Identifier
Created
Classification
Origin
05SINGAPORE1790
2005-06-07 08:39:00
CONFIDENTIAL
Embassy Singapore
Cable title:  

DEPUTY SECRETARY ZOELLICK'S MAY 10 MEETING WITH

Tags:  OVIP PREL PGOV ECON ETRD SN 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 SINGAPORE 001790 

SIPDIS

STATE FOR DEPUTY SECRETARY ZOELLICK

E.O. 12958: DECL: 05/10/2015
TAGS: OVIP PREL PGOV ECON ETRD SN
SUBJECT: DEPUTY SECRETARY ZOELLICK'S MAY 10 MEETING WITH
PRIME MINISTER LEE HSIEN LOONG

C O N F I D E N T I A L SECTION 01 OF 03 SINGAPORE 001790

SIPDIS

STATE FOR DEPUTY SECRETARY ZOELLICK

E.O. 12958: DECL: 05/10/2015
TAGS: OVIP PREL PGOV ECON ETRD SN
SUBJECT: DEPUTY SECRETARY ZOELLICK'S MAY 10 MEETING WITH
PRIME MINISTER LEE HSIEN LOONG


1. (U) Classified by: Ambassador Franklin L. Lavin. Reason
1.4(d)


2. (U) Date Time and Place: May 10, 2005, 11:30AM, Istana,
Singapore


3. (U) Participants:

U.S.
--------------

The Deputy Secretary
Ambassador Franklin Lavin
DAS Marie Huhtala, EAP
D Executive Secretary Ross Wilson
Deputy Spokesman Adam Ereli
D Special Assistant Chris Castro
D Special Assistant Christine Davies
Chris Kavanagh (Embassy Notetaker)

SINGAPORE
--------------

Prime Minister Lee Hsien Loong
MFA Second Permanent Secretary Bilahari Kausikan
PM's Principal Private Secretary Ong Ye Kung
PM's Press Secretary Chen Huai Liang
MFA North America Branch Director Simon Wong
MFA North America Branch Assistant Director Lee Chong Hock
(Notetaker)


4. (C) Summary: During their May 10 meeting, the Deputy
Secretary and Prime Minister Lee Hsien Loong discussed

SIPDIS
developments in China, Southeast Asia and Iraq. PM Lee
reviewed China's growing influence in the region and the
improvement in the cross-Strait situation over the last
year. Turning to Southeast Asia, he said Indonesia was
making the right noises about tackling corruption, but
there had been little progress. PM Lee complained that
Indonesia should pursue terrorist infrastructure rather
than just individual terrorists. Singapore's relations
with Malaysia had improved, but the long-term rise of an
Islamic identity in Malaysia was a concern. The Deputy
Secretary noted the progress in Iraq and the commitment by

SIPDIS
the courageous new government to deal comprehensively with
the insurgency. End Summary.


5. (C) Opening his May 10 meeting with Prime Minister Lee,
the Deputy Secretary said he wanted to make a trip to
Southeast Asia early in his tenure to gauge developments in
the region and listen to leaders, views on issues of common
concern. Prime Minister Lee told him that U.S.-Singapore
bilateral relations were good and trouble-free. The

Strategic
Framework Agreement talks were almost complete and he hoped
that it would be signed in July, when he hoped to visit the
United States.

--------------
Rise of China
--------------


6. (C) China was active in Southeast Asia and its influence
was particularly noticeable -- not militarily but
strategically and economically, commented PM Lee. Its
leaders came prepared to regional meetings, such as ARF and
APEC, with small "goodies" to make sure its partners knew
that China was thinking about them. China was building
friendships, securing access to natural resources, and
avoiding troubles. It had been most successful in
Indochina. All the countries in Southeast Asia wanted to
have good relations with China and recognized its
importance.


7. (C) The cross-Strait situation had improved considerably
since last year, when it had been quite tense, the PM
continued. The Anti-Secession Law and the visits to the
PRC by Taiwan opposition leaders Lien Chan and James Soong
had helped put President Chen Shui-bian in a corner.
Furthermore, people of Taiwan were tired of
cross-Strait tensions and did not want to lose economic
opportunities in China.

--------------
Japan's Reaction
--------------


8. (C) Asked about Japan's response to changes in the
region, PM Lee responded that it had been too preoccupied
with its own internal economic problems. It had made
progress in addressing its banking sector problems and
Singapore had noted a recent increase in Japan's
investments in the region. He thought that Japanese firms
were diversifying out of China. In response to domestic
political pressure, Prime Minister Koizumi had taken a
nationalist line with China, observed PM Lee.

