INDONESIAN DELEGATION LOOKING FOR EMBASSY SITE,

C O N F I D E N T I A L BAGHDAD 003927 SIPDIS SIPDIS E.O. 12958: DECL: 12/02/2017 TAGS: PGOV PREL AA IZ SUBJECT: INDONESIAN DELEGATION LOOKING FOR EMBASSY SITE, DEBT REPAYMENT Classified By: Charge d'Affaires Patricia A. Butenis for reasons 1.4 (b ) and (d). ¶1. (C) SUMMARY: On November 29/30, an Indonesian delegation toured prospective International Zone embassy sites and told USG officials they want to establish a mission in Baghdad "as soon as possible." To the surprise of their Iraqi hosts, the delegation sought to cap its trip by signing a Memorandum of Understanding linking the re-establishment of an Embassy to settlement of Oil for Food debt. The GOI balked at these conditions and did not sign the MOU, which, according to Deputy Foreign Minister Abbawi, will "require further study." END SUMMARY. ¶2. (C) On November 29/30, an Indonesian delegation, led by MFA Secretary General Imron Cotan, toured potential embassy sites and met with Iraqi and USG representatives. In a wrap-up meeting with CDA Butenis, Cotan described himself as "very satisfied" with the sites and said the Indonesian Government was prepared to establish an embassy in Baghdad "as soon as possible." ¶3. (C) Cotan told Ambassador Butenis that before returning to Jakarta, he also hoped to sign a Memorandum of Understanding with the GOI. The MOU, which Cotan provided to PolOff after the discussion, links the re-opening of an embassy to GOI "facilitation" of the embassy's functioning and repayment of Oil for Food debt within a year of the opening. Cotan was clear that the Indonesians expected the GOI to "facilitate" by waiving the first six months rent on the property, and pressed the CDA to weigh in on the issue. (NOTE: During a very brief conversation the following day, Cotan appeared genuinely surprised that the CDA had not immediately approached the GOI to secure the rent-waiver. END NOTE) ¶4. (C) Cotan explained that the previous regime cancelled an obligation for USD 120 million worth of tea and brushed aside the CDA's suggestion the Indonesians consider waiving the debt, stressing that because it involved private Indonesian entities, there was little his government could do. He added that elements of the Indonesian Parliament were against "good relations with Washington" and opposed Jakarta's move to re-open an embassy in Baghdad. Without the MOU "goodies", he concluded, the Indonesian MFA would have a hard time selling the plan to President Yudhoyono and the parliament. ¶5. (C) After the meetings, GOI MFA contacts, including Deputy Foreign Minster Abbawi, told us that while they expected the delegation would raise other issues, they were blindsided by the heavy emphasis on debt repayment. One contact suggested that the Indonesians had come to Baghdad "to quote a price for re-opening their mission." Deputy Foreign Minister Abbawi said the GOI would not sign an MOU during this visit, but would consider the matter further. After the delegation's departure, a Foreign Ministry source confirmed that the parties did not sign the MOU. BUTENIS