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 TOP > Public Security Intelligence AgencyReview and Prospect of Internal and External Situations (issued in January 2007) > 2. Focal Issues of International Public Security in 2006

2. Focal Issues of International Public Security in 2006

1. North Korea and Chongryon (General Association of Korean Residents in Japan)

(1) Situations of North Korea become tense as a result of the missile launches and nuclear test

]North Korea implements the missile and nuclear test to pave the way for obtaining the status of a “nuclear power” as a fundamental strategy for self-defense and preservation of regime.
]China seeks the settlement in the Six-Party Talks, while supporting the UNSC resolution on sanctions against North Korea and posing to put pressure on North Korea.
]Russia is careful about imposing sanctions while expressing its “grave concern.”
]South Korea shows consideration for North Korea, while its appeasement policy is under fire.

<North Korea implemented the missile and nuclear test>

Although North Korea once agreed, in the Joint Statement of the Fourth Round of the Six-Party Talks (September 2005), to abandon all nuclear weapons and existing nuclear programs, the country later rejected returning to the Six-Party Talks in response to the “financial sanctions” imposed by the United States. On July 5, North Korea test-fired seven missiles including Taepodong-2 and carried out a nuclear test on October 9.
   Such actions of North Korea reflected the country's fundamental strategy to seek the status of a “nuclear power state,”, which was upheld by its military as a strategy to secure self-defense and maintain the present regime, and also can be considered to have been tactics to bring the United States at the table with the North Korea, where North Korea desired for the U.S. to lift the financial sanctions.

<North Korea agreed to return to the Six-Party Talks amid increasing concerns over the nuclear issue in international society>

The United Nations Security Council (UNSC) adopted the North Korea-related resolutions; to condemn North Korea for its missile launches (July 15) and to impose sanctions on North Korea against its execution of a nuclear test (October 14; see the table below), with both resolutions adopted unanimously by all members including China and Russia. North Korea defied each resolution, especially strongly against the “sanctions resolution,” regarding the resolution as “declaration of war” and saying that they would “blast anyone who attempts to infringe on North Korea's autonomy and rights to survive on the pretext of the UNSC resolution” (mentioned by a foreign ministry spokesman on October 17).

UNSC Resolution 1718 (2006) concerning sanctions on North KoreaiSummaryj
The UN Security Council,
  • Reaffirms that North Korea's nuclear test constitutes a threat to international peace and security,
  • Acts under Chapter VII of the Charter of the United Nations, and takes measures under its Article 41,
  • Demands North Korea to:
    - not conduct any further nuclear test or launch of a ballistic missile;
    - return to the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and International Atomic Energy Agency (IAEA) safeguards;
    - return immediately to the Six-Party Talks without precondition and work towards the expeditious implementation of the Joint Statement;
    - abandon all nuclear weapons, existing nuclear programs, all other existing weapons of mass destruction and ballistic missile programs in a complete, verifiable and irreversible manner;
    - cease the export of all items related to the above-mentioned weapons and programs
  • Obliges all Member States to:
    - prevent any transfers to North Korea of the specific items mentioned in the Resolution, including technical training, advice, services or assistance related to conventional arms or related materials, nuclear weapons and missiles and other weapons of mass destruction and their programs, and luxury goods;
    - freeze the funds, other financial assets and economic resources that are owned or controlled by the persons or entities engaged in or providing support for North Korea's nuclear-related, other weapons of mass destruction-related and ballistic missile related programs;
    - prevent the entry into or transit through their territories of the persons or their families engaged in or providing support for the above programs;
  • Calls on Member States to take cooperative action including thorough inspection of cargo, as necessary to ensure compliance with the requirements of the Resolution:
  • Affirms that it shall keep North Korea's actions under continuous review and that it shall be prepared to review the appropriateness of the measures contained in the Resolution, including the strengthening, modification, suspension or lifting of the measures, as necessary.
  • Underlines that further decisions will be required, should additional measures be necessary.

Under those circumstances, China displayed a strict attitude toward North Korea, but at the same time called on relevant countries for “cool reaction.” In an effort to seek the way to resume the Six-Party Talks, the Chinese government sent Tang Jiaxuam, Minister for Foreign Affairs to the United States, Russia, and later to North Korea where the Minister met Kim Jong Il (October 19). It seems that, during this meeting, China requested North Korea to return to the Six-Party Talks and to restrain from any further nuclear tests.
   After this meeting, North Korea agreed to have informal talks among representatives of the United States, China and North Korea to the Six-Party Talks in Beijing (October 31) and then expressed on November 1 that they decided to return to the Six-Party Talks on condition that the issue of the U.S. financial sanctions would be discussed and solved between North Korea and the United States within the framework of the Talks.

Behind North Korea's acceptance to return to the Six-Party Talks after the nuclear test, North Korea may have aimed at obtaining not only the U.S. decision to lift the financial sanctions, which North Korea wanted immediately, but also the opportunity to acquire international recognition of North Korea's status as a “nuclear power” in the course of the Six-Party Talks. It can be also assumed that North Korea wanted the support of China, Russia and South Korea to evade strong criticism from the world as represented by the UNSC Resolution, when food assistance from foreign countries has been decreasing as a result of the launch of missiles and nuclear test.

<China, Russia and South Korea apparently consider it a priority to avoid unstable situations>

Even during the period when the world came to consider North Korea's nuclear development seriously (1993 to 1994), China had been consistently standing against the introduction of sanctions on North Korea on the ground that the sanctions would invite instability of the situations not only of North Korea but also of Northeast Asia as a whole, thus taking the basic stance to stand by North Korea. However, the recent execution of the missile launches and the nuclear test made China angry and react severely against North Korea that did not listen to China's advice for self-restraint. Especially after North Korea conducted a nuclear test, China's Foreign Ministry immediately released condemnation statements on the same day, and then President Hu Jintao explicitly condemned North Korea, saying “North Korea should face severe criticism from international society.” (October 17) In addition, China consented to the draft Resolution of sanctions on North Korea proposed to the UNSC, and took various strict, pressure-like measures against North Korea which China had never done before to North Korea. Behind such severe reactions by China, there seems to have been an intention to prevent North Korea from taking further dangerous action, by warning that China would change its pro-North Korea policy, as well as a desire to maintain the framework of the Six-Party Talks and China's leading position and influence as a chair state. Russia reacted cautiously against any sanction decision which could lead to armed clash while expressing grave concern over North Korea's missiles and nuclear test.
   South Korea also condemned North Korea's missiles and nuclear test, and actually froze the aid of supplying rice and fertilizer to North Korea after the firing of missiles. At the same time, however, South Korea determined to continue the joint projects with North Korea; Mt. Kumgang tourism and Kaesong Industrial Complex project in North Korea, which apparently represented South Korea's appeasement policy, despite increasing criticism inside and outside the country against such determination. In addition, South Korea did not participate in the Proliferation Security Initiative (PSI) led by the United States, in an effort to avoid North Korea's offensive reaction.

<North Korea may be using various political tactics under the policy to be “a prosperous and powerful nation” having the status of a nuclear-weapon state>

It could be expected that North Korea, carefully watching the United States' move after the midterm election (November), would probably attempt to make the best use of the Six-Party Talks framework, continuing to make efforts to persuade the U.S. to lift “financial sanctions” and seeking opportunities to gain international recognition of North Korea's status as a “nuclear power” as well as economic aid from foreign countries, with the goal to be “a prosperous and powerful nation.” Also, it is undeniable that North Korea would go back to a hard line again if the country is not satisfied with the outcome of the Six-Party Talks or does not see any satisfactory resolution of the issue of “financial sanctions.” As the agreement was reached among the United States, China and North Korea to resume the Six-Party Talks, China would probably tactically combine support and pressure in its future negotiations and discussions with North Korea, hoping to see the United States and North Korea solve their problems through mutual concession. However, because of China's reluctance to see the unstable situations of Northeast Asia and its adverse impact on China, China seems to continue to be cautious, for the time being, not to allow any exercise of extreme pressure on North Korea that could collapse the present North Korean regime. Russia is expected to continue its efforts to persuade North Korea to restrain from any more nuclear tests and also return to NPT, while promoting diplomatic negotiations for problem solution in the framework of the Six-Party Talks, with the aim to maintain Russia's influence in those areas by trying to restrain the United States. It could be assumed that South Korea would respect cooperative relations with the U.S. and with Japan to a certain degree, while opposing those countries' strong pressure on North Korea, to seek to resume talks with North Korea, which have been suspended since the nuclear test.

(2) In North Korea, “instability” factors continue to increase.

]With an economic slump, disparity in wealth and inflow of external information make the situation more serious.
]Authorities take great pains to enhance discipline, but in vain.

Historically, the mainstay of the North Korean regime consists of; (1) authority of General Secretary Kim Jong Il, (2) “economic equality” among citizens, (3) strong controlling power of the military and public security authorities, and (4) strict information control. However, the introduction of “Economic Reform” triggered the increase of adverse factors which would affect such mainstay, including the recent spreading of mammonism, widened disparity in wealth, serious lack of discipline, inflow of external information.

<Sanctions and decreasing foreign aid made its bad economy even worse and the disparity in wealth wider>

The economy of North Korea entered into the fourth year since the introduction of the “Economic Reform,” but basic production activities in the country are still slow, because of the lack of energy resources, electricity and raw materials, as well as outdated industrial facilities.
   As for economic interchanges with foreign countries, North Korea faces various difficulties as a result of the “financial sanctions” imposed by the United States, which created a global tendency for financial institutions to refrain from transactions of North Korea-related business. Also, the country's involvement in the production of counterfeit currencies, which seems to be an essential means for North Korea to acquire foreign currencies, as well as its unlawful economic activities, such as the production and smuggling of illegal drugs, became an international concern that has made North Korea's international economic activities more difficult.
   In addition, as for food supplies inside the country, it has been reported that the country's rationing system, which was tentatively resumed in autumn of 2005, has been suspended again with the exception of a certain area in Pyongyang. It is estimated that North Korea seemed to be unable to satisfy even people's minimum food demands, as a result of the flood damage in July together with declining aid from foreign countries as represented by the decreased imports of grains from China and the frozen assistance of rice from South Korea after North Korea's launch of missiles.
   With such economic difficulties, the wage level of general workers continues to hover at a low level, while market prices of grains, etc. are rising continuously. Disparity in wealth between certain wealthy groups such as senior officials of the Party, government and the military and the general public has further expanded, and it can be judged that the once-guaranteed “economic equality” among citizens has become almost nominal.
   Furthermore, not only in the level of general Party members or government officials but also in the military and public security authorities, mammonism has been spread, presumably resulting in the weakened control power of the military and public security authorities.

<Measures to stop the inflow of external information were not working due to corruption of authorities>

The recent vitalization of exchanges with China and South Korea has resulted in the entry and distribution of those countries' videos and CDs of movies and music into North Korea and among its citizens. The North Korean government regarded this phenomenon as “imperialists' ideological and cultural poisoning aiming at collapsing the North Korean regime” and established a special agency at the beginning of the year to implement intensive control over people's life, putting even clothing and hairstyle under close scrutiny.
   However, such control efforts seemed to be hampered by the lack of discipline within the military and public security authorities themselves, who took bribes and turned a blind eye to violations instead of fulfilling their control duties. Thus, it seemed that the government's initiative on information control has not produced material results.

