Identifier
Created
Classification
Origin
06JAKARTA2917
2006-03-06 13:35:00
CONFIDENTIAL
Embassy Jakarta
Cable title:  

YOUR VISIT TO INDONESIA: MOVING OUR RENEWED

Tags:  PREL MASS MARR ID 
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C O N F I D E N T I A L SECTION 01 OF 07 JAKARTA 002917 

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SIPDIS

C O R R E C T E D COPY - (PARA MARKING)

E.O. 12958: DECL: 03/06/2015
TAGS: PREL MASS MARR ID
SUBJECT: YOUR VISIT TO INDONESIA: MOVING OUR RENEWED
BILATERAL RELATIONSHIP FORWARD

JAKARTA 00002917 001.2 OF 007


Classified By: Charge W. L. Amselem; Reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 07 JAKARTA 002917

SIPDIS

SIPDIS

C O R R E C T E D COPY - (PARA MARKING)

E.O. 12958: DECL: 03/06/2015
TAGS: PREL MASS MARR ID
SUBJECT: YOUR VISIT TO INDONESIA: MOVING OUR RENEWED
BILATERAL RELATIONSHIP FORWARD

JAKARTA 00002917 001.2 OF 007


Classified By: Charge W. L. Amselem; Reasons 1.4 (b) and (d).


1. (U) Madame Secretary: Your team in Jakarta warmly
welcomes your March 14-15 visit to Indonesia, the most senior
USG visit since Secretary Powell's of January 4-6, 2005. We
have underway preparations to ensure a visit high in
substance and symbolism.

Introduction
--------------


2. (C) Summary: Your decision to move quickly in November
to normalize the military-to-military relationship with
Indonesia has given a new, more cooperative quality to
bilateral relations across a range of interests. Although
our bilateral cooperation improved following Indonesia's
landmark 2004 national elections, SBY's inauguration in
October 2004, and the splendid world-beating U.S. response to
the December 2004 tsumani, our military aid "embargo" proved
a major irritant to SBY and the Indonesian political class,
and an impediment to working in key areas of mutual concern.
Indonesians gave a collective sigh of relief when we ended
the very public sanctions we had imposed for abuses that
occurred under a different government in a very different
era. On learning of the Administration's waiver of
conditions on military cooperation, an enthusiastic
Indonesian President Susilo Bambang Yudhoyono (SBY) privately
told his staff that "we can now have a new relationship with
the United States." The Indonesia Government has signaled in
a variety of ways a willingness to begin in earnest a new,
productive partnership with us.


3. (C) SBY understands that your personal involvement and
commitment made possible our policy shift. He will want to
work with you to craft the direction of our renewed
relations. We have heard from senior GOI officials that in
addition to discussing military relations, the President and
his ministers will raise their hopes for continuing the CT
cooperation that has produced excellent results; exchange
thoughts with you on the role of China in SE Asia; and
discuss the threat posed by avian influenza. We seek to

assure SBY of our support for Indonesia's new democracy and
commitment to reform, and that we look to Indonesia to adopt
a greater role in handling regional and global issues in
partnership with us. Your visit provides an opportunity for
you to brief the GOI on developments in Iraq, Middle East,
Iran, the Korean peninsula, and China. We need also remind
SBY that failure to address key issues -- such as holding
officials responsible for misdeeds including human rights
violations -- could lead to a return of restrictions. We
want Indonesia to sign an Article 98 waiver and move its UN
voting record closer to us on key issues and away from a
fixation on "Non-aligned" positions.


4. (C) SBY seeks progress on many fronts: consolidating
gains against terrorists; pushing economic reform and tsunami
reconstruction under the leadership of a new economic team;
and promoting military reform, in which we can now play a
full partnership role. Much work remains to solidify
Indonesian democracy, inter alia, combating corruption,
reforming the judiciary, improving government responsiveness,
and addressing still lethal sectarian and ethnic divides.
That said, however, Indonesia, the world's largest
Muslim-majority nation, has put in place democratic
structures over the last seven years, making it the world's
third largest democracy, and emerged as an example for others
of the transformational power of freedom.

