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Press Conference with Secretary Cohen and Deputy Prime Minister Ibrahim

Presenters: Defense Secretary William Cohen and Deputy Prime Minister Anwar bin Ibrahim
January 12, 1998

Palace of the Golden Horses, Kuala Lumpur, Malaysia January 12, 1998

Anwar Ibrahim: Thank you, the Pacific Dialogue is the fourth in a series which began in November 1994. Its primary purpose is to enhance understanding, friendship and cooperation between Asia and the United States. It is a non-formal gathering of select political, corporate and academic elites in the region. Myself and Secretary Cohen are the critical co-movers of these both from the Asian and the American side. There is a strong delegation from several countries are attending this dialogue, most notable has been the delegation from the United States. This is 28 strong and includes no less than 13 prominent corporate figures. This is a positive indication of strong interest in the application of regional economics and contributes confidence in the long term prospects for the region. The U.S. delegation is led by Secretary Cohen himself.

This dialogue has traditionally focused on three critical areas, culture and civilization, security and defense, economics and development. However, in view of the current international situation in the region, a large part of the dialogue will continue to focus on what practical and substantive steps can be taken to enhance economic and financial cooperation to resuscitate the health of the economies.

Secretary Cohen: Thank you. The Deputy Prime Minister is picking up from what remains of my Maine accent. Let me thank my good friend the Deputy Prime Minister for hosting this important meeting at this challenging time in the history of South East Asia. In his opening remarks this morning Prime Minister Mahathir referred to the current economic difficulties in the region. He noted that Malaysia is not quite what it was when we last met here. I would like to assure you that the United States' commitment to Asia is exactly what it was last year, and the year before. The United States wants a peaceful, stable, and secure area. The United States will remain engaged in Asia in good times and bad times. Our economic and security interests are enduring and fundamental. So we are working with the countries in the region both bilaterally, and through international organizations, to resolve the economic problems as quickly as possible. Our security commitment remains unchanged.

The forward deployment of approximately a hundred thousands troops in Asia has provided the foundation for stability and peaceful development and that commitment endures.

We are engaged with China because stability rests on the ability of the world's most powerful nation, and world's most populous nation to work together. That commitment endures.

Our alliance with Japan has been enhanced by the new defense guidelines to improve our ability to work together for regional stability. That commitment endures. We are working aggressively through the four party talks on peace on the Korean peninsula. That commitment endures. We are working with countries throughout Asia, both bilaterally and multilaterally, to build military to military relationships to encourage cooperation, and understanding, and that commitment endures.

The futures of Asia and the United States are inextricably linked. This morning, Prime Minister Mahathir talked of Malaysia's search for win-win solutions to the region's problems. A continued U.S. security commitment to Asia is the foundation upon which win-win solutions can be built.

Moderator: The media can ask questions on four mikes on each side of the room.

Question: Charlie Aldinger, Reuters. I would like to ask the Deputy Prime Minister, if I may; Secretary Cohen's speech this afternoon said that United States rejects the idea of any constraints on movements of American forces in the Asia Pacific region. He says that some members of ASEAN have suggested informally that perhaps that the United States should give advance notice of the size and whereabouts of its movements, and he rejects that. He says that would restrain flexibility of movement. How do you feel about that?

Answer (Anwar): That has been the consensus in ASEAN to view positively the continuing American vision, although we have always emphasized on the need to have a comprehensive view of the American presence, in the economic trade and militarily. I think the specific details of the establishment of the military presence that will be discussed not only with ASEAN but with the countries that are concerned. But I don't think that there is any dispute on the need for to see positively the American...United States presence.

Q: As a quick follow up, Secretary Cohen do you think the United States should have to give advance notice of its military movements?

Answer (Cohen): I think what is important is that we maintain our presence for stability in the region, that it be flexible and unrestricted. And that any measures, which I suggested are well-intentioned, confidence-building measures, that they not undercut that need for our flexibility to act whenever such action may be required.