<“Instability” factors continue to increase and dependence on the military seemed to be further strengthened>

The authority of Kim Jong Il is reportedly weakening, as a result of the aggravation of economic conditions and inflow of external information. It is possible that this tendency would be more apparent because of the aforementioned increase of “instability” factors.
   North Korean leadership is expected to continue to make efforts to maintain the present regime by using their controlling power with the support of the military. As the military influence was reportedly growing on important internal and external matters, special attention should be paid to any move of the Kim Jong Il regime.


Unlawful economic activities of North Korea

It has been suggested for some time that North Korea is involved in unlawful production and smuggling of counterfeit currencies, illegal drugs, counterfeit tobacco, etc. Some specialists estimate that such illegal economic activities account for an annual turnover of 500 million dollars, and that such funds are being used by the country's leaders for their secret funds or for the development of nuclear weapons. Alleged illegal activities of North Korea include the following.

<Production of counterfeit currencies>
Since the 1980s, North Korea has allegedly been producing extremely elaborate counterfeit U.S. dollar bills called “supernotes,” which generate an annual turnover of 15 to 20 million dollars. So far, a total of 50 million dollars of the supernotes have been discovered and withdrawn from all over the world.
<Illegal drugs>
The North Korean government is allegedly responsible for producing heroin and stimulants, which generate an annual turnover of more than 100 million dollars. Even diplomats seem to be used as sellers of those illegal drugs. Since 1976, more than 50 North Korean diplomats have been arrested for the possession of or suspected smuggling of illegal drugs in a total of 20 countries in the world.
<Counterfeit tobacco>
North Korea is allegedly producing a large volume of counterfeit tobacco of foreign well-known brands such as “Mild Seven” and “Marlboro,” which generate an annual turnover of several hundred million dollars. Transactions of counterfeit tobacco usually enjoy a large profit margin, and because of this, North Korean military and public security authorities are actively involved in smuggling in cooperation with foreign criminal organizations for extensive transactions.

Main sources: “The Use and Counterfeiting of the United States Currency Abroad” (September 2006), Report of the U.S. Department of Treasury
“Drug Trafficking and North Korea” (March 2005), Congressional Research Service Report

(3) Japan-North Korea relationships become further aggravated due to North Korea's nuclear test.

]North Korea holds Comprehensive Parallel Consultations with Japan, but does not change its adamant attitude.
]North Korea, strongly cautious of expanding criticism by international society against the abduction issue, attempts to calm down public sentiment.
]North Korea reacts strongly against Japan's introduction of countermeasures and condemns the Abe administration.

<North Korea insisted that “the abduction issue has already come to a settlement,” and the Japan-North Korea Comprehensive Parallel Consultations broke down>

In December 2005, North Korea accepted Japan's proposal to have talks based on a comprehensive parallel three-track formula which covered (a) the issue of abduction of Japanese nationals, (b) normalization of diplomatic relations between the two countries, and (c) security problems including nuclear and missile issues, and accordingly, the Japan-North Korea Comprehensive Parallel Consultations were held (February, Beijing).
   However, North Korea insisted that the abduction issue had been settled already, and did not give any positive response toward Japanese demands which consisted of (1) the return to Japan of all surviving abductees, (2) proper investigation and disclosure of the truth and (3) the handing over of suspects directly involved in abduction. As a result, this track was left inconclusive. With regard to the issue of normalization of diplomatic relations, North Korea demanded “compensation” for the damage caused by wartime “compulsory migration” imposed by Japan over Korean people, in addition to economic cooperation referred to in the Japan-DPRK Pyongyang Declaration. Furthermore, concerning the security issues, North Korea showed its intention to make the moratorium on missile launching specified in the Japan-DPRK Pyongyang Declaration invalid. Thus, North Korea continued to stand firm, ending in failure to achieve any material progress in any of the three tracks.

<North Korea attempted to close the abduction issue by making Kim Yong-nam appear at the press conference>

North Korea became particularly cautious of global expansion of criticism of the North Korean government's involvement in abduction cases, especially after the intensification of cooperation between Japanese and South Korean families of abductee victims since Japan's release of the DNA test results (April) showing a high possibility that Kim Yong-nam, a South Korean abductee, is the husband of Yokota Megumi, a Japanese abductee, as well as the meeting (April) of the U.S. President Bush with Sakie Yokota, mother of Megumi. North Korea repeatedly blamed Japan for “bringing the abduction issue to international society with the aim of making North Korea isolated from the world.”
   Under such circumstances, the North Korean government arranged a press conference, where Kim Yong-nam met with the Japanese and South Korean press to assert that he was not abducted and Megumi Yokota passed away. It seemed that North Korea did this to impress upon the Japanese and South Korean public Megumi's death as a fact, hoping to ward off criticism over the abduction issue and have this issue come to an end.
   North Korea also insisted during the session of the United Nations Human Rights Council (June) that “the unresolved issue between Japan and North Korea is not the abduction issue but the issue of wartime compulsory migration.” In addition, during the 4th conference of the International Council to Demand Japan's Liquidation of Its Wartime Past (August, Manila, Philippines) led by North Korea, the country called for the formation of an international anti-Japan circle to demand Japan's prompt “liquidation of its past.” Thus, North Korea attempted to stunt the abduction issue and seek a large amount of “compensation” money from Japan.

<Continuing to stand firm against the Abe administration, North Korea has been strengthening its approach to various groups>

Even after the missile launches (July 5) and the nuclear test (October 9), North Korea continued to insist that the Japan-DPRK Pyongyang Declaration be valid, and at the same time, condemned Japan for its implementation of a series of measures against North Korea (See the table below), which North Korea asserted to be a violation of the Declaration. North Korea maintained its firm attitude, saying that “North Korea would make a countermove.”
   As for North Korea's attitude toward the Abe administration, North Korea earlier refrained from criticizing severely to probe into the position of Abe administration. However, North Korea later came to blame Japan strongly for its enhanced engagement in the abduction issue and implementation of countermeasures against North Korea's nuclear test. North Korea's criticism of the Japanese government became harsher to the point where it demanded the exclusion of Japan from the Six-Party Talks.
   It is expected that North Korea would continue to appeal, via groups like Chongryon, to Japanese politicians, businessmen, mass media and pro-North Korean organizations to reverse public opinion in Japan, and that such an approach could be more aggressive. North Korea would become further rigid in the relation with Japan in the face of the development of the internal and external situations. Therefore, it is necessary to stay cautious of the North Korean movements including possible expansion of its illegal activities.

Major countermeasures taken by the Japanese government on North Korea
Countermeasures against the missile launch
(announced and implemented on July 5)
  • Ban the entry of Mangyongbong-92 to Japanese ports
  • Prohibit, as a rule, North Korean government officials from entering Japan
  • Prohibit, as a rule, North Korean government officials residing in Japan from reentering Japan after their return to North Korea
  • Suspend basically all travel of Japanese government officials to North Korea
Measures taken in accordance with the UNSC Resolution #1695
(announced and implemented on September 19)
  • Block any transfer of funds to the designated 15 organizations and one person strongly suspected of having contributed to North Korea's development of missiles or weapons of mass destruction (restriction on payment and capital transactions)
Countermeasures against North Korea's declaration of a nuclear test
(announced on October 11)
  • Prohibit, as a rule, all North Korean nationals from entering Japan (implemented on the same day of announcement)
  • Ban the entry of all North Korea-registered ships to Japanese ports (implemented on October 14)
  • Ban the imports of all items from North Korea (implemented on October 14)
Measures taken in accordance with the UNSC
Resolution #1718 (announced on November 14)
  • Ban the export of “luxury goods” to North Korea (designated 24 items including automobiles, alcohol beverages and tobacco) (implemented on November 15)

(4) China-North Korea relations turn into mutual distrust and deepened antipathy in complete contrast to “friendly ties.”

]During Kim Jong Il's visit to China, “friendly ties” stressed, but Beijing condemned Pyongyang for its missile launch and nuclear test, exposing their difference in stance.
]Amid mutual distrust, they seem to seek maintained ties.

<Kim Jong Il's visit to China at the beginning of the year gave the opportunity for both countries to show friendship>

Chinese President Hu Jintao visited North Korea (October 2005) shortly after the adoption of the Joint Statement of the Fourth Round of the Six-Party Talks and it was the first visit since his inauguration as President. China evaluated this adoption as a significant achievement which could bring about stability of Northeast Asia and realization of a nuclear weapon-free Korean Peninsula. In return, General Secretary Kim Jong Il of North Korea visited China in January, when the General Secretary praised China's “Reform and Open-Door Policy” and expressed the intention to promote economic exchanges with China, aiming at the economic growth of North Korea. Thus, China and North Korea impressed international society with “friendly and cooperative” relations between the two countries at that time.
   In the context of this friendly atmosphere between China and North Korea, the two countries continued to promote various economic interchanges, keeping the record-high 2005 level of trade activities. At the same time, however, North Korea hinted anxiety over China's increasing influence on North Korean's key ports, important mineral resources, etc., which could possibly make North Korea assimilate into the Chinese economic zone.

<North Korea's nuclear test caused a crack in the ties>

North Korea reacted defiantly against the U.S.-imposed “financial sanctions (September 2005),” and made it a pretext for its persistent refusal to return to the Six-Party Talks. Finally, North Korea test-fired missiles in July and conducted a nuclear test in October, ignoring China's suggestion for self-restraint.
   China expressed its strong anger toward those actions of North Korea, and consented to the UNSC Resolution for sanctions against North Korea in order to suppress North Korea's further implementation of nuclear tests and other dangerous conducts, while raising alert level in the China-DPRK border region. At the same time, China showed the intention to continue its economic aid for North Korea, including the supply of foods and energy, by the name of “humanitarian assistance,” in an attempt to refrain North Korea from conducting another nuclear test. In an effort to bring the situations under control, China also sent its Foreign Affairs Minister Tang Jiaxuan to North Korea and tried hard to persuade North Korea to return to the Six-Party Talks. Facing with such approaches by China, North Korea accepted participation in the chief delegates' informal talks among the United States, China and North Korea (October) and expressed the intention to return to the Six-Party Talks. With the desire to secure North Korea's early return to the Six-Party Talks, China also warned North Korea that China would be “serious about the fulfillment” of the UNSC Resolution (mentioned by President Hu Jintao on November 19). Thus, China combined support and pressure in its approach to North Korea.
   Behind those tactics of the two countries exist the circumstances that North Korea desperately needed economic and diplomatic assistance and other supports from China to maintain the present regime and that China is afraid of a scenario that excessive international pressure on North Korea would result in a collapse of or disturbance around the present North Korean regime, thereby making adverse impacts on China's economic growth and sustainable development.