Objectives of Your Visit
--------------


5. (C) We see your visit as a major opportunity to affirm
the Indonesian model and pledge continued support. Building
on the very positive Indonesian reaction to changes in
bilateral military relations, you could chip away at
attitudes that remain from Indonesia's authoritarian and
"non-aligned" days, bolster continued efforts for political
and economic reform, and push democratic Indonesia to take
greater responsibility to address regional and global issues
in partnership with us. You could also pursue the following
objectives:

a) Urge Indonesia, the world's third-largest democracy, to
help us push democratic progress and religious tolerance;

b) Move our counterterrorism agenda forward by urging

JAKARTA 00002917 002 OF 007


strengthened legal reforms and greater internal coordination;
congratulate the government for recent successes ) including
the neutralizing of terrorist mass murderer Azahari last
November;

c) Propose further military cooperation and continued
support for the modernization and professionalization of
Indonesia's military and efforts to bring it fully under
civilian control, paying continued attention to human rights
and accountability; note Administration efforts to increase
engagement and funding for assistance with maritime security
issues and strengthening humanitarian response capabilities;

d) Encourage Indonesian economic reform and pledge U.S.
support;

e) Underline your support for an Article 98 agreement,
noting the personal commitment that POTUS made and you
implemented to make normal military relations possible, and
explain that such an agreement would benefit both parties and
assist during discussions with and within Congress this year
on military relations with Indonesia;

f) Affirm that Indonesia has "no better friend than the
United States." You can remind Indonesia of our huge aid
program, including our response to the tsunami and to the AI
threat. We see Indonesia as a fellow democracy with shared
values of tolerance and pluralism, as a nation of crucial
importance to the region and the world, and one we want to
succeed.

Ensuring Democracy and Moderate Islam Prevail
--------------


6. (C) We have a great stake in helping consolidate
democracy in Indonesia, the world's fourth most populous
nation and its largest Muslim-majority country. Indonesia's
emerging success as a democracy has profound implications for
our bilateral objectives, for our broader goals in Asia and
throughout the developing world, most notably among other
Muslim-majority countries. Within Indonesia, democracy has
created opportunities for a U.S.-Indonesia partnership that
supports mutual objectives in key areas such as combating
extremism and terrorism, and promoting human rights, security
cooperation, economic development and investment. Indonesia
provides a strong democratic example for countries that lag
in political freedom and stands out as a living example of
Islam's compatibility with freedom and modernity.


7. (C) Indonesia has established new foundations for
democracy over the past seven years. The amended
Constitution provides more effective checks and balances
among the executive, legislative and judicial branches. The
country now has a freely-elected legislature with a chamber
representing different regions, but security forces no longer
have unelected seats in the House of Representatives (DPR).
The People's Consultative Assembly (MPR) resoundingly
defeated attempts by Islamist parties to inject Shari'a law
into the Constitution. The free and fair 2004 national
elections put into practice a new electoral framework with a
vibrant multi-party system. The country's first direct
presidential election defeated an incumbent President and
brought reform-minded Yudhoyono into office. Indonesia
carried out a huge decentralization effort that has shifted
much authority from central government to local officials. A
free, open, and frequently obstreperous press has replaced a
tightly controlled and censored media. Our assistance
programs and diplomatic efforts have supported these
developments.


8. (C) Democratic progress has made Indonesia a player in
the ongoing struggle between democratic modernization and
militant retrograde Islam. As the world's largest
Muslim-majority country, Indonesia suffers the same radical,
hate-filled strains of thought that afflict the rest of the
Islamic world. At the same time, Islam in Indonesia --
especially its syncretic Javanese version -- has a long
history of moderation, combining Islamic beliefs with
modernization and outreach to the rest of the world. We have
worked with Indonesia's civic organizations -- dominated by
Islamic groups -- to make the point that democracy,
modernization, and Islam can work together; Indonesians have
adopted this view and created one of the world's largest
democracies. We must show that we can forge close, long-term
mutually beneficial ties with this fourteen percent of the
Islamic world (more Muslims live here -- nearly 200 million

JAKARTA 00002917 003 OF 007


-- than in all the Middle East).

