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26 March 2003

Kelly Calls Fighting Terrorism Top U.S. Priority in East Asia, Pacific

(Testimony to senators on East Asia-Pacific region March 26) (2350)

Combating terrorism is the top priority of the United States with
regard to the East Asia and Pacific (EAP) region, according to
Assistant Secretary of State for East Asian and Pacific Affairs James

In prepared remarks before a Senate Foreign Relations Committee
hearing March 26, Kelly said the fight against terrorism was critical
to obtaining America's other objectives in the region.

The war on terrorism, he explained to senators, "is inextricably
linked to our long-term and overarching goal of regional stability."

Regional stability, he added, "provides the underpinning for
achievement of other key goals and objectives."

Kelly said the Bush administration's goals for the EAP region include:
promoting and deepening democracy; improving sustainable economic
development; countering proliferation and weapons of mass destruction;
countering international crime in the region; and promoting open

The growth of terrorist networks in the EAP region "presents a direct
threat to U.S. national security, to the welfare of Americans overseas
and to the security of U.S. allies and friends in the region," Kelly

The Bush administration, Kelly went on, "will continue to carefully
manage ties" with five regional allies -- Japan, the Republic of
Korea, Australia, the Philippines, and Thailand -- "to maintain our
ability to sustain a stable and secure environment in the region."

Following is the text of Assistant Secretary of State James Kelly's
testimony March 26 before the Senate Foreign Relations Committee:

(begin text)

Assistant Secretary Statement

Bureau of East Asian and Pacific Affairs
Statement by Assistant Secretary James A. Kelly

Senate Foreign Relations Committee
March 26, 2003

Mr. Chairman, I am pleased to share with the Committee our priorities
for assistance in the East Asia and Pacific region.

U.S. Interests

Combating terrorism in the region ranks at the top of EAP's list of
immediate priorities. This is inextricably linked to our long-term and
overarching goal of regional stability, but it also impacts directly
on each of our five top goals for the region: promoting and deepening
democracy; improving sustainable economic development; countering
proliferation and weapons of mass destruction; countering
international crime in the region; and promoting open markets. Since
9/11, combating terrorism has important resource implications that
must be factored into our Bureau business plan.

Terrorism: The growth of terrorist networks in the EAP region presents
a direct threat to U.S. national security, to the welfare of Americans
overseas and to the security of U.S. allies and friends in the region.
Terrorism carries enormous potential to disrupt regional trends toward
peace, prosperity, and democracy. It adds new urgency to our efforts
to pursue non-proliferation and Weapons of Mass Destruction (WMD)
goals in the region, and affects how the Bureau promotes open markets
and transnational crime objectives. Our preeminent goal, therefore,
must be to ensure that terrorism and its practitioners are rooted out
of every country or safe haven and that we address conditions --
financial, economic and political -- that render the region vulnerable
to terrorism.

To succeed in this effort, we must secure the active cooperation of
others in the region. Bilaterally we are cooperating with our five
East Asian allies and partners committed to combating terrorism, and
with China and with other close friends. We are also working very
closely with ASEAN, the ASEAN Regional Forum (ARF), and APEC to
develop regional, multilateral cooperation on terrorism. In FY 04 we
will continue to work closely with other State Bureaus, particularly
S/CT and DS, and with other USG agencies, including Treasury and DOD,
and DHS to further enhance this reinforcing web of bilateral and
multilateral relationships that foster not only a greater U.S. ability
to combat terrorism in the region, but also leverage growing
intra-regional efforts to come to grips with terrorism. Resources for
this effort must come not only from EAP but also from other
counter-terrorism funding sources available to the Department and
other agencies.

Regional Stability: Regional stability remains our overarching
strategic goal and provides the underpinning for achievement of other
key goals and objectives. Active U.S. engagement and renewed emphasis
on our alliance relationships has helped keep the East Asia and
Pacific region generally stable. Nevertheless, the Korean Peninsula
and the Taiwan Strait remain sensitive and potentially volatile. Our
ability to deter conflict is currently strengthened by several
factors, including the mutual interests of key East Asian powers in
working cooperatively to address terrorism and shared interests in
keeping inter-state frictions within parameters conducive to economic
recovery and growth. Terrorism in Asia carries the potential to
destabilize friendly governments in Southeast Asia.