<Amid mutual distrust between China and North Korea, they seemed to be taking great pains to seek the way of maintaining their ties>

China, from its standpoint of considering stability of Northeast Asia as a top priority, would continue to work hard to maintain the framework of the Six-Party Talks, through various efforts such as avoiding any hasty and excessive pressure on North Korea while maintaining channels with North Korea, combining support and pressure in making an approach to North Korea and extending its approach to the U.S. China would also make efforts to avoid any uncontrollable situation of North Korea and secure stability, by carefully studying various potential measures and possibilities with regard to North Korea's desire to obtain the status of a “nuclear power,” as well as the future of the North Korean regime and impact of international pressure on North Korea.
   North Korea is aware of, but is not satisfied with the way of Chinese approach, but would not probably be able to take any other option than maintaining ties to a certain degree with China, because North Korea could not neglect the aids from China, which were essential for maintaining the regime. At the same time, North Korea would react cautiously and strictly against any emerging events which could make an adverse impact on the stability of the Kim Jong Il regime or its “diplomatic autonomy,” including a certain type of approach and inflow of information from China as well as “coordinated activities” between the United States and China such as the UNSC Resolution and other countermeasures against North Korea.

(5) North and South Korean relationship wanders due to North's missile and nuclear issues.

]North Korea once shows a positive attitude toward intergovernmental dialogues on the issue of “South Korean abductees,” but suspends the talks in protest against the South's reactions after the missile launches.
]South Korean President No Mu-Hyon takes great pains in maintaining its keynote of the appeasement policy toward North Korea, against which international criticism increases.

<North Korea showed a flexible attitude in a discussion over the issue of “South Korean abductees,” aiming at obtaining practical benefits from the South>

In an effort to keep and deepen the friendly atmosphere between the North and the South, which had been created through various occasions including the fifth anniversary (2005) of the June 15 North-South Joint Declaration, North Korea continued to approach South Korea for the formation of the “great anti-conservative alliance,” etc., under the slogans which appealed to national sentiments such as “our compatriot” and “national cooperation.”
   Regarding the issue of “South Korean abductees” to which South Korean people gave much attention, North Korea converted its attitude during the 7th Inter-Korean Red Cross Talks (February) from the stance insisting on “no such existence of South Korean abductees” into the new one to admit its existence by the name of “those reported missing during and after the Korean War” and spoke positively about conducting work for confirming the whereabouts of those missing people. This positive attitude was repeated by North Korea, which stated in the joint press release issued following the 18th Inter-Korean Ministerial Talks (April, Pyongyang) that they would cooperate to reach substantial solution of the issue of South Korean abductees. Also, North Korea arranged the family reunion for “South Korean abductee” Kim Yong-nam. He has been strongly believed to be the husband of Japanese abductee victim Megumi Yokota since his DNA test was conducted by Japan. Kim Yong-nam met his mother and other family members living in South Korea (June, Mount Kumgang, North Korea) as part of the inter-Korean family reunion programs. Behind those actions of North Korea over the issue of “South Korean abductees,” there seemed to be an aim at obtaining large-scale economic assistance from South Korea in return.

<North-South relations cooled down after North Korea's missile launches. South Korean President No Mu-Hyon took great pains in maintaining the appeasement policy toward North Korea>

During the 19th Inter-Korean Ministerial Talks (July, Pusan, South Korea), North Korea strongly criticized South Korea for the expression of regret over North Korea's missile launches and the freeze of rice and fertilizers supply that took place shortly before the Talks. North Korea discontinued the Talks and returned home. In addition, North Korea told South Korea, “there exists no virtual humanitarian problem between the North and the South anymore” (mentioned by the chairman of the Central Committee of the DPRK Red Cross Society in July). North Korea notified South Korea of the termination of the inter-Korean family reunion programs without any mutual consent, and closed all intergovernmental dialogues and humanitarian programs between the North and the South.
   After the UNSC Sanction Resolution against North Korea was adopted following the nuclear test, the North Korea repeatedly released various statements and comments in an attempt to restrain South Korea's participation in the Proliferation Security Initiative (PSI) and their reworking of reconsider the Mount Kumgang tourism project, while North Korea accepted the pro-DPRK Democratic Labor Party as well as South Korean delegates of several civic groups to visit to Pyongyang in order to appeal to South Korea for the maintenance of the appeasement policy.
   On the other hand, the South Korean government suffered increasing criticism of its appeasement policy toward North Korea after missile launches and nuclear test by the North Korea. It resulted in the decreasing approval rate for President No Mu-Hyon which hit a low of the 10% mark for the first time since his inauguration. In response to this criticism, the President himself hinted at possible reconsideration of the appeasement policy shortly after the nuclear test, but later made a decision to basically maintain the joint projects of Mount Kumgang Tourism and Kaesong Industrial Complex, reasoning that “those projects symbolize the peace and safety of the Korean Peninsula and are supposed to play an important role in giving North Korea the opportunity to experience market economy and make a step toward an open-door policy” (speech on the administrative policies on November 6). In addition, the No Mu-Hyon administration refrained from the decision to officially participate in PSI, which had been requested by the U.S.. Thus, South Korea determined to maintain the keynote of the appeasement policy.
   Under such circumstances, South Korea disclosed (October) a group of North Korean operatives who were believed to have secretly approached the South Korean politicians under the direction of North Korea, which had enormous repercussions in South Korean society.

<The North might enhance approach to the South in view of the coming South Korean Presidential election>

It was noteworthy that the issue of whether or not the No Mu-Hyon administration would continue to maintain the appeasement policy toward North Korea would be a crucial point for the presidential election to be held in December 2007. Now, the world is paying close attention to any result of the election which is considered to make a big impact on the situations of Northeast Asia. The No Mu-Hyon administration, who desires to win the election, is reportedly seeking the opportunity to hold the North-South summit meeting. In this context, South Korea's move has drawn much attention.
   North Korea, carefully observing such situations in South Korea, is expected to strengthen criticism of South Korean conservatives including the opposition Grand National Party and also to seek the solidarity of anticonservatives. By doing so, North Korea would probably enhance approaches to South Korea, both overtly and covertly, with a hope to see supporters of the appeasement policy prevail and maintain office.

(6) In an unfavorable situation, Chongryon tries to strengthen solidarity and control of its organizations.

]Justifies North Korea's missile launches and nuclear test, they call upon “all levels to rise up to defend the organization,” emphasizing “struggle against the suppression by the Japanese government

<Activists and Chongryon members increased opposition and adverse feelings against the North Korean government, resulting in further decline of Chongryon's organizational strength>

In recent years, Chongryon (General Association of Korean Residents in Japan) has been working hard to strengthen solidarity of Korean residents in Japan and ideological education for them, in order to put the brakes on the declining organizational strength (influence and the ability of fund raising) which has been conspicuous since 2002 when General Secretary Kim Jong Il made an admission of the fact of abduction of Japanese nationals. However, North Korea's firing of missiles (July) and a nuclear test (October), amid the said efforts of Chongryon, struck additional blows to their organizations and activities.
   As a result, not only Chongryon's general members but also senior activists increased their adverse feelings against the North Korean government, resulting in that more and more members are leaving the Chongryon organizations. Some members even refused offers of their children's entrance into Korean schools. Support of funds from Korean business circles also decreased, forcing some organizations to suffer financial difficulties. Furthermore, the overall activities of Chongryon organizations are on the decrease, in which some members refused to donate and activists evaded a fund-rising campaign for the flood damage in North Korea. Also, the ban on the entry of Mangyongbong-92 into Japanese ports imposed as a countermeasure against North Korea's missile launches was damaging to Chongryon. The ban on the entry of the ship, which had been regarded as “a symbol of ties between compatriots in Japan and their fatherland,” did not simply hinder activists' dispatch and sending goods to North Korea but also upset a large number of Chongryong members.

<Chongryon emphasized “legitimacy” of the missile launches and the nuclear test, in an effort to brace its organizations>

The central headquarters of Chongryon had a sense of crisis on above-mentioned situation, and since August, their senior officials of central headquarters repeatedly gave guidance to regional organizations and also held emergency seminars nationwide in order to prevent emotional disturbance within the organizations and to brace them.
   During those seminars and guidance activities, Chongryon insisted that “the missile launches were a part of military drill for self-defense and carried out as of right,” “the nuclear test was a countermeasure against the U.S. hostile containment policy” to justify those events and obtain members' understanding.
   Chongryon also admitted that they were facing the strongest adverse wind ever, and emphasized defense efforts where, Chongryon insists, it would be important to firmly maintain loyalty to General Secretary Kim Jong Il and fight hard against “pressures” on Chongryon such as the ban on Mangyongbong-92. Chyongryon has been fighting especially strongly against the Japanese government's decision to implement a series of countermeasures against North Korea, along with the deliberation to reconsider tax incentives applied to Chongryon for fixed property tax, by saying that those actions “are the most malicious attempts of subversion and political suppression on Chongryon the Japanese government has ever made before,” and called upon members to rise up to have the Japanese government withdraw the implementation of the countermeasures. Thus, Chongryon has been trying hard to raise fighting spirits and strengthen solidarity within the organizations, by regarding their actions as “fights to denounce the enemy and make them retract.”

<Chongryon vitalized publicity activities to demand the withdrawal of Japan's countermeasures against North Korea>

Although Chongryon displayed opposition to the Japanese government's countermeasures against North Korea's launch of missiles, they earlier had refrained from any activities to condemn the Japanese government, paying consideration to severe public sentiment against the North Korean government. However, when North Korea declared to return to the Six-Party Talks (November 11), Chongryon considered that “things would be most possibly in favor of North Korea as a result of the announcement on the resumption of the Six-Party Talks,” and then vitalized protests against and requests with the Japanese government under the policy to “call upon Chongryon organizations of all levels to rise up to fight hard in defense, cooperating with homeland.” During those activities, Chongryon insisted that the Japanese government's implementation of countermeasures against North Korea and deliberation to reconsider tax incentives applied to Chongryon for fixed property tax “are an outrage that violates the interests and human rights of Korean residents in Japan.” Chongryon carried out extraordinary sit-in demonstrations in front of the Diet Building as well as protest rallies in major cities nationwide, and also called on regional activists to place a request with Diet members from their regions for the support of Chongryon. In addition, Chongryon extended its appeal to foreign journalists and international organizations in Japan.

<Chongryon seeks to strengthen its solidarity to be prepared for the 21st Congress>

It is expected that Chongryon, which is facing the deep-rooted dissatisfaction of its activists and members, will work harder to strengthen the solidarity of its organizations by actively and intensively promoting various activities including protest rallies against the ban on Mangyongbong-92 during the period of “six-month campaign” which Chongryon has designated as a preparation period before the 21st Congress of Chongryon to be held in May 2007. It is also expected that Chongryon will seek to reverse Japanese people's adverse feelings concerning North Korea by strongly insisting that the Japanese government's countermeasures against North Korea would be “human rights violation.”


Declaration of and later rupture of “harmony” between Chongryon and Mindan

Chongryon (General Association of Korean Resident in Japan) and Mindan (Korean Residents Union in Japan) held the summit meeting for the first time and announced the “Joint Statements” to declare “harmony” between the two organizations. However, this declaration of “harmony” broke off when North Korea fired missiles.
Behind this rupture is the difference in fundamental attitude between them, where Mindan intends to build symbiotic relations with Japan while Chongryon sticks to loyalty to General Secretary Kim Jong Il and even justifies the missile launches.

