1998 Congressional Hearings
Intelligence and Security

                                    
21ST CENTURY SECURITY THREATS                                    

STATEMENT OF

ADMIRAL JOSEPH W. PRUEHER, U.S. NAVY
COMMANDER IN CHIEF
UNITED STATES PACIFIC COMMAND
BEFORE THE COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE

POSTURE HEARING
MARCH 5, 1998



Mr. Chairman and members of this Committee, on behalf of the men
and women of the United States Pacific Command, thank you for
this opportunity to present my perspective on security in the
Asia-Pacific region.

Executive Summary

Financial crisis. As this Committee is fully aware, Asia is in
the midst of a serious financial crisis. Some might even say it
is a broader economic crisis. It is important that this financial
crisis also be understood in security terms. We have seen early
signs of instability in Indonesia and have concerns about the
situation in other countries as well. As President Clinton said
in his State of the Union address, a secure, stable Asia is in
America's interest. Our military presence and our military-to-
military contacts throughout the region undergird overall
security and stability in the region.

Security alliance with Japan. Our alliance with Japan continues
to be the most important U.S. security relationship in the
region. The signing of the revised Guidelines for U.S.Japan
Defense Cooperation in 1997 enhances this relationship. Japanese
host-nation support for U.S. forces is a critical part of U.S.
military presence in Asia and meets Congressional goals for
burden-sharing.

China. China's growing economic and military power is a major
issue for regional leaders. The past year brought improvements in
U.S.-China relations. Carrying out the policies of the Secretary
of Defense and, in conjunction with the Chairman of the Joint
Chiefs of Staff, U.S. Pacific Command worked successfully to
improve our military-to-military relationship with the People's
Liberation Army. Our goal is to lay a foundation for a
relationship based on mutual understanding, trust, and increased
openness. Along with the U.S., China will play an enormous role
in determining if the next century is one of conflict or
cooperation. On the subject of Taiwan, we recognize from China's
perspective this is a core sovereignty issue, while China
recognizes that the United States is committed to the peaceful
resolution of Taiwan issues. I am personally optimistic for the
growth of the U.S.-China relationship; however, we must continue
to deal with China from a position of strength, combined with
respect, and not have unrealistic expectations. This is a long-
haul process.

Korean peninsula. The Korean peninsula remains a volatile
flashpoint. U.S. and South Korean troops would be in harm's way
in the first hour of a conflict but are key to rapid conflict
resolution. Our 37,000 troops stationed on the Peninsula and our
alliance with the Republic of Korea have deterred North Korea
from offensive action for 45 years. U.S. forces on the Peninsula,
coupled with our reinforcement capabilities and ROK forces, are
adequate for this task. The goal is eventually to facilitate a
non-cataclysmic end to this situation. We must stay the course of
deterring conflict, providing food aid, engaging in four-party
talks, and supporting the Korean Peninsula Energy Development
Organization, particularly in light of North Korea's continued
economic deterioration.

Readiness and OPTEMPO. U.S. Pacific Command's forward-deployed
forces are ready to execute assigned missions, but significant
deficiencies exist under a "two major theater wars" scenario. In
1997, U.S. Pacific Command Navy, Air Force, Army, and Marine
Corps components all reported shortages of personnel in some
units. Although components have overcome these problems in the
short term, readiness for deployed forces is increasingly
achieved at the expense of non-deployed forces. Currently, some
forces required for long-term commitments in the Asia-Pacific
area of responsibility are positioned in the Persian Gulf. Any
reduction in personnel, equipment, or funding would significantly
erode our capabilities in the Pacific. With some minor
exceptions, we have been able to manage the operational tempo
(OPTEMPO) for forces under U.S. Pacific Command, because we are
accountable for and can trade off between training and
operations. There are no firm indicators that the forces are
"wearing out."


1997 IN THE ASIA-PACIFIC REGION

Five developments stand out for their impact on U.S.
security interests in Asia.in 1997:

--The Asian financial crisis was the most significant development
this past year. It began in July with the sharp decline of the
Thai baht. The currencies of other nations followed suit shortly
thereafter. Serious debt servicing problems in several Southeast
Asian nations and South Korea-brought on economic uncertainty and
concern about potential instability.

