Party (DJP) dramatically because of the 1988 chief executive to one 7-year term. won only 34% of the popular vote, thereby legislative elections, the assembly's Elections were held in early 1981 for a losing control of the assembly for the first greater powers under the 1987 National Assembly and an electoral time since 1952. The final count was 125 constitution, and the influence of public college; the latter elected President Chun seats for the DJP, 70 seats for Kim Dae opinion. There has been significant to a 7-year term (1981-1988). Jung's Party for Peace and Democracy political liberalization since 1987, Although martial law ended in (PPD), 59 seats for Kim Young Sam's including freedom of the press and January 1981, the government retained Reunification Democratic Party (RDP), greater freedoms of expression and 4 assembly than in the past. In 1988, the middle-ranking industrial power. Lacking somewhat by the spring of 1983 when a government released several hundred natural resources, Korea's greatest asset strengthening US economy helped political prisoners and restored the civil is its industrious, literate people. stimulate Korean economic performance. rights of former detainees. In 1989, the The division of the Korean peninsula From 1986 to 1988, booming exports led government asserted its prerogatives to in 1945 created two unbalanced economic once again to high growth rates averaging maintain public stability, raising concerns units. North Korea inherited most of the 12% per year. Current account surpluses over human rights issues. peninsula's mineral and hydroelectric reached a total of $14 billion by the end of The nation was stunned in January resources and most of the heavy 1988, at which time foreign debt had 1990 when the 3 political parties led by industrial base built by the Japanese. decreased to $31 billion-18% of GNP and President Roh, Kim Young Sam, and Kim South Korea was left with a large, 44% of exports. Jong Pil merged to form a new majority unskilled labor pool and most of the Korea registered bilateral trade party, the Democratic Liberal Party peninsula's limited agricultural resources. surpluses of about $10 billion with the US (DLP). This new alliance left Kim Dae Both north and south suffered massive in 1987 and 1988. In 1989, Korea's global Jung and his Party for Peace and destruction in the Korean war, but an trade and current account surpluses and Democracy (PPD) as the primary influx of refugees added to the south's bilateral surplus with the US declined opposition, since the tiny Democratic economic woes. South Korea began the dramatically, due to a number of factors: Party (DP) controlled just eight seats in postwar period with a per capita gross appreciation of the won, labor disputes, the National Assembly. In July 1990, the national product (GNP) far below that of cumulative wage increases and strong DLP passed several significant bills the north. It received large amounts of domestic demand. The surplus remained without debate, and the PPD and the DP US foreign assistance until the 1970s. All approximately $4 billion in 1990. It has precipitated a legislative crisis by US direct aid was stopped in 1980. yet to be demonstrated, however, announcing a boycott of the national South Korea's meager mineral whether a structural, lasting decline in assembly. The PPD returned to the resources include tungsten, anthracite Korea's surplus has begun. Long-term assembly in November, only after getting coal, iron ore, limestone, kaolinite, and growth prospects remain bright. External assurances on several issues, including graphite. There is no oil, and energy factors will remain important. Korea greater local autonomy. In March 1990 is a continuing concern for the ROK's continues to emphasize exports, while the the ROK held its first local elections in 30 economic planners. An ambitious quickly expanding domestic market years. Further local elections were program to develop nuclear power is provides greater economy of scale. The planned for June 1991, and the trend well underway; Korea now has eight ability to adapt to a more open system toward greater democratization nuclear plants in operation, one suitable to a growing democracy and to continued to gain momentum. under construction and two planned. Korea's greater role in the world economy The nation's successful industrial growth are important to the continued success of Principal Government Officials program began in the early 1960s, when the Korean economy. the Park government instituted sweeping President-Roh Tae Woo economic reforms emphasizing exports Prime Minister-Roh Jae Bong and labor-intensive light industries. The FOREIGN RELATIONS Deputy Prime Minister; Chairman, Economic Planning Board- government also carried out a currency Lee Seung Yun reform, strengthened financial South Korea is committed to peaceful Minister of Foreign Affairs-Lee Sang institutions, and introduced flexible settlement of international differences, a Ock economic planning. commitment best illustrated by its Minister of National Defense-Lee From 1963 to 1978, real GNP rose at restrained response to a number of Jong Ku an annual rate of nearly 10%, with provocations by North Korea over the Ambassador to the United States— average real growth of more than 11% for past 15 years. These include the 1968 Blue Hyun Hong Choo the years 1973-78. While Korea's national House raid, the October 1983 bombing in Ambassador to the UN-Roe Chang production was rising throughout the Rangoon, Burma, which killed six of the Hee 1960s and 1970s, the annual population ROK's most prominent leaders, and the Speaker of the National Assembly- growth rate declined to the current 1%, November 1987 bomb explosion aboard Park Jyun Kyu resulting in a 20-fold increase in per Korean Air Lines flight 858, in which 115 Korea maintains an embassy in the capita GNP. Per capita GNP, which lives were lost. Captured North Korean United States at 2320 Massachusetts reached $100 for the first time in 1963, agents confessed to all of these acts. Avenue NW., Washington, DC 20008 now exceeds $4,000, or four times that of South Korea is becoming increasingly (tel. 202-939-5600). North Korea. active in international affairs. Although The political and social unrest that not a UN member, it has launched a followed the 1979 assassination of campaign to join that organization. ECONOMY President Park and the effect of world However, North Korea opposes separate economic developments, including the admission to the UN on the grounds that Over the past 25 years, the Republic of drastic increase in world oil prices in 1979, it would perpetuate the division of the Korea's economic growth has been triggered a severe recession in Korea. In peninsula; some of its allies support this spectacular. Despite the need to maintain the early 1980s, external debt was a contention. South Korea presently has a a large military, South Korea, one of the serious concern, peaking at $47 billion in UN observer mission headed by an world's poorest countries only a 1985. The economy had already recovered ambassador and is active in most UN generation ago, is now the United States' seventh largest trading partner and a 5 specialized agencies. In addition, South centering on mutually beneficial economic de facto recognition of each other's Korea has made efforts to join or activity. Although the legacy of historic existing political, social, and economic participate actively in many other antipathies has at times impeded systems. South Korea supports the international fora, ranging from the cooperation, relations at the government recognition of both Koreas by the major Antarctic Treaty to the Organization for level have improved steadily and powers in the region (US, USSR, PRC, Economic Cooperation and Development significantly in the past several years. and Japan), and the admission of both (OECD). Korea's economic growth, energy Koreas to the United Nations, pending South Korea today has diplomatic requirements, and need for basic raw peaceful reunification. North Korea relations with 148 countries and an even materials and for markets have given currently rejects these ideas, although it broader network of trading relationships. economic considerations high priority in applied for UN membership in 1949 It has hosted a series of prestigious the country's foreign policy. In light of (following the lead of the ROK) and international events, including the 1988 these concerns, Korean diplomacy in supported a Soviet Union draft in 1957, summer Olympics. A total of 159 recent years has also concentrated on resubmitted in 1958, which called for countries participated in the Seoul broadening its international base of "simultaneous UN admission." The North Olympics, making it the largest Olympics support with Third World nations, the now argues that this proposal would ever. Only six nations followed North Association of Southeast Asian Nations perpetuate the peninsula's division. Korea's call to boycott. Chinese, Soviet, (ASEAN), and Middle Eastern states. Tension between North and South and Eastern European participation in Korea wants to participate actively in Korea increased dramatically in the the Seoul Olympics underscored and Pacific basin economic affairs. It has aftermath of the 1983 North Korean accelerated President Roh's policy of offered to host in 1991 the third assassination attempt on President Chun "Nordpolitik"-the pursuit of wide- ministerial meeting on Asia-Pacific in Burma. North-South sports talks the ranging relations with socialist nations Economic Cooperation initiated by following spring became acrimonious and contacts and dialogue with North Australian Prime Minister Hawke. after the Rangoon bombing. South Korea. Korea's suspicions of the north's motives Nordpolitik has so far met with were not diminished by Pyongyang's notable success. In February 1989, Negotiating Efforts proposal for "tripartite" talks on the with North Korea Hungary became the first communist future of the Korean peninsula. This nation to establish full diplomatic Throughout the postwar period, both initiative, made public in January 1984, relations with the ROK. The ROK now Korean governments have repeatedly called for talks with the United States in has diplomatic relations with all the affirmed their desire for reunification of which "South Korean authorities" would countries of Eastern and Central Europe the Korean peninsula, but, until 1971, the be permitted to participate. The tripartite except Albania. Nordpolitik's crowning two governments had no direct, official talks would replace the armistice achievement came in September 1990, communication or other contact. agreement with a peace treaty, which when the ROK and USSR opened formal In August 1971, North and South would provide for withdrawal of all US diplomatic relations. In early 1991 the Korea agreed to hold talks through their troops and set the stage for a declaration ROK and People's Republic of China respective Red Cross societies with the of non-aggression between north and exchanged trade offices, a clear sign of aim of reuniting the many Korean families south. improvement in relations and a possible separated following the division of Korea North Korea's offer to provide relief first step toward eventual diplomatic and the Korean war. After a series of goods to victims of severe flooding in relations. secret meetings, both sides announced on South Korea in September 1984-and The South Korean government and July 4, 1972, an agreement to work South Korean acceptance-led to revived politicians have long been concerned over toward peaceful reunification and an end dialogue on several fronts: Red Cross the fate of the 35,000 Koreans on Sakhalin to the hostile atmosphere prevailing on talks to address the plight of separated Island, now under Soviet control. Koreans the peninsula. Officials exchanged visits families, economic and trade talks, and were originally brought to Sakhalin by and regular communications were parliamentary talks. However, in January the Japanese as forced labor. A series of established through a south-north 1986, the north unilaterally suspended all semi-official Korean delegations visited coordinating committee and the Red talks, arguing that annual ROK/US Moscow and Sakhalin in 1989. These Cross, but the two sides made no military exercises were inconsistent with contacts resulted in Soviet agreement to substantive progress. These initial dialogue. The north also announced a increase the flow of ethnic Koreans in contacts quickly broke down and finally unilateral moratorium on large-scale Sakhalin allowed to visit South Korea. In ended on August 13, 1973. The breakdown military exercises and called upon the US addition, 20 first-generation Koreans reflected basic differences in approach, and ROK to do the same. The US and the from Sakhalin were repatriated in 1988 with Pyongyang insisting on immediate ROK responded by reiterating their after more than 40 years away from their steps toward reunification before longstanding offer to allow DPRK homeland. discussing specific issues and Seoul officials to observe exercises and by Following the ratification in 1965 of a maintaining that, given the long history of proposing pre-notification of military treaty normalizing relations between mutual distrust, reunification must come exercises. These proposals were rejected Japan and Korea, the two nations have through a gradual, step-by-step process. by the north, and in 1987 the north developed an extensive relationship South Korea maintains that a resumed large-scale exercises. meaningful dialogue should be based on 6 In a major new initiative on July 7, Pyongyang as a party head in a group well as a private protocol he signed to 1988, South Korean President Roh Tae with southern opposition and dissident develop tourism and other projects in the Woo called for new efforts to promote leaders. However, he later referred to north. exchanges, family reunification, inter- Roh by his official title and, in his 1991 Korean trade and contact in international New Year's address, offered a revised fora. President Roh called on Korea's version of his confederal proposal in US-KOREAN RELATIONS friends and allies to pursue contacts with which he suggested that regional the north and said that the south intended governments would exercise independent The United States remains committed to to seek better relations with the USSR foreign and defense policy. maintaining peace and stability on the and China. Following the ROK government's Korean peninsula. The United States Roh's initiative provided renewed 1988 decision to allow trade with the agreed in the 1954 US-ROK Mutual momentum to a dialogue suspended since DPRK, South Korean firms began to Defense Treaty to help the Republic of late 1985. Over the following months, the import North Korean goods, all via third- Korea defend itself from external two sides met several times at country contracts. The DPRK has aggression. In support of that Panmunjom to try to arrange a joint denounced and denied this trade. commitment, the US maintains about meeting of the two Korean parliaments. Nevertheless, the north publicized a late 43,000 service personnel in Korea, In early 1989, both sides also met in January 1989 visit by Hyundai including the army's Second Infantry preliminary meetings to discuss Corporation founder Chong Chu Yong as Division and several air force tactical arrangements for prime ministerial-level squadrons. To coordinate operations talks. In other fora, the two national between these units and the 650,000- Olympic committees met to discuss strong Korean armed forces, a combined forming a joint team for the 1990 Asian forces command (CFC) was established in Games in Beijing. Principal US Officials 1978. The CFC is headed by a US general In February 1989, North Korea who serves concurrently as commander in suspended the parliamentary talks over Ambassador-Donald P. Gregg chief of the UN Command (CINC-UNC). US-ROK military exercises. In April the Commander in Chief, UNC- Gen. Robert RisCassi Several aspects of the security north suspended the