April 11: During the visit of Mindan Central HQ Head Ha Byong-OK to South Korea, President No Mu-Hyon agreed to the establishment of “harmony” between the two Korean organizations in Japan
May 17: Summit Meeting was held between So Man Sul, Chairman of the Central Standing Committee of Chongryon and Ha Byong-Ok, and they released “Joint Statements” consisting of six items of agreement.
  (Afterwards, Mindan suffered confusion within the organization when its members increased the voice to oppose the “harmony” and demand the withdrawal of the Joint Statements.)
July 6: Mindan Central HQ declared a complete withdrawal of the Joint Statements because of the launch of missiles by the North Korean government.
August 22: Ha Byong-Ok resigned as Head.
September 21: Mindan Central HQ held the 50th Temporary Central Conference, and Chong Jin, who is negative about the “harmony,” was elected as new Head.

2. China

(1) President Hu Jintao sets the goal of building a “harmonious society” while seeking to strengthen the foundation of his regime. ]Although the construction of a “harmonious society” is placed at the top of the government agenda, China's social and economic problems become more serious. ]On the strength of reinforced anti-corruption measures, Secretary of CPC Shanghai Committee and other senior officials were dismissed, allowing the Hu Jintao administration to strengthen its power base.--

<Building a “harmonious society” has been placed at the top of the agenda of the Hu Jintao administration>

Facing the serious widening of the gap between the rich and the poor as well as aggravated corruption, which would lead to social instability, the Hu Jintao administration highlighted, during the Fourth Session of the 10th National People' Congress (NPC) held in March, the task of building a “harmonious society,” with the aim of solving existing problems such as disparity in wealth as a result of the recent high-rate economic growth, environmental pollution, corruption of company or government senior officials, etc. and to seek “harmony between urban and rural development” and “harmony between humans and nature.”
   During the Sixth Plenary Session of the 16th CPC Central Committee held in October, the government emphasized that this goal of building a “harmonious society” was important as mid to long term objectives to be attained by 2020 (See the column).

<The government implements full-fledged crackdown on corruption, a factor in social instability>

The Hu Jintao administration has strengthened countermeasures against corruption, in the context of the situation that scandals involving corrupted entrepreneurs or government officials would hamper the construction of a “harmonious society” and could lead to social instability as a result of people's frustration at the corruption.
   In March, Hu Jintao carried out a campaign to restore the morals of the CPC (Communist Party of China) members, some of whom tended to be money worshipers or extreme individualists. Also, in June, the penal code was revised as part of measures to crack down on corruption. With such a strong attitude to fight against corruption, the central government dared to expose corrupted senior officials, including Vice Mayor of Beijing Liu Zhihua (June) and Tianjin Chief Prosecutor Li Baojin (August). In September, Secretary of CPC Shanghai Municipal Committee Chen Liangyu was dismissed for his involvement in “serious disciplinal violations.” Thus, full-fledged crackdown on corruption had been implemented.


The goal of building a “harmonious society” addressed by President Hu Jintao during the Sixth Plenary Session of the 16th CPC Central Committee

Major short-term objectives Major objectives to be attained by 2020 for the purpose of building a “harmonious society”
  • Actively implement employment measures
  • Strengthen medical and health care services
  • Strengthen national security measures and national defense work
  • Shape an orderly income distribution pattern, etc.
  • Improve the socialist democratic legal system and administer the country under the rule of law
  • Correct regional disparity in economic growth
  • Improve the public administration system and maintain a favorable social order
  • Establish a social security system, etc.

<President Hu Jintao's power base has been fortified>

President Hu Jintao made efforts to fortify his power base through personnel strategies such as the assigning of members of the China Communist Youth League (CCYL), which he came from, to high positions in a local party committee or the central government. Also, the aforementioned dismissal of Secretary of CPC Shanghai Committee Chen Liangyu was paid much attention, as it was considered to be part of the tactics to strengthen the foundation of the Hu Jintao administration by weakening the Jiang Zemin faction opposing the economic policy of the CPC central committee in conflict with the central government. In addition, during the National People's Congress (NPC) held in March, the President placed his “scientific developing concept” as an important guiding principle for strengthening national defense and military forces. In an effort to grasp the military, he used education activities to deepen his influence as well as personnel strategies to fortify his power base.

<Concern about China's tendency to strengthen its military forces has yet to be cleared up>

During the past decade, China's defense budget has increased about 3.5 times, and the country has become the world's largest importer of conventional weapons. At the same time, China has been increasing and upgrading its military equipment through the development of advanced missiles and the development of new and powerful submarines and fighters. Some specialists suggest that such officially-announced armament activities and the defense budget of China might be quite different from the actual ones, and therefore international society is still cautious and uneasy about the dubious China's military activities.

<Behind the economic growth, the issue of migrant workers from farming villages has become a social instability-causing element>

On the side of economics, China's foreign exchange reserves have grown to be the largest in the world as a result of trade surplus from active exports and foreign direct investments. At the same time, however, acquisitions of foreign companies and aggressive attempts to acquire energy resources have caused friction with foreign countries. In particular, the issue of intellectual property rights, about which criticism came from all over the world, is still unsolved, where the government control and institutional reforms are not sufficient enough to effectively curb the illegal distribution of counterfeit foreign products which are flooding in China.
   With the anxiety of a possible collapse of the “bubble” market of the Chinese real estate industry as a result of uncontrolled land development with fevered investment in real properties and excessive investment, the Hu Jintao administration worked out the policy to exercise macroeconomic control with the aim of maintaining sustainable economic growth of the country. In “the 11th five-year plan” (2006 to 2010) adopted during the NPC in MarchCthe government set the moderate target of a yearly GDP growth rate of 7.5%, but the actual rate during the January-September period turned to be 10.7%, already showing the difficulty in achieving the goal. Also, China's unemployment rate remains high.
   Under the circumstance of a widening income gap between urban and rural regions, migrant workers coming to urban areas from farmhouses increased to more than 200 million. Those migrant workers are strongly dissatisfied with their non-accessibility to public services such as medical services, pension and education, and this issue is emerging as a factor to trigger social instability.

<Protest activities tend to be radical, using explosives and guns >

Although the Hu Jintao administration has been working hard to control protest activities by farmers and workers, regarding it as an instability element menacing the government, the number of extreme protest activities events tends to be increasing and reached about 87,000 in 2005. Some of the rallies were organized by veterans or teachers, and some tended to be radical, using explosives. In addition, there were riots protesting about environmental pollution at basins or against an incident of a doctor's refusal to see poor patients. Thus, sources of protestors' discontent tend to be diverse.
   Behind the growth of people's dissatisfaction with society year by year, there is a tendency for guns and explosives to be spread across society in large quantities, and actually bombings of a bus and an internet café have occurred. The Hu Jintao administration considers that such spread of explosives and guns would not only be a threat to national security but also damage China's credibility in the international community ahead of the 2008 Olympic Games in Beijing, and therefore, launched intensive search and control for those weapons. In particular, they implemented strict control of explosives, regarding them as a possible tool for indiscriminate terrorist attacks, by measures such as enforcement of a new law for strict control on explosives' production and distribution.

<Information control over domestic and foreign media had been strengthened by the government to maintain the stability of its regime>

While the Hu Jintao administration has been working on measures to ease people's dissatisfaction with society, it has introduced stricter information control over news reports and the internet to curb the expansion or organization of anti-government movements.
   Specifically, the publication of weekly magazine Bingdian (Freezing Point) was suspended by the government in January after the magazine carried an article which criticized the country's history textbooks. The government also introduced the examination and permit system for foreign media (September), which required all news reports by foreign media to be censored by the state-managed Xinhua News Agency before release in China. In addition, it has been reported that internet service providers were requested by the Chinese government to restrict internet search made by those users who used certain words hinting criticism of the government.

<Despite the efforts for the construction of a “harmonious society,” the government has yet to overcome a pile of difficult problems such as the disparity issue>

It is expected that the Hu Jintao administration will announce personnel reshuffle of the leading members of the Standing Committee of the CPC Political Bureau at the 17th National Congress to be held in 2007 to strengthen their power base and also that the administration will deliver a “political report” to the Congress, stating the goal of building a “harmonious society” as a guiding principal.
   As for the goal of building a “harmonious society,” it can be assumed that they would, for the moment, tackle various issues which are at the forefront of people's attention such as income disparity, unemployment, environmental pollution, etc. However, it seems difficult for China to seek immediate solutions for those issues, as all of them are structural problems casting many complications yet to be overcome .
   In the country's democratization efforts and human rights issues, to which international society pays close attention, it seems difficult to see prompt progress or improvement since those issues would probably come after economic and social priority matters.

(2) China aims at expanding its influence in international society by strengthening relationships with developing countries, etc., while keeping cooperative ties with the United States.

]Nonintervention policy stressed, and resource diplomacy accelerated in Africa and other areas.
]Through expanding intergovernmental cooperation within the Shanghai Cooperation Organization (SCO), China also seeks to restrain the United States.

<Through President Hu Jintao's official visit to Washington, China aims at laying the groundwork for stable international relations>

The Hu Jintao administration regarded the coming five-year period (2006 to 2010) covered by the 11th five-year plan as “a crucial term for reform and development” (January), and accordingly, expanded their diplomatic activities for laying groundwork for stable international relations, which were necessary for their economic development in order to secure energy resources.
   As for its relationship with the United States, President Hu Jintao visited Washington in April, and, during the meeting with U.S. President Bush, emphasized their intention to “promote the all-around strategic partnership between two countries.” In July, Guo Boxiong, Vice Chairman of the CPC Central Military Commission and China's highest military leader in uniform, visited the U.S. for the first time since his inauguration, which led to the materialization of the first joint naval exercise between China and the United States for marine communication and maneuver in September. In the field of economy, the two countries reached agreement to open the “China-U.S. strategic economic dialogue.” China also made efforts to wipe out the U.S.'s deep-rooted dissatisfaction with its trade deficit against China.
   At the same time, China has promoted the creation of a stable security environment in the region. Cao Gangchuan, Minister for National Defense, made a round of visits to North Korea, Vietnam, Malaysia, Singapore and South Korea in April. As for China's relationship with India, China invited Indian Defense Minister Mukherjee in May when the two countries concluded the memorandum concerning defense cooperation. In November, President Hu Jintao visited India and a joint declaration was announced for enhanced economic and military exchanges, etc.
   China also worked hard to strengthen the unity with ASEAN. In October, China invited all ten leaders of ASEAN members together for the first time to hold a summit meeting.

<China seeks to secure energy resources and export markets, and strengthen economic and military cooperation with African countries, etc.>

In the meanwhile, China tends to be utilitarian, actively providing funds and technologies to developing countries including those designated by the United States as “rogue states,” with an apparent aim of acquiring energy resources or export markets for Chinese products in return, which are necessary for China to promote its economic growth, and because of this, China emphasized its nonintervention policy toward those countries, clearly showing the difference of its stance from that of the U.S.
   China has been especially active in building relations with African countries. In January, China released its official paper titled, “China's African Policy,” in which the country showed its intention to promote all-around cooperation with Africa in extensive fields including investment, infrastructure improvement, training of military personnel, etc. Based on such policy, President Hu Jintao (April) and Prime Minister Wen Jiabao (June) visited ten African countries in total, and during their stay, they signed several agreements including the oilfield development deal (with Nigeria) which gave China preference for its development. Furthermore, China invited leaders from 48 African countries to Beijing in November, and hosted “the first summit of the China-Africa Cooperation Forum.” Thus, China tried to enhance its influence on African countries.

