the channels of dialogue open, however it was not ready to assume such political role and part ways with the US. This showed that even after the Fukuda Doctrine, there was still a large discrepancy between Japan's economic power and its political role in the international arena. Yet, in spite of Japan's failure to play a political role of building bridges in regards to Indochina and Vietnam in particular, Japan managed to strengthen its position in the region. Following the Vietnamese invasion of Kampuchea, it undertook to provide increased economic assistance, especially to Thailand to help the country cope with the new menace from Indochina, supporting the "front line" state of the conflict. The Role of Economic Assistance The second area of development of Japanese policies after the Fukuda Doctrine is Japan's economic strategy towards Southeast Asia. During the 1970s Japan realized the importance of furthering the interests of Japanese businesses and included this component in its foreign policy. This coincided with the assumption that Japan has achieved the third stage of the “flying geese” pattern of development - an economic model that was influential to Japanese lawmakers at the time. That change encouraged transfers of labor-intensive industries to Southeast Asia. Southeast Asian countries were also eager to receive Japanese Foreign Direct Investment (FDI) in the pursuit of their own industrialization. The transfer was further supported by Japanese Official Development Assistance (ODA), which at the time was mainly tied aid. It paved the way for Japanese businesses to work on development projects and promoted the penetration for Japanese FDI in the region. As a result of this convergence of interests, Southeast Asian countries first welcomed Japanese textile industries, then electronics and vehicle-assembly businesses, contributing to the development of new economic links. FDI's role increased even more during the 80s, after the Plaza Accord of 1985, that appreciated the yen and gave an incentive to Japanese companies to produce abroad. The main beneficiaries of those increased capital flows were Indonesia, Singapore and Thailand. By 1992 Japan had become the largest investor in the region, excluding the Philippines, where the US still remained in the first place. Aid also came from the private sector. In July 1977, the Overseas Trade Development Association Foundation of Japan (OTDAF) revised its rules, easing restrictions on loans to medium and small Japanese companies’ overseas investments. The new rule allowed firms to request for loans even if