ASEAN Regional Forum ASEAN Regional Forum
Public Library Publications Annual Security Outlook 2003 United States of America


Introduction and Overview

The outlook for the Asia Pacific Region in 2003 is generally favorable. Economic growth continues in much of Southeast Asia, though the economic impact of the rapidly developing SARS outbreak in Southeast Asia is difficult to assess at this writing. Accounting for over a quarter of the world's gross domestic product, the Asia Pacific region offers enormous economic opportunity. The continued growth of bilateral and multilateral diplomatic exchanges and the more recent initiation of military-to-military dialogues, both bilateral and multilateral, offer optimism that regional disputes will be addressed and resolved peacefully, enhancing regional security and stability.

These overall positive trends are set against a backdrop of ethnic and communal conflict in some countries, and broader political tensions arising form territorial disputes, terrorism, trans-national crime, piracy, lack 'of respect for human rights and the rule of law, and political and/or economical failure in some states. We view this deep concern the worsening situation on the Korean peninsula, caused by North Korea's pursuit of nuclear weapons and other provocative actions, including its suspension of cooperation with IAEA, its decision to withdraw from the NPT, and its claims to have begun reprocessing of spent fuel. North Korea's actions undermine regional security and are a thereat to the global non-proliferation regime.

International terrorism in the region exacerbates tensions in Southeast Asia and complicates the regional security environment. Terrorism carries the potential to undermine the tremendous progress made in expanding democratic governance and prosperity of the region.

The United States will continue to contribute, diplomatically and through its security presence and activities, to improving the political and military environment in the Asia Pacific. The U.S. will work in all available channels and using every available tool to enhance the capabilities of our regional partners to counter the terrorist threat.

Major Issues


Southeast Asia has emerged as a major front in the global war on terrorism, an attractive theater of operations for al-Qaeda and such indigenous terrorist  groups as Jemaah Islamiyah (JI). Bali was the deadliest terrorist attack since 9/11. Recent attacks may have al-Qaeda connections or support; the Jemaah Islamiyah group is clearly involved. The Bali bombings drove home the reality of the terrorist presence in Indonesia, and thus significantly enhanced the potential for region-wide CT cooperation.

A positive step was regional endorsement of the addition of n to the UN 1267 Committee asset freeze. Now two of Southeast Asia's most significant terrorists have been added to the list. The U.S. plans to consult with regional partners about bringing several additions to the freeze list. Progress has been made on capacity building to address financial CT measures, including at conferences in Bali (December 2002) and Singapore (January 2003).

Indonesia has begun to investigate and prosecute indigenous terrorists. Indonesia's investigation of the Bali attacks has led to the arrest of 30 n suspects. We hope Indonesia will widen the net and roll up as much of JI in Indonesia as possible. The arrest of JI leader Abu Bakar Ba'asyir and the promise to try him this year is a crucial step.

Malaysian and Singaporean authorities have taken several effective law enforcement actions (detention of suspects, seizure of explosive materials and financial assets) to stop terrorist activity, including Singapore's detention and interrogation in August 2002 of 21 Jemaah Islamiyah and Moro Islamic Liberation Front suspects. Malaysia's co-sponsorship of the ARF Inter-sessional Meeting on Counter-Terrorism and Trans-national Crime in Sabah in March 2003 and support for a soon-to-open Regional Counter-Terrorism Center in Kuala Lumpur are notable cooperative steps forward in efforts to combat terrorism in the region. U.S. cooperation with Manila to eliminate the terrorist threat in the southern Philippines remains a high priority.

The U.S. will continue to assist with CT capacity building where needed and where it makes sense. The U.S. is looking to regional partners to contribute to this effort-Japan, Australia and the EU have expressed a desire to increase CT assistance primarily in Indonesia, but also with other Southeast Asia states. We are pursuing bilateral and multilateral approaches to combat the threat of terrorism to the region, including counter-terrorism initiatives with ASEAN (Joint Declaration, ASEAN Cooperation Plan) and the ARF (Chairman's Statements on: financial counter-terrorism, piracy and other threats to maritime security, and border security).

The Korean Peninsula

The DPRK's covert uranium enrichment program is, and any reprocessing of spent fuel would be a violation of the U.S.-DPRK Agreed Framework, North Korea's IAEA Safeguards Agreement, the Non- Proliferation Treaty and the North-South Joint Declaration on Denuclearization. Condemnation and calls for immediate dismantlement of North Korea's nuclear weapons program by the international community were prompt. However, rejecting international appeals that it adhere to its obligations the DPRK, through a policy of provocations and brinkmanship, has sought to force the U.S. to negotiate bilaterally and thereby obtain security and financial benefits for violation of its obligations.

