Nepal’s peace process faces a crucial test this month. Elections for a Constituent Assembly (CA) are likely to go ahead on 10 April 2008 as scheduled but political unrest and violence could mar – or even derail – preparations, and the aftermath could bring turbulence. Elections in a delicate post-conflict situation are never straightforward and Nepal has many possible flashpoints, not least that the two armies that fought the war remain intact, politically uncompromising and combat-ready. Once results are in, all political players must be prepared for a difficult period in which they will need to compromise to make the CA an effective body, extend the number of parties with a role in government and urgently tackle crucial issues left aside during the campaign, including security sector reform. The international community has an important election observation function and should listen to Nepal’s political and civil society groups in assessing the credibility of the process.

Some analysts have questioned whether U.S. security interests in the Asia Pacific region are best served by its existing framework of bilateral alliances. The region is now facing an array of changes: deepening trade links, the formation of new regional institutions, and increased attention to the threat of Islamic terrorism. Against this backdrop, China’s rise represents the key driver in the evolving security landscape in Asia. China is now attracting regional states with its economic power and is offering competing vision to the U.S.-centric “hub and spoke” system of alliances. In essence, China’s increasing economic, diplomatic, and military strength is compelling countries to rethink existing security arrangements and take initial steps that may lead to the formation of regional groupings of nations with common interests and values. At the same time, the Bush Administration has pursued stronger defense relations with Australia, Japan, and India.

Northeast Asia is the most dynamic sector of the global economy, and the most dynamic element is undoubtedly the rise of China. However, in this region conflicts dating back to the Cold War have not yet found resolution. The imbalance between economic progress and political stagnation ensures that international affairs pose many challenges to governments and to students alike. The two papers herein, originally presented at the Strategic Studies Institute’s 2007 annual Strategy Conference, highlight the challenges posed by the rise of China and by the new possibility for making progress on Korean issues due to the Six-Party Agreements on North Korean proliferation of February 13, 2007.

Sinhala nationalism, long an obstacle to the resolution of Sri Lanka’s ethnic conflict, is again driving political developments on the island. Nationalist parties, opposed to any significant devolution of power to Tamil areas of the north and east and to negotiations with the Tamil Tigers, help set President Mahinda Rajapaksa’s agenda. The government takes a hardline stance, responding in part to opposition to the flawed 2002-2006 ceasefire and peace process. Would-be peacemakers need to better understand Sinhala nationalism, which is too often dismissed as merely irrational and racist. With little likelihood of a new formal peace process soon, the longterm challenges it poses to the conflict’s resolution need to be addressed.

WE, the Heads of State/Government of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People’s Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam, Member Countries of ASEAN, on the occasion of the 12th ASEAN Summit in Cebu;

Historically, Washington’s view on the second debate has been clear, consistent, and bipartisan. Alliances come first. But Democratic and Republican administrations alike have argued that it is not an “either-or” choice; bilateral alliances and multilateral cooperation are (or should be) mutually supportive, not mutually exclusive. This view may be changing, however, especially in Asia but is being challenged at least in unofficial circles in Washington as well. Some Asian states, China foremost among them, see the existing U.S. alliance structure as a reflection of Washington’s leftover “Cold War mentality” or debate its future relevance, arguing for cooperative or collective security arrangements instead. While the current U.S. administration, like its Cold War predecessors, maintains the primacy of America’s alliances, in recent years Washington seems more inclined to lean toward ad hoc arrangements where, to quote former Defense Secretary Donald Rumsfeld, “the mission defines the alliance” rather than the reverse. The perceived “requirement” for allies to support ad hoc efforts also adds new strains to both structures.

A Maoist walk-out from government on 18 September 2007 and mainstream political parties’ intransigence are threatening elections for Nepal’s Constituent Assembly (CA) scheduled for 22 November. Although a compromise to bring the Maoists back on board is possible, the heightened tensions add to longstanding problems including weak political will, poor governance and security, and continued claims for representation by marginalised groups. The Maoists could contest elections from outside government but polls without their participation would be meaningless, and they retain the capacity to make the country ungovernable if they oppose the process. Critical elements of the 2006 peace deal, such as security sector reform, remain to be tackled, while implementation and monitoring of past agreements have been minimal. Primary responsibility for steering the process lies with the mainstream parties, which need to demonstrate coherence, commitment and a will to reform their own behaviour if lasting peace is to be established.

Yet another "useful and positive" round of Sino-Indian boundary negotiations was held on September 24-26 against the backdrop of a general consensus in both capitals that no breakthrough to the territorial dispute could be achieved for a long period of time. Talks for a settlement have now gone on for more than a quarter of a century (since 1981, to be precise) -- with a "big push" given to them by Prime Minister Rajiv Gandhi's visit to China in 1988, the second one by Atal Bihari Vajpayee's sojourn in Beijing in 2003 and a third one by Manmohan Singh's talks with Premier Wen Jiabao in 2005 and President Hu Jintao in 2006 -- yet all were in vain.

Despite unresolved territorial disputes, mutual suspicions over each other’s military buildup and strategic intent, potential economic competition, and the changing balance of power and realignments, China and India have enjoyed 10 years of mostly uninterrupted progress in their political, economic, and security relationship. President Hu Jintao’s November 2006 visit to India, the first such visit by a Chinese head of state in a decade, marked an important milestone in the bilateral relationship. During Hu’s visit, the two governments issued a joint statement highlighting a 10-point strategy to elevate the relationship and signed more than a dozen agreements to strengthen cooperation in trade, investment, energy, and cultural and educational exchanges.