--The food crisis in North Korea reached new levels and continued
to draw international attention, resulting in unprecedented
interventions by nongovernmental organizations. The aid that
North Korea received did not address the underlying causes of the
food shortage. The crisis will likely occur again in 1998 and in
the years ahead and increases the potential for future
instability on the Peninsula.

--Factional fighting erupted in Cambodia in July 1997, reversing
earlier democratic trends. The Association of Southeast Asian
Nations (ASEAN) postponed indefinitely Cambodia's entry into
ASEAN and is trying to conduct negotiations to resolve the
situation. The outcome remains uncertain.

--In September, the United States and Japan agreed to a complete
revision of the Cold War-era Defense Guidelines. The revised
agreement builds upon our existing security relationship and
includes enhancements in bilateral planning and Japan's rear area
support. The revised Guidelines significantly improve our ability
to meet regional security challenges.

--At the October summit in Washington, DC, China and the United
States committed to forging a "constructive strategic
partnership." On the military side, DoD concluded a Military
Maritime Consultative Agreement, our first bilateral military
agreement with China.

U. S. PACIFIC COMMAND STRATEGY IN ACTION

Theater Strategy

In support of the President's National Security Strategy, Pacific
Command is striving to achieve a stable, prosperous, and
democratic Asia-Pacific community in which the United States is a
player, partner, and beneficiary.

Our military strategy derives from two fundamental premises. The
first is a notion of confluence, that the political, economic and
military aspects of security are interdependent, and cannot be
advanced separately. Second, security, especially military
security, undergirds the stable conditions that are prerequisite
for economic growth and prosperity.

U.S. Pacific Command's strategy consists of three levels of
activities and operations:

--Peacetime engagement

--Crisis response

--Fight and win a major regional conflict

If we are engaged in the region in peacetime and our actions
backed by credible, combat-ready forces, our strategy is able to
respond to crises, prevent wars, and enhance stability.

In 1997, this strategy meant that U.S. Pacific Command forces
were extensively involved in sustaining the military component of
American engagement in Asia, as part of the Administration's
overall engagement program in Asia.

In spite of Asia's current economic difficulties, the investments
our nation is making in Asia's security and stability have
yielded tangible benefits to the United States.

Responses to Asia's Financial Crisis

East Asia's serious financial crisis has implications for
security and stability in the region. The near-term security
impact will include slowdowns in the modernization of Southeast
Asian militaries, reductions and cancellations in scope of some
training exercises, possible reductions in funding of the Korean
Peninsula Energy Development Organization, and pressure to reduce
host nation support: 

Beyond these immediate effects, we are watchful for early signs
of instability including civil disturbances, labor disputes,
increased ethnic rivalries, and some increases in anti-American
rhetoric. 

The U.S. government is responding to the financial crises in a
number of ways. U.S. Pacific Command is taking steps to maintain
the visibility of American military presence and contact with our
military counterparts, especially in Southeast Asia. We have
realigned our engagement programs and are directing resources to
the maximum extent to lower-cost, higher-impact activities.

Security Alliance With Japan
Japan remains our foremost security partnership in Asia. With the
support of the Hashimoto government, we have made great strides
to bolster this relationship over the past year. 

The new Defense Guidelines signed in September strengthened our
alliance and enabled the U.S. and Japan to engage in bilateral
planning for crises in areas surrounding Japan. The new
Guidelines agreement is essential to maintenance of peace and
security in the region.

Japan continues to host about 54,000 U.S. military personnel. In
spite of the fiscal constraints of a slowing economy and a
reduced defense budget, Japan's generous host nation support
continues to meet congressional goals for burden sharing. Funding
reductions in Japan's voluntary Facilities Improvement Program
have had some impact; however, the impact has been minimal as
construction projects have been carefully prioritized through
close coordination of U.S. Forces Japan and the Government of
Japan. At the bottom line, the Government of Japan continues to
provide exceptional facilities and support for U.S. military
personnel and their dependents.

U.S. Pacific command continues to work closely with the
Government of Japan in implementing the Special Action Committee
on Okinawa (SACO) Final Report and minimizing the impact of U.S.
military presence on the people of Okinawa. While we have made
significant progress in most areas, the return of Marine corps
Air Station Futenma is a difficult and exceptionally complex
challenge. We remain flexible as to the type of replacement
facility, as long as it maintains the critical military functions
and capabilities of Futenma.