<Through multilateral summit diplomacy, China also tries to restrain the United States>

Through multilateral summit diplomacy, including the foundation of SCO (consisting of China, Russia and four Central Asian countries), China also tied to restrain the United States. In the Declaration on the 5th anniversary of SCO, which was signed by SCO member states in June in Shanghai, China implicitly tried to restrain the political and military intervention of the United States in the Central Asian region by saying that “Differences in political and social systems, sense of values should not be taken as pretexts to interfere in other countries' internal affairs,” and “Member states do not allow their territories to be used to undermine the sovereignty, security or territorial integrity of other member states,” although “the United States” was not specifically named in the document. President Hu Jintao, hoping to keep current SCO's stance mentioned above permanently, proposed the conclusion of the “Long-term SCO good neighbor and friendship treaty.”
   President Hu Jintao met Russian President Vladimir Putin and Indian Prime Minister Manmohan Singh at Saint Petersburg in July to hold the first trilateral summit meeting among China, Russian and India, and suggested that “strategic cooperation among the three countries should be further deepened.” People's Daily (dated July 19th) praised China's performance at this summit, saying that “the summit has a significant meaning from the viewpoint of multipolarization of the world.”

<“Meeting of the CPC Central Committee on foreign affairs” was held to confirm the policy of building a “harmonious world” >

In August, all nine members of the Standing Committee of the CPC Political Bureau, senior officials of local governments and the military as well as officials in charge of foreign affairs were called to attend an extraordinary meeting of the CPC Central Committee on foreign affairs, where attendants confirmed the policy of building a “harmonious world” to be applied to their diplomatic strategies. The concept of “harmonious world” intends to emphasize respect of the diversity of nations and the world as well as autonomy to make decisions on social schemes, and also implies China's intention to check excessive influence of the United States.
   During the meeting, it was also confirmed that “China should take the initiative in diplomacy.” In accordance with this policy, China actively played a role of mediator in diplomatic talks to settle North Korea's nuclear issues to find the way to resume the Six-Party Talks, in a way to act as a “responsible stakeholder in the global system” as the United States had requested to them. As for the relation with Japan, China took the opportunity of Abe administration's formation to hold the bilateral summit meeting (October)

It is expected that China will try to expand its influence in international society by further displaying its attitude of promoting cooperation with developing countries and its neighboring states, and also tactically combining cooperative and deterrent strategies toward the United States in the deals of important international issues, while professing its “peaceful rise.”

(3) In resumed Japan-China summit talks, China emphasizes “improving bilateral relations.” Announces the establishment of a “strategic reciprocal relationship” between the two countries.

]To attain the goal of building a “harmonious society,” China considers it essential to establish a stable relationship with Japan. Determined to “improve Japan-China relations,” seeking its own “strategic interests.”
]Diplomacy of the Hu Jintao administration toward Japan could be influenced by China's domestic situations in the future.

<Inauguration of the new Japanese Prime Minister led to the reopening of the China-Japan summit meeting>

After about a five-year absence of official visits of both Japanese and Chinese leaders, the Hu Jintao administration finally showed its intention to resume the meeting when Japan's new Prime Minister took office. On October 8, in spite of the opening day of the Plenary of the CPC Central Committee, China invited Japanese Prime Minister Shinzo Abe to Beijing to hold the summit meeting. Prime Minister Abe's visit to China was highly evaluated by the Chinese government, who said that it was an “icebreaker” (as reported by People's Daily on October 5) and “opened the window of hope for restoration and development of China-Japan relations” (as mentioned by a Foreign Ministry spokesman on October 10.)
   The two countries held a joint press conference after the meeting, and announced that they agreed to “seek appropriate settlement of those issues which could affect the future development of the bilateral relations, facing history squarely and having hope for future” and “work hard to establish reciprocal relations based on common strategic interests of the two countries.” Also, China positively evaluated “Japan's post-war efforts to be a nation striving for peace” in the form of a written document for the first time. Furthermore, the Chinese government welcomed Chikage Ogi, president of the House of Councilors, who visited China shortly after the Prime Minister's visit, by giving her the opportunity to meet with President Hu Jintao and three other members of the Standing Committee of the CPC Political Bureau. Thus, China emphasized its attitude to “regard Japan as an important country to China.”
   Also in November, at the Japan-China summit meeting held during the APEC Summit in Hanoi, Vietnam, President Hu Jintao made a “five-point proposal” on relations with Japan, including suggestions that “the direction of the future development of the Sino-Japanese relations should be clarified” and that “friendly feelings between the people of both countries should be promoted.” Displaying such a positive attitude toward further development of China-Japan relations, China confirmed discussing arrangements to make President Hu Jintao's visit to Japan possible.

<Behind China's desire to restore diplomatic relations with Japan is the strong expectation to obtain economic cooperation from Japan>

As illustrated by former President Jiang Zemin's mentioning that “(China) continuously emphasizes to Japan the need to solve the countries' differences over wartime history” (quotation from “The Selected Works of Jiang Zemin”). China had stuck to the issue of “Yasukuni (Japanese Prime Minister's visit to Yasukuni Shrine)” before. Actually, President Hu Jintao said in March that “the Japanese leader's decision not to visit Yasukuni Shrine would be a prerequisite for the reopening of the China-Japan summit meeting.”
   However, the Hu Jintao administration finally decided to resume the summit meeting shortly after the inauguration of the Abe Cabinet. Behind this decision of China, they likely judged that the inauguration of the new Japanese Prime Minister would be a golden opportunity for China to move to restore diplomatic relations with Japan, as actually mentioned by a Chinese official, quote, “we would like to take this opportunity of Japan's change of administration to restore the China-Japan relation” (mentioned on September 6 by Wu Dawei, Deputy Foreign Minister).
   Also, China likely considered that the construction of a “harmonious society,” which the Hu Jintao administration professed as the country's goal, cannot be achieved without stable economic growth, and that for this reason, China should seek to establish stable economic relations with Japan. Shortly after the summit meeting, China invited Japanese VIPs from the financial and business world to hold the “China-Japan Economic Conference,” where China formally requested Japan to enhance its cooperation with China in the field of energy saving and environmental protection and to expand investment in China. Thus, China shows a strong expectation to obtain economic cooperation from Japan.
   It was assessed that China's approach to Japan was encouraged by the enhancement of Hu Jintao's power base after the dismissal of the Secretary of Shanghai CPC municipal committee (September), whose position was allegedly the stronghold of former President Jiang Zemin who stuck to “the issue of history,” allowing Hu Jintao to take the initiative in diplomacy. Late in October, Premier Wen Jiabao said, “No one can interfere with the friendly relations between China and Japan.”

<The Hu Jintao administration's policy toward Japan might be influenced by future domestic situations in China>

In the past, the Chinese government used to hint that they would play their card of “the issue of history” whenever they desire to get an advantage over Japan, just as they did when Japan was on a list of candidates for a new permanent member of the UN Security Council. However, now it is estimated that the Hu Jintao administration will be more practical and utilitarian in promoting diplomatic relations with Japan for the benefit of China, so they are expected to be aggressive in seeking cooperation from Japan, under the slogan of building “strategic reciprocal relations,” in the field of utilization of natural resources and energy, mitigation of environmental pollution, etc. in which they face difficulty to construct their domestic economy.
   On the other hand, strong anti-Japanese feelings still exist in China. Some Chinese actually pointed out that President Hu Jintao's acceptance of Prime Minister Abe's visit to Beijing with “the issue of Yasukuni Shrine” shelved was a sort of gambling. It is possible that the Hu Jintao administration's policy toward Japan would be influenced by domestic circumstances exemplified above or any emerging difference in opinion between Japan and China on important matters (history recognition, development of energy resources, regime, etc.)

(4)With the critical situation around Taiwan's Chen Shui-bian administration in the background, China's “peaceful unification” further infiltrating into Taiwan.

]Amid a growing clamor for the resignation of President Chen Shui-bian, Taiwan's legislature deliberates the resolution for the president's dismissal.
]China strengthens economic and personnel exchanges with Taiwan with an eye to establishment of pro-Chinese government led by KMT.

<While President Chen Shui-bian clarifies his independence-oriented stance, his leadership has weakened>

In the New Year Day address, Taiwan President Chen Shui-bian expressed his intention to work on the establishment of a new constitution, which was his pledge at the 2004 presidential election, as well as his decision in regard to Taiwan's economic and trade relations with China to switch from a “proactive liberalization and effective management” policy to a “proactive management and effective liberalization” policy including enhanced examination on investment projects. Also in February, the President virtually scrapped the National Unification Guidelines which showed the way to peaceful unification of China and Taiwan, by which the President clarified his independence-oriented stance.
   Behind this strong attitude of the President was his desire to clearly differentiate his attitude from that of Ma Yingjiu, chairman of KMT (Kuo Min Tang, or the Chinese Nationalist Party) which is the largest opposition party in favor of exchanges with China, in order to recover the low approval rate for the present government which the Chen Shui-bian administration had been suffering since the crushing defeat of the ruling Democratic Progressive Party (DPP) at the ROC local election in December 2005.
   However, a shadow was cast on the leadership of President Chen Shui-bian, by a series of scandals including indictments of his son-in-law for suspected insider trading of stocks and his wife for suspected embezzlement of public funds in May and November respectively, as well as recognized his involvement in his wife's embezzlement attempts, which led to increasing calls from the Taiwanese people for the President's resignation.
   In the Legislative Yuan (Taiwan's parliament), the resolutions for dismissal of the President were on the agenda three times, in June, October and November, which were proposed by opponent parties including KMT, for the first time since the establishment of the constitutional government. Although all the recall motions were rejected, these movements drew attention as a key indicator of the critical condition of the Chen Shui-bian administration. In August, Shi Mingde, former chairman of DPP took a initiative of “one-million protesters' movement against Chen Shui-bian” campaign and carried out a demonstration in front of the Presidential House to call for his resignation.
   Although DPP officially retains the stance to support the Chen Shui-bian administration, some Legislative Yuan members from DPP turned their backs on DPP and resigned (November). In addition, within DPP, power struggle for the post of president's successor turned into all-out war, which impeded the work of drafting a new constitution.

<China emphasizes “peaceful development” of China-Taiwan relations and has been promoting exchanges aggressively>

China made effort to expand exchange with people of every field and every class including economics, emphasizing “peaceful development” of China-Taiwan relations, while they were strongly cautious of DPP-led government's move to establish a new constitution.
   In April, when Chinese President Hu Jintao met KMT Honorary Chairman Lian Zhan for the first time in one year in China, the President emphasized that, “peaceful growth should be a main theme for the development of cross-straits relations, and thus should be a common objective toward which the people of both sides across the Straits should make strenuous efforts.”

In the field of economic exchanges between China and Taiwan, the “Cross-Straits Economic and Trade Forum” was held (April, Beijing) jointly by China and KMT. Focusing on agricultural workers in the southern part of Taiwan, who are considered to constitute the main supporters of DPP, an announcement was made to grant sales permits and exemption from customs duties for a total of eleven items of Taiwan-grown vegetables.