prime ministerial talks and the sports talks until July, Deputy Chief of Mission— relationship are changing as the US blaming South Korea's arrest of a Raymond F. Burghardt moves from a leading to a supporting role. Counselor for Political Affairs— South Korea has agreed to pay more of dissident clergyman who visited North E. Mason Hendrickson, Jr. the US defense costs, to fund relocation of Korea without government approval. Counselor for Economic Affairs— the large US headquarters garrison at In the fall of 1989, the dialogue resumed Richard Morford Yongsan from Seoul, and to accept in four fora-athletic, Red Cross, Counselor for Administrative Affairs- changes in the CFC command structure. parliamentary, and prime ministerial. In Oliver P. Garza The United States supports direct, the Red Cross talks, there were attempts Counselor for Public Affairs— government-to-government talks to reach agreement on reunions of John Fredenberg between the authorities of South and separated family members and exchanges Consul General-Edward H. Wilkinson North Korea. The US believes that the of cultural arts troupes. Counselor for Commercial Affairs— fundamental decisions on the future of the Prime ministerial-level talks were Peter Frederick Counselor for Agricultural Affairs- Korean peninsula must be taken by the initiated in 1990. Delegations met three George J. Pope Korean people themselves. Therefore, the times, although little concrete progress was made. The north cancelled the fourth Chief, Joint US Military Advisory US has refused to be drawn into separate Group, Korea- negotiations on Korean issues with North meeting, scheduled for February 1991, Gen. Robert J. Jellison Korea, as Pyongyang has insisted. once again citing annual exercises as the Defense Attache- The most rapidly developing area in reason. Col. William McKinney, USA Korean-US relations is that of economics Hopes for a summit (proposed and trade. Korea is now its seventh repeatedly in the past) have also been The US Embassy is located at 82 Sejong-Ro, Chongro-Ku, Seoul; APO largest trading partner, and the US seeks unfulfilled. President Roh, in a speech to San Francisco 96301. Tel. 82-2-732- to improve its trade imbalance, through the UN General Assembly in October 2601, Fax no. 82-2-738-8845. greater access to Korea's expanding 1988, offered to go to Pyongyang at any market and improved investment time to discuss any issue, including North The US Agricultural Trade Office is opportunities for US business. Although Korea's call for a mutual declaration of located at 63, 1-Ka, Ulchi-Ro, Choong- Korea is reluctant to abandon industrial non-aggression. North Korean President Ku, Seoul. Fax no. 82-2-752-5626. protection and the state-directed Kim Il Sung did not respond positively. The US Export Development Office/ industrial policy which played such an Kim had earlier stated that a summit US Trade Center is c/o US Embassy. important role in its industrialization, must first take up his proposal for Koryo Fax no. 82-2-739-1628. Director: William Korean policy-makers increasingly claim confederation and withdrawal of US M. Yarmy. to recognize the benefits of liberalized forces. In his 1989 New Year's address, trade for their economy. Korean leaders Kim suggested that Roh come to seem determined to manage successfully 7 the complex economic relationship with TRAVEL NOTES the United States and to take a more active role in international economic fora as befits Korea's status as a major trading Climate and clothing: Korea's Health: Health services are fair to good nation. temperate, four-season climate is like in most major cities. Most Korean Since the 1950s, the US-Korean that of the eastern US. Dress is more physicians have been trained in conservative than in the US. relationship has developed into one of the Western medicine, and hospital services most important in Asia. The 1982 are adequate. Outside of the major Visas: Visas are not required of tourists hotels, water generally is not potable. celebration of the centennial of Korean- travelling to South Korea if their stay is American diplomatic relations and less than 15 days or if they are simply Transportation: International airports President Reagan's 1983 visit to Korea transiting the country and have a ticket serve Seoul (Kimpo), Pusan (Kimhae), underscored the quality of US-Korean for an onward destination. Tourist visas, and Cheju Island. Extensive intercity air, relations. In 1989, a succession of high- which should be obtained from a Korean rail, and bus service is available. There level visits-President Bush (February), consulate for longer stays, are issued is an excellent network of local bus, taxi, Vice President Quayle (September) and for a 5-year period with multiple entries, and, in Seoul, subway services. but the length of any one visit should not President Roh (October)-reaffirmed a Tele-communications: Seoul is 14 time exceed 90 days. Visas are required for determination to develop and strengthen all official and business visitors. No zones ahead of Eastern Standard Time the bilateral relationship further. immunizations are required of travelers (13 hrs. during daylight-saving time). President Roh visited the US again in International direct-dial service is from the US. June 1990. available to Korea's major cities. Published by the United States Department of State Bureau of Public Affairs Office of Public Communication Washington, DC April 1991 Editor: Peter A. Knecht Department of State Publication 7782 Background Note Series This material is in the public domain and may be reproduced without permission; citation of this source would be appreciated. For sale by the Superintendent of Documents, US Government Printing Office, Washington, DC 20402 = U.S. Government Printing Office : 1991 282-557/20528 DEC-16-91 MON 12:11 P.01 UNITED STATES DEPARTMENT OF COMMERCE International Trade Administration STATES of / Washington, D.C. 20230 International Trade Administration FAX # (202) 377-3968 TRADE INFORMATION & ANALYSIS U.S. Department of Commerce Office of Trade and Investment Analysis Room 2219 Washington D.C. 20230 (202) 377-2456 NUMBER OF PAGES BEING TRANSMITTED ** 6 (INCLUDING COVER PAGE) PLEASE DELIVER MATERIAL TO: RECIPIENT/NAME: Jeanie Bunton FIRM: Office of Speech writing -White House DEFARTMENT/PHONE: Fax 202-456-6218 COMMENTS: 1990 data have been revised. ********** " SENDER/NAME: Francis McFaul 202-377-4423 DATE: 12/16/91 TIME: 12:12 ** IF YOU DO NOT RECEIVE ALL THE PAGES INDICATED ABOVE, PLEASE CALL (202) 377-2456 DEC-16-91 MON 12:12 P.02 -23- Table 5 Top 50 Partners in Total U.S. Trade in 1990 (Domestic and Foreign Merchandise, F.a.s.; General Imports, Customs; Millions of Dollars) 1984 1985 1986 1987 1988 1989 1990 Canada 118,255 122,293 123,764 130,899 153,020 166,762 Japan 175,238 80,710 91,414 108,793 112,824 127,244 Mexico 138,046 138,240 30,012 32,767 29,693 34,853 43,888 52,144 Germany 58,548 26,365 29,453 35,839 38,956 40,929 United Kingdom 41,927 46,946 26,701 26,210 26,814 31,455 36,341 Taiwan 39,156 43,772 19,771 21,096 25,315 32,034 36,843 Kores, South 35,647 34,149 15,335 15,969 19,084 25,086 31,337 France 33,195 32,892 14,150 15,578 17,344 18,673 22,478 Italy 24,593 26,776 12,309 14,299 15,446 16,569 18,351 China 19,148 20,711 6,069 7,717 7,877 9,791 13,532 Netherlands 17,745 20,031 11,623 11,350 11,913 12,180 14,675 16,174 Singapore 17,988 7,654 7,735 8,105 10,254 13,741 16,347 17,859 Hong Kong 11,329 11,182 11,921 13,837 15,925 16,014 Belgium/Luxembourg 16,328 8,440 8,305 9,405 10,360 11,904 13,077 Saudi Arabia 15,027 9,305 6,381 7,061 7,806 9,396 10,731 Brezil 14,009 10,261 10,666 10,698 11,905 13,561 13,214 Australia 13,038 7,468 8,277 8,179 8,500 10,514 12,204 12,967 Venezuela 9,920 9,936 8,238 9,165 9,769 9,796 Switzerland 12,554 5,679 5,764 8,229 7,400 8,808 9,626 10,396 Melaysia 4,576 3,839 4,150 4,818 5,833 7,614 8,697 Spain 4,952 5,039 5,317 5,987 7,419 8,113 8,518 Sweden 4,786 6,049 6,290 6,652 7,684 8,030 Theiland 8,335 2,439 2,277 2,684 3,764 5,172 6,668 8,285 Nigeria 3,085 3,678 2,939 3,869 3,635 5,774 6,529 Israel (incl Gazo) 3,945 4,702 4,657 5,770 6,216 6,067 6,513 Philippines 4,196 3,524 3,336 3,863 4,545 5,270 5,854 India 4,121 3,937 3,820 3,992 5,440 5,772 5,677 Indonesia 6,678 5,364 4,257 4,161 4,209 4,775 5,240 Colombia 2,596 2,798 3,193 3,644 3,915 4,479 5,213 Ireland 2,198 2,243 2,437 2,922 3,558 4,048 4,285 USSR 3,838 2,831 1,806 1,904 3,355 4,993 4,153 Iraq 788 901 968 1,178 2,644 3,584 3,746 Algeria 4,158 2,763 2,284 2,425 2,544 2,585 3,593 Turkey 1,682 1,896 1,793 2,304 2,829 3,375 3,433 South Africa 4,753 3,276 3,523 2,627 3,200 3,190 3,433 Dominican Republic 1,663 1,724 2,006 2,305 2,769 3,291 3,405 Norway 2,763 1,830 2,016 2,246 2,375 3,028 3,128 Chile 1,586 1,428 1,644 1,777 2,247 2,707 2,993 Denmark 2,023 2,370 2,515 2,671 2,633 2,586 2,990 Argentina 1,855 1,791 1,799 2,170 2,490 2,430 2,688 Egypt 2,874 2,402 2,093 2,675 2,553 2,838 2,645 Finland 1,132 1,333 1,288 1,514 1,964 2,339 2,392 New Zealand 1,492 1,584 1,856 1,864 2,101 2,326 2,333 Austria 1,089 1,275 1,328 1,478 1,821 2,008 2,189 Angola 1,113 1,191 764 1,388 1,317 2,025 2,108 Ecuador 2,350 2,428 2,065 1,887 1,909 2,117 2,058 Costa Rica 895 923 1,124 1,251 1,470 1,844 2,000 United Arab Emirates 1,882 1,267 849 1,283 1,284 1,922 1,887 Portugal 1,438 1,241 1,190 1,246 1,442 1,724 1,755 Pakistan 1,337 1,315 1,155 1,138 1,549 1,657 1,752 DEC-16-91 MON 12:12 P.03 a -24- Table 6 Top 50 Purchasers of U.S. Exports in 1990 (Domestic and Foreign Merchandise, F.a.s.; Millions of Dollars) 1984 1985 1986 1987 1988 1989 1990 Canada 51,777 53,287 55,512 59,814 71,622 Japan 78,809 83,866 23,575 22,631 26,882 28,249 37,725 Mexico 44,494 48,585 11,992 13,635 12,392 14,582 20,628 United Kingdom, 24,982 28,375 12,210 11,273 11,418 14,114 18,364 Germany 20,837 23,484 9,221 9,123 10,628 11,802 14,457 16,956 Korea, South 18,752 5,983 5,956 6,355 8,099 11,232 France 13,459 14,399 6,037 6,096 7,216 7,943 9,970 Netherlands 11,579 13,652 7,554 7,269 7,847 8,217 10,117 11,364 Taiwan 13,016 5,003 4,700 5,524 7,413 12,129 11,335 Belgium/Luxembourg 11,482 5,301 4,918 5,399 6,189 7,410 8,522 Australia 10,448 4,793 5,441 5,551 5,495 6,973 8,331 Singapore 8,535 3,675 3,476 3,380 4,053 5,768 7,344 Italy 8,019 4,375 4,625 4,838 5,530 6,775 7,215 Hong Kong 7,987 3,062 2,786 3,030 3,983 5,687 6,291 6,840 Spain 2,561 2,524 2,615 3,148 4,215 4,796 Brazil 5,208 2,640 3,140 3,885 4,040 4,266 4,804 Switzerland 5,062 2,562 2,288 2,976 3,151 4,196 4,911 China 4,944 3,004 3,856 3,106 3,497 5,021 5,755 4,807 Saudi Arabia 5,564 4,474 3,449 3,373 3,776 3,574 4,035 Malaysia 1,856 1,539 1,730 1,897 2,141 2,870 3,425 Sweden 1,542 1,925 1,871 1,894 2,700 3,138 3,404 Israel (Incl Gaza) 2,194 2,580 2,239 3,130 3,244 2,828 3,201 Venezuela 3,377 3,399 3,141 3,586 4,612 3,025 3,107 USSR 3,284 2,423 1,248 1,480 2,769 4,284 3,088 Thailand 1,113 849 936 1,544 1,962 2,288 2,991 Ireland 1,354 1,342 1,434 1,810 2,183 2,483 2,539 India 1,570 1,642 1,536 1,463 2,500 2,458 2,486 Philippines 1,766 1,379 1,363 1,599 1,878 2,202 2,472 Turkey 1,249 1,295 1,160 1,482 1,850 2,003 2,253 Egypt 2,704 2,323 1,982 2,210 2,332 2,612 2,249 Colombia 1,450 1,468 1,319 1,412 1,754 1,924 2,038 Indonesia 1,216 795 946 767 1,059 1,247 1,897 South Africa 2,265 1,205 1,158 1,281 1,688 1,659 1,732 Chile 805 682 623 796 1,066 1,414 1,672 Dominican Republic 646 742 921 1,142 1,359 1,645 1,658 Denmark 605 706 758 893 969 1,051 1,311 Norway 859 666 937 842 929 1,037 1,281 Argentina 900 721 944 1,090 1,054 1,039 1,179 Pekistan 1,092 1,042 830 733 1,090 1,134 1,143 New Zealand 708 727 881 819 940 1,117 1,133 Finland 350 438 381 514 761 969 1,126 United Arab Emirates 695 596 493 619 705 1,238 998 Costa Rice 423 422 483 582 696 882 992 Algeria 520 430 453 426 730 756 948 Jamaica 495 404 457 601 762 1,006 944 Portugel 961 695 638 581 749 925 922 Austria 375 441 464 549 746 873 873 Panama 757 675 711 742 637 723 867 Bahamas 555 786 761 782 740 772 801 Peru 751 496 693 814 795 695 778 DEC-16-91 MON 12:13 P.04 = 25 Table 7 Top 50 Suppliers of U.S. Imports in 1990 (General Imports, Customs; Millions of Dollars) 1984 1985 1986 1987 1988 1989 1990 Canada 66,478 69,006 68,253 71,085 81,398 Japan 87,953 91,372 57,135 68,783 81,911 84,575 89,519 Mexico 93,553 89,655 18,020 19,132 17,302 20,271 23,260 27,162 Germany 30,172 17,145 20,331 25,210 27,155 26,472 Taiwan 24,971 28,194 14,768 16,396 19,791 24,622 24,714 United Kingdom 24,313 22,667 14,492 14,937 15,396 17,341 17,976 Korea, South 18,319 20,288 9,353 10,013 12,729 16,987 20,105 China 19,737 18,493 3,065 3,862 4,771 6,293 8,511 11,990 France 15,224 8,113 9,482 10,129 10,730 12,508 Italy 13,014 13,124 7,934 9,674 10,607 11,040 11,576 11,933 Saudi Arabia 12,723 3,741 1,907 3,612 4,433 5,620 7,157 Singapore 9,974 3,979 4,260 4,725 6,201 7,973 9,003 Hong Kong 9,839 8,266 8,396 8,891 9,854 10,238 9,722 Venezuela 9,488 6,543 6,537 5,097 5,579 5,157 6,771 Brazil 9,447 7,621 7,526 6,813 7,865 9,294 8,410 Nigeria 7,976 2,508 3,002 2,530 3,573 3,278 5,284 Switzerland 5,977 3,117 3,476 5,253 4,249 4,611 4,714 Thailand 5,452 1,326 1,428 1,748 2,220 3,210 4,379 Malaysis 5,294 2,721 2,300 2,421 2,921 3,692 4,744 5,272 Netherlands 4,069 4,081 4,066 3,964 4,559 4,810 4,972 Sweden 3,244 4,124 4,419 4,758 4,985 4,892 4,931 Belgium/Luxembourg 3,139 3,387 4,006 4,171 4,493 4,555 4,578 Australia 2,675 2,836 2,628 3,006 3,541 3,873 4,433 Philippines 2,430 2,145 1,972 2,264 2,666 3,068 3,383 Indonesia 5,461 4,569 3,312 3,394 3,150 3,529 3,343 Israel (incl Goza) 1,751 2,123 2,418 2,639 2,972 3,239 3,313 Spain 2,391 2,515 2,702 2,839 3,204 3,317 3,310 India 2,551 2,295 2,283 2,529 2,940 3,314 3,191 Colombia 1,146 1,331 1,874 2,232 2,161 2,555 3,175 Iraq 124 474 440 495 1,488 2,415 3,015 Algeria 3,638 2,333 1,831 1,999 1,814 1,829 2,645 Angola 1,010 1,053 677 1,294 1,216 1,928 1,958 Norway 1,904 1,164 1,079 1,404 1,446 1,991 1,848 Dominican Republic 1,017 982 1,085 1,163 1,410 1,646 1,747 Ireland 844 901 1,003 1,112 1,375 1,566 1,745 South Africa 2,488 2,071 2,364 1,345 1,513 1,531 1,701 Denmark 1,418 1,665 1,757 1,779 1,664 1,535 1,678 Argentina 954 1,069 856 1,080 1,436 1,391 1,509 Ecuador 1,695 1,837 1,464 1,266 1,228 1,474 1,377 Chile 781 745 820 981 1,181 1,292 1,321 Austria 714 834 864 929 1,074 1,135 1,316 Finland 782 895 908 999 1,203 1,370 1,267 New Zealand 784 857 975 1,046 1,161 1,209 1,199 Turkey 433 602 633 821 979 1,371 1,180 USSR 554 409 558 425 586 709 1,065 Trinidad & Tobago 1,360 1,258 793 815 719 768 1,016 Costa Rice 473 501 641 670 774 962 1,008 United Arab Emirates 1,187 671 356 664 579 684 889 Portugal 477 546 552 664 693 800 833 Peru 1,342 1,087 803 769 658 814 803 DEC-16-91 MON 12:14 P.05 - 180 - All itoms in U.S. total exports (F.a.s. value) to Korea, South (Thousands of dollars) SITC FOY 3 commodity 1986 1987 I 1988 1989 1990 0--Food and live animals : 1--Boverages and tobacco 444,213 : I 667,220 : 858,351 ; 2--Crude matorials, inodible, except fuols 12,045 1,222,952 : 8,100 1,197,035 $ 67,904 3--Mineral fuols, lubricants and related materials 1,611,445 120,452 2,093,736 119,194 2,692,734 238,382 2,928,684 4--Animal and vogetable oils, fats and waxes 331,709 2,979,668 308,244 345,790 728,339 5--Chomicals and rolated products, n.o.s. 23,366 35,812 45,198 6--Manufactured goods classified chiefly by material 751,090 43,271 986,119 1,383,628 51,852 I 404,597 1,644,963 483,796 1,717,714 7--Machingry and transport equipment 798,061 8--Miscellaneous manufactured articlos 2,034,018 1,067,850 2,566,443 987,412 % 3,813,800 9--Commodities & transact not class elscwhore in sitc: 339,591 5,163,704 408,641 5,362,152 562,163 50,469 811,735 83,091 1,081,760 101,331 128,628 173,594 Note: Data bofore 1989 are estimated. Compiled from official statistics of the U.S. Department of Commerce. Commodit trade data before 1989 exclude special catogory exports. Refer to the bilatoral total trade tables for the data on total trade by country and region, Loading itoms in U.S. total exports (F.a.s. value) to Korea, South (Thousands of dollars) $ 1986 SITC rev 3 commodity 1987 1988 1989 1990 1 776--Thermionic, cold cathoda, photocathode valves etc. 485,651 792--Aircraft as associated