Military-To-Military Relations with China


China's regional and global influence will likely grow as its
economy grows and the People's Liberation Army (PLA) fields a
more modern force. Owing to its non-convertible currency, China
has been largely insulated thus far from the direct effects of
the region's financial crisis. Although china's growing power is
high on the list of concerns of regional leaders, China is not a
direct threat to the United States today. The PLA can project
military power only to a limited extent beyond China's borders
but has the potential to attain a regional power projection
capability in the period beyond 2015 and then only with many
correct decisions and full funding.

The tension between China and Taiwan has lessened in the past two
years. From China's perspective Taiwan is a core sovereignty
issue. The U.S. is committed to "one China" as defined in the
three joint communiques, on the other hand, China recognizes that
the United States is also committed to the peaceful resolution of
Taiwan issues. it is in no one's interest to bring the issue back
to crisis levels.

It is important to further develop the u.S.-China relationship in
a realistic way. China has an important role in peaceful
resolution of regional issues including not only Taiwan, but also
the South China Sea and the Korean Peninsula. Proper, balanced
management of u.S.-China-Japan relations will be key to regional
peace and security. We need to continue to encourage steps in the
evolution of bilateral and multi-lateral relations, together with
dialogue and mechanisms to address the issues effectively.

Conducted in conjunction with OSD efforts, U.S. Pacific Command's
military-to-military contacts with the PLA are an important part
of overall U.S. engagement with China. Contacts in 1997 included
hosting visits by the Chief of PLA General Staff, General Fu
Quanyou, and the Deputy Chief of PLA General Staff, Lieutenant Wu
Quanxu. The PLA hosted visits to China by the Commander-in-Chief,
U.S. Pacific command and the Commander-in-Chief, U.S. Pacific
Fleet. The U.S. Navy conducted a ship visit to Qingdao while the
PLA Navy conducted its first-ever ship deployment to the United
States. Although falling short of the level of openness we seek
to establish, the PLA did show us a nuclear-powered submarine as
well as the flight test center at Cangzhou. Pacific Command
opportunities for dialogue with President Jiang Zemin and all
senior PLA leadership have been excellent. Secretary of Defense
Cohen included me also on his January 1998 trip to China in which
we toured Beijing's air defense center and met with President
Jiang Zemin.

U.S. Pacific Command's goals in building this relationship with
the PLA are two-fold: to build understanding and trust, and to
increase openness. Laying this foundation for the future enhances
our understanding of China's military intentions and capabilities
while giving us the opportunity to increase Chinese appreciation
for U.S. forces stationed in the region. We are building this
relationship from a position of both strength and mutual respect.
it will take continuous work over a long haul. For this reason,
it is important to include younger generations of officers in
future military-to-military contacts to capitalize on long-term
working relationships, a point on which the PLA leaders agree.

Deterrence On The Korean Peninsula

The Korean peninsula remains a volatile flashpoint where U.S.
troops and citizens would be in harm's way on the first hour of a
conflict.

The North Korean economy has continued to deteriorate. North
Korea is now dependent on international aid to feed its people.
The regime has agreed to engage in four-party talks aimed at
formally ending the Korean War and appears to be honoring the
terms of the Agreed Framework. This past year also yielded an
agreement with North Korea to accelerate the recovery of
unaccounted-for American servicemen from the Korean War.


Meanwhile, the Republic of Korea (ROK) is coping simultaneously
with the Asia financial crisis and the transition to new
political leadership. Kim Dae Jung, the new President, has
already voiced support for U.S. military presence in Korea into
the foreseeable future . Ensuring that ROK military preparedness
is not seriously weakened by ROK economic difficulties is the
next challenge. Despite the economic problems, the ROK has
pledged to maintain host nation support at previously agreed-to
levels. Secretary Cohen's recent visit moved this cause forward.

While we remain hopeful that four-party talks will reduce
tensions on the peninsula, military prudence dictates maintaining
U.S. forces in Korea and our security alliance with the ROK to
deter any hostile moves by the North.

In my view, reconciliation is in everyone's best interest as a
first step in the long-term process of resolving the situation on
the peninsula. Economic, political, and cultural differences
built up during fifty years of separation and mistrust will not
be overcome easily. The United States and China have key roles to
play, but the two Koreas will ultimately determine the pace of
the process.

