AMBASSADOR DISCUSSES STRATEGIES WITH ACEH

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 000313

SIPDIS

SIPDIS

SECSTATE FOR EAP/MTS

E.O. 12958: DECL: 02/06/2017
TAGS: PREL PGOV EINV EAID ID
SUBJECT: AMBASSADOR DISCUSSES STRATEGIES WITH ACEH
GOVERNOR-ELECT IRWANDI YUSUF


Classified By: Political Officer Daniel Turnbull, for reasons 1.4 (b,d)
.


1. (C) SUMMARY: Aceh Governor-Elect and former leader of the
Free Aceh Movement (GAM) Irwandi Yusuf met with the
Ambassador on February 5, three days before Irwandi's
inauguration, to discuss strategies for the new
administration. The discussion focused largely on economic
development, with the ambassador providing various
suggestions for attracting foreign investment and Irwandi,
excited but somewhat overwhelmed by the task ahead of him,
interjecting brief comments in reference to specific factors
in Aceh. Irwandi said he would represent all Acehnese
people, had appealed to the provincial legislature to work
together and had asked Senior Adviser Leroy Hollenbeck to
stay on in the governor's office. Ambassador congratulated
Irwandi on his election and the success of the peace process
and urged Irwandi to guard against excesses of sharia law.
End Summary.

"THE CITY TOO BUSY TO HATE"


2. (C) Ambassador told Irwandi the world was impressed that
the Aceh peace process had produced a governor-elect who was
a former GAM leader through peaceful, democratic elections.
The challenge would be in producing real results as governor;
Indonesia was not an easy place to get things done. Irwandi
said he had known before the election that he would win and
that he would win in a single round. That that had been the
easy part, compared to the task that lay ahead. With the
election campaign over, it was important now to build
bridges. Irwandi said he would govern in the interests of
the entire people of Aceh, not only the GAM and not only the
political parties represented in the existing provincial
legislature (DPRD),although of course GAM supporters
understandably wanted to see results on GAM issues in return
for their votes. Having no political party base in the DPRD
but needing their cooperation, Irwandi had appealed to party
leaders in the DPRD to work together to tackle Aceh's
problems. But it would take time for the psychological
wounds of the former conflict to heal. The people could
accept and forget a natural disaster from the hand of God,
such as the tsunami, much more easily than the suffering
inflicted by other humans.


3. (U) Ambassador related a tale about Atlanta, Georgia as it
successfully emerged from a long history of segregation and
racial strife to become one of the Old South's
fastest-developing business and residential centers. The
sobriquet as "the city too busy to hate" offered a model for
the path Aceh could take in escaping the divisions of the
past by focusing on economic development. Aceh had a good
base to begin from, the Ambassador suggested, in the recovery
that was under way from the tsunami and the military
conflict: it was possible to show dramatic change in a short
period of time, and people were already in the habit of
change, making it possible to accept more. Finally, Irwandi
and the Acehnese people had the good will of the
international community: all eyes were on them and everyone
wanted them to succeed.


4. (C) Acknowledging that this was "free advice," Ambassador
urged Irwandi to remain alert to the potential negative
public-relations impact among western audiences of sensitive
aspects of sharia law, such as canings and other more severe
forms of punishment. Outsiders who came to Aceh liked the
Acehnese people but were troubled by the image that sharia
law sometimes created, reminding Westerners of Saudi Arabia.
The world would accept a humane, positive sharia, Ambassador
stressed. Irwandi replied that he was convinced sharia law
was not about whippings or the jilbab but about how to
improve the welfare and way of life of the Acehnese people.
He had been criticized for attacking the application of
extreme forms of sharia in Aceh.

FIRST HUNDRED DAYS


5. (U) Irwandi said he planned to spend the first month in
office traveling around the province, meeting the people and
local leaders. At the same time, however, he needed to draft

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a plan of action for the first year and beyond. Ambassador
mentioned that U.S. assistance was supporting the position of
Senior Adviser Leroy Hollenbeck in the governor's office, who
knew the ins and outs of assistance and was there to help the
governor. Hollenbeck would, of course, stay on only if the
governor wanted him to. Irwandi said he had already asked
Hollenbeck to stay and was glad to have his help.

INVESTMENT STRATEGIES


6. (U) Irwandi said what he needed next was American
investors. With Aceh's underdeveloped infrastructure, and it
was not clear what Aceh had that would attract investors.
The Ambassador said the best way to attract investment was to
make Aceh more attractive than its neighbors for investors.
Aceh had to compete globally: with other Indonesian
provinces but also with other countries. USG could encourage
investors to consider Aceh, but investors would make their
own decisions based on the conditions Aceh could offer. U.S.
companies wanted to invest in Aceh. Many had donated
assistance to Aceh and wanted it to succeed. Foreign
investors often turned away from potential investment in
Indonesia because of perceived indifference in acquiring land
and dealing with red tape and, of course, because of
corruption. Businessmen generally found Indonesian costs
inside the factory to be lower than in China but the costs of
getting goods from the factory to the port to be exorbitant.
These were a part of the competition problem that Irwandi
could do something about. The ambassador urged Irwandi to
meet with local AmCham representatives.


7. (U) USAID Director William Frej listed prominent companies
that were active in Aceh and wanted to invest and were
willing to support small and medium enterprise development
and micro lending. The road from Banda Aceh to Meulaboh
would employ thousands of local workers, and the project
would provide a stimulus for other economic activities. It
was important that Irwandi facilitate land acquisition for
the road, Frej stressed.


8. (U) Irwandi responded that Aceh needed other roads as
well, notably one connecting Banda Aceh and Medan.
Ambassador registered agreement and noted we had pushed for
this with other foreign donors. Frej urged Irwandi to
utilize the Multi-Donor Trust Fund which existed for this
purpose. Irwandi had to drive the process forward, however,
Ambassador stressed, and set priorities. He urged Irwandi to
seek advice from Rehabilitation and Reconstruction Agency
(BRR) head Dr. Kuntoro Mangkusubroto, who was intelligent and
knowledgeable and had learned much as BRR head. The
provincial government and the BRR should work together,
Ambassador urged.
PASCOE