equipmts speccrft vehi & pts: 597,338 797,825 815,870 1,011,333 272,543 211-Hidos & skins (except furskins), raw 315,534 767,690 1,155,789 467,587 918,008 044--Maize (not including sweet corn) unmilled 600,690 669,906 700,074 129,877 758,574 263--Cotton textile fibers 356,490 : 429,920 641,024 604,234 155,860 334--0il (not crude) from petrol & bitum minorals etc 313,890 445,495 429,260 481,651 67,914 134,032 $ 874--Mcasuring/chocking/analysing & contr inst&appt nos: 102,480 91,671 167,500 456,147 189,804 282--Ferrous waste & scraps rmltng iron or stool ingots: 229,525 : 314,346 412,251 247,171 213,550 251--Pulp and waste paper 271,158 406,760 I 410,638 227,725 307,104 752--Automatic data process machs a units thereof 397,069 459,336 1 405,095 135,590 158,397 247--Wood in the rough or roughly squared 235,749 342,158 387,175 105,995 158,388 764--Telocommunications equipment, n.o.s. as pts, 247,050 274,892 287,126 140,523 174,013 728--Machry etc spocialized for particula industries nos: 214,921 211,380 280,530 120,916 154,022 759--Ports etc for office mach & auto data process mach: 247,916 461,540 270,445 126,633 188,031 391--Arms and ammunition 282,502 298,201 260,743 2,924 2,790 S11-Hydrocarbons nos & specified derivatives 4,790 144,675 252,179 139,030 141,064 253,164 2 741--Hoatng & coolng equipmnt and pts thorcof, 319,982 248,045 55,229 90,890 041-Whoat (including spelt) and moslin, unmilled 99,899 182,836 219,417 237,984 211,216 222-0il seeds/oleaginous frt for extr soft fix vog oil: 283,266 297,903 216,230 206,104 232,220 260,148 743--Pumps, air or other gas compressors and fans 220,025 196,601 28,569 43,686 76,442 321--Coal, pulvorized or not, but not agglomorated 118,259 187,214 152,305 167,174 167,701 778--Electrical machinory and apparatus, n.o.s 171,786 185,664 45,097 62,940 79,344 288--Nenferrous base metal waste & scrap, n.o.s 174,404 176,795 45,142 62,859 147,620 714--Engs and motors, nonelect a pts, n.o.s 140,816 151,890 66,567 36,174 71,109 723--Civil engineering & contractors' plant & equipment 82,298 144,034 76,833 67,146 71,311 784--Parts and accessories of motor vehicles, etc 118,397 I 136,100 21,262 74,919 70,619 514--Nitrogen-function compounds 102,963 134,858 59,825 96,149 133,992 598--Miscellanoous chemical products, n.e.s 137,102 126,051 14,326 20,328 26,928 011--Moat of bovine animals, fresh, chilled or frozen 100,199 119,676 1,936 1,513 25,058 513--Carboxylic acids etc holides etc a derivatives 78,814 116,664 106,700 127,373 168,244 575-Plastics, n.c.s., in primary forms 149,533 115,102 54,282 93,495 100,653 611--Loather 96,961 113,947 54,662 55,325 70,727 994--Est. low value shps canadian low value and 65,428 111,897 15,379 37,821 42,588 713--Internal combust piston engs, and pts, n.o.s 67,443 111,651 24,422 28,386 43,285 525--Radicactive and associated matorials 59,225 108,940 2,242 8,862 641--Papor and paperboard 16,613 56,170 104,926 61,608 67,432 90,263 122--Tobacco, mfg whether containing tobacco substituto: 102,137 102,962 5,645 6,163 56,448 684-Aluminum 107,466 101,344 25,297 31,826 126,064 114,745 772--Elecricl apparat for switchg or protects olco circ: 88,330 66,111 78,200 115,960 85,708 034--Fish, fresh (live or doad), chilled or frozen 86,519 21,642 23,196 20,311 39,561 83,161 Note: Data before 1989 are estimated. Compiled from official statistics of the U.S. Department of Commerce. Commodity trade data before 1989 exclude special category exports. Refer to the bilatoral total trade tobles for the data on total trade by country and region. Top 40 commodities sorted by total exports, F.a.s. value in 1990. DEC-16-91 MON 12:15 P.06 - 181 - All items in U.S. general imports (customs value) from Korea, South (Thousands of dollars) 1986 SITC rev 3 commodity 1987 1988 1989 1990 - D--Food and live animals 180,191 1--Bevorages and tobacco 294,564 263,264 188,332 176,060 6,662 2--Crude matorials, inadible, except fuels 17,224 14,950 6,171 X 13,286 5,449 3--Minoral fuals, lubricants and rolated matoriala 17,954 26,951 51,637 47,561 4--Animal and vegetable oils, fats and waxes 42,634 29,197 14,606 28,746 74 9,572 5--Chemicals and related products, n.o.s 428 478 1,385 134,746 947 6--Manufactured goods classified chiefly by matorial 152,334 187,568 184,883 1,840,400 252,527 7--Machinery and transport equipment 2,031,539 2,359,488 2,047,807 4,537,304 2,124,898 8-Miscollanoous manufactured articles 7,075,728 9,101,804 8,860,493 5,897,461 7,544,678 9--Commodities & transact not class elsewhore in sitc: 7,266,554 8,090,586 8,234,725 76,481 8,187,132 101,420 129,378 137,691 144,339 Note: Data before 1989 are estimated. Compiled from official statistics of the U.S. Department of Commorce. Refer to the bilatoral total trade tables for the data on total trade by country and region. Leading items in U.S. general imports (customs value) from Koroa, South (Thousands of dollars) 1986 1987 SITC rev 3 commodity 1988 1989 1990 651--Footwoar 1,509,139 1,774,695 776--Thermionic, cold cathode, photocathoda valves etc. 2,325,718 2,182,898 648,034 2,573,003 781--Motor cars & oth motor vehicles 805,710 1,390,651 1,851,948 : 798,671 1,798,590 752--Automatic data process machs 2 units thereof 2,062,202 2,486,562 1,593,997 388,294 1,125,622 848--Apparol a cl acc exe textiles headgeer, all mater1: 617,159 924,439 1,091,002 1,053,031 447,640 651,994 845--Articlos of apparel of textilo fabries nos 819,278 1,035,978 774,761 1,008,942 889,582 542--Nomon/girls coats, capos etc, tox fabric, not knit: 785,073 963,757 728,480 459,972 544,471 764--Tolocommunications equipment, n.o.s. & pts, n.o.s.: 609,889 595,867 659,079 577,790 662,909 394--Baby carriages, toys, games and sporting goods 701,896 686,265 698,373 608,640 947,676 841--Mon's or boy's coats, jackets etc, text, not knit. 825,471 714,828 588,063 552,516 763--Sound recorders, tv recordors, recording modia unr: 611,631 641,380 692,061 585,624 119,404 202,695 B31--Trunks, suitcasos, vanity cases, briafcases, etc 234,146 695,136 464,099 331,346 436,175 762--Rad:obroadeant receivers 448,016 450,212 446,355 271,298 436,969 598--Musical instruments and parts, records, tapas etc. 540,621 541,486 241,877 427,919 244,465 775-Househld type elec & nonolec equipment, n.e.s 329,357 360,818 357,344 340,004 425,018 673--Iron & nonalloy stool flat-roll prod, not clad etc: 437,919 432,985 344,415 170,198 160,839 625--Rubber tires, inter treads, tire flaps & inn tubes: 162,781 123,146 245,825 186,487 185,814 553-Wov fabries, mm text mat (not narrow or spec fab). 196,622 196,980 229,636 191,452 203,443 99--Miscallancous manufactured articlos, n.o.s 241,577 213,706 227,691 103,550 139,458 744--Mochanical handlng equipmt, 2 pts thereof, 192,366 210,229 225,658 60,654 100,129 759--Parts etc for office mach & auto data process mach: 170,131 266,511 219,554 68,511 70,863 761--Talovision receivers 122,937 200,231 208,573 573,537 723,215 778--Eloctricel machinery and apparatus, n.o.s 713,611 296,715 207,459 198,348 263,472 3 $79--Iron & steel tubes, pipes & hol profiles, fittings: 305,197 224,655 205,864 197,303 162,338 I 697--Housohold equipment of base metal, 265,576 197,209 195,262 112,620 141,170 178,183 397--Jowolry, goldsmiths' & silversmiths' wares etc 178,012 158,687 83,186 115,978 $93-Articles, nes of plastics 126,068 138,912 155,311 68,253 106,298 138,516 194-Nails, scrows, nuts etc, iron, stool, copp, alumin: 141,352 150,752 111,883 127,276 133,781 344-Women's or girls' coats, capes etc, toxtile, Kni 124,742 134,005 147,102 1 157,003 141,562 784-Parts and accessories of motor vehicles, etc. 124,678 122,243 46,895 65,086 82,301 31-Special transactions & commod not classif by kind. 94,397 111,456 47,646 65,322 89,318 199--Manufactures of base metal, n.e.s 102,269 104,059 84,470 104,611 51--Offico machines 123,296 93,294 89,668 53,633 79,521 58--Made-up articles of textile matorials, 142,393 118,390 89,569 n.a.s 83,520 101,827 88,713 93--Wire products (excl insulat elect) & foncng grills: 77,881 89,484 74,017 75,559 174--Iron & na stool flat-rolled products, clad, etc 100,784 102,660 87,006 78,445 89,837 71,674 (41--Heatng & coolng equipmnt and pts thoreof, 57,980 84,600 52,795 91,219 153,212 72--Elecricl apparat for switchg or protoctg cloc circ: 58,077 83,395 73,287 78,206 108,827 143--Mon's or boys coats, jackets otc, text, knitted 87,965 82,046 85,278 109,501 101,379 82--Plates, shoets, film, foil & strip of plastics 115,990 79,422 36,283 45,073 73,865 73,224 76,441 Note: Data before 1989 are estimated. Compiled from official statistics of the U.S. Department of Commerco. Rofer to the bilatoral total trade tables for the data on total trade by country and region. Top 40 commodities sorted by general imports, customs value in 1990. THEMES FOR ASIA TRIP Overall America is an Asia-Pacific partner for the long haul (America will not retreat into isolationism/protectionism) -- Economically -- Politically -- Security As outlined in the President's Asia Society speech, there are six keys to America's long-term vision for the Asia Pacific. The trip will highlight each of these: I. PROGRESSIVE TRADE LIBERALIZATION Aggressively pursue Uruguay Round Settlement (if still pending) (Japan, Korea, Australia) -- Promote APEC (All countries) -- Push access for American products and services (Japan, Korea) : Encourage American investment in the region (Singapore, Japan, Korea) II. SECURITY COOPERATION -- Maintain pressure on DPRK nuclear program. Stress need for united action against DPRK nuclear program (all countries; encourage Singapore to get ASEAN action during upcoming ASEAN Summit) -- U.S. will restructure, but remain engaged -- Continued air and naval presence at current levels in Japan for the foreseeable future -- Korea presence dependent on progress for lasting peace on the peninsula; however, envision long-term air presence for regional deterrence into the future -- Singapore agreement as model for access arrangements of the future in other parts of the region III. A SHARED COMMITMENT TO DEMOCRACY AND HUMAN RIGHTS -- Continue pressure on ROK (last visit by Pres. Bush made a difference) -- Lay out position on Vietnam (Singapore) -- Highlight China if necessary 2 IV EDUCATIONAL AND SCIENTIFIC INNOVATION -- Show link between domestic agenda and foreign policy -- Highlight S&T progress (all countries) -- Examine educational differences that we can learn from (Japan, Korea) V RESPECT FOR THE ENVIRONMENT -- Note progress made and areas for improvement (Japan, Korea) -- Announce SE Asia initiative (if ready) VI APPRECIATION OF DISTINCT CULTURAL HERITAGES -- Announce various cultural exchange initiatives (all countries) ROH'S TRACK RECORD Korean Overseas Information Service/Seoul, Korea February 1991 Political Development censorship was abolished with the repeal of the Basic Press Law. The system of requiring the regis- The Administration of President Roh Tae Woo tration of media was liberalized, leading to the came into being on February 25, 1988. This event mushrooming of increasingly diverse print and marked the establishment of genuine democracy broadcast media. in the Republic of Korea for the first time since Measures were taken also to deregulate various it was founded in 1948. Furthermore, the Roh Ad- other areas of national life with a view to promot- ministration was brought into being through the ing private initiative. Campus autonomy was in- first peaceful transfer of power in the 40-year his- troduced and restrictions on overseas travel lifted. tory of the Republic. Creative activities of artists and writers were freed Roh Tae Woo was elected President through from artificial constraints. Government interven- the first direct popular vote in 16 years. This ended tion in the private sector of the economy was perennial domestic and international controversy scaled down. In 1990 alone, laws and decrees were over the legitimacy of the Republic of Korea revised to end or ease government control of 576 Government and set the stage for the successful categories of economic and business activities. hosting of the Seoul Olympics and the effective The Administration exercized moderation and implementation of a northern diplomacy aimed restraint in dealing with disturbances accompany- at opening and expanding ties with the socialist ing the transition from authoritarianism to world. democracy. It patiently waited for the emergence A priority task of the Roh Administration upon of a public awareness and consensus regarding its inauguration was to eliminate all vestiges of past the need for a democratic order based on self- authoritarian rule, while promoting the basic rights regulation. As a result, political and social stabili- of the people. Sweeping amnesties and restoration ty has come to prevail with spontaneous public of political rights were granted to large numbers of involvement. "political prisoners" and "purged politicians." A In early 1990, three major political parties total of 1,673 laws and decrees-about 50 percent merged into one large governing party in what of the total-were revised or repealed to do away may be termed an honorable revolution. This end- with undemocratic provisions and restrictions on ed the governmental lethargy caused by a legisla- basic rights. Thus amended were 291 laws, 733 tive logjam due to a minority ruling party having presidential decrees, 578 prime ministerial decrees to deal with three disparate opposition groups with and 71 treaties. a combined majority in the National Assembly. A particularly notable development has been the Thus the stage was set for constructive politics realization of unrestricted freedom of the press and based on new thinking about the future of the na- speech in keeping with the Declaration of tion in an increasingly interdependent and shrink- Democratic Reforms on June 29, 1987, which ing world. The triparty merger represented a major swiftly led to the demise of authoritarianism. Press political realignment designed to propel the coun- Rise in News Media try into the 21st century and toward the goal of national unification. Number as of Number as of Media Increase June 29, 1987 end of 1990 Also in keeping with the promise made in the June 29, 1987 Declaration and again in the cam- Daily newspapers 28 81 53 paign platform of Roh Tae Woo, legislative and Broadcast media 5 10 5 administrative steps have been taken to introduce Weeklies and monthlies 1,404 3,488 2,084 local autonomy on a phased basis. Local coun- cils are to be elected during the first half of 1991, Dates of Opening Diplomatic Ties with the heads of local governments to be elected With East Bloc Countries about a year later. To increase the financial self- sufficiency of local governing bodies, a cigarette Agreement to ROK embassy Embassy in excise tax and other new taxes have been created Countries open ties signed opened Seoul opened as an additional source of revenue for them, along with a system providing for grants-in-aid from the Hungary February 1989 February 1989 February 1989 Poland November 1989 November 1989 National Government. Much of the authority and January 1990 Yugoslavia December 1989 February 1990 March 1990 power of the National Government has also been Czechoslovakia March 1990 June 1990 developed to local governments. Bulgaria March 1990 June 1990 September 1990 Rumania March 1990 June 1990 July 1990 External Relations Mongolia March 1990 June 1990 February 1991 USSR September 1990 October 1990 December 1990 President Roh Tae Woo has emerged as a regional and international leader of stature, ad- development and greater prosperity. vancing the Republic of Korea towards the world's center stage. Under his presidency, the Republic In consequence, increasing trade and other successfully staged the largest Olympic Games forms of exchanges and cooperation have come ever. The nation has achieved a speedy but solid to be conducted with all socialist countries, except democratization, while maintaining rapid econom- for Cuba and one or two others. This has opened ic growth leading to increasing prosperity. Presi- up, among other things, new, growing markets for dent Roh has successfully endeavored to secure the Republic and added new members to the list for the Republic an