Japan's economy has recovered from its recession and has resumed its spectacular growth. The Japanese have been playing an increasingly active role in Asian economic and political affairs, a trend which we welcome since it can make a substantial contribution to overall Asian security. In the case of Korea, its direct participation in the Vietnam war, its sponsorship and hosting of the Asian and Pacific Council, its ratification of the Status of Forces Agreement with the United States, and President Park's participation in the Manila Conference are its major international accomplishments during the last year. They are indicative of Korea's continuing political development and her expanding role in regional cooperation. The Korean economy is also making impressive progress with the result that the level of our economic assistance has been gradually declining. The military threat from North Korea remains substantial; continued violations by the North Koreans of the Demilitarized Zone attest to their militancy. The Red Chinese capability for reintroducing forces into the Korean peninsula cannot be ignored. The United States forces in Korea, together with our substantial military assistance to that country's ilitary establishment, are still important to the security of Korea and to stability in the area. Some 46,000 Korean troops, including two full combat divisions, are now in Vietnam fighting side by side with our own forces and the South Vietnamese. This contribution attests to the value of our past assistance, both economic and military. The Republic of China remains more directly menaced by Peking's aggressive designs than any of Red China's other neighbors. Our bilateral security commitment to the defense of Taiwan and the Pescadores remains vital to the survival of the Government of the Republic of China. Although the Chinese Nationalists have been increasingly successful in improving their military supply system, maintaining their equipment and bearing an increasing share of their own defense costs, we will have to continue to supply them certain types of military equipment which cannot be produced locally. With respect to economic assistance, however, we were able to terminate our help to the Republic of China in mid-1965 as a result of that country's great economic progress, a direct consequence of our earlier aid programs. Indeed, Taiwan's economic progress represents one of the most outstanding success stories in the less-developed world. The tensions in South Asia have subsided somewhat over the past year and we are hopeful that both India and Pakistan will concentrate increasingly on their overriding problems of economic and social development. We hope, too, that both governments will take meaningful and necessary steps to improve their relations. Red China's objectives in the sub-continent remain the same: to establish itself as the major political influence in the area; to exploit Pakistan's and India's differences in order to weaken and divide the sub-continent; to prevent or delay the development of a strong, unified India; and to minimize United States and Soviet influence. Soviet Union seeks to maximize its influence in South Asia and to curtail that of both the United States and mainland China. The We recognize the need of both India and Pakistan to maintain adequate armed forces and, indeed, have in the past contributed to the development and maintenance of these forces. However, we suspended our military assistance to both countries during the 1965 Indo-Pakistani hostilities and, since that time, have sold only modest amounts of nonlethal military equipment to them. 5. Near and Middle East The Near and Middle East remain of special strategic significance to us because of: (1) the "forward defense" role of Greece, Turkey, and Iran; (2) the position the area occupies as a political, military, and economic "crossroads"; and (3) the important resources found in this part of the world. The three countries stand between the Soviet Union and the warm water ports and oil resources of the Middle East. The most important potential military threat to these three countries continues to be from the Soviet Union and the Warsaw Pact forces. Our substantial military assistance to Greece, Turkey, and Iran over the past two decades has been a major factor not only in discouraging a Soviet attack on these three countries but also in erecting a barrier against subversive aggression. South of Turkey and Iran, the area is under constant tension resulting from two basic causes, the Arab dispute with Israel and the power struggle among some of the Arab states themselves. The danger inherent in the Arab-Israeli dispute was underscored last November when the Israelis, in retaliation for a long series of guerrilla attacks from across their borders, struck with regular forces against a Jordanian village. We are continually seeking to exert a calming influence on such situations, but any basic improvement in the Arab-Israeli situation is still in the distant future. The contest for power among the Arab states is sparked primarily by the UAR but is encouraged by the weakness of several of the states. This is seen, for example, in the civil war in Yeman. There was some hope last year that the war in Yeman could be terminated quickly, following an agreement in August 1965 between President Nasser and King Faisal. Unfortunately, this did not work out. Although Kuwait has spent an active year as a mediator between the two countries, the prospects for implementation of this agreement are still very uncertain. The USSR, and to some extent the Red Chinese, have continued their efforts to extend their influence in the Arab world by providing military and economic aid. Since 1955, the Soviet Union has provided substantial quantities of military equipment to the UAR, Syria, Iraq, and Yemen. The United States has traditionally sought to avoid becoming a principal military supplier for any of the Near Eastern countries, but Soviet action has forced us to supply certain defensive weapons to selected countries in the area, including Israel, Lebanon, Saudi Arabia, and Jordan. Except for Jordan, our arms have generally been provided on a sales basis; and in each instance, we have sought in consultation with other countries to supply only the minimum necessary to meet the legitimate needs of the recipients and thereby prevent dangerous imbalances. 