Lastly, our forces in Korea require the continued use of anti-
personnel landmines (APLs). APLs are critical in current plans to
deter or halt an attack, to reduce casualties, and to reduce the
risk of humanitarian disaster that would result from combat in
and around Seoul until the situation on the peninsula is resolved
or new technologies are developed, APLS should remain an integral
part of U.S. forces on the peninsula as specified in the
President's policy directive on this issue.

Joint Task Force Bevel Edge in Thailand

Thailand is an important treaty ally and security partner.
Thailand is important both for its location in Southeast Asia and
as a strategic bridge to the Persian Gulf. Thailand is one of the
nations in Southeast Asia most affected by the financial crisis.

U.S. Pacific Command maintains close relations with the Thai
military. This relationship yielded tangible benefits in July
1997 when fighting erupted between rival political factions in
Cambodia. U.S. Pacific Command temporarily staged a small special
operations force package, Joint Task Force BEVEL EDGE, in
Thailand in preparation for a possible evacuation of American
citizens from Cambodia. Approval for this deployment was
simplified and expedited because of the strength of our working
relationship with the Thai military. This is a good example of
the yield from our engagement program.

Fire-fighting in Indonesia

The United States has a special interest in a stable Indonesia.
With the world's fourth largest population, including the world's
largest Islamic population, and a location astride shipping lanes
linking Asia to the Arabian Gulf, Indonesia is strategically
important. Events in Indonesia affect the rest of the region.
Indonesia's importance to the United States is especially
significant in light of China's growing power and Indonesia's key
role in the Association of Southeast Asian Nations (ASEAN) and
the ASEAN Regional Forum (ARF).
Indonesia has been hit especially hard by the financial crisis.
1997 also brought drought and major forest fires to parts of
Indonesia and Malaysia, leaving large swaths of Southeast Asia
blanketed in smoke and haze. Deployment of Air National Guard C-
130s from Wyoming to Indonesia to fight these fires made a
significant contribution towards controlling the fires and
brought the United States an enormous amount of good will.

Engagement Dividends in Singapore

Singapore is another Southeast Asian nation with which the United
States is comprehensively engaged. Singapore is a strong
proponent of U.S. military presence in the region. Among the many
ties that the Department of Defense and other U.S. government
agencies maintain with Singapore, forces assigned to U.S. Pacific
Command train regularly with Singapore's defense forces. I met
with Singapore's senior defense officials on several occasions in
1997, further cementing the bilateral relationship.

American military engagement with Singapore paid off in January
1998 when Singapore announced its intention to give the U.S. Navy
access to the pier being built at Changi Naval Base. This pier
will accommodate our Navy's largest aircraft carriers. Access to
this pier will help sustain American military presence in the
region.

A New Visiting Forces Agreement with the Philippines

The Republic of the Philippines is a treaty partner and occupies
a geographically important position in the region. The recently
negotiated Visiting Forces Agreement (VFA) is critical to
continued engagement with the Philippine armed forces. We
anticipate the Philippine Senate will ratify the agreement later
this year.

Notwithstanding current limitations, we strive to maintain
contacts with the Philippine military. An example of this is the
Philippine Army joining U.S. Army Pacific in co-hosting the
annual Pacific Armies Management Seminar (PAMS) in Manila in
March 1998. Forty-one countries are attending, including China,
Vietnam, and India.

Defense Cooperation with Australia

Australia remains a staunch ally, friend, and vocal supporter of
U.S. presence in Asia. Pacific Command has an excellent military-
to-military relationship with the Australian defense
establishment. Australia is modernizing and reducing her forces,
implemented defense efficiencies, and remains dedicated to
maintaining interoperability with U.S. forces.

Modest Contacts with India

India is an emerging regional power with great potential in the
coming century. India has been successful in liberalizing its
economy over the last five years and has begun to expand ties
with East and Southeast Asia.

Though frequently overlooked because of our tendency to focus on
the India-Pakistan situation, India also looks towards China as a
principal security concern for the future. These concerns have
been made clear during recent security discussions with Indian
officials. For now, however, India and the Indian military are
focused inwardly. U.S. Pacific Command maintains modest levels of
contact with the Indian military.