<While obtaining cooperation from the United States for suppressing Taiwan's move toward independence, China has reinforce military preparedness against Taiwan>

In the diplomatic field, China also worked hard to create the environment supporting peaceful unification. When President Hu Jintao met U.S. President Bush at Washington in April, the Chinese leader emphasized “common strategic interests of China and the U.S.” obtainable from the interruption of Taiwan's move toward independence, and had the U.S. President give his word to “not support Taiwan's move toward independence.” Thus, China impressed international society with the cooperative relation between China and the United States in the issue of Taiwan's independence.
   In addition, China actively persuaded six African countries who had diplomatic relations with Taiwan to break the relations and instead establish diplomatic relations with China. As a result, Chad entered into diplomatic relations with China in August.
   At the same time, China seemed to gradually reinforce its military preparedness against Taiwan. The People's Liberation Army had already planned to deploy more than 700 short-range ballistic missiles aiming at Taiwan by the end of 2005 and to increase its deployment at a rate of about 100 missiles per year.(reported by the U.S. Department of Defense in May)

<Situations of Taiwan have been changing in favor of China who desires to achieve peaceful unification>

Although it can be expected that President Chen Shui-bian will further push his strong independence-oriented policy in order to recover from his political crisis, it is likely to be difficult for him to restore the power of his administration under the situation of emerging discord within DPP.
   On the other hand, China can be expected to take advantage of the political crisis of the Chen Shui-bian administration and implement new measures for expanding economic exchanges with Taiwan to promote “peaceful growth” of cross-straits relations, taking into consideration the possibility of KMT's comeback as the ruling party at the presidential election to be held in 2008.

3. Russia

Russia makes efforts to display the significance of its presence by hosting the G8 summit.

]Russia impresses the world with its international presence through the St. Petersburg Summit. As for internal affairs, Russia starts preparations for the post-Putin administration.
]Russia demands Japan's concession on the Northern Territorial issue by tactically using hard-line and moderate attitudes.

<Russia hosted the G8 Summit as the chair country for the first time and managed the Summit without any trouble>

Russia considered it important to make the St. Petersburg Summit (July) successful as the country's diplomatic challenge to display the significance of its presence as “a great nation.” Although Russia had suffered, until shortly before the beginning of the summit, international criticism one after another, such as that for its retrogressing democratization as well as for suspended energy supplies to neighboring countries, the country succeeded in managing the summit, by passably arranging issues on agenda, including the issue of energy securities proposed by Russia, to the satisfaction of relevant interested parties. However, it can be expected that Russia will be confronted with conflicts of interest against the U.S. and European countries, because Russia actually faces various diplomatic confrontations with the U.S. and Europe over the issue of Iran's nuclear development, etc., and in the field of the introduction of foreign capital, which the Putin administration needs as important resources, Russia is alleged to overemphasize its national interests, just as seen in the case of the “Sakhalin II” project where Russia cancelled the permit of foreign companies for reasons of environmental disruption.
   As for the relationship with China, Russia has been promoting cooperation with Beijing on the issue of Iran's nuclear development and other diplomatic issues, with the aim of restraining the United States. Relations of the two countries have been strengthened through mutual visits of VIPs of respective countries including President Putin's visits to China (March and June), President Hu Jintao's visit to Russia (July) and Prime Minister Mikhail Fradkov's visit to China (November).

<On the Northern Territories issue, Russia insisted upon the Japan-Soviet Joint Declaration, leading to the continued state of deadlock>

President Putin mentioned (June) that he had never admitted Russia's obligation to return any of the islands and blamed Japan for not fulfilling the 1956 Japan-Soviet Joint Declaration without Russia's consent. However, later (September), he also said that Russia had no intention to put the Northern Territories issue aside indefinitely and that he considered it important for the two countries to cooperate in seeking the solution. Thus, Putin showed an attitude of seeking Japan's concession, hoping to see a scenario that the return of two islands makes this issue come to an end. At the same time, Russia decided (August) to invest a total of about 18 billion rubles (or about 72 billion yen) for the period of nine years beginning in 2007, mainly in infrastructure improvement of the four northern islands. Thus, Russia has continued to assert as a fait accompli that the Northern Territories belong to Russia.
   Under such situation, an incident occurred (September) where the Russian Border Service fired on and seized a Japanese boat, Kisshin Maru No.31, in waters near Kaigara Island, part of the Northern Territories, with one Japanese crewmember shot to death in the incident. Russian authorities prosecuted the captain of Kisshin Maru who was sentenced to a fine and confiscation of the boat. This incident again revealed Russia's unjust occupation of the Northern Territories.
   In the first meeting between President Putin and Prime Minister Abe, which took place during the APEC Summit (November), Putin agreed to continue negotiations over the Northern Territories issue based on all of the agreements and documentation with consent by the two countries in the past to seek a solution acceptable to both countries. Russia's future move toward negotiation draws attention.

<Russia started preparations for the State Duma Election in view of the post-Putin administration>

Situations concerning Chechnya, which have been one of the key indicators of Russia's internal stability, tended to subside after the murder of Shamil Basayev, field operation commander, by Russian security authorities (July). Also, the domestic economic conditions of Russia seem to be stable thanks to soaring oil prices.
   With the support of such positive factors of internal conditions, the political world in Russia in a shift to the post-Putin administration exhibits the general tendency to seek to maintain the existing strong power base of Putin, who is negative about the extension of his term. President Putin himself has not clearly expressed his attitude about his successor. It can be estimated that factional disputes within the administration or political tactics will continue toward the 2007 State Duma Election and the 2008 Presidential Election.
   Also, the world pays close attention to the murder case of the well-known female news reporter who had been aggressively pursuing the issue of corruption of the Putin administration and human rights issues as well as the death of the former lieutenant-colonel of the Federal Security Service of Russia who had strongly criticized the Putin administration and fled to the U.K., since those incidents could, depending on their future development, possibly have some influence on the Putin administration.

4. Middle East and Asia

(1) The security situation in Iraq continues to deteriorate, extremely serious now, despite the inauguration of new government.

]The sectarian conflict escalates, and terrorist attacks by militants still occur frequently, with no progress in negotiations to resolve political issues.
]The Japan Ground Self-Defense Force completes the withdrawal of its troops from Iraq while the Air SDF continues its transport operations there.

<Despite the completion of the post-Hussein political process, the sectarian conflict is escalating, with the security situation deteriorating>

After the elections to the Iraqi National Assembly held on Dec. 15, 2005, political parties representing the Sunnis, Shiites and Kurds tried to form a national coalition government. However, coalition negotiations proceeded only slowly due to the parties' differences over how to allocate cabinet posts. Still, with the inauguration of the government of Prime Minister Nouri al-Maliki on May 20, the political process to sort out the mess after the collapse of the government of former President Saddam Hussein was completed, with Hussein sentenced to death in the first trial at the Iraqi High Tribunal (November).
   However, there was no sign of improvement in the security situation in the country, with incidents of sectarian violence and terrorist attacks by anti-U.S. militants occurring frequently.
   The sectarian conflict grew particularly fierce after the terrorist bombing of a Shiite mosque in Samarra in central Iraq (February), claiming the lives of many civilians and displacing a number of people from their homes in Baghdad and other parts of Iraq. The Iraqi Mujahideen Council, whose main constituent body is the the Al-Qaeda in Iraq and other groups repeatedly carried out attacks on Iraqi government institutions and U.S.-led multinational forces in addition to terrorist attacks intended to fuel the sectarian conflict. Despite the killing of Zarqawi, the leader of the Al-Qaeda in Iraq by the U.S. forces (June), such attacks continued under the leadership of Abu Hamza al-Muhajir, who is regarded as the successor to Zarqawi. Also, elements which supported the now-defunct Baath Party launched terrorist attacks on the multinational forces and Shiite militias. They are believed to be more involved in the sectarian conflict.
   Although the U.S. forces and Iraqi security forces have carried out sweeping operations against armed rebels in Baghdad and the western part of Iraq, the operations have not produced substantial results. In addition, Iraqi security organizations are said to be infiltrated by Shiite militia members, casting doubt on the neutrality of their activities.
   As shown above, the security situation in Iraq has grown quite serious because of the sectarian conflict and increased terrorist activities by anti-U.S. armed rebels.

<The new government's efforts to restore security and resolve political problems have stalled>

Prime Minister Maliki has put top priority on subduing the escalated cycle of sectarian violence and announced a 24-point “national reconciliation plan” (June) that featured the dismantling of militia groups and a review of the policy of excluding members of the now-defunct Baath party from positions of power, among other measures. However, negotiations to flesh out the plan bogged down due to the discord between the Sunni and Shiite parties.
   At a session of the Iraqi National Assembly (September), a political conflict occurred over a bill to adopt a federal system that would grant a high level of autonomy to provinces. The Shiite and the Kurdish party, which were in favor of the bill, severely opposed the Sunni party, which objected to the bill. The Shiite and Kurdish parties agreed with the Sunni party to suspend the introduction of a federal system for at least one and a half years, but they railroaded the bill through the parliament (October) without conducting deliberations. Also, the Kurdish party has shown increasing inclination toward independence, unveiling a policy of flying the Kurdish flag, instead of the Iraqi national flag, at all autonomous government facilities (August) and drawing up a draft autonomous government constitution.
   In October, meanwhile, there came hopeful signs such as the signing of a reconciliation document at a meeting held in Saudi Arabia by religious leaders of the Shiites and Sunnis and the announcement by Prime Minister Maliki of a plan to work out a “roadmap” for restoring security. Still, it remains to be seen whether these initiatives will produce results.
   With regard to future prospects for the situation in Iraq, there is concern that the political discord between the Shiites, Sunnis and Kurds may deepen further and that progress may be slow in efforts to resolve pending political issues (such as the fight over the control of Kirkuk, a city rich in oil resources, and constitutional amendment). Another focus of attention is a possible change in the Iraq policy of the U.S. Administration of President George W. Bush, who dismissed Defense Secretary Donald Rumsfeld and indicated the possibility of a policy change following the defeat of his Republican Party in the November mid-term elections. Also demanding attention is the possible impact of an agreement to normalize diplomatic relations between Iraq and Syria (November).

<The Japan Ground Self-Defense Force completed its withdrawal from Iraq while the Air SDF is continuing its transport operations>

The Government of Japan decided in June to withdraw GSDF troops engaged in humanitarian operations in Samawah, located in the southern Iraqi province of al-Muthanna, concluding that the mission had been concluded. In line with this decision, the GSDF troops stationed in Samawah completed the withdrawal after some two and a half years of operations there (July), during which there were no Japanese casualties of war.
   Now, Japan needs to keep closely watching the situation in Iraq with a view to ensuring the security of the ASDF mission of transporting U.N. personnel and goods and the safety of reconstruction operations led by the Government of Japan.

(2) Uncertainty over the future course of Iran's nuclear development

]Iran continues uranium enrichment activities in defiance of a U.N. Security Council resolution warning of the imposition of sanctions.
]Political maneuvering over the possible sanctions against Iran appears to be growing complicated.

