TRANSFORMATIONAL DIPLOMACY IN INDONESIA

UNCLAS SECTION 01 OF 04 JAKARTA 002644 SIPDIS SIPDIS SENSITIVE DEPT FOR S, D, P, EAP A/S HILL FROM AMBASSADOR HUME E.O. 12958: N/A TAGS: PREL PGOV ECON SOCI TBIO ID SUBJECT: TRANSFORMATIONAL DIPLOMACY IN INDONESIA JAKARTA 00002644 001.2 OF 004 ¶1. (U) This message is Sensitive but Unclassified -- Please handle accordingly. ¶2. (SBU) Summary: Indonesia, the fourth most populous nation, is a crucial test for transformational diplomacy. Just ten years ago it was an authoritarian, military dominated state weakening under the pressures of the Asian financial crisis. Now it is the one state in the region to earn Freedom House's "free" rating and its economy is growing at over six percent. U.S. diplomacy promotes this progress, including through large economic assistance and public diplomacy programs. Real challenges remain: to secure accountability for past human rights abuses by the military; to strengthen the police force; to reduce corruption; to make the economy more attractive for direct foreign investments; and to improve education. What lessons can transformational diplomats learn from progress to this point, and what have become the crucial issues that policy makers need to confront? End Summary. The Context and Circumstances -------------- ¶3. (SBU) From independence in 1949 until the fall of President Suharto in 1998 the Indonesian state was comparable to the colonial state created by the Dutch and maintained by the Japanese during World War II. The legitimacy of President Sukarno's government came from its liberation of the nation from the colonial power; elections were not the basis for Sukarno's hold on power. After Sukarno, for the next three decades Suharto based his legitimacy and that of his government on delivering security and economic growth. The sources of authority were the military and the crony capitalists who built industrial and trading conglomerates and amassed enormous fortunes. It was a top-down power structure, and Suharto ruled like a sultan. ¶4. (SBU) The Asian economic crisis of 1997 forced the collapse of Suharto's government within a year. Between 1998 and 2004, Indonesia had five different presidents; the economy first shrank, then stagnated; the military, rather than guaranteeing security, fomented violence, especially in East Timor; in turn, East Timor voted for independence in a referendum and then was occupied by a United Nations force; and comparable crises simmered in Aceh and Papua at the western and eastern extremities of the Indonesian archipelago. It seemed as likely as not that the state would break apart. Instead a series of political leaders, with broad political support, created the basis for a renewed state dedicated to the principles of democracy and the rule of law, as well as committed to providing ordinary citizens with security, economic opportunity, and basic social services. In late 2004, the election of Susilo Bambang Yudhoyono, a former general, as president confirmed the national determination to make a new start. Political Change -------------- ¶5. (SBU) Two reforms have changed the fundamentals of the state in Indonesia. First, direct, democratic elections are now used at every level of government to select the president, the parliament, regional governors, provincial parliaments, mayors, and town councils. In the last four years Indonesians have voted peacefully in over 200 elections, without interference by the military. International and local observers have repeatedly certified these elections to be free and fair. Incumbents now understand that they have but a few years to govern before having to answer to another vote. The point of reference for government has shifted from the security of the state to the benefit to the voters. The second reform has been decentralization of the state from Jakarta to the provinces, with special statutes for the troubled Papua and Aceh regions. Resources, comprising up to forty percent of the total state budget, and responsibility have shifted for such services as education and health. Local officials are slowly learning how to design, implement and manage these services. But it is clear that accountability in government is now closer to the people. ¶6. (SBU) The Indonesian people have made clear, repeatedly, JAKARTA 00002644 002.2 OF 004 that they want a democratic government committed to the rule of law, and their choice, not outside pressure, is the basis for this remarkable change. The United States has become a partner in these changes through its own policies and programs. USAID funding has supported the conduct of elections and the training of grassroots politicians. Public diplomacy funding has introduced Indonesians, through education and exchange programs, to U.S. democracy. Other programs provide training for institutional capacity building at the local level, improving the prospects for decentralization. The democratic transformation is far from complete, but it is well under way. Security -------------- ¶7. (SBU) Before 1998, the Indonesian military was the bedrock of state power, and it retains enormous influence and capacity. The military's three missions are now defined as performance of humanitarian missions beyond the capacity of civilian authorities, participation in UN authorized peace-keeping missions, and maritime security. The last incident in which the military was accused of major human rights violations took place in 2000, although there has been little accountability for earlier violations. Department of Defense experts are now working with the Indonesian military to design a budget process that will make the entire military budget subject to approval by parliament, increasing transparency and accountability and enabling the military to divest itself of problematic money-making operations. In 2005, The United States resumed training of military officers, security assistance for military sales and numerous joint exercises, but it has not resumed training with Indonesia's Army Special Forces (Kopassus) because of past human rights violations. Australia cooperates closely with Kopassus. ¶8. (SBU) The police, separated from the military in 2001, now have first-line responsibility for internal security, including counter-terrorism. Indonesia's new civilian police force is working on three transitions: from a force that protects the state to a force that protects the citizens; from an inquisitorial criminal justice procedure (which puts a premium on confessions) to an evidence-based procedure; and from a poorly trained force that deployed massive numbers to a well trained professional force under tight control. USG programs, funded at over $7 million yearly, have made a huge contribution to these changes. At Indonesia's request, U.S. experts designed the full range of