Cooperation on the "Full Accounting" Mission

Cooperation from Vietnam, Laos, and Cambodia in support of Joint
Task Force Full Accounting's mission continues to be good.
Indeed, the increased contact brought about by the Prisoner of
War/Missing in Action (POW/MIA) issue has helped pave the way for
further engagement with Vietnam and Laos.

Looking Ahead

I would like to highlight several policy issues affecting the
future of security and stability in the Asia-Pacific.
First, despite Asia's economic turmoil, the fundamentals of U.S.
security policy remain sound. U.S. economic, diplomatic, and
security interests overlap and require an integrated approach to
policy in the region. Stable conditions resulting from security
will be the foundation upon which Asia's economic recovery will
be built.

Second, U.S. forward-deployed forces in Asia remain the linchpin
of regional security and stability. U.S. Pacific Command
participated extensively in the Quadrennial Defense Review, which
reaffirmed the importance of maintaining about 100,000 military
personnel in Asia. The United States should continue to maintain
about 100,000 personnel-but more importantly, the capabilities
that this number represents forward deployed. This number is a
gauge by which nations in Asia measure U.S. commitment.

Third, it is important that the Department of Defense continue to
build its military-to-military relationship with China. This
relationship provides a means of dialogue between our nations and
gives U.S. military leaders insights not otherwise available.

Fourth, on the Korean peninsula, the aim is to bring about a non-
cataclysmic resolution. Neither a lash-out nor a total collapse
of the North is in U.S. or ROK interests; either would negatively
affect security and stability on the Peninsula and in the region.
Food aid and four party-talks are two ways to engage North Korea
to achieve the peaceful end-state we are after. At the same time,
we must encourage the ROK to maintain current levels of military
preparedness and host nation support at agreed-upon levels.

Fifth, as the nations of Southeast Asia struggle through the
current financial crisis, 'it is manifestly in U.S. strategic
interests to remain engaged with them. Assuring them of U.S.
interest in Southeast Asia's security and stability ultimately
serves long-term U.S. economic, diplomatic and security
interests. From a military perspective, International Military
Education and Training (IMET) -- especially for Indonesia,
Thailand, Malaysia, and the Philippines--is one of our nation's
most important means of influencing future leaders. I appreciate
the dilemmas at stake in this issue, but especially in light of
Asia's current financial crisis, restricting IMET limits our
ability to achieve our nation's goals-a secure, prosperous, and
democratic Asia-Pacific region.

Sixth, I would like to highlight the strategic importance of
Guam. Guam was and is a strategic bridge supporting the
deployment of forces to the Persian Gulf for military operations
against Iraq and would be essential to combat operations on the
Korean peninsula. As this Committee decides how much military
infrastructure our nation must maintain, it is important that
Guam be understood as a vital bridge linking CONUS-based forces
and U.S. strategic interests in Asia.

Seventh, an increase in Congressional delegations hosted by U.S.
Pacific Command on their way to and from Asia was a welcome trend
in 1997, an indication that Congress recognizes the region is
important to the United States. I urge members of Congress to
visit Asia and see for themselves the range of economic,
diplomatic, and security interests the United States has in the
region. My Asian counterparts and their civilian bosses share
this view.

Eighth, we urge your support for ratification of the U.N.
Convention on Law of the Sea. Maintaining freedom of navigation
is critical to regional security and economic development. Some
Asia-Pacific nations assert excessive maritime claims that
challenge this freedom. Participation in the Law of the Sea
Convention will allow us to participate in negotiations to
resolve these claims, add credibility to our stated policies and
interpretations, and preserve navigation rights vital to
executing our missions.

Finally, a comment on "prudent risk." In the ideal world, CINCs
would both be all wise and would have enough resources to deal
with every conceivable contingency that might arise. Of course,
we don't live in that ideal world and our nation's resources are
not that large, but they are mostly sufficient. Although the
world is not free of danger and conflict, there is evidence of a
"strategic pause" following the end of the Cold War. In this
environment, CINCs must be willing to weigh their instincts to
avoid risk against the associated costs and accept some prudent
level of risk. The nation and our national leaders must also
accept "prudent risk."

Resourcing The Strategy

Our nation's security strategy in the Asia-Pacific region yielded
tangible results in the past year. The coordinated efforts of
many people throughout the Department of Defense other U.S.
government agencies made this strategy effective. Due to the
economic turmoil in the region, it is essential that we sustain
this strategy of preventive defense in the year ahead.