international position com- of its economic and business partners. In fact, mensurate with its expanding national clout. For trade with the East bloc jumped from US$3.7 bil- lion in 1988 to US$5.6 billion in 1990. example, he delivered major speeches addressed to international audiences at the following fora: Full diplomatic relations were established with before the General Assembly of the United Na- the Soviet Union-a longtime major ally of North tions on October 19, 1988; before a joint session Korea-in September 1990. On the heels of this, of the United States Congress on October 18, Presidents Roh and Gorbachev jointly issued a 1989; before the Hungarian parliament on "Moscow Declaration" of agreement to develop November 23, 1989; before the Japanese Diet on ties of constructive bilateral cooperation, includ- May 25, 1990, and at Moscow University on De- ing mutual efforts toward "the relaxation of ten- cember 14, 1990. sion and the establishment of the climate of trust for the eventual reunification on the Korean In the Seoul Olympics in 1988, the East and the Peninsula." West were brought together for the first time in 12 years. It was rated as the largest and best Olym- These developments have a greater potential to piad ever and was regarded by many as the most break the stalemate on the Korean Peninsula than successful world festival of peace and harmony. anything else that has happened since the Korean Through the 1988 Olympics, the world had a good War of 1950-53, for they signaled the extension look at the Republic of Korea as a democratic, of the Post-Cold War international order into prosperous, modern and peaceful country. This Northeast Asia with the aim of promoting regional offered a model for the reforms and openness in peace. This is expected to nudge the hardline Com- Eastern Europe, which in turn led to the emer- munist regime in the North into initiating reform gence of a new world order of detente and cooper- and openness, leading to improved relations be- ation. This subsequently helped advance the goals tween the two divided parts of Korea. of the Republic's northern policy. In May 1990, President Roh visited Japan as The policy of cultivating ties with East bloc the first chief executive of a democratic Korean countries was designed chiefly to create an inter- Government with universally acknowledged national environment conducive to both unifica- legitimacy. He also became the first Korean Presi- tion with North Korea and continued economic dent to speak before the Japanese Diet. He dis- Inter-Korean trade has been slowly but steadi- Through such efforts, often-bitter labor dis- ly growing from a nearly negligible initial level in putes, which mushroomed in the wake of the 1988. Declaration of Democratic Reforms in mid-1987, have greatly decreased in both frequency and in- tensity. Labor disputes numbered 1,770 in 1988 Economy, Infrastructure, Environment and slightly decreased to 1,585 in 1989 but dropped to only 316 in 1990. The fact that wages In light of the fact that speculative activities were nearly doubled between 1987 and 1990 as the result sending land and housing prices skyrocketing, of newly bursting unionism has also contributed legislative program was carried out to enforce a significantly to increasing industrial peace. concept of land as public property and to tax ex- A minimum wage law was enacted in 1988, cessive or idle land holdings more heavily. Steps along with legislation to promote equal employ- were also taken to ban business corporations from ment opportunities for both sexes. holding or acquiring lands not essential to their intrinsic business operations. Government-supported Standard working hours per week were reduced projects were implemented to develop 150 hous- from 48 up until 1988 to 46 in 1989 and further ing tracts totaling 228 million square meters and to 44 in 1990. A law for promoting the employ- 45 industrial sites totaling 191 million square ment of the physically handicapped went into ef- fect in 1990. meters to help stabilize land prices. The Government drastically deregulated and In view of the fact that many Korean workers decontrolled business activities to promote private have difficulty finding affordable housing, a pro- gram was initiated to build 250,000 low-cost hous- initiative and entrepreneurship, as noted earlier. During 1990 alone, laws and executive decrees ing units for them. In 1990, the initial year, 60,000 units were completed. In addition, 4,225 rental were streamlined to free 576 categories of econom- ic activities from unwarranted Government con- apartments were built for unmarried female workers. trol. In particular, deregulation measures were taken to make it easier to newly enter 19 selected These are part of a national program to build industries, including alcoholic beverage manufac- two million housing units between 1988 and 1992 turing and the information and telecommunica- in order to ease serious housing shortages in tions businesses, with a view to promoting Korean cities. By comparison, 1.55 million units competition. were constructed between 1981 and 1987. Labor laws were revised to promote the rights Under the new, accelerated housing program, of workers to organize, collectively bargain and the number of units built increased from 320,000 strike. As a result, the number of labor unions in 1988, to 460,000 in 1989 and further to an es- in the country jumped from 4,086 in December timated 750,000 in 1990. This program incor- 1987 to 7,883 in June 1990, a 93-percent rise, while porates projects to create five new towns around their membership swelled from 1.27 million to just Seoul. Special emphasis is placed on providing under 2 million, a 52-percent increase. more adequate shelter to low-income families, es- pecially by building 250,000 rental apartments, still In view of the fact that the sudden removal of a rarity in Korea, between 1989 and 1992. In ad- restrictions on unionism entailed difficulties in con- dition, measures are being taken to encourage pri- ducting yet unfamiliar collective bargaining, the vate construction of small-scale multifamily Administration sponsored educational courses for housing units in urban areas as part of efforts to union leaders and labor relations managers. About stabilize rent, which has sharply increased in re- 110,000 persons attended such courses between cent years. A total of 380,000 such units were built 1988 and 1990. Roundtable discussions between between 1988 and 1990. Assistance will also be labor and management on the national and region- provided to improve existing housing for low- al levels were energized to promote mutual under- income families. standing. The budget for promoting social development, with focus on the welfare of the poor, was in- ly half in Government and half in private funds, creased from 4.43 trillion won (US$6.3 billion) in is scheduled to be invested in antipollution projects 1987 to 7.43 trillion won (US$10.6 billion) in 1990. by the year 2000. The expanded 1990 budget provides for, among other things, monthly subsistence aid of 39,000 To expand and improve infrastructure in keep- won (US$56) to each needy incapacitated person, ing with the rapid economic growth of the nation, educational funds to 418,000 children of poor fa- a special infrastructure planning team was creat- milies and vocational training for 15,000 persons, ed at Chong Wa Dae (the Presidential office and and the establishment of 419 day care centers. residence) in January 1991. One trillion won (US$1.4 billion) in surplus funds in the Govern- The income tax exemption point for wage earn- ment budget is being invested in such projects as ers has been hiked, while a more sharply progres- a second Seoul-Inch'on expressway, the widening sive taxation has been applied to the upper income of the Seoul-Pusan expressway from four lanes brackets. Special tax deductions have been newly to six, the improvement of over 60 feeder roads created on expanded for employees. Credit facili- and the expansion and improvement of all- ties for ordinary citizens have been enlarged to important Pusan and Inch'on ports, especially to help them meet emergency financial requirements, enlarge their container facilities. A new interna- start small businesses, deposit key money for liv- tional airport will be constructed to serve Seoul. ing quarters or educate their children. Bank loans Communications networks will be expanded and allocated for such purposes totaled 1.6 trillion won improved, with a view especially to add 5.9 mil- (US$2.2 billion) in 1990. lion telephone circuits. An optical fiber cable was A national medical insurance system was in- laid between the island province of Cheju-do and troduced on a phased basis and came to cover the the mainland for more efficient and expanded entire population in 1989, whereas only 61 per- communications. cent of the population benefited from the system To ensure a steady supply of energy to meet in 1987. A national pension fund was created, with the growing requirements of the nation, the emer- 4.61 million employees of 63,000 workplaces join- gency oil stockpile was increased from 31 million ing it by the end of 1990. Eligibility to join the barrels in 1987 to 38 million barrels in 1988. Elec- fund will be progressively expanded, with the goal tric power generating capacity of the nation was of benefiting the entire population by the end of upped to 21 million kilowatts in 1989 from 19 the 1990s. million kilowatts in 1987. Environmental protection has been yet another As the combined result of all such development priority of the Roh Administration. The Office efforts, the Korean economy has managed to con- of Environment was elevated in status to the tinue to grow at a rapid average rate through the Ministry of Environment in January 1990 to more öften turbulent first three years of the Roh vigorously and effectively clean up the environ- Presidency. Although various new external and in- ment, in part by more closely orchestrating ternal impediments have arisen, threatening to de- environment-related policies of all Government celerate growth while accelerating inflation, the agencies. To that end, nine environment-related Korean economy is expected to rebound strongly laws and executive decrees have been revamped, again before long through painful but necessary in particular to require environmental assessment industrial readjustments, if its past performances prior to undertaking major development projects. are a valid guide. A total of 17.1 trillion won (US$20 billion), rough- KOREA-U.S. TRADE RELATIONS Korean Overseas Information Service/Seoul, Korea February 1991 Status of Bilateral Trade deficit, and which could be obtained on equal or more favorable terms from the United States. As By the end of the 1980s, the Korea-U.S. trad- a result, imports of American goods rose 46 per- ing relationship had assumed a new importance cent in 1988, 25 percent in 1989 and 6.5 percent for both nations. Whereas the United States has in 1990, compared to corresponding figures for traditionally been Korea's number one trading the overall import growth rate of 26 percent, 19 partner, Korea has emerged as America's seventh percent and 13.6 percent. largest trading counterpart. Two-way trade volume In 1989, a major package of bilateral trade ac- cleared $36.3 billion in 1990. cords was reached under the auspices of Section In recent years, Korea has focused its efforts 301 of the 1988 U.S. Trade Act, and Korea has on reducing the surplus in trade it registered with since carried out its obligations as scheduled. The the United States since 1982. After peaking at $9.6 agreements addressed a range of market sectors, billion in 1987, the surplus has consistently from agriculture to investment, and have greatly declined, dropping to $4.7 billion in 1989 and fur- enhanced opportunities for U.S. firms in the ther reducing to $2.4 billion in 1990. Such rapid Korean marketplace. progress toward trade equilibrium is largely a result In addition to these accords, Korea has also of Korea's market opening policies, such as im- port liberalization, improvement of import proce- taken special steps to further respond to U.S. con- cerns on such issues as tobacco, wine, telecom- dures, enhanced protection of intellectual property munications and civil aviation. And, while Korea rights and accelerated market opening in the ser- is already the second largest importer of Ameri- vice and agricultural sectors. As a result, in 1990 can agricultural products, many items of particu- Korea imported $16.9 billion worth of American goods while it exported $19.4 billion to the U.S. lar interest to the United States, such as pecans, soybeans, have been included in the liberalization market. and tariff reduction schedules despite the high sen- sitivity of Korea's agricultural sector. Import Liberalization Tariff Reduction The Korean Government began to actively carry out import liberalization in the early 1980s, gradu- ally expanding the number and range of items In 1984, Korea initiated a Five Year Tariff eligible for import on an automatic approval ba- Reduction Program, which led to a reduction in sis. As of January 1991, the number of items sub- the average ad valorem level from 23.7 percent ject to import restriction was reduced to 283 and in 1983 to 11.4 percent in 1991. The rate will fur- the overall import liberalization ratio rose to 97.2 ther drop to 10.1 percent in 1992, 8.9 percent in percent. In the manufacturing sector, the liberali- 1993, and to 7.9 percent in 1994, the current rate zation ratio has reached 99.7 percent. of most developed countries. For manufactured goods, the average tariff rate was reduced from From 1983 onwards, the Korean Government 22.6 percent in 1983 to 9.7 percent in 1990 and has also been highly responsive to U.S. requests is scheduled to fall further to 6.2 percent in 1994. in drawing up its lists and timetables for import The corresponding figures for agricultural tariffs liberalization. Since 1986, Korea has also had an are 31.4 percent in 1983, 19.9 percent in 1990 and import diversification program in effect which has 16.6 percent in 1994. Also, in response to U.S. identified some 290 items that are purchased from requests, the Korean Government used its conces- Japan, with which Korea has run a chronic trade sionary tariff system, to further reduce tariffs on some 1,877 items of special interest to U.S. ex- will be lifted; business services, in which foreign porters in 1987 and 1988 and on an additional 203 agencies in joint ventures will be permitted to hold items in 1989. up to a 99 percent share; telecommunications, Effective December 1990, the Korean Govern- wherein database and remote computing services ment abolished the 2.5 percent Defense Tax which will be permitted; construction, where foreign eq- led to the decision to postpone the tariff reduc- uity restrictions will gradually be reduced; distri- tion plan by one year. The tax burden on imports bution, where all restrictions will be lifted for retail will, nonetheless, see a net reduction. outlets under 700 sq meters; transportation, where foreign participation in joint ventures will gradu- ally be permitted; tourism, and financial services, Intellectual Property Rights Protection for which principles of national treatment and reciprocity will be applied. Since the mid 1980s, Korea has actively worked In the negotiation on agriculture, Korea sharp- to strengthen its intellectual property laws and to ly reduced its list of non-trade concerns to help enhance their enforcement. Five new items of move the negotiation forward. In the textiles legislation were enacted as part of this effort and group, Korea supports the plan to phase out MFA special units were formed to apprehend and prose- restrictions by 2000. In the intellectual property cute violators. Korea also acceded to five inter- rights discussion, Korea has agreed to revise or national conventions and, in consideration of a enact legislation for the protection of trade secrets U.S. Government request, agreed to provide spe- and semiconductor mask works. And, on govern- cial