training programs for the new force, helped rewrite the criminal procedure code, trained the Detachment 88 Anti-Terrorist Unit, designed a new 'use of force' policy, and provided other critical support. One area where we need a concerted, long-term effort is countering police corruption. USG employees and contractors work within the police force to promote reforms by working directly with the police. However, current United States policy limits our training of the elite Mobile Brigade (Brimob) because there has been inadequate accountability for earlier human rights violations. The Australian Federal Police do train with Brimob, which would be the first line of defense in the event of an attack on a diplomatic facility here. Economic Change -------------- ¶9. (SBU) Ten years after the 1997 Asian financial crisis the Indonesian macro-economy has recovered but not fully reformed. The fortunes built up during the heyday of crony capitalism still dominate the economy. The only (relatively) reformed sector is banking, due to bankruptcies and forced consolidations. The Jakarta stock market has just had a record year, and balance sheets are robust. Nevertheless, the six-percent growth rate is too anemic to reduce joblessness and, other than in the extractive industries, Indonesia fails to attract a proportional share of the direct foreign investment going to Southeast Asia. U.S. firms already here make money, but their representatives caution that new or smaller players would have to take on a reliable local 'partner' to protect their investments. The sanctity and enforceability of contracts remain problems. There is progress in protecting intellectual property rights, but JAKARTA 00002644 003.2 OF 004 corruption is widespread. ¶10. (SBU) Our $60 billion anti-corruption programs aim to reverse this situation. Some programs provide training for investigators and prosecutors assigned to the special anti-corruption court, where the prevailing conviction rate is 100 percent. Other programs target the general court system, both to improve transparency (publishing the text of decisions on the web) and to raise efficiency by improving management of court dockets. In one program aimed at encouraging judges to produce a code of ethics, all participants admitted to taking payments from parties before the court (but denied payments influenced their decisions). The anti-corruption drive led by President Yudhoyono has widespread public support, but the problem is so engrained in the local economy that progress is slow. Social Change -------------- ¶11. (SBU) In 2003, former President Megawati asked President Bush for special help in reforming Indonesia's primary and secondary schools, and President Bush agreed. This $157 million six-year program is revolutionary. It is changing classrooms in state schools, madrassas, and Islamic Pasantren boarding schools from rote learning to learning by doing, with students now working in teams at cluster tables. Rather than sticking to a traditional syllabus, students now select, classroom by classroom, the modules to study. Students, parents, and even teachers claim to be enthusiasts of these new methods. Concentrated in selected areas at first, these changes are slowly being applied throughout the country. But the university system is ill-prepared for the wave of inquisitive minds that will arrive on its campuses starting in five years, barely enough time to put in place the courses needed to train the next generation for jobs needed in a globally competitive, modernizing economy. ¶12. (SBU) Health is another sector begging for reform. Avian influenza is now endemic in the poultry populations of every province in Indonesia, and more than half of the human fatalities of this disease have happened here. The public health system is primitive; clinics and hospitals are often shockingly ill-prepared for even normal cases. One senior international health official said the leaders of this sector are "in hopelessly over their heads." Although the U.S. government has major programs here to deal with the dangers of avian influenza and to promote immunization for childhood diseases, the health system requires long-term investments in human resources and improvement in clinical standards. Frankly, our local partners do not yet grasp the urgency of these tasks. Lessons Learned -------------- ¶13. (SBU) Three lessons stand out. First, the most important requirement for transformational diplomacy is a partner committed to democracy, anti-corruption and the rule of law and determined to improve the standards of governance and service provided to the citizens. Second, once there is agreement on overall goals, the USG has offered a variety of programs from which the Indonesians can choose, securing buy-in from Indonesian partners and assurance that they want the offered programs. Third, transformational diplomacy works slowly and at times unevenly: programs must continue long enough, perhaps for a decade or more, so that initial progress demonstrated in a pilot program is gradually so integrated into the institutions of government that it becomes part of the government's genetic code. Issues to Confront -------------- ¶14. (SBU) The remarkable progress to date has brought closer three policy challenges that will need to be addressed. With regard to the security forces, the two units with which the United States has restricted contacts (Kopassus and Brimob) are the most competent units in the military and police and the units most likely to be called upon in the event of a terrorist incident in which U.S. citizens are held hostage. The United States should consider and be willing to launch a process of re-engagement that includes both respect for human JAKARTA 00002644 004.2 OF 004 rights and cooperation on counter-terrorism. Second, education reform will begin to produce increased numbers of motivated and inquiring students who want scientific and technical education that prepares them for jobs in a modernizing and globally competitive economy. Without a good education and jobs to follow, their resumes will read much like those of the 9/11 Al Qaeda operatives. Can the U.S. encourage reform of university-level education in Indonesia? Third, in two years Indonesians will return to the polls either to re-elect the reform-minded Yudhoyono or to choose a new president. The confusing political scene in Indonesia includes dynamic politicians from the center, but unrest in Aceh or Papua could empower nationalist political figures who might turn back the clock on democratic reforms. Most Islamist politicians present themselves as moderate reformers, but some have an entirely different agenda. The goals of transformation diplomacy require a partner here that continues the commitment to democracy, the rule of law, and good governance. HUME