(5) Japan will provide support for regional development initiatives such as ASEAN regional cooperation, APEC, Mekong basin development and for "South-South cooperation." $ ^{*26} $

### 2. Southwest Asia

Southwest Asia is home to the largest population of impoverished people in the world. $ ^{*27} $ With the goals of the Development Partnership Strategy in mind, Japan will continue to focus on the region's poverty problems, provide assistance designed to encourage economic liberalization in the countries of the region, and promote regional cooperation based on economic cooperation. Following underground nuclear testing by India and Pakistan in May 1998, Japan had no alternative but to fundamentally review its assistance policies toward both countries. In continuing to seek positive reactions from India and Pakistan in the area of nuclear nonproliferation, it is necessary for Japan to continue dialogue with both nations.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

(1) Japan will provide support for alleviating poverty and ensuring the livelihood of the poor (focusing on assistance for basic human needs, including health and medical services, primary education, and agricultural and rural development).

(2) Japan will provide support for human resources development and social and economic infrastructure development in order to revitalize private-sector activities and to create a more attractive environment for foreign investment.

(3) Japan will provide support for environmental conservation to cope with the increasing environmental burden created by population and economic growth.

### 3. Central Asia and the Caucasus

Since the collapse of the Soviet Union, the countries of this region have pursued democratization and the establishment of market economies. However, the region remains beset by political and economic instability caused by vulnerable economic structures, growing unemployment and social instability, ethnic conflicts, and territorial disputes. Japan has actively endeavored to assist this region and was successful in calling for the inclusion of these nations into DAC's list of aid-receiving countries. In view of the geopolitical significance of this region and the importance of access to its energy resources, it is vital for Japan to continue to promote its "Silk Road diplomacy" $ ^{*28} $ and provide support for the achievement of stability in the region.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

(1) Japan will provide support for social and economic infrastructure development to help build the foundation for self-reliant economic development.

(2) Japan will provide assistance for human resources development and institution building to support the process of democratization and transition to market economies.

(3) Japan will provide support for the alleviation of social problems and difficulties encountered in the process of reform and for the transition from the negative legacy of the Soviet period (e.g. support for environmental pollution countermeasures and for radiation victims of Semipalatinsk).

### 4. The Middle East

As Japan's principal source of petroleum imports, the Middle East is an extremely important factor in Japan's economic stability. Furthermore, developments in the Middle East peace process and the situation regarding Iraq could have a major impact on world peace and stability. Japan continues to actively provide support for the social stabilization of this region and for the improvement of the environment for peace. Adequate access to water resources constitutes a critical factor in maintaining the region's stability. While the countries of the Middle East, consisting of both oil-producing countries and less-developed countries, represent a diverse range of economic conditions, the training of domestic engineers and other human resources stands as a critical challenge in the strategies for economic diversification and development of non-petroleum sectors.

In light of the above, Japan will provide assistance and support while emphasizing the following points.

(1) Japan will provide support for the Middle East peace process (through assistance to the Palestinians as well as to neighboring Arab countries and support for initiatives related to multilateral negotiations).

(2) In relatively low-income countries, Japan will provide support for social and economic infrastructure development, including agricultural and water-resources development.

(3) In the relatively high-income Gulf states, Japan will provide technical cooperation for the training and education of domestic engineers for the achievement of economic diversification and the development of non-petroleum sectors and provide appropriate support for the development