treatment for three categories of U.S. intellec- ment procurement, in June 1990 Korea submit- tual property. With the revision of the Industrial ted its intention to accede to the GATT Code. Property Law in September 1990, Korea's legal framework for IPR is regarded as one of the Korea is also cooperating with the United States world's most comprehensive. in multilateral negotiations for an international steel consensus and at the OECD Working Group VI negotiation to reform the world shipbuilding Cooperation in the Uruguay Round and repair industry. Korea and the United States are also exploring Korea has also cooperated with the United ways to expand regional cooperation at the Asia States in the Uruguay Round of multilateral trade Pacific Economic Cooperation (APEC) forum. negotiations. Korea's offer list extends to eight sec- Launched at Canberra, in November 1989, APEC tors of interest to the U.S.: audio-visual services, serves as a channel to further trade and industrial where restrictions on the import/distribution of cooperation among the members of the Asia Pa- motion pictures and sound and video recordings cific region. NORTHERN DIPLOMACY Korean Overseas Information Service/Seoul, Korea February 1991 By far the most significant developments in for- War was still dominating world politics, the eign policy in recent years has been the establish- Republic of Korea had little appeal as a partner ment and steady expansion of ties between the for trade and economic cooperation. Republic of Korea and hitherto inaccessible so- cialist countries. Although a relationship with the socialist world began to be sought long before the Changing Domestic and Sixth Republic, it was not until about a year af- International Environment ter the inauguration of President Roh Tae Woo in February 1988 that breakthroughs were The 1980s saw crucial changes conducive to a achieved, at long last. warming of relations with the East bloc. Above The ice was broken with the establishment of all, Korea's economic stature grew conspicuous- diplomatic relations with the Republic of Hungary ly. It has emerged as the 10th largest trading na- in February 1989. The significance of this event tion in the world after three decades of rapid went far beyond the initiation of bilateral relations economic development. Furthermore, its interna- between the two countries, for it was symbolic of tional reputation was enhanced enormously by the a new era to unfold in the Republic's diplomatic hosting of the 1988 Olympic Games and the history. democratization process set in motion in 1987. These factors-combined with intensifying moves For a long time, the post-World War II for- within socialist countries to restructure their econ- eign policy of the Republic of Korea generally dealt only with the free world. In the aftermath omies and open up to the outside world-were the catalyst for Korea's new era of Northern of the Korean War (1950-53) which was started Diplomacy. by an unprovoked invasion from Soviet aided Communist North Korea, Communism and so- Also by then the Sixth Republic had adopted cialism were regarded not only as alien but dan- Northern Diplomacy as a top priority, integrat- gerous and threatening ideologies. This attitude, ing it into its unification policy. President Roh however, began to undergo subtle change as the hinted at this linkage in his inaugural address when early 1970s saw the Sino-American rapprochement he said, "Improved relations with countries with and later, as a pragmatic flexibility began to ideologies and social systems different from ours manifest itself in some aspects of East-West re- will contribute to stability, peace and common lations. prosperity in East Asia. Such a northward The Republic of Korea embarked on some ef- diplomacy should also lead to the gateway of forts to adapt itself to the more fluid world situa- unification." The President has repeated this tion. President Park Chung Hee's statement in theme on many occasions but it was perhaps stated June 1973, announcing a willingness to develop in most detail in the "Special Declaration in the Interest of National Self-esteem, Unification and contacts with Communist countries, is the most notable example; arguably this was the harbinger Prosperity" on July 7, 1988. While outlining six of what is now called Korea's Northern Diploma- policies which he hoped would help create a sense cy. The conciliatory gesture, however, was not of national community between the two parts of Korea, the President said, "To create an at- reciprocated. mosphere conducive to durable peace on the Many reasons could be cited for the failure of Korean Peninsula, we are willing to cooperate with the earlier attempts at improving relations with the North Korea in its efforts to improve relations with East bloc countries. A primary one, however, was countries friendly with us and in parallel with that, at the time, apart from the fact that the Cold this, we will continue to seek improved relations with the Soviet Union, China and other socialist countries came with the establishment of diplo- countries." Thus while warmer relations with the matic relations with Hungary in February 1989. socialist world are, as has always been the case, Following the exchange of embassies on Febru- based on the expectation of economic and other ary 1, relations between the two countries deve- benefits to both sides, the Republic has attached loped rapidly and in November of that year special significance to its Northern Diplomacy be- President Roh made an official visit to Hungary. cause of the expected additional benefit of an in- This was the first visit by a Korean head of state ternational atmosphere more conducive to peace to a East European nation. The following Novem- and security on the Peninsula and eventual unifi- ber, President Arpad Goncz of Hungary visited cation with the North. Seoul. Poland followed. It set up a trade office in Five Principles of Northern Diplomacy Seoul in May 1989, about a month after South Korea opened a similar office in Warsaw. On Northern Diplomacy is based on five principles. November 1 of that year, the two countries an- First, South Korea will not seek to isolate North nounced an agreement to establish formal diplo- Korea, but, on the contrary, hopes that its new matic relations. The Republic of Korea established ties with North Korea's old friends will lead them its embassy in Warsaw on November 27. Less than to encourage North Korea to institute reforms and two months later, on January 17, 1990, the Pol- become a more responsible member of the inter- ish embassy was opened in Seoul. national community. Second, as already discussed, A basic pattern has emerged in the cultivation the South will pursue its Northern Diplomacy in of relations with socialist countries. Following the tandem with its unification policy. Third, both po- initiation of academic, athletic or cultural ex- litical and economic, as well as other non-political changes, trade offices with consular functions are exchanges, should be developed with socialist opened, and some months later, full diplomatic countries simultaneously, because without an at- relations are established which in turn lead to a mosphere at mutual trust created by first forging steady increase in economic and other types of ex- diplomatic ties, it is impossible to develop full- changes. It was also in this way that ties were es- fledged economic cooperation. Although the tablished with Yugoslavia on December 28, 1989, Republic understands that a principle of the sepa- Bulgaria on March 23, 1990, Czechoslovakia the ration of politics from economics has often been following day and Romania on March 30. Alba- applied to relations between nations without for- nia is the only East European country not yet mal ties, it is determined to pursue improvement showing any apparent interest in cultivating rela- of economic as well as political relations at the tions with South Korea. same time as a keystone of its Northern Policy. Fourth, the Government will try to build a public All along it was hoped that these countries could concensus on the goals of its Northern Diploma- and would help influence North Korea to end con- frontation and improve relations with the South cy. To this end, a number of inter-ministerial committees have been formed to formulate and and follow their example in instituting reforms. coordinate policies. Fifth, the South will maintain But it was the Soviet Union and the People's close ties with the United States and its other tradi- Republic of China which were seen as having the tional friends. The South's relationship with these greatest influence with North Korea while at the same time offering the biggest potential markets old friends is crucial to pursuing the Northern for South Korean goods and services. Policy from a position of strength, as it is impor- tant not only in terms of national security, but also Relations with the Soviet Union are seen in in terms of trade and other economic activities. Seoul as being especially important not only be- cause of potential economic benefits-which could Recent Achievements be great-but because of their expected salutary influence on national security. The Soviet Union As noted above, the first breakthrough in South was behind the North Korean invasion of the Korea's move toward rapprochement with socialist South in June 1950 and still continues to supply Trade with the East Bloc (Million $/%) Exports Imports Two-way Total Percent Percent Percent '89 '90 '89 '90 '89 '90 of Increase of Increase of Increase Total 1,962 2,758 40.6 2,261 2,886 27.6 4,223 5,644 33.6 China 1,438 1,580* 9.9 1,705 2,268 33.0 3,143 3,848 22.4 USSR 208 519 149.5 392 370 -5.6 600 889 48.2 East European Countries 270 541 100.4 117 213 82.1 387 754 94.8 Yugoslavia 47 214 355.3 20 42 110.0 67 256 282.1 Poland 56 113 101.8 18 91 405.5 74 204 175.7 Hungary 49 90 83.7 19 23 21.1 68 113 66.2 Czechoslovakia 79 52 34.2 24 23 -4.2 103 75 -27.2 Romania 0.3 22 - 19 3 - -84.2 19 25 31.6 Bulgaria 18 18 0.0 11 21 81.8 29 38 31.0 Others 46 118 156.5 47 35 -25.5 93 153 64.5 Vietnam 45 117 160.0 42 33 -21.4 87 150 72.4 Mongolia 0.1 0.5 400.0 0.5 2 300.0 0.6 2.5 316.7 Source: The Office of Customs Administration * The breakdown of the total does not include all East bloc countries with which Korea trades. Exports to China for 1990 are estimated. Products Traded with the PRC Products Traded with the USSR (Million $/%) (Million $/%) Exports Imports Exports Percent Imports Percent Products Value of Products Value of Percent Percent Increase Increase Products Value of Products Value of Fabrics 328 Increase 43.7 Fabrics 307 Increase 4.8 TVs and parts 142 -8.4 Crude oil and Ships 181 325.5 Pig iron 67 10.7 201 97.4 petroleum products VTRs 66 371.4 Bituminous coal 54 14.9 Plastics 78 -7.5 Yarns and fibers 139 -22.5 Textiles 29 107.1 Aluminum 32 255.6 Yarns and fibers 61 -24.1 Bituminous coal 103 39.1 Electric motors 24 700.1 Crude oil 26 - Paper and Cement -28.1 Frozen seafood 48 95 - Cold rolled steel 23 19 -6.6 31.9 cardboard modern military hardware to North Korea and re- Gorbachev. mains its major economic benefactor. They are thus seen as one important key to a solution to On March 26, 1990, diplomatic relations were the complex Korean question. It is hoped that as opened with Mongolia, the first Asian Communist ties improve between the South and the Soviet country to initiate formal ties with the South. This Union, as its economy is helped by economic ties should favorably affect South Korea-Vietnam re- with the South and as the Cold War winds down lations which are being improved gradually, par- the world over, the Soviet Union will be able to ticularly in terms of economic cooperation. It may convince North Korea to open up to the outside also influence Seoul's relations with China. world and negotiate a peaceful settlement with the The People's Republic of China is North South eventually leading to peaceful unification. Korea's other major ally and though the Soviet Seoul's political and economic goals, therefore, Union has supplied more military aid to the North, basically coincided with Moscow's economic needs China is closer ideologically and is also a source to push the two nations into a rapid acceleration of economic aid. China is attracted by the South's of ties which began with the opening of trade rapid economic development but improvement in offices in April 1989 and culminated in the estab- ties have been complicated by their desire not to lishment of full diplomatic relations on Septem- unduly upset their North Korean comrades. ber 30, 1990, an event preceded and followed by Nevertheless, the constantly increasing economic summit meetings between Presidents Roh and ties between the two countries led in October 1990 to an agreement to establish trade offices with impact on the attitude of North Korea, either to consular functions. The Korean trade office in the South or to the Free World in general. While Beijing opened in January 1991 and the Chinese the initial inclination may be to say, "not much," office is expected to open in Seoul in early March. the truth is that some faint signs are appearing that Two-way trade which rose from $3.1 billion in some shifts are occurring in the North Korean at- 1989 to $3.8 billion in 1990 is expected to increase titude. Only time will tell if these represent a real even more rapidly in the months ahead as the two desire for change or only an extension of the trade offices lay a foundation for better and closer North's pet propaganda trickery. The fact that the economic relations. Seoul hopes that full diplo- Prime Ministers of the South and North have met matic relations with Beijing will follow in the near three times can be an indicator of what is in the future as has been the case with other socialist offing. It is the first time that such high ranking countries but is also well aware that China may officials have met since the division of the nation. be more reluctant to move quickly than was the While no substantial agreements have been Soviet Union. reached, it is still significant that such meetings have been held between the two hostile parts of Korea. The second sign that North Korea may in- Future Prospects and Conclusion deed feel pressured to open up, not only by its own mounting economic problems but by the suc- In a short span of time, Korea's Northern cess of the South's Northern Diplomacy, are the Diplomacy has made dramatic progress due to the talks which it has begun with Japan on normaliz- convergence of several factors as already discussed. ing relations. While all predictions are that the Korea has by now established diplomatic ties with negotiations will be a slow and tortuous process, nearly all the East European nations plus Mon- the fact that P'yongyang has begun to talk to what golia and is turning its attention to the remaining it has called an imperialist enemy all along is a hardline Communist countries, especially those of sign that North Korean attitudes are indeed be- East Asia. While relations have certainly warmed ginning to change. Durable peace and security on even with these holdouts, it may take a relatively the Peninsula and peaceful unification are top na- long time to come to terms with them because of tional goals and will thus continue to be a major their still continuing adherence to Communist goal of Korea's Northern Diplomacy. There seems ideology and their closer ties and sense of com- to be cause for guarded optimism that some radeship with North Korea. Nevertheless, the progress can finally be made toward that end, in events of recent years point to the slow but steady spite of the apparent futility of efforts along that germination of relations with the remaining so- line so far. cialist countries as well. As far as relations with former and present so- A corollary of the success of the Northern cialist countries with which Korea has already es- Diplomacy has been an increase in Korea's inter- tablished ties, the focus will be on ever expanding national stature, enabling it to contribute a great- scientific, technological, academic and