SAUDI ARABIA -- A PRESENCE TO RECKON WITH IN

C O N F I D E N T I A L SECTION 01 OF 04 JAKARTA 002049 SIPDIS DEPT FOR D, P, EAP, NEA, EAP/MTS, EAP/MLS, NEA/ARP NSC FOR E.PHU E.O. 12958: DECL: 11/06/2018 TAGS: PREL PGOV ECON KISL ID SA SUBJECT: SAUDI ARABIA -- A PRESENCE TO RECKON WITH IN INDONESIA REF: JAKARTA 1779 JAKARTA 00002049 001.2 OF 004 Classified By: Ambassador Cameron R. Hume, reasons 1.4(b+d). ¶1. (C) SUMMARY: Saudi Arabia enjoys a positive image among Indonesians and is ramping up its already robust educational assistance. In addition to the annual flow of pilgrims to Mecca, Saudi religious groups are active here. While few have direct links to extremism, Saudi religious influence is very conservative and has had an impact on Indonesian Islam. ¶2. (C) SUMMARY (Con'd): Trade between the two countries is limited, but there has been a recent uptick in Saudi investment. The political relationship is not particularly active, and it is complicated by migrant labor abuse and other bilateral irritants. In the battle for influence and opportunities in Indonesia, the U.S. needs to consider the wide-ranging nature of the Saudi-Indonesian relationship. END SUMMARY. PERCEPTIONS AND IMAGES ¶3. (U) According to a recent Pew Research poll, 81 percent of Indonesians have a positive perception of Saudi Arabia. By comparison, the percentage of Indonesians who view China favorably is 58 percent; Pakistan - 58 percent, Iran - 53 percent, India - 63 percent and the United States - 37. ¶4. (C) Although favorable Indonesian views of the United States have increased from 22 percent in the past year, Saudi Arabia continues to outstrip us as Indonesia's preferred country. Indonesians see Saudi Arabia as the home of Islamic values, a key foundation of the bilateral relationship. The SAG is keen to build on this. In 2007, Saudi Arabia issued 600,000 visas to Indonesians, according to the Saudi ambassador. (Note: The U.S. issued 60,000 visas to Indonesians in 2007.) Most of these are for religious pilgrimages or migrant labor, but many are for students. ¶5. (U) Assistance by the Saudi government, private citizens and quasi-governmental Islamic organizations and charities contributes to this positive image. The Saudi-based Muslim World League has an office in Jakarta. Saudi citizens often contribute to mosques, medical centers and Islamic schools in Indonesia. This sort of untracked assistance is reportedly dispensed through informal networks involving Indonesian middlemen with Saudi connections. EDUCATION A KEY AREA ¶6. (C) Although the Saudis do not provide official figures, GOI contacts estimate that about a thousand Indonesians currently study in Saudi Arabia. According to Alwi Shihab, Presidential Envoy to the Middle East, Saudi Arabia seeks to grant more graduate degrees to students from Islamic countries, including Indonesia. Saudi officials note that Iran is likewise increasing the number of scholarships available to Indonesians for study in Iran. The Indonesian Ministry of Religious Affairs offers a limited number of scholarships for study in the Middle East and many of these go to Saudi Arabia. ¶7. (U) Numerous bilateral educational exchange programs already exist, many supported by Saudi scholarships. The Institute for the Study of Islam and Arab Affairs (LIPIA),a private organization linked to Riyadh's conservative Imam Muhammad bin Saud Islamic University and supported by the Saudi Embassy, is a key center. LIPIA, which is largely staffed by Saudi nationals and stresses the conservative Wahabi interpretation of Islamic doctrine, offers a BA-equivalent degree program in Islamic subjects and Arabic JAKARTA 00002049 002.2 OF 004 language. The institute's top 500 graduates are offered scholarships in Saudi schools. TERRORISM AND ISLAMIC EXTREMISM ¶8. (C) Indonesian views of Saudi influence not uniformly favorable. Liberal Muslims see Indonesian Islam as more nuanced and tolerant than the Saudi/Wahabi variant. They regard the Saudi interpretation of Islam as inappropriate for Indonesia's diverse society. These Indonesians scoff at the Saudi/Wahabi approach and are alarmed at the harsh tinge it has brought to the tolerant Indonesian worldview. Moderate Muslim organizations like Nadhatul Ulama (NU) reject Saudi influence. ¶9. (C) Indonesians generally view Osama Bin Laden as an outsider to Saudi society and mainstream Islam and therefore do not see Saudi Arabia as a source of terrorism. That said, well-financed Saudis promote an extremely conservative religious agenda. ¶10. (U) Because of Saudi prosetylization Salafism has gained a small following in Indonesia in recent decades. Saudi funding and support were instrumental in boosting the number of Salafist pesantren from a handful in the 1980s to several hundred today. Starting in the early 1990s, the Saudi Al-Sofwah Foundation supported itinerant Salafi preachers in Indonesia. Finally, Saudi-linked funding has reportedly supported Salafist publications and electronic media here. (Note: The Saudi Salafist International Islamic Relief Organization (IIRO) had channeled a large amount of funding to Indonesia during the 1990s, although this dried up following 9/11.) ¶11. (C) Saudi funding of Indonesian Islamic groups dropped off after September 11, 2001, because of increasingly strict controls within the international banking system, according to