SOROS' INTEREST IN ACEH SPARKS ANTI-SEMITIC

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 002723 SIPDIS SIPDIS EAP, EAP/MTS, EB, DRL/IRF, DRL/PHD E.O. 12958: DECL: 09/26/2017 TAGS: PREL PHUM EINV EAID PGOV ID SUBJECT: SOROS' INTEREST IN ACEH SPARKS ANTI-SEMITIC SENTIMENTS IN JAKARTA REF: JAKARTA 2365 Classified By: DepPol/C Stanley Harsha for reasons 1.4 (b)(d). ¶1. (SBU) Summary. A September 21 statement by Aceh Vice Governor Muhammad Nazar on American financier George Soros' possible plans to invest in palm oil plantations in Aceh sparked an anti-Semitic backlash among national Islamic political party leaders in Jakarta. The alleged plan-reportedly discussed in vague terms when Aceh Governor Irwandi Yusuf met with Soros in New York City earlier in September-triggered accusations of a Jewish conspiracy to sway the GOI into normalizing GOI-Israeli relations. Meanwhile, in Aceh, there was a more tolerant reaction to the possibility of Soros' investment. End Summary. ¶2. (C) Gov. Irwandi met with George Soros for 90 minutes during a mid-September visit to New York City in the middle of September, according to Leroy Hollenbeck, the USAID-contracted Aceh Governor Advisor. Irwandi asked Soros to fund his plan to open up land in Aceh to palm oil plantations. (Note: Irwandi has been shopping this pet project around to various international funding sources as a way of creating jobs and income for farmers. He has identified 45,000 hectares available for this project across three regencies with another 100,000 to 150,000 hectares which he hopes to identify soon.) Soros reportedly told Irwandi that he does not invest directly in projects, prompting Irwandi to suggest Soros fund a management company in which farmers share the assets. Soros expressed mild interest in the idea of an indirect investment scheme, Hollenbeck told a USAID officer. ¶3. (SBU) Immediately following this meeting, Irwandi was quoted by Indonesian news agency Antara as saying Soros was interested in developing about 20,000 hectares during the first stage of the project, an investment that could feed 2,500 families in Aceh. This story got limited play in Indonesia and did not generate any reaction. However, on September 21 Aceh Vice Governor Muhammad Nazar told the media in Jakarta that Soros "is going to carry out a survey soon from America to invest in palm oil. We are going to provide between 100,000 and 200,0000 hectares for palm oil. Hopefully, Soros' investment will come to Aceh next year," adding that "Soros also is interested in investing in 
banking." ¶4. (SBU) The next day this was the lead story in the sensationalist Jakarta daily Rakyat Merdeka, (circ. 120,000) which ran a September 22 story with the banner headline, "Jewish Conglomerate Investing Money in Aceh." Leaders of three Muslim political parties reacted strongly in the September 23 edition of Rakyat Merdeka, which was the only newspaper to report on the issue as a controversy. Chairul Mahfiz, Secretary General of the Governing Board (DPP) for the United Development Party (PPP) said he suspected Soros had a "hidden agenda behind this plan," to use investment as a "tool" to pressure President Yudhoyono's administration to establish diplomatic relations with Israel. He cited Soros as the triggerman behind the 1997 Asian economic crisis. Chair of the DPP for Prosperous Justice Party (PKS) Soeripto said, "The Indonesian government has to be wary of Jewish movements which have several times wanted to invest capital in Indonesia." He added, "Indonesia is the strongest defender of Palestine so the refore Jews want to entice Indonesia into being weak on the Palestinian struggle." Another PKS official said that if Yudhoyono breaks his contract with PKS to keep its distance from Israel, PKS will withdraw all support from the government. Chair of DPP for the Cresecent Moon and Star Party (PBB) Nizar Dahlan said, "Tell Jews there is no place for their investment in Indonesia." ¶5. (C) Irwandi was upset over the deputy governor's public statements on Soros and hoped that the issue will go away, Hollenbeck told us. Cornered by the media on September 25 when he returned home, Irwandi said, "Soros is not going to build industries or do banking and he is not interested in making money in Aceh, but rather wants to create development for the common people in tsunami areas." ¶6. (SBU) The Acehnese reacted more positively. In fact, the head of the Aceh branch of the conservative Islamic party PKS, M. Nasir Djamil, differed with his Jakarta colleague on JAKARTA 00002723 002 OF 002 this issue. An Aceh representative in the Indonesian House of Representatives (DPR),Djamil said that if Soros wants to invest in Aceh that is fine as long as Irwandi first answers questions that the provincial legislature (DPRD) would have about governance issues. "For me, plans to attract investments or loans from Soros is not a problem, but it will become a problem if the assistance is not sent to the right place, or if it is used corruptly," Djamil told Antara news agency. ¶7. (SBU) Soros' Open Society funding of a major Indonesian NGO, the TIFA Foundation, which supports human rights, local governance, media, civil society and pluralism, has never drawn criticism. TIFA's founders are all very distinguished figures. ¶8. (C) George Soros remains deeply unpopular in some Indonesian Muslim circles because of a widespread belief that he masterminded the 1997 financial crisis, so that people who believe this also equate his name with a Jewish conspiracy to suborn Islam in Indonesia. Muslim nationalist politicians have latched onto this issue to boost their own credentials and to imply that the Yudhoyono administration might be soft on Israel. Still, emboffs have heard from a number of Acehnese and citizens in North Sumatra that they would welcome investment from Soros, and that it would not matter if the capital was Muslim, Christian or Jewish. As with many such issues, this matters much more in Jakarta than in the outer provinces. HEFFERN