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 JAKARTA 00000313 002 OF 002 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