<Iran succeeded in producing low-level enriched uranium and effectively rejected international calls for a halt to its enrichment activities>

In January, Iran notified the International Atomic Energy Agency (IAEA) that it would resume uranium enrichment experiments. In response, the IAEA held an emergency Board meeting (February) and decided to refer the Iranian nuclear issue to the U.N. Security Council. Iran reacted by stopping the application of the additional protocol of the nuclear Nonproliferation Treaty (NPT) and resuming preparations to begin enrichment experiments.
   After the U.N. Security Council adopted a chairman's statement calling for the suspension of Iran's uranium enrichment activities in March, the country accelerated its nuclear development, beginning enrichment experiments in earnest in April and succeeding in producing low-level enriched uranium in May.

Key events related to the issue of Iran's nuclear development
August 2002 Iran's secret construction of a large-scale nuclear facility is revealed
September 2003 The IAEA Board adopts a resolution condemning Iran
October 2003 Iran agrees to suspend uranium enrichment
December2003 Iran signs the additional NPT protocol
September 2004 The IAEA Board adopts a resolution condemning Iran
November 2004 Iran agrees to suspend uranium enrichment-related activities
August 2005 The government of President Ahmadinejad is inaugurated
August 2005 Iran notifies the IAEA of its resumption of uranium conversion operations
September 2005 The IAEA Board adopts a resolution warning of referral of the nuclear issue to the U.N. Security Council
January 2006 Iran notifies the IAEA of its resumption of uranium enrichment experiments
February 2006 The IAEA Board adopts a resolution to refer the Iranian nuclear issue to the U.N. Security Council
July 2006 The U.N. Security Council adopts a resolution warning of sanctions against Iran
September 2006 Iran rejects the sanctions-warning resolution and continues nuclear development

As a result, the five permanent members of the U.N. Security Council and Germany in early June proposed a package of incentives for Iran, including offers to provide economic aid and hold a security dialogue in exchange for a complete halt to the Iranian uranium enrichment activities. In addition, the U.N. Security Council on July 31 passed a resolution warning of the imposition of sanctions, urging Iran to halt uranium enrichment activities by August 31.
   However, Iran ignored the U.N. resolution, starting pilot operations of its heavy water production facility (August). Also, Iran effectively rejected the proposed package of incentives on August 22, saying that it could not accept the demand for a complete halt to its uranium enrichment-related activities, although it showed willingness to continue negotiations.

<Iran showed its resolve to continue nuclear development as the countries concerned engaged in various political calculations over the issue of sanctions>

To counter Iran's nuclear development, the U.S. in September banned both direct and indirect transactions between Bank Saderat, a major Iranian bank, and all companies operating in the U.S. as its continued efforts to realize the passage of a U.N. Security Council resolution introducing sanctions against Iran. At the end of September, the U.S. strengthened its own sanctions against Iran, enacting the Iran Freedom Support Act, which expands the range of its sanctions against the country imposed under the former Iran-Libyan Sanctions Act (Libya was excluded from the coverage of the act) while aiming at providing assistance for democratization movements in Iran.
   Major EU members such as the U.K., France and Germany, concerned over the possible spread of nuclear technology, tried to act as mediator in the dispute over Iran's nuclear development. However, the EU members are now inclining toward the idea of imposing sanctions as Iran has refused to respond to their calls for a halt to its uranium enrichment activities.
   Meanwhile, Russia has remained cautious over the idea of imposing sanctions against Iran because of its close relations with that country, including its support for the construction of Iran's Bushehr nuclear plant and nuclear fuel supplies. The cautious stance also reflected Russia's hope to maintain its influence in the Middle East and its concern over the implications of the Iran issue for the security of Russia's southern border regions. Thus, Russia has taken a unique approach in trying to avoid the imposition of sanctions against Iran, proposing to build on its own soil an international uranium enrichment center that might be used by Iran.
   China has also showed a cautious stance on the possible sanctions against Iran, insisting that the nuclear issue should be resolved through dialogue, as it pursues the strategy of securing oil concessions in Iran and strengthening its ties with the Middle East region.
   While the countries concerned engaged in various political calculations, Iran has defiantly maintained a hard-line stance, arguing that oil-importing countries, rather than Iran, would be the victim of anti-Iran sanctions because the oil price would surge.
   Given Iran's stubborn defiance and the maneuvering by the countries concerned, uncertainty is expected to grow over the future course of the issue of Iran's nuclear development.

(3) Deepening turmoil over Middle East peace process

]Progress slow in negotiations toward establishing a Palestine national coalition government.
]The government of Israeli Prime Minister Ehud Olmert loses support.

<Distrust between the Hamas and Fatah is growing>

In Palestine, the Islamic fundamentalist organization Hamas won a landslide victory in the elections to the Palestinian Legislative Council in January, leading to the inauguration of the Hamas government led by Prime Minister Ismail Haniyeh in March. However, the Hamas government faced a fiscal squeeze as the U.S. and European countries, which designate Hamas as a terrorist organization, suspended aid.
   Therefore, Hamas joined hands with Fatah, led by Palestinian Authority Chairman Mahmoud Abbas, with a view to forming a national coalition government as a way to reduce the profile of Hamas. However, their coalition negotiations bogged down in September as distrust between the two movements grew due to Hamas' refusal to abandon its policy of not recognizing Israel's rights to exist. In a further blow to the Hamas government, Palestinian civil servants mainly consisting of Fatah supporters staged a general strike after payments of their salaries were suspended for more than seven months, leading in October to violent clashes, including exchanges of gunfire, between the Hamas and Fatah factions. Although the coalition negotiations were resumed, little progress has been made so far.

<In Israel, the government faced a storm of criticism after the Israeli forces' invasion of Gaza and Lebanon>

The Israeli forces advanced into Gaza and Lebanon, provoked by the kidnapping of Israeli soldiers by Palestinian armed groups such as Hamas (June) and by Lebanon's Islamist Shiite Hezbollah group (July). In response to the Israeli advance, the Palestinian armed groups launched rocket attacks on Israeli-controlled areas, and Hezbollah pounded northern Israeli cities with repeated rocket attacks. Israel withdrew its troops from the Lebanese territory in compliance with U.N. Resolution 1701 (August), but a storm of criticism erupted against the Olmert government's security policy. Therefore, the Olmert government has been trying to stabilize its grip on power by courting an ultra-rightwing party with a hard-line Palestine policy as a partner.
   Uncertainty remains over the future course of the Middle East peace process as the process is unlikely to get restarted for the moment, given the failure of the Hamas government of Palestine to function properly and the need for the Olmert government of Israel to pay heed to hard-line opinions in order to stabilize its grip on power.

(4) Deteriorating security in Afghanistan

]Nation-building efforts lag as the Taliban gathers force again.

<The Karzai government faced a variety of problems>

In Afghanistan, the move toward democratization was expected to be firmly in place after the presidential and National Assembly elections were held in 2004 and in 2005 and the provision of international aid for the reconstruction process proceeded.
   However, the government of President Hamid Karzai has failed to resolve a variety of problems it faces, including the deterioration in the security situation, increasing unemployment, a widening gap between the rich and the poor, and a sharp rise in the production of illegal drugs, and its administrative organization's insufficient functioning due to problems such as rampant bribery. In addition, the Karzai government's influence over regional warlords remains weak.

<The Taliban became active, leading to deterioration in the security situation even in Kabul>

In March, the Taliban stepped up its armed insurgency as a man believed to be Taliban leader Mullah Muhammad Omar declared a spring offensive. The Taliban thus launched repeated attacks on foreign forces stationed in Afghanistan, mainly in the southern and eastern parts of the country, where there is a large population of Pashtun people, who form a support base for the Taliban.
   The security situation in Kabul, which was previously relatively stable, has started to deteriorate, as shown by a suicide bombing attack thought to have been carried out by the Taliban in September near the U.S. embassy in the Afghan capital despite the heavy security around the area.
   Behind the stepped-up offensive by the Taliban is likely an increase in the group's strength due to growing criticism of the U.S. and dissatisfaction with the Karzai government among Afghan citizens following a rise in noncombatant casualties caused by attacks by the U.S.-led foreign forces.
   Although the Taliban is believed to have been damaged by the U.S.-led forces' sweeping operations, it is probably receiving persistent support, in terms of supplies of goods and personnel, from Pashtuns living in areas along the Afghan-Pakistani border. Also, it has been pointed out that the Taliban has increased its financial muscle through activities such as involvement in drug production and trade. Under these circumstances, the Taliban is expected to further step up its fight against the foreign forces as well as against the Afghan government and security forces.
   As shown above, Afghanistan must tackle a range of tasks, including stabilizing the security situation, strengthening the government's administrative functions and resolving social and economic problems. Given such challenges, Afghanistan faces substantial difficulty in laying the foundation for a stable nation.

5. International Terrorism

(1) The Threat of Islamic extremism spreading through the world.

]Islamic extremist groups influenced by Al-Qaeda conduct terrorism around the world.
]Western countries confront the threat of “home-grown terrorists.”

<Al-Qaeda continued to attempt to step up terrorist activities around the world, inspiring Islamic extremist groups to launch a number of terrorist attacks on U.S. and European interests>

Amid repeated calls for attacks on the United States and its major allied countries by terrorists believed to be senior members of Al Qaeda, Islamic extremist groups affiliated with Al-Qaeda carried out a number of attacks in Iraq and Afghanistan. Furthermore, terrorist bombings occurred in other countries such as Egypt, India and Syria, and indiscriminate mass murder terrorism plots aimed at passenger aircraft and other targets were uncovered in Western countries, indicating that the threat of Islamic extremism is continuing to spread.
   Al-Qaeda increased its calls for participation in “jihad,” issuing statements in the name of Osama Bin Laden and other senior group members. They called for attacks in not only Iraq and Afghanistan, which Al-Qaeda regarded as the “key battlegrounds,” but also in Palestine, Sudan and Somalia. Also, Al-Qaeda claimed to be preparing to attack the U.S. mainland, and strengthened collaboration with Islamist extremist groups in Iraq, Egypt and Algeria. Thus, Al-Qaeda maintains its stance of leading the “global jihad,” in an attempt to step up attacks on the United States and its main allies.
   In this situation, the spread of Al Qaeda's influence in developed countries was highlighted by the revelation in August in Britain of a terrorist plot targeted at passenger aircraft, the leader of which was believed to have had contact with an Al-Qaeda member.
   Al-Qaeda is thought to have received substantial damage as countries around the world strengthened their crackdown on terrorism. Still, the terrorist group is expected to maintain a certain degree of capability to carry out attacks themselves and step up efforts to induce more attacks on the United States and its allies by inciting Muslim extremists to violence with its statements and organizing them into terrorist groups.