In FY 04, we will continue to carefully manage ties with five regional
allies -- Japan, Korea, Australia, the Philippines, and Thailand -- to
maintain our ability to sustain a stable and secure environment in the
region. Our strategies in this effort include the forward deployment
of military assets. In FY 04 both FMF and IMET will be used as tools
for expanding and deepening U.S. regional influence with allies and
friends. We also will expand our cooperative relationships with other
key regional states, including China, where we will coordinate and
monitor rule of law programs in FY 04. We intend to draw on and
enhance the potential contributions to regional stability of regional
multilateral organizations, including the ARF, APEC, and ASEAN. In
particular, the new ESF funding in our FY04 request will support
expanded U.S. engagement with ASEAN to enhance its stabilizing role in
Southeast Asia.

Democracy: Stability and prosperity create good conditions for the
development of democracy. In East Asia, the generally stable
environment has created conditions in which democratic values have
gradually been incorporated into the governing structures of many
regional states. In the past decade, the Philippines, South Korea,
Thailand, Mongolia, and Taiwan have consolidated their relatively
young democracies. Indonesia, under authoritarian rule for thirty
years, remains engaged in a struggle for democratic transformation. We
will continue our efforts to foster democracy in Indonesia with ESF
and DA funding. These efforts are designed to reinforce educational
opportunity, domestic demand for honest government and greater respect
for individual human rights; they also underscore key dimensions of
the U.S. counter-terrorism effort in Indonesia.

Elsewhere in the region, the democratization process has been slower
to develop. We will continue to promote more open societies and
democratic governments in key areas, including in Laos, Cambodia and
Vietnam. We will focus particularly on states where there is evidence
of some progress toward these goals. These are critical components in
the development of a stable and enduring framework for overall
regional development. We are watching developments closely in Burma
for signs of change. Lately, Burma has shown no signs of interest in a
dialogue with the democratic opposition that could lead to progress in
that country.

International Crime and Transnational Issues: Our strong diplomatic
and military presence in the region will be key to addressing
immediate and pressing transnational challenges that arise. These,
almost by definition, will require multilateral solutions, and several
of them, the most obvious being terrorism, already pose a serious
challenge to regional stability. We will work with USAID, as well as
with other Department bureaus to keep ahead of the advancing trends
that have internationalized once-local problems. For example,
narcotics trafficking and the epidemic of infectious diseases,
especially HIV/AIDS, malaria and TB, are hitting our region harder
now. In coordination with USAID and with INL and OES Bureaus, we are
working to address these problems and seeking to supplement bilateral
solutions with multilateral approaches.

Through our EAP Regional Women's Issues Account, we are developing a
regional approach to the problem of trafficking in persons (TIP). Our
objective is to reduce trafficking of women and children, to eliminate
violence against women, and to increase women's empowerment and status
through increased participation in the political process. Our efforts
have concentrated on TIP projects in eligible Tier 3 countries, such
as Cambodia and Indonesia, to help them improve their performance. In
addition, we are providing assistance to Tier 2 countries that face
the risk of being downgraded to Tier 3. We are adjusting our foreign
assistance and technical training priorities to reduce the level of
trafficking in the region. Our FY 04 request account is for $3

Open Markets/Economic Development: Although related to our goals on
terrorism, democracy and regional stability, promoting open markets
and pro-growth policies is an essential goal on its own merits. U.S.
trade with East Asia now exceeds that with Western Europe. Asia
includes some of the largest and fastest growing economies in the
world. Open economies support U.S. jobs and income, broaden the
foundations on which democratic institutions can be constructed, and
create incentives to settle problems peacefully.