Encouraging Engagement in Region and Globally
--------------


9. (C) SBY's focus on repairing Indonesia's image, and on
gradually building a leadership position on the world stage
befitting Indonesia's size, gives the foreign policy
apparatus an opportunity to change Indonesia's role in
international fora. We need Indonesia to take the side of
democracy in world debates and act as a moderating influence
on more radical regimes in the Middle East. Indonesia's
historical non-aligned orientation and jealous safeguarding
of national sovereignty have made it cautious in entering
into bilateral agreements and reluctant to single out
wrongdoers in multilateral fora. Indonesia's decision to
abstain in the IAEA vote February 2 to refer the Iran
proliferation case to the UNSC demonstrated its continued
difficulties when confronted by issues in which it needs to
take a responsible public stand with other democracies of the
world community. Indonesia has begun to reassert its
traditional leadership role in ASEAN and made tentative
attempts to press for democratic norms within ASEAN's nascent
political community. ASEAN members made helpful statements
in Kuala Lumpur about the lack of progress in Burma, and
agreed to send Malaysian FM Hamid to Rangoon. We have
encouraged SBY to carry a strong message of reform to the
Burmese junta during his visit there at the end of February.


10. (C) Indonesia should increase engagement in
international security efforts, including maritime security
and the Proliferation Security Initiative (PSI). Indonesia
has worked with Malaysia, Singapore, Thailand and the
International Maritime Organization to improve maritime
security in the strategic Strait of Malacca, but needs more
effective measures in this and other areas. Indonesia
professes strong support for non-proliferation, but has not
endorsed the PSI Statement of Principles. It should see PSI
as a means to enhance cooperation as part of our mil-mil
relationship and as an area in which it should take greater
responsibility.

Significant Progress on Terrorism; Problems Remain
-------------- --------------


11. (C) The bombings in Bali October 1 left no doubt that
terrorism remains a significant threat. Jemaah Islamiyah
(JI),the most active terror group in Indonesia and one of
the world's deadliest, has conducted most of the dozens of
bombings in Indonesia since 2000, killing hundreds of persons
(mostly Indonesians). Founded in 1992 as an offshoot of the
Darul Islam network that for decades sought to turn Indonesia
into an Islamic state, JI has as its ultimate goal the
establishment of an Islamic caliphate that spans the southern
Philippines, Malaysia, Singapore, Indonesia, and southern
Thailand. JI's leaders (including its now imprisoned
"spiritual" leader Abu Bakar Ba'asyir or "ABB") returned to
Indonesia from exile after Suharto's fall in 1998. Thanks to
the GOI's recent success in taking down bombing mastermind
Azahari we see a much greater understanding within the GOI
and the population of the dangers posed by these radicals.
We see the greatest public commitment to act expressed by
leaders since the first Bali bombings in 2002. In your
discussions with Yudhoyono and others you could stress the
importance of government efforts to achieve clear public
understanding that jihadist radicalism has no place in
Indonesia.

Reform of the Indonesian Military
--------------


12. (C) SBY, a retired General, has continued the reform of
the Indonesian Armed Forces (TNI) begun after the fall of
Suharto. As Defense Minister he has a strong-willed civilian
military expert, Juwono Sudarsono, who also served as
Minister of Defense in Gus Dur's cabinet. Juwono's Ministry
implemented the TNI law enacted in September 2004 and has in
preparation legislation to bring TNI fully under control of
the Ministry. Under Juwono, TNI professionalism and respect
for human rights continue to improve; TNI has stayed out of
politics and submitted to increased civilian control; TNI has
observed legal restrictions on its domestic CT involvement
and allowed the Indonesian National Police to take the lead
on the issue; and TNI has fulfilled its obligations under the
GOI-GAM MOU ending three decades of conflict in Aceh.
Although making progress, the GOI has not yet ended TNI's

JAKARTA 00002917 004 OF 007


business activities and provided it a realistic budget --
most of TNI's budget comes from "self-financing." The
appointment of Marshall Djoko Suyanto to lead the TNI should
move reform even further given his reputation as the most
open-minder senior general. While TNI respect for human
rights and punishment of individuals who abuse rights has
increased, accountability has remained incomplete in the caseu/1K`:g}Wamang and other suspects remains a high priority for us.