Trained and equipped combat-ready forces make the strategy
credible. Adequate resources are essential to sustaining these 
forces and the effectiveness of the strategy.

Force Disposition Today

The forces assigned to U. S. pacific command are adequate to
execute assigned missions today and are arrayed in two major
zones spanning the Pacific and Indian oceans:

--Approximately 100,000 personnel are forward-deployed in Asia,
principally in Japan, Korea, Guam, and Diego Garcia. These forces
include the 7th Fleet, 8th U.S. Army, III marine Expeditionary
Force, 5th Air Force, 7th Air Force, 13th Air Force, the 1st
Battalion of the 1st Special Forces Group (Airborne) and other
joint special operations forces, maritime prepositioned ships,
and Army-and Air Force prepositioned stocks.

--Approximately 200,000 personnel are stationed in Hawaii,
Alaska, and the West Coast of the United States. These forces
include the 25th Infantry Division, 3rd Fleet, I Marine
Expeditionary Force, 1st Brigade of the 6th Infantry Division,
11th Air Force, I Corps Headquarters, and designated units and
individuals of the Army, Air Force, Navy, and Marine Corps
Reserve, and Army and Air National Guard.

Readiness and OPTEMPO

Although U.S. forces deployed in the Pacific are ready to conduct
assigned missions, I would like to bring some readiness issues to
the Committee's attention.

U.S. Pacific Command has reported significant deficiencies in six
of the eight measured functional areas for a "two major theater
wars" scenario: (1) command, control, communications, and
computer systems; (2) logistics and sustainment; (3)
intelligence, surveillance, and reconnaissance; (4) mobility; (5)
infrastructure; and (6) special operations. We have addressed
specific deficiencies in these areas through the Joint
Requirements Oversight Council and the Senior Readiness Oversight
Council. Significant investment will be required to overcome
these deficiencies.

From the perspective of the U.S. Pacific Command Army, Navy, Air
Force, and Marine Corps components, personnel shortages are the
principal readiness concern, though pockets of lower levels of
readiness exist due to equipment shortage and availability.

--U.S. Pacific Fleet reported that personnel shortages have
affected forward-deployed naval force readiness. Though command
attention has caused recent improvements, in the near term (May
1998), 58 of 623 Chief Petty Officer billets will be "gapped."
Junior enlisted manning at sea, currently at 81 percent, was
recently only 73 percent, down from 92 percent four years ago.
Pacific Fleet is currently short over 1900 sailors in key
technical ratings. In addition, there are backlogs in aircraft
engines and aircraft intermediate and depot level maintenance,
particularly for the S-3B.

--U.S. Pacific Air Forces (PACAF) reported an Air Force-wide
decline in pilot retention, a serious manning problem which
cannot be corrected in the near term. PACAF aircraft maintenance
statistics indicate the beginning of a decline in aircraft
mission capable rates. The PACAF F-16 cannibalization rate is
15.9 percent, compared to 6.6 percent in fiscal year 1995, due to
lack of spare parts.

--U.S. Army Pacific (ARPAC) reported shortfalls in infantrymen
and "low-density/high-demand" specialties such as engineers,
communications specialists-, intelligence analysts, and
mechanics, though these shortfalls will be corrected by the end
of the fiscal year. Slower modernization of some lower-profile
equipment, such as 2%-ton trucks, is causing increased
maintenance difficulties, though this will be corrected in fiscal
year 1999 with the delivery of new vehicles.

--U.S. Marine Forces Pacific (MARFORPAC) reported shortages of
personnel in each major reporting unit, primarily in
communications, intelligence, air traffic control, air support,
infantry, landing support specialists, and vehicle mechanics.

Although components have mitigated the impact of these problems
in the short term, readiness for deployed forces is being
achieved at the expense of non-deployed forces.

Maintaining adequate readiness requires predictable funding and
investments both to bolster deficient areas and operate to meet
our commitments. In the near term, timely passage of supplemental
appropriations for unfunded contingency requirements, such as in
Bosnia and the Arabian Gulf, is critical to sustain readiness.
Without this relief, OSD has decided that Services will have to
absorb costs from operations and maintenance accounts to the
detriment of readiness.