cultural ex- er share to the international community. This may changes. The benefits to Korea will come not only well lead in the near future to Korea's being ad- from the increasing diversification of markets mitted into the United Nations, either with North which will certainly help strengthen the economy Korea or on its own. This will mean that the but also from exposure to various hither-to- Republic will have been accepted into the world unknown ideas and cultural experiences. The ex- community as a full-fledged member. tent to which both sides will benefit from the new ties will depend to a great extent on the ability of the East bloc nations to make a success of their brave reforms and put their economic house in order. The question then remains about whether the new ties are already having or will soon have any THE ECONOMY Past Performance, Current Policies and Future Prospects Korean Overseas Information Service/Seoul, Korea February 1991 In the last quarter century, Korea's economic Korea's commodity trade volume increased growth has been among the fastest in the world. from US$500 million in 1962 to US$123.9 billion The country has overcome obstacles and chal- in 1989. Korea had continuously posted trade lenges to transform itself from a subsistence-level deficits until 1985 when the country's foreign debt economy into one of the world's leading newly reached US$46.8 billion, the fourth largest in the industrializing countries. Today, however, the world. During 1986-1989, Korea recorded current Korean economy faces new challenges; internal- account surpluses and its debt declined. ly, it must deal with the inevitable demands that Inflation in Korea had been one of the major come with the process of political democratiza- economic problems in the 70s and early 80s, dur- tion and externally, it is confronted by an increas- ingly complex international trading environment. ing which consumer prices rose at annual rates of between 10-20 percent. Since 1982, Korea has managed to keep inflation down in single digits. Past Performance and Policies The ratio of domestic savings to GNP grew from 3.3 percent in 1962 to 37.7 percent in 1989. Since Korea launched its First Five-Year Eco- nomic Development Plan in 1962, the country's Current Developments and real GNP has expanded by an average of more than 8 percent per year. As a result, Korea's GNP New Challenges has grown from US$2.3 billion in 1962 to US$210 billion in 1989; per capita GNP has increased from The current prospects for the economy, unlike a meager US$87 in 1962 to about US$5,000 in the past, are not so bright. Since 1989, the Korean 1989 at current price levels. economy had been experiencing difficulties, in- cluding slower growth, high inflation and a de- The industrial structure of the Korean econo- terioration of the balance of payments. my has also been completely tranformed. The agricultural sector's share of GNP has declined The GNP growth rate fell to 6.7 percent in 1989 from 37.0 percent in 1962 to 10.2 percent in 1989. from the 12 percent level of previous years. A The manufacturing sector's share has increased slump in the growth rate of the manufacturing sec- from 14.4 percent to 31.3 percent in the same peri- tor, from 18.8 percent in 1987 and 13.4 percent od. The service sector accounted for only 24.1 per- in 1988 to 3.7 percent in 1989, contributed large- cent of GNP in 1962 but generated 46.8 percent ly to the declining GNP growth. The export in 1989. growth rate, which was 36.2 percent in 1987 and 28.4 percent in 1988, fell to just 2.6 percent in Trends of Major Economic Indicators 1989. Reflecting this fall in the export growth rate, the current account surplus was lowered to around Unit '62 '70 '75 '80 '85 '89 US$5.0 billion, a significant drop from the 1988 surplus of US$14.2 billion. GNP US$ bil. 2.3 8.1 20.8 60.5 89.7 210.1 Per Capita GNP US$ 87 242 590 1,592 2,194 4,968 In 1990, the economic growth rate has shown GNP Growth Rate % 2.2 7.6 6.8 -4.8 7.0 6.7 signs of recovery. Preliminary estimates show that Domestic Savings Ratio % 3.3 17.9 17.9 22.9 30.0 36.3 the GNP growth rate during the first three quart- Trade Volume US$ bil. 0.5 2.7 11.7 38.8 52.9 123.9 ers of the year was 9.8 percent. However, most Wholesale Price % 9.4 9.2 26.3 39.0 0.9 1.1 of this growth is attributable to an increase in Consumer Price % 8.3 15.9 25.3 28.7 2.5 5.1 domestic demand, particularly domestic consump- Recent Economic Trends Major Tasks and Policy Directions '90 Unit '89 To cope with the new challenges to economy, (Jan.-Sept.) the Korean Government has made and implement- GNP ed economic measures, including the 'Economic GNP Growth Rate in % 6.7 9.8 Revitalization Package of April 4', the 'Anti Real Manufacturing Sector Growth Rate in % 3.7 8.5 Estate Speculation Package' and 'Stabilization Private Consumption Growth Rate in % 9.8 10.4 Policies'. The major objectives and policy direc- Investment Growth Rate in % 16.2 24.5 tions contained in these measures are as follows: Equipment Growth Rate in % 12.3 18.0 Prices Structural Adjustment and Wholesale Price % 1.1 5.5 Technology Development Consumer Price % 5.1 9.0 First, the Government has made and will make Balance of Payments efforts to improve the international competitive- Export US$ bil. 61.4 46.0 ness of Korean industry. To induce capital invest- Import US$ bil. 56.8 46.4 Current Account Balance US$ bil. 5.1 -0.7 ment in the manufacturing sector and to stimulate sagging exports, the Government increased spe- cial loans for capital investment in the manufac- turing sector and provided funds for the restruc- tion. The growth rate of exports was only 3.2 per- turing of small and medium firms. The Govern- cent compared to the same period of 1989, while ment will increase R&D investment and encourage the growth rate of imports was 10.4 percent. The private enterprises to actively invest in technolo- trade balance fell rapidly to a US$0.5 billion deficit gy development on their own. The Government in the first three quarters of last year from the $4.5 is also placing emphasis on promoting the develop- billion surplus in 1989. In addition, price stability, ment of basic science and technology-intensive sec- which had served to boost Korea's competitive- tors such as semiconductors and new materials ness, weakened; consumer prices, which had ris- industries. For the traditional sectors, product in- en on annual average of 2-3 percent between 1984 novation for higher value-added products is be- and 1987, rose to 9.0 percent in the first three ing encouraged. Industrial restructuring through quarters of 1990. measures such as overseas investment will be The eruption of war in the Gulf has made fu- promoted as well. ture performance of oil prices uncertain. If the on- going conflict results in a substantial and sustained Price Stability rise in oil prices, then Korea's balance of payments Second, the Government will focus on stabiliz- would plunge further into deficit. The cumulative ing prices, wages and real estate speculation. effects of external and internal price hikes will raise Breaking the vicious circle of high wages, high production costs which in turn will diminish eco- prices and low growth is critical for further de- nomic growth and the competitiveness of exports. velopment and also for pursuing economic re- In a nutshell, the current Korean economy faces forms. In this regard, the Government is encourag- many new challenges in both the internal and ex- ing management and labor unions to set up a ternal front. Part of the economic slowdown may "wage increase rule" whereby wage increases will be explained by the cyclical adjustment of the remain within the scope of productivity growth. economy after three consecutive years of high The Government will try to contain the prices growth. However, concerns have been growing of staple goods such as rice by containing the rise that a large share of the slowdown is attributable of the Government purchase price. To prevent the to structural problems, particularly regarding the increase of housing price, a primary source of in- international competitiveness of Korea's industry. flationary concerns in Korea, the Government will institute measures to restrict real estate specula- tion. Additionally, the Government will increase investment for the supply of affordable housing. Resolution of Imbalances and Inequalities 1988, the Korean Government has been undertak- ing appropriate measures to further liberalize In order to resolve imbalances and inequalities foreign exchange transactions and gradually inter- that have arisen in various segments of the econ- nationalize its currency. omy during the process of rapid industrialization, In March 1990, the Korean Government in- the Korean Government will put more emphasis troduced a new foreign exchange system called the on the following: the development of rural areas, "Market-Average System." In this new system, supporting low-income urban classes and the poor, the official rate is determined on the basis of the development of regions which have lagged behind previous day's inter-bank exchange rates. By 1992, the national development standards, and support- the Korean Government will allow direct partici- ing small and medium-sized firms. In particular, pation in the domestic securities market by a set of regulations to deter the overconcentration foreigners and overseas portfolio investment by of land ownership by a minority of the popula- Koreans. tion has been implemented since the beginning of 1990. Increasing Opportunities for Foreign Investors External Policies for Korea is broadening the scope of opportunities open to foreign investors. In 1984, the country in- Greater International Cooperation troduced a negative list system for investment ap- proval which made it clear which industries were Import Liberalization open to foreign investment. Korea is committed to establishing the strate- Since then, the Government has annually in- gies and policies necessary for fulfilling its inter- creased the number of industries on the open list. national responsibilities and roles commensurate Nearly 80 percent of all industry fall into this with its economic status. Import liberalization is, category. The manufacturing sector is almost com- and will continue to be, the guiding principle in pletely open to foreign investors and the service Korea's trade policy. sector is becoming increasingly open as well. By the end of 1992, the current foreign investment Since 1980, Korea has made continuous efforts approval system will be converted to a notifica- towards import liberalization. The import liber- tion system. alization rate increased from 68.6 percent in 1980 to 96.4 percent in 1990. The average tariff rate Closer Cooperation with Developing Countries decreased from 24.9 percent to 11.4 percent dur- ing the same period and is expected to be only 7.9 Because of its successful economic development percent by 1994, the same average level of tariffs in the past quarter-of-a-century, Korea has increas- found in OECD member countries. ingly been called upon to share its development In October 1989, Korea decided to disinvoke experiences with other countries. Trainees from GATT balance of payments protection which other developing countries now come to study the mostly covers agricultural products. According to Korean experience while Korea dispatches develop- the decision, Korea will move to eliminate its re- ment experts to work with governments and busi- maining restrictions or otherwise make them con- nesses overseas. form with GATT rules by July 1, 1997. Furthermore, in 1987, Korea established the Economic Development Cooperation Fund Liberalizing Foreign Exchange Transactions and (EDCF) to provide bilateral official loans to de- Capital Markets veloping countries. As of October 1990, Korea has arranged to provide loans for seven projects in The Korean Government has been pursuing the seven developing countries. The Korean Govern- liberalization of foreign exchange transactions and ment also promotes private overseas investment capital markets. In particular, since Korea joined and technology transfer. the list of IMF Article VIII nations in November Promoting Economic Exchanges Active Participation in with Socialist Countries Multilateral Economic Forums The Government is pursuing a "northern poli- Korea has actively participated in virtually all cy," the aim of which is to promote economic multilateral forums. In the Uruguay Round, Korea relations with socialist countries. The 1988 Seoul has made contributions that are commensurate Olympics provided the impetus for Korea to es- with its capabilities and played a mediating role tablish ties with socialist nations, and "Perestroi- between the developed and developing countries. ka" in the Soviet Union and German Unification Korea has introduced various proposals in the have expanded opportunities in this area. Uruguay Round negotiations to reduce tariffs, eliminate non-tariff barriers, liberalize textile trade, The volumes of Korea's trade and investment with socialist countries have expanded markedly improve safeguarding measures, and reduce sub- since 1988. Trade amounted to US$3.6 billion in sidies and countervailing measures. 1988 and to US$4.2 billion in 1989. Trade with Korea will host the third APEC (Asia Pacific the Soviet Union grew 106.8 percent in 1989 and Economic Cooperation) Ministerial Meeting in 62.1 percent during the first three quarters of 1991. Korea has joined the European Develop- 1990. Trade with East European countries as a whole ment Bank in March 1990 and has committed sup- grew 80.8 percent and 101.2 percent in these same port to development in Eastern Europe. Korea has intervals, respectively. As of September 1990, also begun an informal dialogue with OECD and Korea has invested US$57 million for 44 projects has held an OECD-DAEs (Dynamic Asian Econ- in China and has invested US$119 million in other omies) workshop in 1990, in Seoul. countries. Pre-Advance for Presidential Visit October 22-23, 1991 Shilla Hotel BACKGROUND INFORMATION ON SURVEY SITES NATIONAL CEMETERY The cemetery was created in 1954 as the Armed Forces Cemetery and renamed the National Cemetery in 1965. The cemetery covers 343 acres, and more than 47,000 identified members of the Korean Armed Forces and other illustrious Koreans are buried there. The cemetery is also the resting place of 120,000 Korean military personnel whose remains have not been identified. A memorial tower 30 meters high, constructed in 1967, commemorates these dead. The tomb of the unknown soldier is located on the cemetery grounds. President Park, Chong Hui and his wife are also buried at the National Cemetery. Hyun-choong Gate THE NATIOAL CEMETERY, NATION'S HOLY GROUNDS The National Cemetery, as nation's holy grounds where rest the departed patriots and war dead who threw their precious lives for the defense and prosperity of their fatherland, is the centripetal point of strong national spirit where we can meet with one mind and feel patriotism of those deceased who de- fended our country. This cemetery in its rear side adjoins the ridges of Tongjak hills which are spread like three-fold screens, whose main peak is Mt. Kongjak, alongside the foot of Mt. Kwanak, and in its front side flows the Han River divinely, and ençompasses the soft and comfortable soils covering 1,430,000m² (351acres)of area surrounded with the meandering hills, and watches the glorious history of this country. The National Cemetery was founded on July 15, 1955 as the military cemetery and enshrined only the military officers, enlisted men and military employees, but 10 years thereafter it was elevated as to- day's national cemetery on March 30, 1965 and now some 162,000 patriotic spirits are enshrined in- cluding patriotic martyrs, patriots, meritorious individuals, military officers and enlisted men, police offic- ers and reservists. As people's self-independence spirit become elevated, some million prayers visit this cemetery year- ly throughout the four seasons, and a nationwide memorial ceremony is yearly observed on June 6 to pray the heavenly