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NO. 44 — November 21, 1997

 

JEI Report will not be published November 28, 1997 because of the
Thanksgiving Day holiday. The next issue will be dated December 5, 1997.

While we take a printing holiday,
keep up-to-date on breaking Japan-related developments
by visiting the
JEI Spin On The News page

Feature Article

JAPAN-NORTH KOREA RELATIONS: IMPROVING BUT FORMAL TIES REMAIN UNCERTAIN by Barbara Wanner

Summary

Japan's long-chilly relations with North Korea appear to be warming up for the first time in five years. Nonetheless, its foreign policy professionals are only cautiously optimistic about the near-term prospects for establishing formal diplomatic relations between the two countries. Tokyo and Pyongyang, they note, still are nowhere close to bridging important bilateral differences. Pyongyang's history of intractable, often provocative, behavior also raises caution flags in Tokyo. In the most recent example, North Korea's unyielding position basically ground to a halt talks involving it, South Korea, the United States and the People's Republic of China that are aimed at realizing peace on the Korean peninsula.

Yet Tokyo recognizes that each side stands to benefit from normalization of relations. Most important from its perspective, establishing formal ties with Pyongyang would enhance regional security. Japan, for instance, would be better able to monitor its neighbor's compliance with a 1994 U.S.-North Korea agreement designed to thwart Pyongyang's suspected nuclear weapons program as well as to discourage North Korea's development and proliferation of ballistic and chemical weapons. At the same time, with the North Korean economy near collapse and reports of people starving to death, Pyongyang would seem to be in dire need of Japanese money, food, energy assistance and agricultural technology.

As desperate as North Korea's economic situation appears, however, some experts contend that the food and energy shortages do not risk toppling the regime of Kim Jong Il. Accordingly, the incentives for Pyongyang to improve relations with Tokyo or Western capitals are weaker than outsiders might assume. Pyongyang might be willing and able to muddle through for a few years, sustained by periodic injections of food assistance from various sources, these analysts propose.

Too, while the impasse in the four-way talks provides a window of opportunity for an expanded Japanese-North Korean dialogue, Tokyo is reluctant to get too far ahead of South Korea and the United States in its dealings with the insular regime. Insiders also note that domestic political factors as well as issues related to Japan's resident Korean community may continue to complicate Tokyo's policymaking toward Pyongyang, although these constraints are less of a problem than in earlier years.

 

JEI Report will not be published November 28, 1997 because of the
Thanksgiving Day holiday. The next issue will be dated December 5, 1997.

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Weekly Review

Hokkaido Takushoku Bankruptcy Highlights Tumultuous Time In Japan by Douglas Ostrom

The November 17 failure of one of Japan's 10 key banks, Hokkaido Takushoku Bank, Ltd., launched several days of furious financial activity in Japan. In keeping with the pattern of equity markets often treating seemingly bad news as good news, the Tokyo Stock Exchange erupted with one of its biggest single-day gains ever, soaring almost 8 percent as measured by the Nikkei index of 225 first-section stocks. In contrast, when the ruling Liberal Democratic Party presented an economic stimulus plan November 14 that contained a new idea or two, it was rewarded with a 2.2 percent drop in the Nikkei average.

 

Restructuring Of NTT Starts Telecommunications Market Shuffle by Jon Choy

To give Japan's largest telecommunications carrier a better chance to compete in the global marketplace, Tokyo approved major changes last spring to the laws governing Nippon Telegraph and Telephone Corp. (see JEI Report No. 46B, December 13, 1996). Sometime after April 1999 NTT will be split into three parts — two regional service companies and a long-distance firm. At that point a holding company will be created that will own all the shares of the three subsidiaries. Meanwhile, NTT got the green light last June to expand into international services businesses and overseas markets. The impacts, both actual and pending, of this restructuring already are beginning to appear in the form of decisions by NTT and its competitors.

 

Li Peng Stresses Bilateral Ties On Japan Trip by Eric Altbach

Prime Minister Ryutaro Hashimoto and Chinese Premier Li Peng pledged to deepen the dialogue between their countries, with a special emphasis on security issues, during a 90-minute meeting in Tokyo November 11. Such a statement had been the goal of the Japanese leader's early September talks in Beijing with Mr. Li and President Jiang Zemin. However, it was short-circuited by the controversy over the geographic reach of the new U.S.-Japan defense operational guidelines, specifically whether they extended to a conflict in the Taiwan Straits (see JEI Report No. 34B, September 12, 1997).

 

Japanese, North Korean Politicians Agree That Peace Talks Should Resume by Barbara Wanner

A delegation of politicians representing the ruling Liberal Democratic Party and its noncabinet partners, the Social Democratic Party of Japan and the New Sakigake Party, wrapped up three days of informal talks November 14 in Pyongyang with members of the Korean Workers' Party. The two sides reiterated an August agreement between Japan and North Korea to resume normalization negotiations "as soon as possible." Although the lawmakers said nothing explicitly about when the peace talks should resume, that was not the overriding purpose of the meeting. Anxious to avoid another of the breakdowns that has frozen bilateral relations for the last five years, Japan and North Korea for the time being apparently regard nongovernmental exchanges as the best way to continue mending fences and airing issues before plunging into a new round of normalization talks.

 

Notes

JEI Report will not be published November 28, 1997 because of the
Thanksgiving Day holiday. The next issue will be dated December 5, 1997.

While we take a printing holiday,
keep up-to-date on breaking developments by visiting the
JEI Spin On The News page

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