These provocations have included its December 2002 unfreezing of the nuclear facilities at Yongbyon and expulsion of IAEA personnel. On January 10, 2003 in response to an IAEA resolution calling on the DPRK to reverse its decision the DPRK announced its withdrawal from the NPT. On-February 26, after the IAEA had reported the DPRK's further non-compliance with its Safeguards Agreement to the UN Security Council, as the lAEA was obliged to do, the DPRK restarted the 5 MW reactor at Yongbyon for the first time since 1994. In March, North Korean aircraft carried out a dangerous and provocative interception of an unarmed U.S. surveillance aircraft operating in international airspace.

The U.S. believes that, given the implications of the DPRK's nuclear weapons program for regional peace and security and for the global nonproliferation regime, the verifiable and irreversible termination of that program must be addressed in a multilateral format. In that regard, we welcome China's efforts to organize the multilateral meeting Beijing in April 2003 and we welcome the DPRK's decision to participate in that meeting. Given the DPRK's record of ignoring bilateral agreements, the international community could only have confidence that North Korea would respect an agreement if it enjoyed wide international participation and support. Once the DPRK's nuclear weapons program is verifiably and irreversibly terminated, the U.S. would be prepared to talk to North Korea about developing a substantially new relationship.

The U.S. will work closely with regional allies and partners to further stability and reconciliation on the Korean Peninsula. Close U.S. and ROK coordination with Japan is a key component of our strategy, carried out in regular meetings of the Trilateral Coordination and Oversight Group (TCOG).


Over the past eighteen months, the challenge in U.S.- China relations has been twofold: to move beyond the downturn in bilateral relations caused by the EP-3 crisis of 2001; and to move aggressively toward a relationship in which shared interests are translated into complementary and/or common policies. The United States seeks a candid, constructive, and cooperative relationship with China that contributes to the promotion of our shared interests in peace, security, and prosperity in the region. U.S.-China relations continue on an even keel following President Jiang Zemin's successful visit and summit meeting last October, and the Secretary's visit to Beijing this February. The past six months have seen successful rounds of the Defense Consultative Talks, Human Rights Dialogue, initiation of a high-level Security Dialogue, and we believe that addressing bilateral concerns through such mechanisms helps foster trust and mutual understanding. While differences remain on issues such as human rights and nonproliferation, the U.S. and China have been successful in ensuring that our differences do not preclude cooperation in the many areas where we have common interests.

While China shares U.S. concern over the North Korean nuclear program, it is trading off competing objectives:
it does not want a nuclear North Korea, but worries about steps to address the problem that might destabilize its northeast border. We are consulting regularly with the Chinese government to address the issue.

China shares our interest in eradicating the scourge of terrorism, and, we have welcomed China's public and private expressions of support and cooperation in our counter-terrorism efforts. China has been a helpful partner in ,the war on terrorism, and counter-terrorism has emerged as a "plus" on the bilateral ledger. China and the U.S. continue biannual consultations on counter-terrorism, begun shortly after 9/11. In designating the East Turkestan Islamic Movement, we indicated that China also faces a terrorist threat, but that this threat should not be used as an excuse to repress legitimate non-violent dissent among China's ethnic minorities.

China has addressed some of our concerns about WMD- related and missile proliferation by Chinese entities, but work remains to be done. Although China's promulgation last year of missile, chemical and biological, and munitions-related export controls was a welcome step, the PRC needs to fully implement and effectively enforce these controls, and there remain "grandfathering"-related questions regarding the November 2000 arrangement.

We seek a China that is a cooperative partner to the United States and its neighbors within this region. We welcome China's engagement in Asia-Pacific and other organizations that promote security and economic development, including APEC, the ARF, and ASEAN+3. While it is premature to judge PRC implementation of its WTO commitments, China's accession to the WTO is a major step towards economic reform and the full integration of China into the global economy. We are hopeful, therefore, that China's new willingness to reach out to its neighbors in multi lateral fora may signal China's recognition that engagement is the most constructive way to develop its role in East Asia. The United States and its Asian allies and partners agree: we seek a constructive course of integration for China into the Asia-Pacific.

Taiwan Strait

The United States remains committed to the peaceful resolution of cross- Strait differences in a manner acceptable to the people on both sides of the Strait. We do not wish to see provocation on either side of the Strait. The United States is committed to the security provisions of the Taiwan Relations Act and in this context provides Taiwan the defense' articles and services it needs to defend itself. Taiwan's perception of threat and, thus, its requests for assistance with its self-defense are determined by the actions and deployments of the PRC.

South China Sea

The United States maintains an explicit position of neutrality with regard to the competing claims in the South China Sea. However, the U.S. seeks to prevent competing claims in the South China Sea from disrupting regional peace, 'security, and freedom of navigation.