bliss for those departed patriotic spirits that defended this country throwing their lives and so contributed to what this country is today. THE NATIONAL CEMETERY GUIDE MAP 00 24 Introductory Remarks 1 Main Gate 23 2 Information 3 Management Office 4 Golden Lawn Plaza 00000 5 Memorial Museum 22 6 National Defense Hall 21 7 Education and Movie Hall 8 Hyun-Choong Pond VIA 20 9 110 Hyun-Choong Gate and Tower 19 0 0000 00000 00000 10 Monument for the Ranger Com- mandos D 17 18 11 Monument for the Ten Human 16 000 O Bombs 0 0 12 Police officers Graveyard 15 14 13 Monument for the Police officers 14 West Graveyard for Soldiers 13 15 East Graveyard for Soldiers 12 16 Graveyard for Patriots 1111 17 Second Graveyard for Generals 18 Second Graveyard for Meritorious Citizens 11 19 Third Graveyard for Generals 9 20 Tomb of The Late President Syng-Man Rhee 10 4 21 Farm of Deers 5 22 First Graveyard for Meritorious Citizens 6 ill 23 First Graveyard for Generals 8 3 2 24 Tombs of The Late Mr. and Mrs. 1 President Chung-Hee Park 7 Speaker Installation THE NATIONAL ASSEMBLY The Assembly building located on Yoido, a large island on the Han River, was completed in 1975. It houses offices, meeting rooms, and the Assembly's library. The current National Assembly is composed of 299 members from two political parties. It is the Thirteenth National Assembly since the founding of the Republic in 1948, and was elected in April 1988. The Assembly Speaker is Park, Jyun Kyu. This Assembly has played a larger role in politics and policy-making than previous assemblies. Nonetheless, the ruling Democratic Liberal Party controls the majority of seats. The two opposition parties merged into the Democratic Party in September 1991. The Democratic Party leaders are Kim, Dae Jung and Lee, Ki Taek. THE BLUE HOUSE The Blue House is the official residence of the President of the Republic of Korea. During the Koryo Dynasty, a palace called Yi-Koong, used by the King as a resting place, was located on what are now the grounds of the Blue House. When Kyongbok Palace was built during the Yi Dynasty, the Blue House area was the rear garden of the Royal Palace. In 1927, the Japanese government constructed the present Blue House as a residence for its Governor-General. In 1948 when the Republic of Korea was established, the building was designated as the Presidential residence. After the student revolution (April 19, 1960), the building was redesignated as Chong Wa Dae (Blue Tile House), a name derived from its unique blue roof tiles. SEOUL SCIENCE HIGH SCHOOL Seoul Science High School was established in 1989 by the Ministry of Education as a "direct outgrowth of heightening concern for scientific and technological discoveries which represent the strength of a country in the modern world" as one of seven such schools nationwide and the only one existing in Seoul. It has 30 students to a class, about half of the average class size in Korea, and six classes in each grade, totaling approximately 500 students. It is a co-educational school with female students making up about one-sixth of the population. The applicants must be in the top three percent in their academic records from junior high school and compete in an entrance examination (one in eight is accepted). There are currently 57 teachers. Instruction is highly individualized and non-graded. Many students accelerate their graduation by two years, and about 90 percent enter the Korea Institute of Technology. Students live in dormitories and thus have 24-hour access to computers and laboratories. AMBASSADOR'S RESIDENCE The site of the Ambassador's residence in Seoul has the distinction of being the first property in Korea to be sold to a foreigner. The site has been in U.S. possession for almost a century. The original residence, which housed all American representatives since 1884, was dismantled in 1973. Construction of the new residence for the American Ambassador was begun in 1974. The residence is a combination of basic Korean style with modern features. The traditional exposed beams, columns and rafters were made from spruce and douglas fir imported from the U.S. The representational and private areas are separated by a central court and a broad corridor. A dining room, library, music room, and two guest rooms complete the representational area. U.S. FORCES AT YONGSAN The Yongsan Garrison occupies 714 acres of land just south of Namsan Mountain. The post is divided into three major areas: South Post, North (Main) Post, and Camp Coiner, with several smaller areas adjacent to these three. One hundred and sixty tenant units occupy 1,225 buildings. Additionally, the post provides all the support facilities associated with a small city: a hospital, a fire station, a police force, commissary and exchange facilities, schools, theaters, etc. The United States Forces Korea has approximately 7,000 military personnel stationed at Yongsan. They are augmented by about 1,400 U.S. civilian and 6,000 Korean civilian employees. SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91 5:23PM ; 2025442260-> CCITT G3;# 1 THE ASIAN STUDIES CENTER OF THE HERITAGE FOUNDATION Phone: (705) 546-4400 Fax: (202) 544-2260 202 DATE: December 9, 1991 TO: Jeannie Bunton FAX NUMBER: 456 6218 FROM: Rick Fisher TOTAL PAGES: 7 pgs., ++ cover COMMENTS: : A friend is looking for a list of proverbs and may fax them to you. 214 Massachusetts Ave., N.E., Washington, D.C. 20002 CCITT G3;# 2 OEOR OPY FIND HAS A The Heritage Foundation U.S. and Asia The Heritage Foundation was established in 1973 as a nonpartisan, tax-exempt 2025442260> policy research institute dedicated to the principles of free competitive enterprise, limited government, individual liberty, and a strong national defense. The Fonoda- tion's research and study programs are designed to make the voices of responsible conservatism heard in Washington, D.C., throughout the United States, and in the Statistical Handbook capitals of the world. 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(202) 546-4400 KOREA, SOUTH ECONOMIC STATISTICS CCITT G3;# 3 KOREA, SOUTH (Billions of US$, percentages where appropriate) LAND 1984 1985 1986 1987 1988 1969 1990 Area: 38,200 square miles GDP 87.0 89.7 102.7 128.4 169.2 204.0 223.85 Cultivated: 21.6% Forest: 65.8% Pasture: 1.0% Growth 9.3% 7.0% 12.9% 12.8% 12.2% 6.5% 8.6% Resources: coal, tungsten, graphite, iron ore, limestone, graphite CPI Rise 2.3% 2.5% 2.8% 3.0% 7.1% 5.2% 9.2% POPULATION Exports 29.259 30.289 34.792 47.301 60.679 62.371 63.124 1990 Estimate: 43,350,000 Annual Growth: 0.8% to U.S. 10.027 10.713 13.497 17.991 21.164 20.543 18.5 Life Expectancy: 69 years Literacy: 93% Imports 30.628 31.058 31.734 41.025 51.812 61.556 65.127 Infant Mortality: 23 Fertility: 16 from U.S. 5.983 5.956 6.355 8.099 11.290 13.478 Ethnic Divisions: Korean: 100% 14.4 CurAccount -1.372 -0.887 4.617 9.854 14.161 5.1 -1.8 2025442260-> Workforce: 17,963,000 Unemployment: 3.0% Commerce and Services: 25.5% Manufacturing: 27.5% South Korea is the 7th largest U.S. trading partner. Agriculture and Fishing: 20.5% Construction: 6.0% Government and Public Authorities: 20.0% MILITARY Students: Primary and Secondary: 9,640,000 University: 1,300,000 1990 Military Budget: US$ 10,891,000,000 Increase over 1989: 10.2% POLITICAL Outlay as a Share of GNP: 4.7% Official Name: REPUBLIC OF KOREA As a Share of Government Spending: 31.1% Capital: Seoul Total Regular Forces: 750,000 Type of Government: Multi-party Republic Chief of State: President ROH Tae Woo Army: 650,000 Reserves: 4,500,000 Head of Government: same Navy: 60,000 Airforce: 40,000 5:24PM Foreign Minister: LEE Sang Och Combat Aircraft: 493 1991 Freedom House Index (I is highest, 7 is lowest) Naval Vessels: 3 Attack Submarines, 9 Destroyers, 25 Frigates, 4 Corvettes, 11 Fast- Political Freedom: 2 Civil Liberties: 3 Attack Craft (missile), 68 Inshore Patrol Craft, 9 Minesweepers 1989 Voting with U.S. at U.N.: Not a voting member of the U.N. Security Alliance with U.S.: Mutual Cooperation and Security (1954) Other Security Alliances: none FY 1991 U.S. Assistance (Allocations) Economic: none Military: US$ 1,000,000 U.S. Military Installations: Kunsan Air Base, Uijong-Bu HQ, Tongduchon Army Base, Osan Air Base ECONOMY U.S. Military Personnel: 32,000 Army, 12,200 Air Force SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91 Currency: Won, 1 US$ = 716.4 Won (1990) Foreign Military Personnel: none Major Industries: textiles and clothing, food processing, chemicals, steel, electronics, Armed Opposition Groups: none ship building, automobile production INVESTMENT Major Agricultural Products: rice, barley, vegetables, legumes Major Imports: machinery, oil, steel, transportation equipment, textiles, organic 1990 U.S. Direct Investment: US$ 2,096,000,000 chemicals, grains 1990 South Korean Direct Investment in the U.S.: US$-850,000,000 Major Exports: textiles and clothing, electrical machinery, footwear, steel, ships, auto- mobiles, fish Per Capita GDP: US$ 5,140 (1990) 3 46 47 KOREA, NORTH KOREA, NORTH ECONOMIC STATISTICS CCITT G3;# 4 (Billions of US$, percentages where appropriate) LAND 1984 1985 1986 1967 1988 1989 1291 Area: 47,100 square miles GDP 18.9 19.7 20.1 19.59 20.18 20.78 21.5 Cultivated: 19% Forest: 74% Pastore: 1% Growth 2.7% 4.0% 2.0% 2.0% 2.0% 2.0% 2.0% Resources: coal, lead, tungsten, zinc, graphite, magnesite, iron, copper, gold, phosphates, CPI Rise Da na na 02 salt, fluorspar na па na Exports 0.691 0.638 0.673 0.796 0.931 na 2.1 POPULATION to U.S 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1990 Estimate: 21,293,000 Annual Growth: 1.7% Imports 0.813 0.825 0.839 1.120 25 2.6 2.6 Life Expectancy: 72 years Literacy: 95% from U.S. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Infant Mortality: 27 Fertility: 2.1 Ethnic Divisions: Korean: 100% CurAccuunt na na na na na na na 2025442260-> Workforce: 8,100,000 Unemployment: officially none Trade with North Korea is illegal. Commerce and Services: na Manufacturing: na Agriculture and Fishing: na Construction: na MILITARY Government and Public Authorities: na 1989 Military Budget: US$ 4,154,000,000 Students: Primary and Secondary: 5,000,000 University: 100,000 Increase over 1988: -10.2% POLITICAL Outlay as a Share of GNP: 24% As a Share of Government Spending: 30% Official Name: DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA Capital: Pyongyang Total Regular Forces: 1,111,000 Type of Government: Communist State, one-man rule Army: 1,000,000 Reserves: 540,000+ Chief of State: President KIM II-Sung Navy: 41,000 Airforce: 70,000 5:25PM Head of Government: same Combat Aircraft: 716 Foreign Minister: KIM Yong Nam Naval Vessels: 24 Attack Submarines, 3 Frigates, 3 Corvettes, 34 Fast-Attack Craft 1991 Freedom House Index (1 is highest, 7 is lowest) (missile), 173 Fast-Attack Craft (torpedo), 6 Coastal Patrol Craft, 148 Inshore Patrol Political Freedom: 7 Civil Liberties: 7 Craft, 20 Minesweepers 1989 Voting with U.S. at U.N.: Not a voting member of the U.N. Security Alliance with U.S.: none FY 1991 U.S. Assistance (Allocations) Other Security Alliances: Treaty of Cooperation and Mutual Friendship with USSR Economic: none Military: none (1961); Friendship and Non-Agression Treaty with PRC (1951) U.S. Military Installations: none SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91 ECONOMY U.S. Military Personnel: none Currency: Won, 1 US$ = 2.18 Won (1989 official rate) Foreign Military Personnel: попе Major Industries: machine building, electric power, chemicals, mining, metallurgy, Armed Opposition Groups: none textiles, steel, cement INVESTMENT Major Agricultural Products: com, rice, vegetables, fruits, fish Major Imports: petroleum, machinery and equipment, coking coal, grain 1990 U.S. Direct Investment: none Major Exports: minerals, metallurgical products, agricultural products, manufactures, 1990 North Korean Direct Investment in the U.S.: none machinery, chemicals, fish Per Capita GDP: USS 930 (1989) 44 45 REGIONAL PERFORMANCE FIGURES Area ('000 km2) 047.5 7,682.3 144 46.5 5.8 677 181 9,800 18.3 1.074 3.289 1.948 377.8 122.3 99.2 200.0 % cultivated 12 2.4 83.53 0.8 0.28 15 11 10 15 & 55.1 3125 14.1 19 21.0 3 % forest 3 8.3 14.53 68.7 B5 40 74 13 55 20.6 11.1 30.520 66.4 74 65.4 40 % pasture 45 3.7 4.05 1.9 1 2 3 33.2 3 nil 4.B 5.825 1.7 1 0.1 n.o. Population Total 1999 (m) 15.9 17.1 114.8 1.6 0.3 41.3 7.0 1,119.9 0.8 5.8 883.4 109.4 123.8 21.3 42.0 4.0 % average annual growth '62-'88 2.6 0.8 2.6 2.1 2.5 2.0 2.2 1,4 2.2 0.8 2.1 1.8 0.4 2.1 1.0 2.5 Projected year 2,000 (m) 25.4 19.1 146.6 1.9 0.3 48.8 8.6 1,280 0.0 8.3 1,042.8 223.8 127.5 24.9 40.0 5.0 Years till population doubles 27 90 E2 32 27 34 31 49 32 82 33 38 175 32 72 28 Urban population 92 % of total 18 85 13 5 59 24 11 21 39 B3 26 26 77 64 70 10 Death rate per 1,000 22 7 14 17 3 73 18 7 6 $ 11 0 6 5 B 16 Birth rate per 1,000 46 15 39 38 29 # 39 21 27 13 32 27 10 26 10 41 Infant mortality per 1,000 182 8.7 120 128 11 97 128 37 21 7.4 95 89 4.8 33 30 110 % under 18 years 40 22 48 38 37 37 36 27 38 22 39 30 20 34 27 43 Life expeciency 41 70 54 48 71 55 49 68 63 77 57 59 79 70 08 47 Students Primary 580,500 1.73m 11.6m 63,643 38.083° 6.48m 919.500 123.7m 137,916 534,450 129.9m 30.02m 9.37m n.z. 4.86m 495,7 Secondary 105,000 1.28m 2.8tm 4,370 18,748 1.42m 98,800 80.8m 44,446 450.148 19.77m 4.48m 5.37m 6,8, 4.55m 60.2: University 13,800 441,076 47,039 407 0356 nill 11,500 2.1m 2,000 $9,532 3.1m 1.83m 2.13m n.a. 1,10m 20.00 Workforce Total (m) 4.98 8.41 34.75 0.00 0.00 18.2 3.75 553 0.25 2.73 311 75.1 63.3 7 17.9 1.0 % commerce, services 12.7 61.23 18.07 3.8 26.4 17.65 23 13.2 12.82 82.2 10.5 28.3 64.7 n.a. 42.4 17. % manufacturing 10.2 14.27 10.84 0.7 6.6 7.93 2.8 17.3 8.08 27.7 6.5 6.7 24.1 38 27.0 1.1 % agriculture. fishing 67.8 5.04 65,27 03 5 69.74 80.8 80.2 0.85 0.8 52.3 55 0.2 43 19.5 BC % construction 0.3 6.98 3.08 n.a. 33" 1.14 n.s. 4.4 2.1 8.6 7.2 n.a. 9.3 p.a. B.S D. % govt. and public authorities n.a. 4.85 11.56 2 40 3.59 n.s. 1.8 29 0.7 0.8 1.7 3.1 18 4.4 B.: Social Persons per hospital bad 2,200 est. n.a. 3,277 1.480 250 1,663 n.a. 433 435 232 1,700 1,540 04 n.a. 335 37 Persons per dector 14,471 n.s. 3,488 9,700 1,600 3,947 n.a. 647 2,123 885 4,900 7,044 611 N.R. 938 26,: Literacy rate (%) 12 90 28 20 80.3 70 41 est. n.a. 86 n.a. 36.2 n.a. 99.7 D.H. 98 4 TV receivers ('000) 12 ᵃ n.a. 460 n.a. 63 n.a. n.a. 188,873 50 est. n.b. 2,800 9,002 n.a. It.S. n.a. e Radios ('000) 82326 n.a. 4,000 16 02 n.s. 1779 262,408 350 est. n.a. 37.000 n.a. n.3, n.a. n.w. 35 Telephones ('000) 31.22 4,889.18 241 1.99 49 67.5 27 10,893 38 3,105 ast. 4,300 1,882 n.a. n.3. 15,000 6. Care 35,000 7.44m 52,000 2,411 68,997 n.a. n.e. 1.46m 39,924 213,16914 1.89m 3.05m 56.1m n.a. 2.95m 15, Trucks and commercial 31,000 2.05m 63,000 1,357 13.248 107.283 7,100 3.46m 63,339 137.03016 2.55m 3.05m 21.3m p.a. 1.18m 2.2 Metoraycles n.a. 318,600 188,000 2.882 3,720 n.a. R.B. 3.50m 4,090 18,031 7.5m 14m 17.9m n.a. 1.22m n. Length of rellways (km) 8 38,023 2,740 ntl 12 4,482 550 53,187 820 3410 63,012 4,784.8 25,795 4,380 8,456 a Length of paved highway (km) 2,800 38,219 5,894 1,761 1,0933 n.a. 2.000 862,505 500 1,485'7 1.5m 50,749 5,101.8 n.a. 1.550 2,4 Production & Prices DOP at market prices ('89, US$3) n.s. 292.54 22.79 237.713 3.7 78 n.a. 413 0.57 0.05 270.21 n.a. 2.83 21,3 211.9 0. Per capite income ('89, us$) n.a. 12,452 202 170³ 15,200 - 195 n.a. 371 1,663.8 10,910 330 n.a. 23,033 1,069 4,968 1 GOP in local currency (b) 1987 n.a. 298.4 455.14 3.53 5.68 83.2 n.a. 1.138 0.71 0.37 2,604.4 124,538.9 345,476 23.8 103,423,3 л 1986 R.B. 337.8 465.6 3.88 5.91 71.00 n.a. 1,368 0.72 0.43 2,944 139.452.1 367,389 24.1 127,952.7 - 1989 n.a. 368.6 495.55 n.o. 6.44 76 n.a. 1,573 0.81 0.49 3,488.9 n.s. 391,342 24.4 142,266.9 = 1890 (forecast) n.a. 0.8. 520.53 11.8. n.a. 99 n.a. n.a. n.a. 0.55 3,633.3 n.a. 417,200 24:3 155,320 I GDP, real growth '80 (%) n.e. 3.3 6.2 1ˢ. 2.7 -11,4 n.a. 13.8 12.5 2.3 a.1 7.4 6.1 2 a.7 1990 (forecast) n.e. 2 5.02 n.a. n.a. 7.4 n.a. n.a. n.a. 2.5 4.5 6 4 2 9.0 % avg. GOP growth '85.89 n.a. 3.7 4.02 8.321 п.