YOUR VISIT TO INDONESIA

S E C R E T SECTION 01 OF 02 JAKARTA 013193

SIPDIS

SIPDIS

PLEASE PASS TO NSA HADLEY AND SECRETARY RICE FOR THE
PRESIDENT FROM AMBASSADOR PASCOE

E.O. 12958: DECL: 11/18/2026
TAGS: PREL MASS MARR ID
SUBJECT: YOUR VISIT TO INDONESIA

JAKARTA 00013193 001.2 OF 002


Classified By: AMBASSADOR B. LYNN PASCOE FOR REASONS
1.4(B) AND (D).


1. (S) Summary: Mr. President: Your visit to Indonesia
provides an excellent opportunity to consolidate recent gains
in U.S.- Indonesian relations and showcase the success of our
core political values ) freedom, democracy, and economic
development ) in this, the world,s largest Muslim-majority
nation. People in Indonesia must see that their interests
lie in a cooperative effort between the world,s third and
fourth largest countries to build a better future, not in a
peevish Third-Worldism or Islamic Utopia. President
Yudhoyono shares our basic values and is genuinely committed
to implementing them in Indonesia despite the many economic
and political challenges he faces and the country,s steady
string of natural disasters. Indonesia is a Muslim success
story with serious problems to be sure, but it has earned our
support. Its continued success will not only solidify
stability in this critical region (and minimize a potentially
major terrorist threat),but also demonstrate that countries
that choose the right path will prosper politically and
economically. By showing that you care about Indonesia's
future, and highlighting the major commitments that your
Administration has implemented and supports, the visit can
set the tone for continued cooperation in years to come.

Yudhoyono has the Right Vision
--------------

2. (S) You, of course, have met President Yudhoyono several
times and know he has a clear vision for his country that any
American can support. What is refreshing about him is that
he truly understands and believes in a democratic future for
his country. Indonesia's dictatorship collapsed only eight
years ago, and the road forward has been a rocky one. But
Yudhoyono knows Indonesia needs a democratic system that
translates into real benefits for his people so that they
will buy into democracy for the long term. He was elected on
a platform for increased attention on education, health, and
rural infrastructure, to clean up the massive corruption that
tarnishes government operations, and to resolve the domestic
conflicts that had threatened the Indonesian state. On the
world scene, he espouses (even in hostile surroundings such
as the Havana NAM Summit or Saudi Arabian University) a
policy of political and religious moderation and broad
international cooperation that rejects extremism, terrorism,
nuclear proliferation and unnecessary international
conflicts. He calls on countries and individuals to resolve
their problems through good governance, religious tolerance,
economic development, and education. He wants to help tackle
real issues in the world, thus his early offer of
peacekeepers for Lebanon. He fights within Indonesia against
the kind of sectarian and ethnic hatred that threatens so
many societies around the world. In his public comments
during your visit, Yudhoyono will emphasize the issues that
are closest to his people's hearts: health, education,
economic growth, and natural disaster management, as well as
alternative energy and information technology. He hopes to
make the benefit of our friendship tangible for the average
Indonesian.

Pushing Reform has been Tough
--------------

3. (S) As in any democracy, Yudhoyono has had to find the
balance between satisfying his constituents, parochial
interests and bringing about tough, but necessary changes.
His instincts and policies have been excellent, but the
obstacles are daunting. They include slow rolling by a
stunningly recalcitrant bureaucracy and parliamentarians who
literally expect to be paid off to vote for positive votes on
critical legislation. Nonetheless, Yudhoyono has placed
reformers in the key economic ministries and heading the
military and police, and his government has arrested some
major government and corporate thieves. He had to make the
unpopular decision to slash fuel subsidies, thus doubling
fuel costs and causing his poll ratings to drop significantly
for a time. By doing so, however he saved $6-10 billon for
the national budget that the government is plowing into
social spending. He knows he has been unable to improve
living standards quickly enough, and hopes to draw in more
foreign investment to raise economic growth to 7%. Keeping
our assistance at robust levels will make the difference now

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and next year, helping him produce the results he needs
before coming up for reelection in 2009. President Yudhoyono
is by nature careful in making decisions, but he can be quite
decisive and is unquestionably the best Indonesian leader on
the horizon.

American Success in Indonesia
--------------

4. (S) The United States has significantly raised our
contribution to Indonesia,s development in recent years.
U.S. assistance following the 2004 tsunami in Aceh, both
public and private, may have reached a billion dollars and
has been greatly appreciated in Indonesia. One extremely
significant ongoing program is the education initiative you
announced in Bali in 2003. That program, designed to produce
dynamic teachers and involved parents, is expanding from 1000
to 1500 public and Islamic schools, is widely accepted as the
model in other school districts, and is crucial for shaping
the next generation of Indonesian leaders. We have also
provided major assistance to their anti-terrorism activities,
restored military-to-military ties with an emphasis on
training and management, given crucial backing in the fight
against avian influenza and on other health issues, and
supported other efforts from elections to economic and
judicial reforms. In short, we are working quite effectively
to help the Yudhoyono government and the people of Indonesia
succeed.

Moving the Agenda Forward
--------------

5. (S) In addition to showing the world that Indonesia can be
a model of progress, your visit will provide a major
affirmation to Indonesians that we take their country
seriously. Although many Indonesians criticize U.S. policy
in the Middle East (and demonstrations are a normal sight
here),your visit is widely welcomed and appreciated. Most
Indonesians will be proud that you will have taken the
trouble to come. You can also help nudge the Indonesians
forward in areas where they have good intentions, yet still
lag behind. Promoting issues such as improving the
investment climate, intensifying the fight against avian
influenza, supporting the fight against corruption, and
improving governance will provide the basis for a more stable
Indonesia, and block forces trying to destabilize this vital
zone of Asia.

The Fight Against Terrorism
--------------

6. (S) Although your host prefers that counterterrorism and
security issues not emerge as major public themes, progress
in this critical area has been consistently strong since
Yudhoyono became President. Hundreds of terrorists have been
arrested and successfully prosecuted in the last few years.
Sentences imposed by the courts are getting longer and the
ringleader of the group that killed two Americans in Papua in
2002 was just sentenced to life imprisonment. While much of
Indonesia's success is directly related to assistance we and
the Australians provide, it is also important to note
Yudhoyono has improved the public tone on terrorism markedly
in the last two years. Indonesians have moved well beyond
the denial of a few years ago to the point that the public
has come to accept that terrorists who conduct or are
planning attacks on Indonesian soil must be hunted down. In
his public statements, Yudhoyono emphasizes that Islam is and
must be compatible with a free and open democratic society
and placed himself squarely in the camp against all those who
would use violence to further their political ends.


7. (S) In sum, Mr. President, your visit here will allow you
to highlight Indonesia as a clear example of a country that
sees and is pursuing the benefits of democracy, appreciates
our help while doing so and whose success will make the
region and the world safer from international extremism. It
will also help convince the Indonesian population that their
future lies in a partnership with the United States. We look
forward to your visit.
PASCOE