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The Republic of the Philippines faces some continued economic problems and in facing those problems should receive the encouragement and support of the United States.

I am attaching a copy of a letter I sent as a result of our luncheon conversation with President Marcos.

[The letter follows:]

Hon. CATHERINE BEDELL,

Chairman U.S. International Trade Commission,
Tariff Commission Building, Washington, D.C.

DEAR MADAME CHAIRMAN: On a recent visit to the Philippine Islands, President Marcos told our congressional delegation that little things become irritants and mentioned two things specifically. One is the one cent a pound tariff on coconut oil which the Philippines pays and the second is the twenty percent duty on mahogany which the Philippine Islands pay while all other hardwoods pay only a ten percent duty.

I am not aware of the background or the reasons for these tariffs and I would appreciate any information you can provide.

Unless there are strong reasons for retaining them, obviously our friends in the Philippines would appreciate our dropping these particular tariffs. I look forward to hearing from you.

Cordially,

INDONESIA

PAUL SIMON,
U.S. Congressman.

Indonesia, the fifth largest nation in the world in terms of population, has not received the kind of attention and encouragement that country should receive from the United States.

Because of the tremendous natural resources which Indonesia has, the potential for progress is there, a potential that is now being partially achieved. Whether the high birth rates and other problems which afflict Indonesia will permit the continuation of the improvements is a matter of conjecture.

Indonesia presents the same dilemma to the United States that Korea and the Philippines present. The government of President Suharto is providing more freedom than the predecessor government provided. That we can applaud. But there is no question that there are sizable numbers of political prisoners in Indonesia.

I was favorably impressed by the competence of the cabinet level ministers I met with. Whatever President Suharto's assets and liabilities may be, clearly one of his assets is an ability to pick good people for key positions.

This last sentence must be modified, however, with the awareness that there is widespread talk about corruption in government, much more widespread than in any of the other countries we visited on our Asian trip. Again, how much of this the United States should get involved with an issue like this and discuss it frankly with leaders of the Indonesian Government is a determination for which there are no clear-cut answers.

One of the possibilities that Indonesia clearly provides is of a substantial increase in market for U.S. soybeans. Because of the nutritional problems and economic problems which Indonesia faces, stress ought to be on high-protein foods and soybeans obviously present that possibility.

The United States should encourage educational programs through our economic assistance. Congressman Stephen Solarz and I visited a poorer area of Djakarta and it is not easy to forget the 11-year-old boy we talked to who could not go to school because his parents could not afford the $1.25 a month which an education requires.

Indonesia is requesting some military assistance. Because the military assistance is of a conventional nature and very limited, this request for military assistance probably should be honored.

Djakarta has been chosen as the seat for the Asian nations which have formed the organization which they refer to as ASEAN. What is significant is that ASEAN has received encouragement from the European nations, from Japan, Australia, Canada and New Zealand, but has had virtually no contact with the United States. ASEAN should not become a U.S. puppet, and any assistance we give should be low key, but we should express more interest than we are now expressing. India is the only country that has expressed hostility to the organization and the United States is the only major power, other than India, that has not offered cooperation.

One issue which is of significance not only to Indonesia but to the United States is their discovery of natural gas. They have experienced the same slowness from U.S. regulatory agencies that many of us experience. I am attaching a letter I have sent to the chairman of the Federal Power Commission which I hope will produce results in view of the growing shortage of natural gas.

[The letter follows:]

Mr. JOHN N. NASSIKAS,

Chairman, Federal Power Commission,
Washington, D.C.

DEAR MR. NASSIKAS: On a visit to Indochina during the congressional recess I talked with government officials there who are in the process of producing substantial quantities of natural gas.

They have contracted with Japan for approximately three-fourths of their natural gas production and Japan is eager to contract for the balance. This will be available approximately in March 1978.

For reasons of their own economy they would prefer not be totally dependent on one purchaser of natural gas and would like to sell the balance to Pacific Gas and Electric, which I understand has applied to the Federal Power Commission for approval of this sale.

Because of the shortages we will experience in natural gas in the near future it would appear to me (without knowing all the details on the transaction) that this is a sensible arrangement.

The government of Indonesia, however, says that they must know whether the United States is interested in the purchase of the natural gas, otherwise they will have to contract with Japan for the balance.

It would seem to me to be vital to the interests of this nation to make a decision as rapidly as possible on a matter involving the supply of energy.

I don't presume to suggest what your decision should be but I would urge that it be a rapid one, otherwise in fact the Federal Power Commission will be negating a possible source of natural gas for this country.

I'm taking the liberty of sending a copy of this letter to Donald Rumsfeld, of the President's staff.

My best wishes.

Cordially,

PAUL SIMON,

U.S. Congressman.

REPUBLIC OF KOREA

Korea represents the dilemma which the United States faces in many areas. It is more pronounced here, however, because the military situation is more demanding.

The United States must maintain a military presence in the Republic of Korea for at least 5 years in order to maintain stability in that area of the world. It is important here (as elsewhere) that that military presence is not too overwhelming. Not only should the numbers of our troop not be increased, every effort must be maintained to minimize their impact on the Korean cultural scene.

