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 -------------- ¶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 -------------- -------------- ¶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 -------------- JAKARTA 00011769 002.2 OF 002 ¶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