Diplomacy a Cruise Through the Islands

By Amy Wilentz

It was once a placid pond where Western powers could splash contentedly, encircled by a ring of friendly nations. The Philippines were American. Viet Nam (Indochina then) was French. Singapore was British. Indonesia belonged to the Netherlands. Then, after World War II, the slow move toward regional independence began. Today many of the small countries that dot the Pacific are fiercely nationalistic. Yet, at least for now, most of them remain closely allied with the West.

Last week Secretary of State George Shultz made a five-stop Asian trip to bolster those ties against recent strains, and to coincide with the annual meeting in Manila of the Association of Southeast Asian Nations (ASEAN). The Manila trip, Shultz's second visit to the Philippines since Corazon Aquino toppled Ferdinand Marcos in February, was also intended to show staunch U.S. support for the new Filipino President, whose fledgling administration lacks the stability of an established government.

Small but significant ripples in the Pacific pond have been worrying U.S. strategists. Last year Kiribati, a tiny Micronesian nation about 3,000 miles east of Singapore, became the first South Pacific country to sign an agreement with the Soviet Union. The $1.7 million fishing treaty allows the Soviets emergency access to the cash-starved nation's 33 coral atolls. Two weeks ago Moscow began similar negotiations with Vanuatu, a nearby island nation, and Fiji has also expressed interest in a Soviet fishing agreement. In the latest talks the Soviets are more demanding: they are asking for shore privileges and airline landing rights as well as fishing access. Vanuatu, an 80-island nation about 1,000 miles east of Australia and 1,000 miles north of New Zealand, has recently sought closer relations with both Cuba and Libya.

Even more troubling to Western analysts has been the clash with New Zealand that began in 1984 over the U.S.'s right to dock nuclear-powered or -armed ships there. Last week the dispute led the two nations to move toward formally ending their mutual-defense treaty under the ANZUS (Australia, New Zealand, U.S.) alliance. While the U.S. and New Zealand will maintain their military agreements with Australia, they will no longer defend each other. After meeting with New Zealand Prime Minister David Lange in Manila, Shultz declared, "We part company as friends, but we do part company as far as the alliance is concerned." Nor is New Zealand alone in opposing visits by nuclear vessels. A 13-country group called the South Pacific Forum has agreed on a nuclear-free policy for its territory.

With such difficult problems facing the larger region, Shultz chose an itinerary that was likely to accentuate the positive side of U.S. dealings in the Pacific rim. He selected allies who tend to be receptive to his "businessman's diplomacy," and whose policies reflect his favorite themes: rising democracy, a comeback for capitalism and free trade. Thus the Secretary flew first to Hong Kong, a bastion of free enterprise on the tip of China, and ended his trip with a stopover in Palau, a U.S. territory in the South Pacific that voted in February to become semi-independent while granting the U.S. continued military-base rights.

In Singapore, Shultz held a 2 1/2-hour private meeting with Prime Minister Lee Kuan Yew, a personal friend of the Secretary's. Sounding a theme frequently heard during the three-day ASEAN conference in Manila, Lee warned Shultz that the growing trend toward protectionism in the U.S. Congress was threatening the economic stability of the Pacific basin. Shultz was receptive to the warning. Like President Reagan, he strongly favors free trade and opposes protectionist measures. "I believe their statements of concern are justified," the Secretary said later. "We ought to pay attention." He advised Lee to show good faith by keeping his markets open.

Shultz then paid a brief visit--the first by a high-level U.S. official--to the oil-rich Sultanate of Brunei (pop. 214,000), which sits on the northwest coast of the island of Borneo and has been ruled by the same family for 29 generations. "There are no poor people in Brunei," said one U.S. official. He added that little Brunei, with its annual per-capita income of roughly $17,000, "has no serious problems of any kind." Shultz chatted with the Sultan and took a tour of the thousand-room palace compound with its squash and tennis courts and a banquet hall with a 120-ft.-high ceiling, which seats 4,000. Basically, said the American official, Shultz was there to show Sultan Hassanal Bolkaih that the U.S. is aware of Brunei's existence.

The stop in Manila, the Secretary's next destination, was not so & refreshingly simple. The U.S. is intent on strengthening the Aquino government, partly because of its democratic principles and partly because Washington is worried by the continuing Communist insurgency in the Philippines. Shultz came armed with a check for $200 million that was previously promised to the Philippines but then held up in the complicated U.S. foreign aid appropriation process. While Aquino gladly accepted the funds, several Filipino officials grumbled that the check was not nearly generous enough. Retorted Shultz: "It's only $200 million, but I'm still a small-town boy and I think that's a lot of money."

Shultz supported Aquino's policy of putting military pressure on the Communists while inviting them to the negotiating table. Yet Defense Minister Juan Ponce Enrile seemed to undercut that two-pronged approach by stating that it would take a "miracle" to produce a political solution. Aquino and Enrile denied persistent rumors of a serious rift between them, and the two made several joint appearances. Enrile did say that he might run in the next presidential elections.

"I'm bullish on the Philippines," Shultz told a news conference before departing. Still, such rhetorical support is about all Aquino can expect. She readily conceded that the current U.S. foreign aid allotment, which totals $500 million for the fiscal year, "is as far as American government assistance will go." To raise more money, she plans to turn a scheduled U.S. visit next fall into a private-sector fund-raising drive to encourage foreign investment in her country.

With reporting by Johanna McGeary with Shultz, and Nelly Sindayen/Manila