OPTEMPO has not been a major problem in U.S. Pacific Command.
With minor exceptions, U.S. Pacific Command's components are
staying within OPTEMPO goals established by service headquarters.
Units that have exceeded or are forecasted to exceed goals-
include two MARFORPAC infantry battalions and a Marine F-18
squadron, PACAF's F-15E squadron and one F-16C squadron, and two
ARPAC battalions. There are no firm indications that the force is
"wearing out." However, people are working hard and there is no
sign of let-up in the workload.

Improvements to Warfighting Capability

U.S. Pacific Command's resource priorities were submitted to the
Joint Requirements Oversight Council earlier this fiscal year. We
have given the highest priority to the readiness of personnel and
equipment; second, to near-term force improvements and upgrades
to existing systems; third, to joint, multiservice, and multi-
national systems which enhance warfighting capability and
interoperability with our friends and allies; and fourth, to new,
long-term recapitalization.

I would like to highlight two new capabilities that are important
to U.S. Pacific Command's long-term warfighting capabilities.

--Theater missile defense. With North Korea developing long-range
ballistic missiles, the differences between theater missile
defense and national missile defense are blurring. Nations such
as China and India are actively developing new ballistic
missiles. There is a need to keep Pacific geographic and
geopolitical considerations in mind as we develop missile
defenses.

--Chemical and biological defenses. North Korea is assessed to
have the capability to manufacture, deploy, and employ chemical
and possibly biological weapons. It is prudent to assume that
North Korea would use chemical weapons in any conflict on the
Korean peninsula. In conjunction with U.S. Forces Korea, U.S.
Pacific Command has generated a list of near-term fixes to close
the gap in our capability to defend against chemical and
biological attacks.

Quadrennial Defense Review and National Defense Panel

U.S. Pacific Command endorses the Quadrennial Defense Review
modernization strategy, which attempts to balance near-term
readiness and future capabilities. The command also supports the
National Defense Panel's conclusion that breadth of capability
will be as important as depth for long-term readiness and
modernization and that reductions in infrastructure are necessary
to help fund modernization.

Investments in People

Investments in people and training are as important as new
technologies. Adequate funding for compensation, medical,
retirement, housing and other quality-of-life programs is
necessary to attract and retain the skilled personnel upon which
our forces depend.

Readiness to respond rapidly in support of military contingency
operations should be the principal guide as the military health
system is reformed.

Training and force protection are quality-of-life concerns as
well as readiness issues. U.S. Pacific Command has developed
plans of action to reduce vulnerability to terrorism and is
steadily working requirements through the Services.

Service military construction plans provide appropriately
for warfighting infrastructure and improvements to quality-of-
life.

Asia-Pacific Center for Security Studies

The Asia-Pacific Center for Security Studies (APCSS) is rapidly
becoming a key part of U.S. Pacific Command's engagement
strategy. In January 1998, APCSS hosted a timely conference on
economics and security in Asia, bringing together experts from
business, academia, and the U.S. military to discuss the origins
of Asia's financial crisis and the implications for security and
stability. Similar conferences have examined peacekeeping,
humanitarian support, and environmental issues.

The conference program complements the Center's primary academic
organization-the College of Security Studies-that draws together
future military and civilian leaders from around the region to
explore national perspectives on regional security issues. The
Asia-Pacific Center is an excellent investment in regional
security.

New Headquarters

A new headquarters building for U.S. Pacific Command staff is
required. The headquarters facility the staff is in today is a
45-year old hospital building that has deteriorated beyond the
point of maintainability. The engineering estimate is for $75
Million for repair alone. To meet the demands of 21st century
operations this command must have a modern, efficient facility,
one that our taxpayers can be proud of, and one they can afford.

Funding is in the FYDP for this headquarters building.

Conclusion

Last year I concluded that while not conflict-free, the Asia-
Pacific region was at peace. This year the region is closer to
the margins of general peace. The financial crisis could lead to
broader economic and security problems.

As military professionals, we are paid to be pessimists and
expected to keep our powder dry. However, this charter does not
keep us from being optimists about the future of the AsiaPacific
region. I am convinced that by working in a forehanded way and
respecting legitimate views, and by maintaining a position of
strength, we can best contribute to peace, stability, and
prosperity.

The continued support of Congress and the American people in
these endeavors is vital and appreciated. With your support and
the cooperation of our friends and allies, the United States will
continue to successfully advance our national interests in the
Asia-Pacific region.