Q: Jamie MacIntyre from CNN. Secretary Cohen, and Deputy Prime Minister, Malaysia has indicated that it believes it can weather the current economic crisis without the intervention and assistance of the IMF. Secretary Cohen, did you offer any guidance about whether or not IMF reforms are in order to restore confidence, and can I get a reaction as to whether or not it should be international

Answer (Cohen): First may I inquire whether you reported that the haze has lifted. Secondly, no, I did not suggest to Datuk Mahathir or to the Deputy Prime Minister that they should invoke the need for IMF funding. This is something that is unique to each individual nation. Each country will have to make their own examination of whether such support would be required. As I understand it, Malaysia has indicated it can deal with its problems without such support, and IMF funding, and that's really determined by the sovereign nation of Malaysia.

Answer (Anwar): Let me clarify that point. I think what the Prime Minister Mahathir meant was that we can make the necessary adjustments, policy reforms. In Malaysia, we continue to have budget surplus, we have revised growth downwards; we have made major cutbacks and budget relocations and we continue to have sustainable reserves and therefore we do not see a necessity of having to resort to the IMF for assistance. But we have continued, we continue to work with IMF. We are having consultations down there and I should venture to add that the adjustments that we make and announced on the 5th December was also after some consultations with IMF and this is ongoing program, arrangement that will be observed. And the benefit of having a dialogue with the IMF is to have a clear understanding of what's happening and measures taken by neighboring countries in the region. But more important is a general consensus that we the Finance Ministers of ASEAN have tried to tackle this problem, accepting the need for effective surveillance among ourselves, working towards further transparency and accountability.

Question: For Secretary Cohen. Tom Fuller from the Herald Tribune. Sir, Given the ongoing and perhaps worsening turmoil in Indonesia, has United States dusted off its contingency plans, or does it have contingency plans for security threat from that situation if the turmoil turns regional, and some sort of...manifests itself in racial riots that spill over...migration of people from Indonesia, etc.

Answer (Cohen): I don't think it would be helpful to speculate what may or may not take place in the future. If Indonesia does act quickly and in accordance with IMF recommendations, I don't think we have to face such a future that you just outlined. So I think it would be counterproductive to speculate as to what may unfold in the future. I think it is important for Indonesia to act quickly and to try to reform its economic structures as closely as possible for the IMF recommendation.

Question: Jim Randall with VOA. Mr. Secretary, you've made it clear what you don't what in terms of prior consultation and limits on action. What, specifically, do you want in terms of military operations, training, basing...the right to land aircraft? What is that you are specifically looking for?

Answer (Cohen): I think you just answered the question. What we'd like it to do is to continue doing what we are doing, to build on what we have. This is a very strong bilateral relationship with Malaysia, with other countries in ASEAN. We would like to build upon those bilateral relationships, to have more training, to access ports or facilities in order to carry out training and joint exercises, should they become necessary and desirable in the future. But essentially to build a closer bond and relationship on a military to military basis and enhance the security relationship in this entire region. I think we have a very solid foundation now. We would like to expand that and explore ways in which we might even consult on a multilateral basis, but the purpose is to build on the bilateral relationships that we have, and that's something I'm seeking.

Question: Could I ask a follow up? What order of magnitude are you talking about currently? Are there a dozen ship visits a year, a hundred? Are we dealing with a few hundred troops? A few thousand troops? Could you give us a feeling for how large these operations are and how large you would like them to be?

Answer (Cohen): Well, it is not a question of the size of the operations, but rather of how they are carried out. We have, in fact, increased some of the visits here in Malaysia. We would hope to increase them in other regions as well; we are exploring cooperative arrangements with China. I'll be going to China shortly to sign an important maritime safety agreement. So we are looking for ways in which we can simply build upon the relationships that have been established. If we can increase visits; if we can in fact share more exercises -- be they table top exercises with respect to China, which hopefully would expand to actual real exercises in the field, humanitarian operations, peacekeeping operations. Those are things we would hopefully achieve. But there is no definition of how many should be involved or how frequently. As the situation permits and as is desirable to have greater interoperability with our armed forces with training, greater understanding and greater transparency; all of that is important in building trust and confidence in this region. What is critical for us is that the United States continue to be a stabilizing force for the region. That is the purpose behind the U.S.- Japan defense guidelines update. It is the purpose behind the U.S.- South Korea consultative agreement that we signed in December back in Washington. It is the purpose behind building these relationships up so that they can have a even greater stabilizing force in the region.