We welcome the preliminary Code of Conduct on the South China Sea, concluded on November 4, 2002, designed to avoid hostilities over competing claims there. The negotiating effort contributes to greater understanding and transparency and reduced tensions. We take no position on the legal merits of the competing claims to sovereignty related in the South China Sea and urge a diplomatic solution; we oppose unilateral actions relating to claims in the region. The U.S. has a fundamental interest in maintaining and ensuring freedom of navigation in the South China Sea and in respect by all for the terms of the Law of the Sea; the more concrete the commitments, the more effective it will be.

Since the agreement in early 2000 to open ASEAN-China negotiations on a South China Sea "Code of Conduct," there have been no major conflicts or new occupations in the disputed areas. We appreciate the restraint show by the claimants in the last year and the effective moratorium on new occupations since 1998. The absence of provocative actions is also welcome. We urge all parties to exercise continued restraint and pursue diplomatic efforts to find a resolution to the disputes.


Indonesian perceptions of terrorism shifted dramatically following the Bali bombing. The Government of Indonesia, in the wake of this tragic event, began a wide- ranging investigation, which has led to arrests of many of those directly or indirectly responsible for the bombing. However, actions are somewhat constrained by concerns about potential repercussions if counter- terrorism actions are seen to be anti-Muslim.

In the aftermath of the Bali attack, the GOI issued two anti-terrorist decrees to facilitate the investigation and arrest of terror suspects. Police have detained Jemaah Islamiya (JI) leader, Abu Bakar Ba'asyir, with minimal public outcry. However, the GOI needs to make much further progress in dealing with the security threat posed by extremist groups that are opposed both to secular democracy in Indonesia and the West (particularly the U.S.). It remains to be seen whether Megawati and her government will follow through to secure convictions and maintain the pressure on extremists.

In addition to tackling terrorism, Indonesia must cope with the economic blow dealt by the Bali attacks, which has worsened the business climate at a time when foreign investment is sorely needed. The Indonesian Government continues to struggle with pervasive corruption, a climate of impunity, and a complex relationship with a powerful military. The GOI must be encouraged to maintain efforts to resolve the separatist conflicts in Aceh and Papua through dialogue not military action. The Bali bombings dealt severe blows to Indonesia's tourism sector and investment climate, already poor prior to the bombings. Economists forecast that the bombings could reduce Indonesia's 2003 economic growth rate by as much as one percentage point and widen the GOI's budget deficit. Besides reducing the terrorist threat, Indonesia must speed up economic and judicial reforms to encourage greater private investment. Because of good macroeconomic management, Indonesia will complete its current IMF program in December.

In a promising development, the GOI and the Free Aceh Movement (GAM) signed a cease-fire agreement in December 2002. The agreement was achieved through the mediation of the Center for Humanitarian Dialogue (HOC), a non- governmental organization. Both sides have had difficulty preventing occasional, sometimes serious provocations from within their ranks. The USG is actively working with the HOC to encourage both sides to fully implement the terms of the agreement and not lose the progress made thus far. political process to gamer public support for the reconstruction effort has been seriously lagging behind implementation of the cease-fire.


Efforts to foster peaceful democratic change in Burma have essentially ground to a halt. There have been only a handful of political prisoners released since late November, while there have been new arrests of political activists. Most seriously, the regime has not demonstrated its willingness to begin a real dialogue with the National League for Democracy on substantive political issues. Hopes for progress remain vested with the efforts of UN Special Envoy Resale Ismail. The economic situation has been unsettled, with a banking crisis causing financial uncertainty in the country. The international community is calling for an independent investigation by competent officials from outside Burma into charges of widespread rape by the Burmese military.

As of April 2003, UN Special Reporter for Human Rights Pithier is still in discussions with the Burmese government regarding an independent, credible investigation. Pithier cut short his most recent visit when he learned that his supposedly confidential discussions with political prisoners were being monitored by Burmese authorities. The ILO Liaison Officer (in Rangoon since October 2002) has attempted to engage the GOB in discussions to develop a "viable plan of action" to eliminate forced labor, but so far these efforts have been unsuccessful. USAID provided $1 million of HIV / AIDS assistance to independent NGOs inside Burma in FY 2002; we anticipate expanding this further in FY 2003.

The U.S. is very concerned over the lack of substantive dialogue and continued detention of political prisoners. Political transition is key to the well being of the Burmese people, for economic recovery and for the future transformation of the country. Reports of extensive human rights abuses, especially by the Burmese military in ethnic regions, are deeply troubling; we appreciate support in calling for credible international investigation.


The U.S. will continue to strengthen its security cooperation with the Philippines. Our longstanding counter-terrorism cooperation is stronger after last year's successful "Balikatan " exercises and President Arroyo's speech describing the U.S.-Philippine relationship as a "moral partnership" based on shared values and strategic interests. We are currently pursuing programs that will further enhance Philippine military CT capabilities in line with our global campaign against terrorism. Our current counter-terrorism program is consistent with our robust overall security assistance package for the Philippines.

