PRESIDENT,S NATIONAL DAY SPEECH UPBEAT, BUT NO

UNCLAS SECTION 01 OF 02 JAKARTA 002248 SIPDIS SIPDIS SENSITIVE DEPARTMENT FOR EAP, EAP/MTS, EAP/MLS, INR/EAP E.O. 12958: N/A TAGS: PGOV ECON PTER ID IR SUBJECT: PRESIDENT,S NATIONAL DAY SPEECH UPBEAT, BUT NO SURPRISES JAKARTA 00002248 001.2 OF 002 ¶1. (U) This message is Sensitive but Unclassified -- Please handle accordingly. ¶2. (SBU) Summary: President Yudhoyono's annual National Day speech offered a generally upbeat assessment mixed with a sober recognition of the challenges facing the country. The speech covered democracy, terrorism, national unity and separatism, Indonesia's approach as a non-permanent UNSC member and its national economic development priorities. A speech by Speaker of the House Laksono focused on legislative priorities. Mission will email a copy of the speech to EAP/MTS when it becomes available. End Summary. SBY's Speech -------------- ¶3. (U) On August 16, President Susilo Bambang Yudhoyono delivered the annual national address on the eve of Indonesia's National Independence Day, August 17. The nationally televised speech, which is the equivalent of the U.S. President's State of the Union address, was delivered before the Indonesian House of Representatives (DPR). Ambassador Hume attended. Key speech's key themes included: -- National Unity: Yudhoyono stressed Indonesia's national resilience over its 62 years of independence. Predictions early in the Sukarno era and again after the fall of Suharto that Indonesia would break up into smaller, ethnic units had been proven false, the President commented. Indonesia had weathered separatist challenges and stood unified facing the future. Repeating a standard theme from previous years, he emphasized that Pancasila (the five basic principles) had held the country together and would remain inviolate. Under no circumstances would the government support any change in these basic constitutional principles. -- Responsibilities of Democracy: Nearly a decade into the democratic era, Yudhoyono stated, Indonesia must now pay attention to the responsibilities of democratic government. Harmony and balance were ideals that Indonesia prized and they should be preserved. The challenge for Indonesia now was learning to use its freedom constructively. Rule of law and tolerance were fundamental to the success of democracy. Separatism would not be tolerated. At the same time, Indonesia must successfully manage the challenges of globalization, ensuring that development was directed toward a peaceful, just and democratic society. The continuing mud flow in Sidoardjo in eastern Java was a problem that must be resolved. The government would continue to take the lead, in coordination with others. -- Ethnic Conflict: The president singled out Poso (Central Sulawesi),Maluku (Moluccas),Aceh and Papua as areas of ethnic conflict where the government had succeeded in preserving domestic peace and security. (Note: Well-targeted police raids and personal intervention by Yudhoyono and Vice President Kalla in the first half of 2007 largely ended spiraling violence between the Muslim and Christian communities in Poso. Yudhoyono's visit to Ambon, Maluku, in July was marred by a protest which involved the hoisting of the banned Malukan flag. End Note.) Aceh continued along the road established by the Helsinki peace process and MOU, although scattered conflicts pointed up the need for further confidence building between GAM and other groups. Yudhoyono acknowledged the central government needed to take an active role in developing Papua, pledged to assist Papua and West Papua (Papua Barat) and noted his recently issued presidential instruction to this effect. Papua should not become a source of discontent that could threaten Indonesia's national unity. -- Terrorism and the United Nations: On terrorism, Yudhoyono praised the national police and other institutions in tracking down, capturing and prosecuting terrorists. Despite these successes, however, Indonesia must look below the surface and address the roots of terrorism, including "backwardness, poverty, injustice, extremism, radicalism and a culture of violence." Indonesia's success would benefit Indonesian society demonstrate Indonesia's accountability to JAKARTA 00002248 002.2 OF 002 the international community. On Indonesia's approach in the United Nations Security Council, where Indonesia will serve a second year as a non-permanent member in 2008, Yudhoyono stated that Indonesia would continue to collaborate with other members on the basis of a "free and active" foreign policy (a reference to Indonesia's tradition of non-alignment) and would emphasize peaceful over military solutions to conflicts. He also noted that Indonesia would host the UN's 13th Council of Parties meeting on climate change in Bali in December 2007. -- Economic Development: Coming on the heels of solid economic growth figures in the last quarter, Yudhoyono identified multiple national priorities in 2008 meant to spur economic growth and reduce poverty and unemployment. The eight priorities were: increase investment; encourage exports; enhance employment opportunities; revitalize the fishing and forestry sectors and promote village development; accelerate infrastructure development; increase the access to and quality of education and health; increase the effectiveness of the war on poverty; and fight corruption and accelerate bureaucratic reform. In addition to these items, the government would continue to develop its capability to respond to natural disasters, reduce the risk of natural disasters and address avian influenza. Infrastructure development remained crucial, with an emphasis on land, air and sea transportation, electricity and irrigation. The government would give priority to areas recently hit by natural disasters. On the positive side, Indonesia had achieved extensive progress on the economic front in the past ten years. Indonesia had foreign exchange reserves of US$50.9 billion, a stable exchange rate, a reduced debt ratio and a healthier balance in the financial sector. (Note: Mission is continuing its review of the economic-related portion of the speech and will report further.) Speaker's Remarks -------------- ¶4. (U) In his remarks, House Speaker Agung Laksono recalled highlights and themes of Indonesia's national independence struggle and the major changes since the fall of President Suharto in 1998. Emphasizing the importance of Pancasila as the basis for all Indonesian national institutions, he called for continued unity as Indonesia faced the future. Laksono reviewed the legislative agenda for 2008, including the national budget, institutions of government and political parties, fiscal reforms, national implementing legislation for international agreements and bilateral treaties. He also discussed the controversial proposed Defense Cooperation Agreement with Singapore and the EU flight ban on Indonesian airlines, as well as the Constitutional Court's recent ruling to allow independent political candidates to run in elections. Upbeat, but Sober -------------- ¶5. (SBU) As he has a right to be, Yudhoyono was upbeat about the incredibly fast pace of the country's democratization as well as guardedly confident regarding its overall macroeconomic situation. That said, he was honest, noting the many challenges facing the country. Papua and the generic warning against separatism were stark. The president also dwelt a bit on the mud flow issue, stressing that the GOI was serious about dealing with it. The president's inclusion of "radicalism and extremism" among the underlying causes of terrorism marks a significant advance over previous statements which basically mentioned "poverty" as the key cause of terror. HUME