Question: Peter Biles, BBC. A question for the Deputy Prime Minister. In light of the economic turmoil, can you clarify your government's position on the issue of migrant laborers? There seems to be some confusion over exactly what is going to happen.

Answer (Anwar): Let me first say that the Pacific Dialogue, that we have Secretary Cohen leading this big American delegation at this watershed...defining moment in the history of the region facing these countries...is very reassuring. It is welcome and seen to be a clear signal that the dialogue and the friendship and the collaborative arrangement helps. And we shall see what concrete measures and decisions will be reached later. But certainly the Clinton administration has given a clear indication of support and is seen not only by me but others as something positive. This was repeated at the dialogue by the participants throughout the day. On the issue of migrant labor, we have two million. Our decision is to redeploy them to the sectors that we require. We have immediate need of about 60,000 workers in the plantation sector, 20,000 in the manufacturing sector, who will have to be redeployed the excess migrant workers -- granted legal ones, those with permits -- to these sectors. Never mind the numerous statements you have seen in the last few days. People react to them. "What happens if there is massive retrenchment?" We are still short of workers in Malaysia. Still very short of workers.

Question: So you aren't taking on repatriation?

Answer (Anwar): No, this is an ongoing program that we have taken on for the past two years, particular with the Indonesian government. They have been very cooperative, so we will continue to send back some. But we will have to be mindful of the difficulties faced by many governments. We will continue to have discussions with the governments within ASEAN.

Question: Mr. Deputy Prime Minster, Jim Mannion from Agence France Presse. Earlier this morning, Prime Minister Mahathir said that one million workers would be sent home. Why is that necessary? Wouldn't it contribute to the instability of the region?

Answer (Anwar): These policies are made known from our discussions, our arrangements with our neighbors that we will only keep those workers with permits -- the illegal ones will have to be sent back and they have already agreed. But I do accept difficulties faced by our neighbors. Now, we will have, not to review this, but to handle this carefully. Right now, our decision is to redeploy them to sectors that will require...I do not think there is a decision reached to send them immediately.

Question: Bill Gertz, Washington Times. I'd like to ask the Deputy Prime Minister a question about China. Maybe Mr. Secretary you could also answer. The Chinese military is engaged in a modest military build-up of newer weapons. Do you see that as a potential threat to Malaysia's security?

Answer (Anwar): We see China as a friendly country; we are engaged with China on a continual basis, and we see no reason why we should consider China as a threat. We in fact encourage...we view as a positive thing the enhanced relations between the United States and China. But ASEAN as a region has taken a very firm position, and our policy is that we will continue to engage with China as a friendly neighbor.

Answer (Cohen): Not much I can add to what the Deputy Prime Minister has said. As I've indicated previously, the United States is seeking a positive and constructive relationship with China and that we do not treat it as an enemy, but rather as a regional power that will emerge and one that we hope will enter the international community in a responsible fashion. That's the purpose behind our engagement with China, to achieve that end. And so we are working with ASEAN, with Japan, with other countries in the region to make sure the United States continues to offer the stabilization that I mentioned before. So I am looking forward to working with China and hopefully that will be as constructive as our aspirations are.

Question: I am (unintelligible). Do you think there will be an improvement in relations with Iran?

Answer (Cohen): That depends a great deal upon what Iran does. As President Clinton has indicated in the past, that he would like to see a constructive relationship with Iran. That is the position expressed by the prior administration, the Bush administration, as well. Provided Iran is prepared to alter its behavior. Provided it discontinues supporting acts of terrorism, that it does not seek to develop weapons of mass destruction, and ceases trying to undermine the Middle East peace process. If those objectives can be achieved, then obviously it would be met with a policy response by the United States. At this point we have heard a positive statement that was made by the President (of Iran). We have to see that the words are followed up with constructive deeds.

Question: (Unintelligible) the Middle East?

Answer (Cohen): The Middle East? With respect to Iran? Well, again it depends on what Iranian behavior is going to be. In the past they have supported acts of terrorism. They have tried to acquire nuclear, chemical, biological weapons. They have been undercutting the Middle East peace process. To the extent that those policies change, then it could be met with a policy response that takes place. We have seen no evidence that there has been any change of behavior on the part of the Iranian government as such. Then it will not change our relationship.