The U.S. and Philippine governments are concerned by the growing evidence of links between the Abu Sayyaf Group (ASG) and transnational terrorist organizations, including al Qaeda and Jemaah Islamiyah.

U.S. military aid to the Philippines in 2002 enhanced Armed Forces of the Philippines (AFP) capabilities in fighting terrorist groups, in particular the ASG, which had held U.S. hostages in Mindanao. Last year's BALIKATAN CT training exercise built on our training of a Philippine CT light reaction company (LRC) that began in February 2001. BALIKATAN '02 involved some 160 U.S. trainers, including Special Operations Forces, and more than 400 support personnel providing advice and assistance to' Filipino soldiers. U.S. personnel were only permitted to use force in self-defense. Although last year's hostage crisis ended with the death of American Martin Burnham and a Filipina nurse, BALIKATAN dealt significant blows to the ASG and increased the capabilities of the AFP. Despite improvements in the AFP's counter- terrorist capabilities, insurgent groups have been able to launch new offensives. In late 2002 and early 2003, several terrorist incidents occurred, resulting in the death or maiming of numerous Filipinos.

US. Regional Defense Posture and Activities

The United States will maintain significant and highly capable forces in East Asia and the Pacific Rim. This allows the U.S. to playa key role as a stabilizing force and security guarantor to allies. The U.S. will continue a forward presence policy, in cooperation with its allies and friends, which reflects its interests in the region.
Today, roughly half of the U.S. forces in the region are stationed in Japan, and close to 40% are stationed in the ROK. U.s. efforts to build on strong partnerships with other nations in the region buttress the U.S. goal of ensuring stability in Southeast Asia, an area of growing economic and political importance.

The U.S.-Japan alliance is the linchpin of U.S. security strategy in Asia and an important force for stability in the region and around the world. Both nations have moved actively in recent years to update the framework and structure of joint cooperation and strengthen the bilateral relationship. Our alliance relationships with the Republic of Korea, Australia, Thailand and tile Philippines, and our robust security cooperation with Singapore, are also key 'elements of the U.S. contribution to peace and stability in this region. These provide a security framework across East Asia and the Pacific.

The military threat posed by the DPRK continues and the U.S remains committed to its treaty obligations to assist in the defense of the ROK in the event of North Korean aggression. The U.S. continues to work with regional allies, partners, and friends toward a shared goal of a Korean Peninsula free of weapons of mass destruction and their delivery systems.

Threats to the U.S. and international peace and security are diverse and difficult to predict. September 11th demonstrated the need to deal with the full range of threats that we face from terrorism, to the potential use of weapons of ,  mass destruction by states and non-state actors, to long-range missiles intended to intimidate and blackmail us by holding our cities hostage to attack. Hostile states, including a number that sponsor terrorism, are seeking weapons of mass destruction and long-range missiles. To meet this threat, we have developed a strategy that includes non-proliferation, counter-proliferation, and defenses. We also need a new concept of deterrence not based solely on the threat of nuclear retaliation. The new environment also offers an opportunity for reduced reliance on offensive nuclear retaliatory forces, as demonstrated in the new strategic framework with Russia that is founded on common interest and cooperation and advances our goal of having the lowest number of nuclear weapons required to meet our national security needs, including our obligations to our allies. Coalition military action in Iraq, supported by u.s. allies and friends in the region, has eliminated the Saddam Hussein government and its ability to use weapons of mass destruction or transfer them to international terrorist groups.

The United States will continue and build upon bilateral and multilateral exercises with key states in the region. The U.S. has long shared with Asia Pacific nations the objective of strengthening regional cooperation as a means to address common problems. and deal with emerging issues. U.S. defense cooperation efforts in the region, including a variety of multilateral activities, are consistent with this long-standing objective and with ASEAN Regional Forum objectives.

United States' regional security interests include transparency, mutual understanding, and regional cooperation. The U.s. is approaching these objectives by building bilateral and multilateral military-to-military cooperation and capabilities to better face non-traditional trans-national security challenges such as drug trafficking, piracy, terrorism, and humanitarian crises.

The Pacific Command (PACOM) continues to provide education and training to deepen regional security dialogue and to develop crisis action planning, peacekeeping (consistent with UN standards), humanitarian assistance, disaster response, and search and air rescue skills.

With the increased appearance of international terrorism in the region, the need for regional security cooperation and multilateral training has become even more pronounced. PACOM has introduced CT training and exercises to several countries in the region and anticipates being able to do so on a region wide basis. Of particular emphasis is the need to for intelligence sharing and CT mil-to-mil cooperation.

The continued strengthening of U.S. security dialogues and confidence- building measures with the members of ASEAN and through the ASEAN Regional Forum (ARF) are among the many ways the U.S. is seeking to enhance politico-military ties with Allies and friends in the Asia Pacific region.

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