Indonesia,s Judicial Sector and Corruption
--------------


15. (C) Indonesia's judicial sector must overcome the
corruption, ineffectiveness and pervasive impunity from which
it suffered during the Suharto regime. A broad range of U.S.
programs assists Indonesia to do so. We successfully
encouraged the Attorney General to establish in September a
counter terrorism and transnational crime task force and we
will support it financially. The AGO recently named someone
to head the task force, but we still await significant steps
by the AGO to create the body. Our ICITAP and ATA training
programs have helped develop the operational and
organizational capacity of the Indonesian National Police
(INP) as highlighted by the success of U.S.-trained "Task
Force 88," which killed JI bomber and mass murderer Azahari
last November in the course of a well-executed raid on a
terrorist safehouse. USAID has a multi-year rule of law
initiative focusing on the courts, the AG's office and other
judicial institutions, including the Corruption Eradication

JAKARTA 00002917 005 OF 007


Commission (KPK). CT cooperation has led to arrests,
prosecutions and convictions of large numbers of terrorists.
Assistance to the judicial sector also helps SBY pursue his
high priority anti-corruption agenda and create a better
climate for foreign investment.

Public Diplomacy Environment
--------------


16. (C) Indonesian institutions have proven remarkably open
and receptive to U.S. public diplomacy efforts. The point
that Indonesia has "no better friend than the U.S." seems
widely recognized among the elite who have benefited from
U.S. education (a large number of the cabinet have studied in
the U.S., often under USG sponsorship) as well as the man in
the street. While public opinion polls show disagreement
with many U.S. policies, other polling results and our daily
experience show a substantial positive feeling about the
U.S., and our values and social institutions. Our effective
response and significant contributions to the tsunami relief
had a tremendous impact, receiving wide publicity and praise
in Indonesia, and helped turn around the decline in our
approval ratings. More important, our access to all levels
of society provides opportunity for aggressive public affairs
programming. We have set up American Corners throughout
Indonesia -- half in Islamic universities -- and carry out a
large program of student exchanges with Islamic institutions.
Media remain receptive to training programs and
participation in State Department reporting tours. A large
Fulbright program, an active International Visitor program,
and an aggressive outreach to send younger people to the U.S.
for a year in high-school all enhance mutual understanding by
exposing the next generation of leaders to a deeper
understanding of the U.S.

Economic Reform
--------------


17. (SBU) Although Indonesia's record on counterterrorism
and military reform receive the bulk of attention in the
U.S., President Yudhoyono's domestic political future will
rise or fall on the success of his economic reform program.
Indonesia, one of the "Asian Tigers" before the 1997-98
financial crisis, enjoyed annual GDP growth of over seven
percent from 1990-96. The crisis triggered the collapse of
Indonesia's state-centered, cronyist development model, and
the country has since made halting progress toward a more
open, private sector economic system. Yudhoyono came into
office with a ringing pledge to implement a "pro-growth,
pro-poor, and pro-jobs" economic policy that, for the first
time, explicitly recognized the private sector as a key
partner in development. He set the ambitious target of
raising Indonesia's average GDP growth from 2006-09 to 6.6
from its current 5.5 percent level, and halving the poverty
and unemployment rates. The Indonesian and foreign business
communities responded warmly to Yudhoyono's agenda, and
continue to support him strongly.


18. (SBU) Aside from the tsunami disaster, the defining
moment of Yudhoyono's first year in office proved his bold
decision to raise subsidized fuel prices by an average of 126
percent on October 1, 2005. The fuel subsidy cuts open the
door to the most significant expansion of GOI social and
development spending in a decade, and Indonesia's FY 2006
budget shows a 28 percent increase in non-interest,
non-subsidy spending. But the subsidy cuts caused hardship
to millions of low-income Indonesians accustomed to decades
of cheap gasoline and kerosene, led to a surge in inflation
and took some steam out of the economy. In order to raise
growth, SBY's highly regarded Coordinating Minister for
Economics, Dr. Boediono, has said that the GOI will ramp up
government development spending and issue a package of
measures to improve the business climate. As Indonesia's
second largest non-oil and gas export market and the leading
investor in the energy sector, we have an interest in
Boediono's success. Getting ExxonMobil's long-delayed USD 3
billion Cepu oilfield project in East Java off the ground has
shaped up as a test of Boediono,s ability to cut through
bureaucratic red tape.