<Iraq and neighboring countries were beset by frequent terrorist attacks by Islamic extremists and others>

In Iraq, armed groups of Sunni Islamic extremists like the Al-Qaeda in Iraq, whose members include foreigners, not only attacked government institutions and the U.S.-led multinational forces but also carried out bombing and other acts of terrorism targeted at Shiite civilians frequently as a way to fan sectarian violence. (See Page 36). The Al-Qaeda in Iraq rallied Sunnis dissatisfied with Iraq's federal system into a movement and tried to authorize it by declaring the establishment of the Islamic State of Iraq, founded upon the Iraqi Mujahideen Council, fueling concern that the organization may further step up terrorist activities in the future.
   In Iraq's neighboring countries such as Saudi Arabia, Egypt and Syria, the threat of terrorism grew, as shown by the occurrence of terrorist attacks targeting Israelis as well against U.S. and European interests in those countries, including a U.S. embassy.
   In Saudi Arabia, a terrorist attack targeting a major oil facility in Abqaiq, located in the eastern part of the country, took place in February. An Islamic extremist group, Al-Qaeda in the Arabian Peninsula claimed responsibility for the attack, which indicated that they maintained a certain degree of capability to implement terrorist attacks despite the strengthened counter-terrorism crackdown by the authorities.
   In Egypt, a terrorist bombing attributed to the Islamic extremist group Tawhid Wal Jihad took place in April in Dahab, a popular tourist spot for Israelis in the Sinai Peninsula. Also, a terrorist plot targeting foreign tourists and attributed to another Islamic extremist group, al-Taefa al-Mansura, was uncovered in Cairo, raising concern that Islamic extremists were building a base for their activities in Egypt.
   In Syria, a country whose security situation was previously deemed to be relatively stable, a terrorist bombing attack targeting the U.S. embassy in Damascus occurred in September, by a group of Syrian Islamic extremists believed to be behind the attack. There was a concern for a possible deterioration in Syria's security situation, since foreign jihadists reportedly have a base in the country for infiltrating into Iraq.
   Under these circumstances, anti-U.S., anti-Israel Islamic extremists are expected to continue engaging in acts of terrorism targeting Western interests in Iraq and neighboring countries, fueling concern over a further spread of terrorism there.

< A series of large-scale terrorist attacks took place in Afghanistan, India and Sri Lanka>

In Afghanistan, a series of suicide bombings occurred amid calls for jihad in the country by Taliban and others (See Page 41). The increase in suicide bombings, coupled with Taliban's stepped-up armed insurgency, raises concern that foreign military forces stationed in Afghanistan may suffer increased casualties.
   In Mumbai, located in the western part of India, terrorist bombs exploded in July at eight locations almost simultaneously, including on commuter trains and at railway stations, killing more than 180 people and injuring more than 800 others. In the incident, the involvement of Lashkar-e-Taiba (LET), an Islamic extremist group based in the Pakistani part of the Kashmir region, or fundamental Islamist organizations in India are suspected, underscoring a need to remain alert to terrorist activities related to the Kashmir territorial dispute.
   In Sri Lanka, the Liberation Tigers of Tamil Eelam (LTTE), a separatist group of minority Tamils, started to engage in battles with government troops in late July, mainly in the northern and eastern parts of the country. With more than 1,000 people killed in the renewed wave of fighting in just about two months, concern grew that the ceasefire accord reached in February 2002 might collapse.
   Although Japan, Norway and other parties concerned tried to arrange direct dialogue between LTTE and the Sri Lankan government, LTTE continued violent activities, including a suicide bombing in early October that killed about 100 Sri Lankan Navy soldiers.
   The separatism conflict is said to have claimed the lives of more than 67,000 people since 1983, and it has been pointed out that terrorist activities may escalate further, depending on the course of future peace negotiations.

<Indonesia continued to face the threat of possible terrorist attacks despite stepped-up raids on terrorist organizations, while in Thailand and the Philippines, terrorist incidents continued to occur>

In Indonesia, Noordin Mohammed Top, a member of the international terrorist organization Jemaah Islamiya (JI), and his associates led a series of bombing attacks, but Top's group lost key members, with group members including a senior aide shot to death by police in April this year, following the death of bomb expert Azahari Husin in 2005.
   The group was probably damaged to a certain degree by the loss of key members, as indicated by the absence of any new terrorist incident for more than one year.
   Despite the damage done to Top's group, the threat of terrorism persists. Top is believed to be trying to rebuild the group while on the run as he has issued statements threatening terrorist attacks on the U.S. and Australia, citing the U.S. government's Iraq policy.
   In the Philippines, the country's national forces have carried out sweeping operations against JI and Abu Sayyaf Group (ASG) in the Jolo island in the southwestern part of the country since August, where JI member Dulmatin, seen as a mastermind of the terrorist bomb attack in Bali in October 2002, and others are believed to be hiding.
   The sweeping operations have exposed a terrorist bomb plot by ASG, and there is also growing concern that Raja Solaiman Movement (RSM), an organization comprising Islamic converts, will carry out bombing attacks in the Manila metropolitan area in collaboration with ASG. In June, a group believed to comprise left-wing extremists launched a series of five bombing attacks in the metropolitan area. Thus, the threat of terrorism comes from a variety of organizations.
   In the southern part of Thailand, meanwhile, bombing and other attacks were repeatedly carried out by an Islamic separatist group on government officials, security organization officials, teachers and ordinary citizens. This region is the most frequent target of terrorist attacks in Southeast Asia, with more than 1,700 people estimated to have been killed by Islamic extremists since 2004, and there are worries that acts of indiscriminate terrorism may increase in the future


<Western countries were confronted with the threat of “home-grown terrorists”>

In the Western world, government authorities uncovered a series of terrorist plots for indiscriminate mass murders, including plans to bomb government facilities in Canada and assassinate the country's prime minister (June) and a plot to blow up passenger aircraft in Britain(August).
   These terrorist plots involved so-called “home-grown terrorists,” including second- and third-generation Muslim immigrants who have grown up in Western countries as well as Europeans and other Westerners who converted to Islam. This fact forces Western countries to cope with the threat of terrorism from their own citizens, who can easily cross the national border.
   Behind the rise of home-grown terrorists is an influx of Muslims into Western countries from former colonies encouraged by tolerant immigration policy. The immigrant Muslims typically form their own communities in suburban areas, a situation which fosters feelings of isolation from society at large and led young Muslims to identify themselves with Islam. In this process, some young Muslims turn into extremists, inspired by sermons by inflammatory imams and “jihad videos.”
   With regard to Westerners who convert to Islam and become terrorists, it is more difficult for authorities to identify the Islam-convert type of home-grown terrorists and detect their activities compared with the immigrant type. One such convert carried out a suicide bomb attack in Iraq.
   Al-Qaeda's contacts with home-grown terrorists have been pointed out, and there is also speculation that a Bosnia-linked terrorist group is recruiting European Muslims for terrorist plots targeting Western countries. Therefore, it is important to keep a closer watch than before on Muslims' move toward extremism in the Western world.
   Also, the controversy over a cartoon concerning the Islamic prophet Muhammad that was carried by European media in January unleashed Muslim outrage around the world, threatening to fuel a clash between Western and Muslim values.
   In July, terrorists provoked by the cartoon attempted bomb attacks on German trains, raising concern that such a clash of values may further foment terrorism.

(2)Stepped-up counter-terrorism measures by Japan and other developed nations

]Developed countries strengthen counter-terrorism measures in response to the simultaneous terrorist attacks in London in 2005 and other incidents, by establishing relevant legislation and deploying more financial and human resources.
]Japan implements the “Action Plan for Prevention of Terrorism” through measures such as revising the Immigration Control and Refugee Recognition Act.

<Developed countries such as the U.S., Britain, France and Germany strengthened anti-terrorism measures in response to the simultaneous terrorist attacks in London in 2005 and other terrorist incidents>

Since the multiple terrorist attacks of September 2001, the U.S. has continued to increase its counter-terrorism-related budget and personnel. Also, the country established the office of Director of National Intelligence (DNI), which supervises various intelligence organizations, in an effort to obtain terrorism-related information as quickly as possible and to take effective countermeasures through integrated management of the intelligence community. As part of this effort, the Drug Enforcement Administration's Intelligence Division was added to the intelligence community as a 16th constituent body in February, thus facilitating sharing of information about terrorist cases involving drug smuggling. In March, the “2001 Patriot Act”, which had been enacted in response to the 2001 multiple terrorist attacks, was revised to make 14 of 16 provisions of the acts permanent, including ones related to wiretapping in terrorism investigations and information sharing between law-enforcement authorities and intelligence organizations. The revision also strengthened measures to prevent terrorist financing.
   In Britain, the simultaneous terrorist attacks in London in July 2005 made it necessary to bolster counter-terrorism measures, prompting the enactment in March of the “Terrorism Act 2006”, which makes it a criminal offense to encourage terrorism activities, to circulate terrorist publications, and to engage in preparations and training for terrorist activities. The act also enables the extension of the detention period for terrorism suspects without indictment or court trial. Also, Britain decided to increase the budget and personnel for security and intelligence organizations in order to enhance the information-gathering and analysis capabilities. Specifically, the Security Service (MI5) plans to open regional offices and increase its personnel sharply by 2008.
   France also faced increased need to strengthen counter-terrorism measures. The country enacted a new antiterrorism law that extends the detention period for terrorism suspects without charge and court trial, allows the use of video surveillance on public streets by authorities for the purpose of terrorism prevention, and imposes harsh punishments for participation in organizations or conspiracy intended to prepare for terrorism. France also decided to continue increasing the budget and personnel for anti-terrorism measures so as to ensure effective countermeasures.
   Meanwhile, the attempted simultaneous terrorist attacks on trains in the western part of Germany in July accelerated the anti-terrorism efforts of Germany, which had sought to cope with terrorism more effectively by establishing the Joint Counterterrorism Center (Gemeinsames Terrorismusabwehrzentrum; GTAZ), intended to act as a bridge between the law-enforcement and intelligence-gathering authorities, in addition to increasing the terror-related budget and personnel. In September, the German government decided to build an anti-terror database that puts terrorist-related information gathered by police and intelligence organizations under unified management, and to expand the use of surveillance cameras. The government aims at starting operating the database in 2007 after enacting a relevant law.

<Japan steadily implemented the “Action Plan for Prevention of Terrorism”>

Japan has steadily implemented the “Action Plan for Prevention of Terrorism,” revising the Immigration Control and Refugee Recognition Act in order to strengthen measures to prevent terrorists from entering its territory, as required by the “Action Plan for Prevention of Terrorism,” drawn up in December 2004.
   The revised act obliges foreign nationals except for “special permanent residents” to provide personal identification data such as fingerprints on the occasion of disembarkation examination. For the purpose of preventing the entry of terrorists, the revised act also establishes legal grounds for the deportation of persons designated as terrorists as a result of consultations among government agencies concerned. Furthermore, it requires the captains of incoming airplanes and ships to submit the list of passengers in advance. With regard to the deportation of designated terrorists, the director-general of the Public Security Intelligence Agency is due to provide Minister of Justice with opinions necessary for terrorist designation.
   In order to prevent terrorism, the Public Security Intelligence Agency keeps track of the movements of international terrorist organizations by enhancing cooperation with foreign organizations, and watches for terrorist-related activities in Japan as well. Specifically, the agency gathers information and conducts investigations in order to 1) find out whether there are people and organizations in Japan who may be related to terrorist groups and, if there are, keep track of their activities and 2) to grasp the flow of funds and goods in Japan that could be related to terrorist groups. As and when necessary, the agency provides the information thus collected to organizations concerned. In line with the revision of the immigration act, the Public Security Intelligence Agency devotes increased efforts to gathering information necessary for the designation of terrorists and is holding consultations and exchanging opinions with other governmental organizations.

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