6. Africa During the past year, military coups or other sudden changes in regime occurred in Dahomey, the Central African Republic, Upper Volta, Nigeria, Ghana, Uganda and Burundi. Certain of these, as in Ghana, have had some stabilizing effect. Others, as in Nigeria, have not as yet stabilized (although the situation there has not deteriorated noticeably in recent months). Moreover, there have been border disturbances between Somalia and Ethiopia, Somalia and Kenya, Chad and Sudan; insurgency in the Portuguese territories, Ethiopia, Rwanda, Sudan, and Congo (K); tribal violence in Nigeria; increased military build-ups and tensions in the Maghreb and the Horn; and extended or continued Communist influence in Algeria, Burundi, Congo (B), Guinea, Mali, Somalia, and Tanzania. Two recent major developments have resulted in United Nations involvement in southern Africa. First, the United National General Assembly adopted a resolution terminating the Republic of South Africa's mandate over South West Africa and establishing an ad hoc committee to recommend practical means by which South West Africa should be administered. Second, following the United Kingdom's unsuccessful efforts to restore constitutional government in Southern Rhodesia, the matter was taken to the United Nations Security Council for action in the form of selective mandatory economic sanctions. It is unlikely that African expectations for the early establishment of majority rule and independence in Southern Rhodesia, South West Africa, and the Portuguese territories will be met. We therefore may anticipate pressures by the Afro-Asian nations in the United Nations for increasingly severe measures under U.N. authority, including the use of force in the form of blockade or otherwide. We have made it clear that our policy is to avoid active military involvement in Africa, and we will exert all of our influence to achieve peaceful resolution of these problems. Communist efforts in Africa at present are having their greatest impact on U.S. security interests in the Maghreb and the Horn. These are the areas of Africa of most immediate strategic concern to the U.S. North Africa on the southern flank of NATO, and the Horn, at the approaches to the Red Sea. - In the Horn, the Soviets have provided significant amounts of equipment to Somalia, thereby heightening Ethiopia's and Kenya's concern about Somalia's claims to large sections of their countries. Somalisupported insurgents already pose significant internal security problems for both these countries. The gradual withdrawal of U.K. forces, including their scheduled departure from Aden in 1968, and uncertainty as to the French position in French Somaliland following the referendum scheduled for this April, could add to the problem by creating a political-military vacuum in the area. 7. Latin America In Latin America our primary goal is to promote the social, economic, and political development of our sister republics so that their people can live in peaceful, prosperous societies. While progress is being made, that goal is far from being achieved. Social tensions, unequal distribution of land and wealth, unstable economies, and the lack of broadly based political structures create a prospect of continuing instability in many parts of Latin America. In a number of countries, a wide gap yawns between expectations and realities, in terms of social status, economic well-being, and political aspirations. The rising cost of living and the insistent desire of the bulk of the population to improve their inadequate living standards give further impetus to the underlying social and political tensions. The answer to these problems, if one is to be found, lies in the success of the Alliance for Progress, to which we and our Latin American friends are devoting so much of our resources. However, if the goals of the Alliance are to be achieved, law and order must be maintained. Accordingly, our military and police assistance programs for Latin America continue to be directed to the support of internal security and civic action measures. We have sought with considerable success to avoid diversion of resources and manpower to the creation or support of unnecessarily large or sophisticated military forces, both to forestall an arms race among Latin American countries and to insure that their limited resources are applied to social and economic objectives. Our FY 1967 Latin American military assistance grant aid programs total about $55 million and our police assistance programs about $5-7 million. In contrast, our programs for economic assistance average over $1 billion a year more than 15 times the amount we allocate for security programs. - It is highly unlikely that any Latin American country will face a direct military attack from any nation outside the hemisphere or from Cuba. The principal external threat to Latin American countries comes in the form of materiel and leadership support of internal subversion and insurgency. The Cuban government, for example, has trained about 5,000 young people from other parts of Latin America in revolutionary ideology, guerrilla warfare, and terrorism. The Communist Tri-Continental Conference held in Havana in January 1966 and attended by delegations from about 80 countries, including the Soviet Union and Red China -- established a permanent organization to provide support, on a global basis for so-called "national liberation" movements, particularly those which had already reached the fighting stage. The Communist parties in Latin America increasingly stress the creation of broad popular "anti-imperialist" fronts. They continue their efforts to penetrate student and other intellectual groups, to control organized labor, and to organize the peasants. A number of bilateral border disputes in the Hemisphere also remain to be solved. Hemispheric harmony will continue to be endangered as long as these disputes remain unresolved, and all the nations in the Hemisphere have an interest in their peaceful settlement. The principle that mutual assistance and self-help are essential to social and economic development has received broad acceptance by our Western Hemisphere neighbors. The Act of Rio, adopted by the Second Inter-American Conference in November 1965, called for a Third Special Inter-American Conference to consider guidelines for amending the Charter of the Organization of American States (OAS). These proposed amendments are intended to strengthen the Organization through structural changes, and to incorporate in the Charter the basic principles and concepts of the Alliance for Progress. The amendments would also give to the Council of the OAS the necessary powers to move more effectively in the settlement of disputes. The Third Special Inter-American Conference is now scheduled to be held in Buenos Aires in February 1967. In addition, the Summit Meeting of American Presidents, scheduled for April 1967, should give new impetus to the Alliance for Progress and strong support at the highest level for dealing with economic and social problems throughout Latin America. The agenda for the meeting, although not firm, will probably include such important subjects as agriculture, education, trade, and economic integration. We hope that arms limitation (such as a regional agreement not to acquire sophisticated weapons) will also be considered. Flowing from these and other actions, we anticipate increased hemispheric solidarity and improved economic progress in the future. |