Sustained economic recovery from the Asian Financial Crisis of the
late 1990's will require significant additional reform efforts. We
continue to work multilaterally and bilaterally to help restore
long-term growth prospects by strengthening Asian financial systems,
improving corporate governance and restructuring, promoting regulatory
reform, and pressing for trade and investment liberalization. Recovery
of the Japanese economy is crucial to regional recovery, and we
continue to urge the GOJ tackle deflation and implement fully its
plans for structural and financial sector reform, as well as measures
to become more open to foreign direct investment and trade. We are
pleased with the successful conclusion of negotiations on the
U.S.-Singapore Free Trade Agreement (FTA) and look forward to its
implementation as an example of advancing free trade in Asia. We
closely monitor China's compliance with its WTO obligations, which
will increase the access of the Chinese people to goods, ideas and
information, encourage further economic reform and, advance the rule
of law. We work closely with U.S. business in our effort to promote
these market-oriented, pro-growth policies in the region.

Not all countries in the region have shared in the economic growth.
Significant development needs remain throughout the region, including
in Mongolia and in the Philippines, Indonesia and several other ASEAN
states, particularly ASEAN's newer mainland Southeast Asian members.
We recognize that the immediate post 9/11 demands of the war on
terrorism have diverted resources from this region. These factors
require that we take a fresh look at our program resources and where
they are focused. While we could always spend additional resource on
economic development in the EAP region, we are effectively using our
current level of funding to meet key regional goals such as stemming
the growing links between the EAP region and the South Asia-based
terrorist networks and eliminating poverty in the region that
terrorists are poised to exploit.

Our program requests for FY 04 reflect a realistic effort to address
terrorism directly and also through programs designed to reduce its
appeal to economically and politically disadvantaged populations. Our
Philippines programs offer a good example. Supplemental and FMF
funding is addressing weaknesses in Philippine military capabilities
to combat terrorist groups, while our ESF programs, such as Livelihood
Enhancement and Peace program in Mindanao that has enabled 13,000
ex-combatants to take up peaceful pursuits such as farming, have been
successful in developing better alternatives for populations
susceptible to terrorist recruitment. In FY 04 we must maintain ESF
funding for the Philippines at $20 million to adequately continue
momentum for social foundations for peace. In conjunction with INL, we
are also looking at ways to enhance civilian police capabilities.

Weapons of Mass Destruction: Proliferation of weapons of mass
destruction, nuclear, chemical, and biological, and their means of
delivery have been a major concern in East Asia during the past
decade, but have become even more urgent since 9/11. We continue to
work toward a reduction of this threat, including through discussions
with China focused on getting the PRC to adhere fully to existing
bilateral and multilateral nonproliferation arrangements. The latter
includes China's commitments contained in the November 2000 missile
nonproliferation arrangement, as well as getting China to fully
cooperate in pre-license and post-shipment verification checks related
to U.S. dual-use exports. We are asking for China's cooperation in
bringing other countries under the discipline of multilateral arms
control and nonproliferation arrangements. We are also working to
prevent, contain, and reverse the possibility that such WMD might
become available to non-state terrorist organizations.

Modifications of Current Restrictions: EAP priorities for FY 04 are to
sustain our foreign assistance to Indonesia and the Philippines.
Existing restrictions on our ability to consider a full range of
security assistance options for Indonesia reduce the Administration's
flexibility in military-to-military relations. While conditions are
not now in place to warrant removal of restrictions, we are not
seeking that today; we are working towards the time when that will be

Current legislation restricts assistance to the central government of
Cambodia. Provided that the situation in Cambodia improves, including
successful free and fair elections in July 2003, greater flexibility
in allowing closer cooperation with the central government, might be
in the U.S. national interest: Types of assistance that could then be
considered include: enhancing counter-terrorism capabilities;
promoting rule of law and justice; and developing a smaller more
professional military.

Cambodia needs training in immigration, border security, and other
areas critical to our global fight against terrorism. IMET funds could
be used to professionalize the Royal Cambodian Armed Forces through
training in human rights and rule of law as well as help officers
contribute to regional stability and play an effective role in
transnational issues (narcotics, human trafficking, border security,
and protection of land and natural resources) through additional
training in civil-military relations and military justice.


The foregoing represents a brief overview of the EAP Bureau's top
goals and objectives, and the resources we will need to meet them. It
incorporates our best assessment of the region-wide demands and
requirements we should work to meet, but it cannot incorporate
resource requests for major, unanticipated events that could emerge
without warning in the region, including on the Korean Peninsula.

(end text)

(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)