GOI TROUBLED BY EVENTS IN THAILAND

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 011769

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/20/2016
TAGS: PGOV KDEM KISL ID
SUBJECT: GOI TROUBLED BY EVENTS IN THAILAND

REF: A. A. JAKARTA 10136 (ARMS CACHE ACTIVATES RUMOR MILL)

B. B. 05 JAKARTA 12822 (RETIRED GENERALS TAKE AIM)

C. C. 05 JAKARTA 12416 (INDONESIAN OPPOSITION GROUP)

JAKARTA 00011769 001.2 OF 002


Classified By: Political Officer Eric W. Kneedler, reason: 1.4 (b) and
(d).

SUMMARY
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1. (C) On September 20, President Susilo Bambang Yudhoyono
convened a meeting of top advisors to discuss the coup's
implications for Indonesia. Several times during that day,
one of the President's top foreign policy advisors pressed
the Charge for information about the USG's understanding of
the events in Thailand, reflecting not only the President's
strong interest, but also the GOI's apparent absence of
reliable information coming out of Bangkok.


2. (SBU) GOI Foreign Minister Hassan Wirajuda, speaking from
New York, called on Thailand to "settle the political crisis
through democratic means," according to press reports. Theo
Sambuaga, the Chairman of the Indonesian House of
Representatives' (DPR) Commission on foreign affairs, was
less subtle, calling the coup, "a step back in the life of
Thailand as a democratic country." Publicly GOI officials
uniformly emphasize the importance of maintaining democratic
values, while expressing discomfort with the fact that a
model for democracy in the region could so easily part with
its core democratic principles. Press coverage of the coup
has been extensive and critical, and the Indonesian rupiah,
mirroring major Asian currencies, depreciated only slightly.
End Summary.

FOR SBY, COUP HITS A LITTLE TOO CLOSE FOR COMFORT
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3. (C) On September 20 SBY convened an early afternoon
meeting of his top advisors to discuss events in Thailand and
evaluate what implications they might have for Indonesia.
According to Dadan Irawan, a member of the Golkar party's
Central Board and a contact with reasonably good access to
the Palace, the President was concerned that his enemies in
the military, as well as the political elite (Refs B and C),
might find inspiration in the success of the bloodless coup.
Dadan noted that the coup, coupled with the June discovery of
a huge arms stockpile that may have been earmarked for
destabilization exercises (Ref A),probably only served to
lift SBY's already heightened state of awareness. According
to Dadan, SBY did not call the meeting because of his
knowledge of any specific plots, but out of a desire to
maintain vigilance and proactively work to ensure Thakin's
demise would not be replicated in Indonesia. The meeting
also focused on possible local and regional economic fallout,
as well as the ramific
ations for ASEAN.


4. (C) Following the President's emergency meeting, Charge
met with one of SBY's top advisors in response to his request
for information about the coup. The advisor had called
Charge several times requesting updates. Charge briefed him
on the latest news as reported by U.S. Embassy Bangkok, and
then responded to questions about the possible impact of the
coup on U.S. military assistance to Thailand.

THE GOI REACTS
--------------


5. (U) Foreign Minister Hassan Wirajuda, in New York for the
UNGA, set the tone for the GOI stating: "the Indonesian
government is closely following the developments in Thailand
with concern. As a fellow member state of ASEAN, the
Indonesian government hopes that the democratic principles,
important elements in the ASEAN community that have been
agreed together, will remain enforced."


6. (U) Theo Sambuaga, the head of DPR's Commission I and a
prominent Golkar legislator, said, "from whatever angle it is
seen, such action against a legal, democratically elected
government cannot be justified." He went on to call on the
GOI and ASEAN to "not endorse or recognize the coup d'etat."

THE MEDIA
--------------


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7. (U) Daily Kompas, the newspaper of record, ran a front
page story about the coup, complete with a timeline, maps,
and photos of the key protagonists in the story. Other
newspapers of import in Indonesia also covered the story
extensively, casting the coup in a highly unfavorable light
and highlighting its extrajudicial nature.

LIMITED RISK FOR ECONOMIC FALLOUT
--------------


8. (SBU) Following news of the coup, the Indonesian rupiah
slipped a modest 0.1 percent to 9,171 rupiah to the dollar on
September 21, its lowest point in two months, but a
relatively insignificant movement. A leading Indonesian
economist with an international bank told us that there was
only a low risk of financial contagion from the crisis. A
Bank of Indonesia (BI) currency expert said BI is "watching
but not worried," noting the rupiah quickly rebounded to
pre-coup levels on September 21. "The central banks in
Thailand and Indonesia have strong reserves now," he added
(Note: Indonesia has a comfortable US $41 billion in
reserves. End Note). This analysis is consistent with what
we have heard from other contacts. Mindful of Thailand's
role as the catalyst for the Asian economic crisis, the GOI
is watching the reaction to the events in Bangkok, but after
one day of volatility, domestic markets have stabilized.

HEFFERN