а. -2.44 n.p. 11.6 1,7 a.s B 8.13 4.52 X 10.4 Agriculture " % GDP 85.327 4.2¹⁸ 37.80 46 n.a. 28 n.a. 33 23.24 0,3 33.04 4,333 2.6 n.a. 10.2 f Manufacturing as % GDP 31.827 15,918 9.94 B n.a. 10 n.a. 21 11.4 20.1 28,7 12.06' 29.2 n.s. 31.3 Gross capital formation as % GOP n.a. n.a. 10.08 6 n.a. 142 n.a. 25.5 n.a. 26.7 22.0 27.54 30.9 n.a. 34.5 Consumer prices (% rise) 1989 n.a. 6 8 8.5 n.a. 38.77 n.a. 17.8 8.1 10.1 8 6.97 2.7 n.a. 6.9 1890 (foracaal) n.B. 6.5 9.3 8.5 n.s. n.a. 200 3.3 a 9.5 13.5 8.11 set. 1.6 n.a. 9.0 GDP deflater '80 (% change) n.a. 5.7 7.1 n.a. M.B. n.e. Л.П. 3.7 n.a. 10.8 n.a. n.a. 1.5 n.a. 4.7 Money growth '69 (M2. %) n.a. 22.8 16.27 35 n.a. 49.43 n.a. 16.2 1020 19.9 18.4 14.7 9.9 n.a. 19.8 1 All universities & colleges have been closed since June 1983 21088 1988 "1984 1987 "1988 "M3 "Incl. forestry 14 Registered private cars & taxis 16 Registered buses, light buses & goods vahicles 16 British section of the Kowloon-Canton Railway Length of public roads "Market prices 20M3 21 1983-88 SEXOI. East limor 26 1978 " 1988-89 target 25 1984-88 29 Peninsular Malaysia only Bowl 6 FAR EASTERN ECONOMIC REVIEW S #:20 CCITT WASS:S SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91 982 238.8 0.017 330.4 0.298 1,564 147.18 270.5 802 462.8 300 0,825 65.5 36 518 332 Area ('000 km2) 21.5 a n.a. 16 n.D. 0.7 18 1.5 20.7 3 41 1.9 35.93' 28 50 20 % cultivated CS.4 40 n.a. 80 n.s. 7 37,8 28.8 0.8 80 52.87 4.5 22,2 64 27 31 % forest C.1 R.B. all - n.a. 78.8 18.4 35.1 0.8 2 1.4 n.m. n.a. n.e. 8 15 % pesture Population 42.9 4.0 0.0 17.9 0.2 2.2 16.1 3.3 114.5 4.0 65.7 2.7 17.2 20.2 88.7 70.2 Total 1990 (m) 1.0 2.5 1.5 2.6 3.7 2.8 2.5 0.8 3.0 2.7 2.5 1.0 1.5 1.5 2.8 % average annual growth '82-'09 230 5.0 0.9 21.8 0.3 2.8 25.3 3.5 149.1 E.1 182.7 8.0 19.4 22,1 62.7 88.3 Projected year 2,000 (m) 72 28 47 28 18 25, 29 82 23 26 27 47, 47 25 Years till population doubles 70 16 97 35 26 52 7 84 28 13 you) 22 20 Urbsn population as % of total 0 18 3 5 9 6 17 a 13 12 a Death rate per 1,000 16 41 18 30 46 36 42 17 44 39 33 20 39 Birth rate par 1.000 30 110 8 30 75 50 112 10.0 110 59 48 0.9 22.5 17 39 80 Intent mortality par 1,000 27 43 23 36 45 41 42 24 44 41 39 28 35 28 & 42 % under 15 years AS 47 76 06 81 55 52 74 58 54 84 70 74 B0 BB Life expectancy Students 4.35m 495,375 19,054 2.33m 32,8203 2.61m 421.394 0.52m 382.093' 0.63m 287,833 12m Frimary 502,800 6.00m 4.55m 00,2261 31,917 1.35m 7,203* 064,000 233,843 $20,000 51,189° $:49m 188,274 155m 834,000 Secondary 1.10m 20,003' 7.809 $1,000 nil 13,200 81,691 204,034 150,549 7,137° 1,45m 60,756 29,748 535,004 502,200 182,000 University SW Workforce 17.9 1.85 0.22 7.05 0.09 0,443 7.5 1,471.3 31.82 0.21" 23.3 1.81 6.4. 8.32 30.5 32 Total (m) 42.4 17.8 R.S. 27.6 n.o. 25.6 6.3 86.6 20.81 58" $8.99 22.8 28.4 23.00 11 % commercs, services 27.6 1.5 38.7 17.3 12.8 22.9 n.a. 17.3 18.54 g. 18.48 28.9 13.4 32.38 11 % manufacturing 12.5 85 0.0 30.8 17.1 0.5 91.8 10.8 51.18 273 45.2011 0.45 47.1. 12.20 58.4 72 % agriculture, fishing 5.a 0.6 8.8 6.0 2,8 7.8 0.7 6.3 6.39 6ª 4.22 6.8 57 8.78 2.6 3 % construction 4,4 n.s n.a. 13.5 n.a. 27.7 1.0 28.3 n.a. 143 n.a. 5.5 10.85 6.2 14 % govt. and public authorities Social 336 362 400 550.1 1,484 87 3.928 122 1,680 728 684 268 3002 232 683 284 Persona per hospital bed 938 26,510 951 2,667 6,451 870 19,674 463 1,848 11,209 4,648 968 4,973 1,000 Persons per doctor 08 41 n.a. 76 95.4 n.a. 35 n.a. 28 48° 87.0 872 02.0 70 90 est.3 Literacy rate (%) n.a. n.a. n.a. 1,741 5,890 123 57 n.w. 01.8 55" 4,349 533 441 5,521 n.a. n.a. TV receivers ('000) n.a. 307 n.a. 443 28,201 223 2,007 n.a. n.s. 50' 5,618 105.12 1,127 4,000 n.a. n.a. Radios ('000) 19.000 8.2 80.56 1,537 M.D. 62.6 76.8 n.a. 808 70e 220 1,240 106 7,883 1.200 140-150 Telephones ('000) 2.03m 15,800 25,295 1.49m 509 n.a. 16,315 1,802,600 266.200 11,796° 1.27ml 270,000 165,737 2.04m 637,243 n.s. Care 1.18m 2,250 3,461 n.a. 358 n.a. 10.996 307,173 M.C. 29,0214 596,209 180.564 n.a. 817,174 1.71m R.E. Trucks and commercial 1.22a fl.a. n.a. 2.70m 2,000 n.a. 29,077 82,328 530,100 1,204 288,902 129,096 307,588 10.21m 4.15m n.a. Matercycles 5,455 all nil 3,644 nil 1,876 62 4,029 8,775 all 639 n.a. 1,677 2,533 3,735 2,500 Length of rellways (km) 1.000 2,447 n.a. 21.330 nil 900 2,898 52,370 58,710 950 160,069 2,838 28,749 17,178 46,000 13,000 Length of paved highway (km) Production & Prices WID GOP at market prices 219.9 0.676 3.08 28.42 0.039 n.a. 2.98 40.1 45 3.57 44.36 29.19 7,009 140.06 08.95 0.08 (88, US$b) 4.0e8 1588 6,877 8,659 490 8803 160 10,588 435 937.9 808 10,810 417 6,889 1,238 200 est. Per capita Income ('89, US$) GOP In local currency (b) 08.428.3 n.e. 18.07 80.0 0.71 n.a. 69.5 60.2 675.4 2.6 708.37 42.01 198.7 8,222.99 1,253.2 205 1987 17.962,7 n.a. 20.89 56.3 0.77 8.9 77.4 63.8 773 3.1 820.83 49.36 221.9 3,496.95 1,507.0 217 ast. 1958 12,288.0 n.a. 24.75 71.8 0.84 n.s. 64.9 68.2 872.6 3.3 964 58.31 252.7 3,878.65 1,795.8 235 1989 56,320 n.a. n.a. 77.88 0.93 n.a. n.a. 72.6 987.2 n.s. n.s. @@ n.a. 4,254.85 n.a. n.a. 1990 (torecast) 6.1 4.0 5.7 7.8 ast. (1,B. n.s. 2.01 1,4 4.8 3.1 5.00 8.2 2.3 7.57 12.2 8.2 GDP. real growth '89 (%) 0.0 5.2 n.a. 8.3 R.S. n.e. 3.5 1.0 6.2 -1,1 3 8 A.S. 5.22 0.5 n.s. 1990 (foresset) 10.4 n.a. 17.7 n.a. n.o. n.s. 4.9 0.8 n.a. 5.3 2.81 0 4.1 9.99 9.95 5,1 % avg. GDP growth '85-'89 10.2 52.6 n.B. n.a. n.a. n.B. 54 8.3 4 30.3 27.08 0.3 25 4.59 15.2 39.3 Agriculture B7 % GDP 31.3 10.0 n.a. n.a. n.a. n.e. 48 13.5 7.1 10 28.30 30.1 15.3 35.59 25.4 31.9 Manufacturing as % GDP Gross capital formation 34.6 n.a. 19.8 n.a. n.a. n.a. 15.6 19.7 14.55 20.5 17.25 86.5 21.8 22.05 30.5 n.a. 88 % GDP Consumer prices 1% rise) 5.0 8D 8.3 4 n.a. n.a. 11.9 7.2 10.72 5.4 10.50 2.4 11.8 4.41 5.4 35 1989 9.0 n.a. N.R. 3.8 n.a. n.a. 14 5.0 6.89 4.5 14 4.5 n.a. 3.99 T 50 1990 (forecest) 4.7 n.a. 11,3 n.s. R.B. n.a. 8.0 5.3 7.57 all 10.53 2.5 9.7 3.11 5.2 n.a. GOP defisior '88 (% change) 10.8 n.s. 21.7 13.5 n.a. n.a. 24.2 3.8 7.2 7710 29 18.1 12 14.3 20.2 242' Money growth '89 (M2, %) Sources: 1990 World Population Data Shael of the population Reference Bureau, Inc. Washington: Review Correspondents. For delinitions ⑉ page 4. CCITT G3;# 6 7 2025442260- : WALLS SENT BY:HERITAGE FOUNDATION-1 :12- 9-91 REGIONAL PERFORMANCE FIGURES Public Expenditure Central govt. expenditure (USSb) 1989 n.a. 59 1.91 0.14 n.e. 1.2 R.S. 79,2 0.38 7,250m 48.3 12.67 007.4 n.a. 30.4 0.17 1080 (budget estimate) n.a. 73.77 2.1 0.12 n.a. n.a. n.a. 70.4 0.37 9,372m 62.5 14.29 500.8 n.a. 34.6 0.21 Defence as % GDP n.a. 2.3 1.94 n.a. n.a. 7.0 N.S. 1.6 8.5 n.a. 0.897 26.8 4.7 n.a. Defence 88 % budget n.B. 9.7 14.82 n.B. 0.8: 8.3 6.8 12.5 16.7 3.47 8.3 n.e. 27.2 0.0 Education as % budget n.a. 7.5 14:00 16.8 14.6 19.4 17.8 3.6 6.44 7.7 n.a. 22.0 a.4 Central govt. revenue (USSD) 1989 n.s. 75.30 3.9 75.7 0.333 8,308m 29.8 13.54 607.4 n.a. 35.9 0.1" 1990 (budget extimate) 506.8 40.6 n.a. 68.5 0.321 10,863m 33.08 18.94 a.s. 0.21 % personal Income tax n.a. M. 11.8 4.2 19.00 38.5 0.3. 14.8 11.6. 39.98 % company Income tax na 25.7 5.0 n.a. 22.4 n.s. 15.3 n.a. % customs, excise, sales, VAT 50.2 40.93 5.7 41.5 35.24 16.6 n.a. 50 13 Budget surplus or deficit as GDP 1,8 3.6 8.5 -3.7 -1.3 n.o. 2.2 $10.0 Foreign Trade Merchandise exports (ussm) 1988 630 2,037 258.37 11.5 47,516 359.38 83,165 12,844 19,824 204,917 1,800 59.550 0,4. 1988 037.58 $01.71 73,142 14,208 23,830 275,775 2,050 61,410 07 1920 (ast.) n.a. 51,285 15,528 R.B. A.O. 2,100 63,500 n.a. % manufactures n.a. 3.98 88 73.8 49.77 85.7 n.a. 84.5 45 % food and farm products 36 est 6 12.5 60.85 2 17.2 8.77 0.8 n.a. 4.1 42 % metals and minerals 60 ast 18.58 - 10.7% 18.71 0.2 5.7 38.17 0.6 n.a. 1,4 no 4.85 Merchandise Imports (US$m) 1988 n.e. 393.9 63,889 19,812 14,311 187,354 2,000 46,200 n.a. 1959 n.a. 390 action 24.1 03:142 560.72 72,151 23,848 17,374 210,847 2,600 53,810 230 1990 (ast.) n.a. 3,750 49,820 61.587 26,235 n.a. n.a. 2,800 65,000 n.a. % plants capital aquipment n.e, 46.87 BQ 00.8 18 15.3 27.10 12,5 n.s. 30.4 0.0 % raw materials and food n.g. 23.92 57 124.0 PAY 14.7 43.82 28.4 n.o. 53.0 11.11. % energy n.e. 4,8 # R.B. 16.5 12.8 14.52 34.9 n.a. 0.0 01.2 Imports and exports 85 % GOP n.s. 27 23.15 18 260.2 14.1 A.M. 39.9 15 69 35 % energy imported (net) n.s. n.a. 1.48 38.8 n.a. 82.3 10 85.5 n.D % lood imported (net) n.a. n.a. 1,61 5 n.a. 28 n.a. 4.0 0.0. % trade with Pacific region (excl. us, Japan) n.a. n.a. n.a. 20 10.9 36.2 42.87 28.3 n.a. 9.8 now % trade with Japan 7.8 11 n.a. 32 8.8 23.02 4.119 8.4 14.7 N.B. % trade with US 0.8 9.9 n.a 14.9 13.58 26.1 nil 17.4 n.s. Terms of trade Index change (%) 1988 n.a. 8.9 15.1 B.O. 99.5 n.s. 2.3 n.a. 2.8 п.п. 1989 n.a. -4.3 -9 n.a. n.a. 7.4 89.3 n.a. -4.2 n.a. 7.6 0.2. 1990 (set.) n.e. n.a. -10 n.a 80.8 est: n.a. n.a. n.a. n.a. -1.8 n.a. Number of visitors 1988 n.a. 2.1m n.w. 1,450 n.a. 2,854 3,272 24.8m 251,000 5.40m 1.63m 2.34m n.a. 2.7m 2,52 Services receipts (USSm) Tourism 1988 n.a. 3,645 8.7 2.01 n.a 8.36 6.a. 2,070 125.57 4,243 1,027 2,393 n.a. 3,265.2 11.24. 1989 n.a. 3,590 16.9 1.9a n.m. 18.31 0,28 n.a. 164.26 4,880 n.a. 3,143 n.a. 3,311 0.10 Investment 1988 n.a. 3,385 54.9 0.4 n.m. n.s. n.a. 2.344 not 14.99 3,110.7 74,837 n.a. 985.0 0.0 1988 n.a. 4,527 78.8 n.a n.a. n.a, n.a. 2,013 net 18.68 2,285.3 101,785 n.a. 1,800 R.D. Transfers 1988 n.a. 9,341 768 0.8 n.a. n.a. n.s. 200 58,74 n.a. 16,524 n.a. 1,608.8 n.a 1989 n.a. 3,652 636 4.8 n.B. n.a. n.s. 214 64.25 n.a. 18.090 n.a. 1,151,8 0.2 Services payments (US$m) An Tourism 1088 n.a. 3,383 77.1 n.s. n.B. n.e. n.m. 833 34.34 2,811 270 n.a. 18,682 n.p. 1,353.3 11.11 1889 n.a. 3,927 113.5 a.a. n.a. n.a. n.a. n.a. 41.97 3,178 378 n.a. 22,490 n.a. 2,356 11.0 Investment 1988 n.a. 13,693 187.9 n.a. n.a. n.a. n.a. 850 46.97 n.a. 2,648 n.a. 53,805 n.a. 2,928.3 n.s 1989 n.a. 17,003 187,4 n.a. n.a. n.a. n.2. N.M. 53.35 n.a. 2,917 n.s. 78,343 n.s. 2,845 0.8 Transfers 1988 n.a. 1,597 n.a. n.a. n.a. n.a. n.o. 5,382 29.90 n.a. 12 n.s. 22,950 n.a. 469.4 5.0 1989 n.a. 1,727 n.s. n.a. n.a. n.m. n.a. 426 20.83 N.R. 26 n.a. 25,845 n.a. 1,127.5 11.00 Current-account balance (USSM) 1988 B.H. 14,095 -1,110.B 41,93 п.в. n.a. n.a. -3,802 +36.42 n.a. -8,810 1,707 79,831 n.a. 14,150.7 -12: 1989 4 18,452 -1,375.8 $3.9 n.a. n.a. n.a. -4,317 -21.78 n.a. -8,640 1,669 57,157 n,a, 5,054.8 -1BE 1990 (forecast) n.a. n.s. -1,558.8 n.a. n.s. n.a. n.a. n.a. n.a. n.a. -11,600 n.a. n.s. n.a. -1.000 :130 Capilal-account balance (US$m) 1988 n.a, 11,472 1,327 n.a. n.o. n.a. n.a. +7,132 -50.77 n.a. -2,970 n.a. -130,030 n.a. -2,732.8 5,4 1989 n.a. 12,073 1,387 n.o. n.B. n.a. n.a. -9,179 -8.11 n.a. +2,720 n.a. -89,245 n.a. -3,362.6 0.0 1990 (forepast) n.a. n.a. n.a. n.a. n.a. n.a. n.a. p.s. n.a. a.s. -500 n.a. n.e. n.B. D.A. n.n. Foreign reserves (US$m) 503.83 17,358 521 57.92 27,000 $00-400 mi. n.o. 15.000 228.98 n.a. 4,150 6,055 75,313 n.a. 15.540 16.1 Public foreign debt (ussm) 1,429" 97,437 8,885.7 73.52 n.a. 4.8b n.a. 40,000 327.4 n.a. 89,700 41,026 all 4,000 29,372 1,10, Public debt-service ratio (%) 5.6 est. n.e. 22.59 65.1 n.a. 80 n.a. 10 11 n.a. 29.3 18.64 nil n.s. 10.9 14 21985 31988 1987 "Electricity Timber & coffee "Tin & gypsum *1986 121nol. health 13/ficl. energy 10 Percent trade with China 22 Excl. Napalese, Sri Lankan nationals, Bangladoshl nationals With Soviel Union Including cradits 24 Finance Ministry ast., November 1980 8 FAR EASTERN ECONOMIC REVIEW 2025442260-> : Wd82:S SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91 CCITT G3;# 7 SAMPLEW Mongoli Guinea Public Expenditure Central govt. expanditure (US$b) J0.4 0.17 n.o. 9.03 0.071 1.8 0.65 17.5 10.58 1.05 9.58 4.05 2.3 48.03 10.3 1.34 1989 34.8 0.21 n.a. 8.94 n.a. 1.3 0.63 17.4 11.48 1.19 4.88 2.6 31.8 11.7 n.a. 1990 (budget estimate) 4.7 n.a. 1.2 1.0 3.34 1.8 3,1 5.20 2.7 n.a. Dalance 88 % GDP n.a. n.s. n.a. n.a. 27.0 n.a. n.8. n.a. 15.3 B 5.8 4.5 25.7 4.80 10 20.1 18.1 n.a. Defence as % budget 22.0 5.4 n.b. n.a. 13.7 16.8 12.5 14.6 n.a. 17.7 2.412 Education as % budget Central gevt. revenue (USSE) 35.0 0.18 0.48 9.15 0.045 1.8 0.33 18.9 6.98 0.88 1989 40.6 0.21 n.a. 0.04 0.078 1.3 0.32 18.8 8.03 n.B. 1990 (budget estimate) 14.0 n.a. n.a. N.B. all 0.6 7.1 47.5 % personal income tax 16.3 n.s. n.n. n.s. all 33.1 2.2 9.4 % company Income tax 50 10 n.a. n.a. n.a. 59.7 85.8 28.2 70 % customs, exclas, sales, VAT Budget surples or deficit 2.2 -13.8" n.a. n.a. 4.2 n.a. -7.6 -1.5 as % GDP Foreign Trade Merchandise exports (USSm) 3,659 R.B. 1,492.9 20,146 44.6 702 164.3 8,209 1988 1,410 07 1,843.1 24,912 n.a. 72222 183.8 9,369.5 1989 1.800 n.a. n.a. 26.700 n.a. n.a. 214.3 2,093.8 1990 (est.) 14.5 468 92.7 69.3 n.s. 15.72 65 24.4 % manufactures 4.1 42' 1.7 n.a. R.B. 393 34 44.5 46 % food and farm products 60 2.1 11.1 n.a. 41.73 1 8.9 1 % metals and minarals Merchandise Imports (US$m) 200 n.a. 1,280.5 14,775 94.6 1,150 635.9 7,005.1 0,391 1.10 8,159 45,427 2,240 49,655 19,565.9 2,545 1988 010 230 1,479.3 21,120 n.a. 1,82733 645.2 7,167.1 7,034 1.20 10,619 51,113 2,243 52,240 28,418.9 n.a. 1889 000 n.z. n.a. 23,173 n.a. R.H. 714.3 9,420 5,035 1.35 11,502 n.a n.e. 58,872 31,700 n.a. 1990 (est.) 6.4 n.a. 10.3 n.a. n.a. 30.2 40 26.0 3a 38 28.38 44.2 13.8 10.4 $6.5 33 % plant, capital equipment 3.6 N.W. 74.1 n.a. n.w. 10.8 25 18.3 33.58 31 46.97 4.8 82.4 72.1 88.1 48.412 % raw materials and food .0 n.a. 4.2 n.a. n.a. 33.8 7.3 6.3 16.75 10.5 14.27 13.8 10,4 5 8.7 n.a. % energy is 35 n.e. n.n. n.a. n.a. 28 46.5 25.84 61.4 -0.31 532 54 80.71 55.4 n.a. Imports and exports as % ODP in n.n. 0.8 all n.s. n.a. 27.2 27,0 13.4 92.9 59.7 n.a. % energy Imported (net) .0 n.a. 0.4 n.a. n.a. n.a. 12.5 n.a. 2 nil n.a. % food Imported (net) % trade with Pacific region a n.a. 47.3 38 n.a. n.a. 38.70 30 n.a. (excl. US. Japen) 7 n.n. 7.2 20.2 n.a. 1 19.7 24.2 10.5 % trade with Japan 4 h.S. 22.3 17.2 n.B. n.B. 16.6 15.7 nil % trade with US Terms of trade Index change (%) a n.a. n.a. 2.0 n.a. n.o. 3.684 5.34 7.7 n.a. 1988 a n.a. n.a. -0.9 n.o. n.a. 10.42 n.a. -6 8.77 -12.3 n.s. 1988 en n.o. n.a. -1.0 n.a. n.a. n.s n.e. R.M. n.s. n.s. 1990 (ast.) in 2,521 5.62m 3.95 109,715 10,000 239,945 001,078 48,010 164,732 2m 4.9m 00,000 Number of visitors 1989 Services receipts (U3$m) 5.2 n.z. n.a. n.a. 37.8 n.a. 107.13 ,082.6 65,1 2,289 3,060.4 57 Tourism 1988 11 0.13 n.a. 841 D.E. 5 99.01 848.6 197 2,689 3,765.1 n.a. 1988 .0 n.a. n.a. n.a. -10.0 n.s. 19.7 759.5 n.a. 305 69.1 3,281 365.5 n.a. Investment 1968 If n.a. n.a. n.a. n.o. n.a. 21 722.3 n.s. n.z. 589 864.91 57.5 6,695 $48.6 n.a. 1989 1.8 -287.02 387.9 2,382 233.3 n.a. n.s. n.a. n.a. 10.1 n.a. 115.8 $85.5 n.a. 219.1 775 Transfers 1988 .8 n.a. A.B. n.a. n.a. n.m. 117.0 570.8 n.a. 217.1 930 -332.93 552.7 2,683 247.0 n.a 1989 Services payments (USSm) .3 n.a. n.a. 1,319.63 0.24 0.8 47.5 1,078.7 n.a. n.a. 70 1,544.08 67.8 4,031 595.8 n.s. Tourism 1988 6 n.a. n.a. 1,382.59 n.a. n.a. 8.3 1,393.0 n.s. n.s. 77 1,872.06 T7.4 4,022 758.3 n.a. 1989 .3 n.a. n.a. n.o. 22.28 n.a. $.6 2,718.3 n.a. n.a. 2,354 619.98 234.8 1,852 2,075.5 n.a. Investment 1960 5 n.a. n.a. n.a. п.в. n.a. 5.1 2,623.3 n.a. n.a. 2,716 684.3 221.4 2,775 2,209.7 n.a. 1989 Transfers 1988 n.a. n.a. N.B. 0.41 n.s. 5.3 385.3 n.a. n.a. 3 -287.02 37.7 3.032 30.0 n.a. 6 n.m. n.a. n.s. n.a. n.a. 10.1 298.4 n.a. n.a. 2 -332.93 27.7 4,350 33.8 n.a. 1989 Current-account balance (USSm) -130 п.я. +1,741 8.4 n.a. -295.4 -1,180.1 1,682 -235.35 -373 1,353.04 -389.1 10,177 -1,633.7 1,3815 1988 0 -180 n.o. -146 0.2 n.a. -310.2 -881.0 1.934 -387.94 -1,465 2,406.17 -285.4 11,384 -2,354.2 n.a. 1989 -100 n.a. -091 3.8 n.a. -365.9 -2,700- 1,852 n.a. -1,600 1,463.27 n.s. n.o. -4.3 H.B. 1900 (forecast) Capital-account balance (USSM) 8 -1,844.07 n.a. n,a, 299.4 321.1 1.209 111.92 492 804.58 281.2 -7.612 +2,835.7 9795 1988 n.a. n.p. $ n.b. n.a. +265.93 n.a. n.a. 411.5 759.3 1.952 327.18 1,527 1,979.47 293.1 -8,249 +5,954.5 n.a. 1989 n.a. N.H. n.a. n.e. 0.8. 290.7 8,100 1,444 п.я. 1,879 1.755.9 0.0. n.a. n.a. n.a. 1990 (foresset) 16.15 0,002 28.8 415.4 3,199.8 135 360 2,234.17 22,697.13 584.7 63,000 12,300 14.0# Foreign reserves (US$m) 0.0. n.s. 1.100 n.A. 14,000 53.58 167,007 883.2 11,761.1 15,600 988.6 26.1 nil. 3,988.4 1,148 11,400 12.04 Public foreign debt (US$m) 14 n.a. 8.5 5.7 n.a. 11.0 21 15.7 12.4 29.7 n.a. 24.4 11,3. 10.5 T73 Public debi-service ratio (%) For definitions see page 4, CCITT G3;# 8 Wd62:S SENT BY:HERITAGE FOUNDATION-1 ;12- 9-91