Question: Steve Myers from the New York Times. One question for the Deputy Prime Minister. I was wondering if you can explain how you see the economic retrenchment affecting Malaysia's plans to modernize its military, and whether that came up in your discussions?

Answer (Anwar): We have had to revise some of the earlier projections both in terms of growth and also in terms of procurement-- newer weapons for the military. But what we have agreed upon is just to defer any of the earlier commitments, whilst (unintelligible) a modern, capable, military force.

Question: Mr. Secretary?

Answer (Cohen): This did not come up during our discussions.

Question: (Unintelligible) of TV3. Mr. Deputy Prime Minister, a senior UMNO politician has said that about 20 billion ringgits were withdrawn from Malaysian owned banks and placed in foreign financial institutions, and this has shown a lack of confidence. What is your reaction to that?

Answer (Anwar): We have observed a very free exchange currency, and there is of course off-shore ringgit. Before the trouble, we had an estimate of roughly ten billion off-shore. Now the estimate is about 20 billion off-shore. So I don't think it is quite correct to suggest that there has been an outflow of the 20 billion ringgit purely because of the recent turmoil. I do accept that towards the end of November, there was some withdrawal from local institutions, but we came out with a very firm categorical statement that it is our desire to defend and protect investors in the system and that the issue was quite resolved. I am not aware of this senior official; there are many senior officials.

Question: Bob Burns from the Associated Press. Some people in the U. S. have expressed some concern that the austerity measures and economic reforms that are being recommended in South East Asian countries could lead to an anti-U.S. backlash here. Do you share those concerns and are you concerned with future constraints on the expansion of the military relationship here?

Answer (Cohen): Well, I know that has been raised as a concern, but in comparison to what needs to be done, for example, it is very clear that several of the countries that are currently experiencing economic difficulty have to have some assistance. The IMF right now is the only institution, or the primary institution, whereby that reform and assistance can come about. So the restrictions may be very austere, and they may cause additional difficulties, but they have the best chance right now of at least stabilizing the situation. What more needs to be done, what other institutions, what other formulations can be devised in the future remain to be seen. For the moment, it seems that what we need is a stabilizing force right now that will come in the form of the IMF assistance. With respect to what it will do as far as military sales are concerned, we'll have to defer that question. Obviously, we are interested in helping these countries that are experiencing difficulties right now also deal with their security concerns by either stretching out, or finding some other method of payment or some deferral of payments to accommodate that, but we'll have to see how far the economic difficulties persist, and what the impact will be on the internal security needs of the individual countries.

Question: As a follow up, in security areas beyond the question of arms procurement -- I was thinking more along the lines of agreements by governments to more open U.S. presence, port visits and bilateral...joint exercises and that sort of thing -- is there some reluctance to do that if there is some resentment of America in opposing economic austerity?

Answer (Cohen): There's always the possibility, I suppose, but right now, based upon my conversations with the individuals in this conference, this dialogue, and various partners in the region, there's very strong support for maintaining the American presence and finding ways to build upon that relationship. To the extent that countries come to feel the United States or the IMF are counterproductive, then that could have some implications as far as our relations are concerned. I don't foresee that taking place. I think that the sentiments are so strong in the region, that they appreciate what the United States does provide in the way of security and assurances, stabilizing force...that it is the best hope that they have for recovering the future. We hope that this is going to be temporary in nature; it could take months; it could take longer. But we believe that our presence will be a productive contributor to the restoration of economic stability and prosperity. So I don't foresee that taking place.

Question: The U.S. has always been known for its support for regions facing problems, you send ships and troops. Now do you see right now, in view of the economic difficulties, do you see the U.S. providing direct assistance outside the IMF?

Answer (Cohen): U.S. assistance will come in the form of supporting the IMF. I do not anticipate that the U.S. will provide direct funding as such. Other instruments, and other instrumentalities might be devised in the future, but at this moment the contribution the United States is making is trying to be of assistance in providing funds through the IMF. Beyond that, we have not made any decisions.

Moderator: The Secretary has to leave.

Question: I have a question. Have there been any changes in Iraq's position that would facilitate changes in the U.S. presence in the Gulf?

Answer (Cohen): I have not seen any changes on the part of Saddam Hussein that could cause me to believe that there should be a reduction of the U.S. presence at this time.

Moderator: Thank you.

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