U.S. Assistance Programs
--------------


19. (SBU) For more than 40 years, the U.S. has had an active
bilateral assistance program in education, public health,
support for democracy, and economic growth including

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infrastructure development. In FY05 the bilateral USAID
program came in at more than $135 million (appropriated
dollars and food aid combined) and we actively work with
Indonesian partners in areas Indonesia has identified as of
highest priority. The USAID program in Indonesia aims to
"Help Indonesia Succeed." The USAID country-wide assistance
program works with the GOI, local governments and private
partners, including civil society, to improve the quality of
basic education; improve the delivery of essential public
services at the community level, including health services
and clean water; create a better business, trade and
investment environment that will support economic growth that
generates new and better jobs; promote more accountable and
transparent governance at the national and local levels; and
promote biodiversity and environmental protection. Ensuring
that Indonesians know of this contribution remains a key part
of our public diplomacy and the mission, through PAS and
USAID, conducts active campaigns to get this message out to
the media.


20. (SBU) These programs allow the U.S. to lay the
foundation for a better future for the people of Indonesia,
while responding rapidly to more immediate requirements as
varied as response to the Indian Ocean tsunami disaster;
implementation of the Aceh peace accord; avian influenza and
polio outbreaks; and an HIV/AIDS epidemic that risks breaking
out. Anti-corruption support, including a focus on
"governance" issues in all sectors in which we work, as well
as specific institutional support for justice sector reform,
addresses one of the most difficult economic and democratic
development issues faced by Indonesia today, and one of the
highest priorities of SBY's government. With USAID and other
assistance, continued progress in the fight against
corruption and better delivery of basic services will help
Indonesia qualify for full support from the Millennium
Challenge Corporation. Indonesia just received MCC
"threshold status."

Assistance Programs for Aceh
--------------


21. (SBU) The U.S. has provided Indonesia tsunami recovery
and reconstruction assistance totaling $400.1 million (and
U.S. the private sector contributed more than $1.4 billion to
the regions). USAID implemented more than $43 million for
relief and transition activities in the weeks following the
tsunami and earthquake. We have directed the remaining $357

SIPDIS
million to U.S.-managed reconstruction activities, debt
relief ($20.1 million),a contribution to the jointly-managed
Government of Indonesia-World Bank Multi-donor Trust Fund
($10 million),and activities of the U.S. Trade and
Development Agency ($2.5 million). The U.S. will rebuild the
road from Banda Aceh to Meulaboh and other vital
infrastructure, restore livelihoods, and improve essential
basic services (health, education, water, sanitation, and
environment) while strengthening local governance capacity to
manage these services. We provide technical assistance to
develop national and local disaster planning and
preparedness, including early warning systems. We have
programmed more than $10 million to assist the implementation
of the landmark peace agreement between the GOI and Free Aceh
Movement (GAM) separatist movement. Our programs promote
public understanding and support of the agreement, help
integrate former combatants into Acehenese society and
sustain community-based development.

Avian Influenza
--------------


22. (SBU) Indonesia's size and complexity complicated its
response to H5N1 avian influenza (AI),and while we should
praise Indonesia's efforts to prepare for a potential
pandemic, much work remains. Of a total 28 confirmed human
cases since July 2005, 20 have proven fatal, a number second
only to Vietnam. Since SBY designated Coordinating Minister
for People's Welfare Aburizal Bakrie to coordinate its AI
activities, the GOI has developed an initial AI preparedness
framework, but must improve coordination among health,
agriculture and other sectors. Since the first confirmed AI
patient in July 2005, Indonesia has responded with case
investigations, has proven quick to report findings, and
shared samples for confirmation with international
laboratories. The Ministry of Health (MOH) has established
outbreak response teams to investigate reported human cases.
The U.S. Navy Medical Research Unit (NAMRU-2) in Jakarta has
supported the Health Ministry through its 24-hospital

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influenza surveillance system, initial laboratory testing for
the AI virus in hundreds of human samples, and outbreak
investigations. We have exchanged draft MOU's and expect to
begin intensive negations soon to re-establish NAMRU-2's
long-term legal status.
AMSELEM