--------------
Indonesia
--------------


9. (C) Indonesia and China had always had a complex
relationship, noted PM Lee. There had been clashes in the
past and Indonesia saw itself as the dominant power in
Southeast Asia. Concerned about China's influence in an
exclusive East Asia Summit, Indonesia had argued that India
should be included. At the same time, Indonesia saw
significant economic opportunities in the China market.
China was interested in "courting" Indonesia and securing
access to energy supplies. The Deputy Secretary commented
that President Yudhoyono appeared to want a more active
role for Indonesia in ASEAN. PM Lee said President
Yudhoyono had a good view of the external environment and
recognized that ASEAN had to work together in the face of a
rising China and India. He had difficulty, however,
placing greater ASEAN economic integration ahead of
narrower nationalist economic interests.


10. (C) President Yudhoyono was making the right noises
about tackling corruption and promoting economic
development, observed PM Lee. He was uncorrupt, but his
ministers had "varied" reputations and there had not been a
drastic improvement in the corruption climate. The
President would have to be personally engaged on this issue
to make progress, but he was moving cautiously.
Multinational firms would not invest in Indonesia, because
it was too difficult to operate there and there were more
attractive options elsewhere, notably China.


11. (C) According to PM Lee, Indonesian Vice President
Jusuf Kalla was positive the GOI would reach an agreement
with the Acehnese separatists (GAM). The GAM had shifted
its focus from independence to autonomy and now both sides
needed to find a face-saving formula for a settlement. PM
Lee said it would also depend on the attitude of the
Indonesian Armed Forces (TNI). Asked about security reform
in Indonesia, PM Lee said it would take time to divest the
TNI of its business interests. It would also require a
large increase in the military budget to ease the
transition, but he did not think that was likely to happen,
suggesting the reforms will be incremental and incomplete.

--------------
Limits on CT in Indonesia
--------------


12. (C) PM Lee said that when a terrorist committed a
bombing attack in Indonesia, the authorities would arrest
and charge the individuals involved. The GOI would not,
however, pursue their infrastructure and support networks,
complained the PM. Indonesia allowed many extremist groups
to operate openly because they were not seen as a threat
to the state and enjoyed public sympathy.

--------------
Relations with Southeast Asia
--------------


13. (C) PM Lee commented that Malaysian Prime Minister
Abdullah Badawi had set a new tone in bilateral relations
with Singapore and wanted to solve problems, unlike his
predecessor. At the same time, Badawi had good Islamic
credentials, which gave him some leeway domestically to
deal with the Islamic party (PAS). Badawi was confident
that Malaysia would not turn into a radical Islamic state.
Over the last 15-20 years, however, the underlying
situation had shifted, cautioned PM Lee. The Islamic
identity of Malaysia had become more pronounced than the
Malay and many Malaysian students had returned from
studying in Pakistan, Iran, and Saudi Arabia with a more
radical conception of Islam.

14. (C) PM Lee expressed his concern over the violence in
southern Thailand. Although it had not yet happened,
outside groups such as Jemaah Islamiyah could take
advantage of the separatist violence and turn it to their
own ends. The cleft between the south and the rest of the
country was deep and the police had done a poor job of
maintaining control.


15. (C) Turning to Vietnam, PM observed that its leadership
was keen to move forward and develop the economy. Vietnam
was making a series of incremental reforms and lacked the
major strategic change of direction that Deng Xiaoping gave
China. Vietnam wanted to join the WTO, but had difficulty
fulfilling its requirements.

--------------
Iraq
--------------


16. (C) The Deputy Secretary thanked Singapore for its
support on a range of issues of importance to the United
States. He noted that he had recently visited Iraq and the
new government had been formed by very courageous people.
They understood what was at stake in creating a new
democracy and were willing to meet the challenges. It
would take a combination of political, economic, and
military means to defeat the insurgency. He remarked that
the elections in Afghanistan, the Palestinian Authority,
and Iraq signaled momentous changes in the region and
reminded him of the dramatic changes in Eastern Europe in

1989. PM Lee commented that the Iraqi elections were a
great triumph and undermined the reasons for an
insurgency. At the same time, he urged the United States
to do more to "lower the temperature" between Israel and
the Palestinians, since it had an effect on Muslims in
Southeast Asia, including Singapore. The Deputy Secretary
noted the President and Secretary's interest in an Israeli
disengagement from Gaza as well as our Broader Middle East
and North Africa Initiative.
LAVIN