Were the United States to withdraw its troops, it could be taken as a signal by Kim Il Sung that his North Korean troops could march South without interference by the United States. This could bring on assistance then to him from the Soviet Union and the People's Republic of China and cause the major blowup that all of us want to avoid.

Acknowledging the need for a continued military presence, how do we deal with a government that gives its people appreciably more freedom than does the government of North Korea, yet not as much as we generally believe ought to be given?

Here, we must keep in mind that the main city, Seoul, is only 25 miles from North Korean troops. If there is some instability and lack of sensitivity to civil liberties, we must imagine how we would be reacting if Soviet troops were 25 miles from Washington, D.C.

But there is no question that the restrictions on civil liberties are not only a matter of security, they are also a matter of convenience to the Government. How far should we get involved in the internal affairs of another government? Should we be expecting other governments to model themselves completely after our form of government? I think the answer to the latter question is obviously in the negative. At the same time, we have an obligation to press for freedom, even though that pressure for freedom must be handled delicately.

Korea (as Indonesia and the Philippines) presents the dilemma of assistance rather starkly.

My own conclusion is that the CIA type of operation clearly has to be a thing of the past and that any other covert type of activity also must be rejected.

What probably is needed is some type of foreign aid formula which openly and frankly assesses the problems of civil liberties and gives rewards to those nations which show a greater sensitivity in the area. of civil liberties.

The economic progress that has been made by Korea is startling. The United States ought to be learning some lessons from both Japan and Korea in the way of achieving economic progress. How their situation may be applicable to ours I don't know, but when two nations with almost no natural resources can make startling economic progress, we ought to do more than simply applaud. We ought to be studying what they have done, why they have done it, how they have. done it, and apply the applicable lessons to ourselves.

JAPAN

One of the first impressions of a visitor to Japan is not only the economic progress but the high prices!

There are obviously some major economic pluses both in the history and in the future of Japan. There are also some liabilities, liabilities that they have largely overcome in the past and I believe will continue

to overcome.

Among the items of interest to me were these:

(1) They have in a time of relative international instability an unemployment rate (described by them as those "fully unemployed") of 1.7 percent.

(2) Part of the inflation in Japan has been caused by an excessive authorization of currency. Their basic formula is the increase in the gross national product plus the increase in the Consumer Price Index. The result of that, of course, is inflation stimulating more inflation.

(3) One of the things which top Japanese officials expressed to me (though they would not want to be quoted directly) is the fact that in U.S. foreign economic assistance we use far more personnel than they do. As a result, in their opinion, our foreign economic assistance is less effective than it should be. They say that some of the underdeveloped countries get to rely on some of the experts we send in rather than developing their own expertise. I feel this is a criticism that has much validity.

(4) Japan has set for itself a goal of 1 percent of gross national product for the developing nations. Of that 1 percent total, 0.7 percent is to be governmental assistance, approximately half of that in the form of loans, about half of that in the form of grants. The balance is through private investment. The United States has set no specific goals. I feel we would be wise to set some specific goals as Japan has done.

(5) Eighty-six percent of the loans and assistance Japan provides are to Asian countries. Obviously they are providing assistance with a view to their own economic future also. This is particularly significant since 16 of the 25 poorest nations of the world are in Africa today rather than in Asia.

(6) Japanese officials are not pleased by the lack of response of the United States to the needs of the Asian Development Bank. Originally the hope was that one-third of the funds of the Asian Development Bank would be provided by the United States, one-third by Japan, and one-third by other countries. Right now it is approximately 42 percent by Japan and 16 percent by the United States. And as of this writing, the United States is behind on a $50 million obligation to the Asian Development Fund.

Beyond these specific statements I would add that I was most impressed by the caliber of leadership which I found in Japan.

The Asian theater is currently undergoing a transitional period from great power domination to one of more diverse and complex influence centers. The credibility of the United States is now being tested after a serious setback from the Vietnam period. In order to prevent any further erosion we must fully accept the current trends and power shifts to fill the void left by current reassessments. SinoSoviet rivalry has had the effect of limiting the damage to U.S. influence. We must take advantage of this circumstance to set forth our determination and commitment to our Asian friends and assure a continued economic, political and military influence in that region of the world.

We must reassure all parties that we recognize a new order and that no longer can any one single power be dominant. In doing this we must also restate our willingness to be a major and continuing influence not only in Asia, but the rest of the world as well.

In this new era we must recognize the need for self-reliance and integrity of the smaller nations as they attempt to adjust to a changing environment. Likewise, our influence must also adjust to meet the changing demands of these nations. This new period requires more attention to the economic and political aspects of American assistance. In this effort we must recognize the increased influence and position of Japan as a new Asian leader of non-Communist Asian nations through the use of its great economic power. In order to maintain a viable U.S. future foreign policy for Asia we must move toward helping to solve the many economic problems related to food, energy, trade and investments.

As the role of our military influence visibly gives way more and more to the economic and political aspects of foreign assistance, it is vital that our future military posture in Asia be clearly defined. As the basis of all our combined efforts, the military commitment must be fully defined and understood by our allies. In addition, we must also define our commitment to the people of the United States in such a manner that their support can also be counted on in the future.

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