Most days, the street outside the Thai embassy in Phnom Penh fills early with pedicab drivers shuttling old women to market. One winter day in 2003, however, a far different crowd gathered outside the Thai mission. Cambodian newspapers had misquoted a Thai television pop star as calling Cambodians “worms” and questioning whether Angkor Wat, Cambodia’s ancient temple complex, should be returned to Thailand. Stoked by the report, mobs attacked Thai-owned businesses across Phnom Penh, causing millions of dollars worth of damage.

In a dynamic Asian order featuring new centers of power, China’s rise will naturally challenge Washington’s ability to protect its interests in the region. In 2000, presidential candidate George W. Bush labeled China as the United States’ leading strategic and military competitor. In September 2005, Deputy Secretary of State Robert Zoellick explicitly warned Beijing not to “maneuver toward a predominance of power” in Asia, suggesting that it was doing exactly that.

The Asia Pacific region has too many regional organisations, yet they still cannot do all the things we requiere of them. This matters because the larg adjustments which the world will have to make to the rising power of China and India will be managed more easily and effectively if their neighbours can help shape the emerging landscape.

The paper argues that the Spratly dispute has shown signs of de-escalation in recent years. This has occurred however in the absence of significant changes in material terms and in the cirnumstances pertaining to the dispute as well as in the absence of major progress in conflict management and resolution. The paper seeks therefore to understand what explains the de-escalation process.

When local elections were held in Aceh on 11 December 2006, conventional wisdom (shared by Crisis Group) was that candidates from the Free Aceh Movement (Gerakan Aceh Merdeka, GAM) would not do well. They might pick up two or three of the nineteen district races, but the biggest prize – the provincial governorship – was almost certainly out of reach. The old Jakarta-linked parties would benefit from deep pockets, established structures and a split in the former insurgency’s leadership. Polls just before formal campaigning began showed GAM’s governor/deputy governor slate – Irwandi Yusuf and Muhammad Nazar – virtually out of contention. But GAM won overwhelmingly, in what an analyst called “a perfect storm between the fallout from the peace accord and the failure of political parties to understand the changing times”. The challenge now is to govern effectively and cleanly in the face of high expectations, possible old elite obstructionism and some GAM members’ sense of entitlement that it is their turn for power and wealth.

The September 2006 coup in Thailand, despite its damage to democratic development, opened the way for improved management of the conflict in the Muslim South. Prime Minister Surayud Chulanont’s interim government has overhauled some of its predecessor’s worst policies and signalled willingness to address longstanding grievances. But verbal commitments in Bangkok have been difficult to translate into changes on the ground, and relations between security forces and local communities continue to be strained while violence mounts. Thais outside the South have exerted pressure for a return to heavy-handed crackdowns on suspected militants. The government must respond to the escalating attacks, but with care – widespread arbitrary arrests and civilian casualties would only increase support for insurgents.

On November 21, 2006, Nepal’s government and the Communist Party of Nepal (Maoist) signed a comprehensive peace agreement (CPA) to formally end their ten-year conflict, which has resulted in an estimated 13,000 deaths. The agreement has been widely hailed as historic and many observers feel cautiously optimistic, in spite of the hurdles that lie ahead.

After four years of relative peace, Sri Lanka has again plunged into military conflict between the government and the separatist Tamil group, the Liberation Tigers of Tamil Eelam (LTTE). A 2002 ceasefire, negotiated with Norway’s help, remains intact on paper but is flouted on the ground with increasing regularity and frequent brutality. More than 2,500 people, many of them civilians, have been killed since January. Human rights abuses and political killings are carried out with impunity by both sides. The humanitarian crisis in the north east is critical, with more than 200,000 fleeing their homes during the year. Until attitudes change on both sides, the immediate prospect is for worsening violence.

The U.S. Institute of Peace recently hosted Farooq Kathwari, head of the Kashmir Study Group, to discuss the prospects for peace in Kashmir. Kathwari’s personal involvement and commitment to the peace process give him a unique ability to see potential for a way around the obstacles in this seemingly intractable conflict. During the session, Chester Crocker, a member of the Kashmir Study Group and a USIP board member, described those obstacles in more depth, providing a framework for analyzing what peacemaking efforts like Kathwari’s have been able to achieve and which aspects of the process remain fragile.

This report begins with a question. What changes in U.S. strategic and defense relationships in the Asia-Pacific region, if any, are needed to respond to major developments in the region, particularly China’s emergence as a major power, the continuing potential for inter-state conflict, and the struggle against militant Islamists? The report addresses this central question by setting it within the larger dynamics of American strategy in both a global and regional context. It discusses the shifting correlates of power in Asia before considering the current strategic debate, force structure, and key American security relationships with regional states. It also considers the United States’ strategic response to recent developments and provides several policy options.

The Heritage Foundation is honored to welcome you to this, our 11th B.C. Lee Lecture. This annual endowed lecture series is named in honor of the late B.C. Lee, founder of the Samsung Group of Korea. These lectures focus on U.S. relations with the Asia–Pacific region. Their aim is to promote mutual understanding and to enhance cooperation between the United States and the nations of Asia.