Saudi Embassy contacts. However, Yahya Asagaf, a close adviser to Indonesian State Intelligence Agency (BIN) Chief Syamsir Siregar, told us that some Saudi individuals continue to fund extremist groups in Indonesia, despite Saudi government efforts. BILATERAL RELATIONS ¶12. (C) A key channel of bilateral relations is the Indonesia - Saudi Arabia Joint Commission that meets every two years in alternating capitals. The Commission agenda includes energy, agriculture, investment as well as security issues, terrorism and transnational crime, consular and migrant-labor, education, Islamic affairs and culture, according to Abdurrahman Sabran, who handles Saudi affairs in the Department of Foreign Affairs (DEPLU). ¶13. (C) Higher level contacts between the two countries remain sporadic. President Yudhoyono last visited Saudi Arabia in 2006 and Vice President Kalla visited in 2008, while Foreign Minister Wirajuda visits Saudi Arabia roughly once a year. Alwi Shihab told us King Abdullah was considering stopping in Indonesia while on a planned visit to Japan in the near future. ¶14. (C) Despite these contacts, diplomatic ties between the two countries remain relatively weak, especially in multilateral fora. Rizal Sukma and Ambassador Wiryono Sastrohandoyo of Jakarta's Center for Strategic and International Studies (CSIS) offered a number of explanations. First, Saudi Arabia was a relatively minor player in the multilateral fora that the Indonesians considered important, such as the Non-Aligned Movement (NAM), the United Nations and the International Atomic Energy Agency JAKARTA 00002049 003.2 OF 004 (IAEA). Second, Indonesian officials do not feel that Saudi officials take them seriously or seek their views on key issues. ¶15. (C) Saudi officials here acknowledged these limitations on bilateral relations. Ahmad Ali Kattouah, First Secretary at the Saudi Embassy, told us SAG efforts to engage Indonesia on Iran's nuclear program had produced few results. Kattouah said the Saudi government had engaged Indonesia regarding the UN Security Council vote on UNSCR 1803 in April 2008 (Indonesia was the sole abstention in the 14-0-1 vote). While Indonesia had acknowledged Saudi concerns about the regional threat posed by Iranian nuclear weapons, Jakarta refused to make any public statements against the Iranian program, ostensibly because of domestic sensitivities. DEFENSE TIES MARGINAL ¶16. (C) Indonesia has almost no defense cooperation with Saudi Arabia. The latest Indonesian Defense Department White Paper makes no mention of Saudi Arabia. The Saudi embassy in Jakarta has a defense attach and an assistant defense attach, but neither of them regularly attends host-nation functions and military events. However, Saudi Arabia does support the travel of Indonesian military personnel on religious pilgrimages to the country. Such support ranges from transportation and logistical support on the ground for ordinary soldiers to providing all required transportation, accommodation and other services to senior officers and their families. TRADE AND INVESTMENT ¶17. (U) Saudi Arabia and Indonesia continue to develop their trade and investment ties. According to official figures, bilateral trade in 2007 was over $4.3 billion, although $3.4 billion of this consisted of Saudi exports (mostly oil and gas),leaving Indonesia with a negative balance of $2.5 billion. Indonesian exports grew by 50 percent from 2006 to 2007, notably in paper, textiles, furniture and plywood, although exports remain small. (Note: Indonesia's 2008 withdrawal from OPEC removed a key common interest from the relationship.) ¶18. (C) DEPLU official Sabran said Indonesia was negotiating to sell Saudi Arabia five CN-235 planes manufactured by PT Pintaro in Bandung. The deal, which the governments were negotiating, might occur partially on a barter basis, in return for food products or oil. ¶19. (C) Saudi investment here is increasing. Observers credit this to efforts by Alwi Shihab, the President's envoy to the Middle East. Shihab said Saudi Arabia was also considering financing a refinery in central Java--a project he has personally promoted. The Saudi Ministry of Petroleum was concerned not to let Iran capture projects like this. ¶20. (U) Saudi companies have recently announced several large agriculture investments. In June 2008, a consortium of eight Saudi companies, including Global Unions Company, publicized their intent to invest up to $2 billion to develop Indonesia's agro industry. A second consortium of fifteen Saudi investors declared in July its plans to invest $65 million to develop rice fields in various parts of Indonesia. According to DEPLU and CSIS contacts, the Bin Laden Group is considering investing $4 million in agribusiness (rice, ethanol) in southern Papua. LABOR ISSUES RANKLE ¶21. (C) Saudi treatment of migrant workers hurts the JAKARTA 00002049 004.2 OF 004 Kingdom's image here. Indonesian NGOs have documented numerous cases of trafficking and abuse of Indonesian migrant laborers, although few reliable statistics exist. The most common complaints are excessive workload and unpaid wages. NGOs have called on Saudi Arabia to abolish the kafala (sponsorship) system, which, gives employers the power to prevent workers from changing jobs or leaving the country. NGOs have also urged the SAG to implement legal protections for domestic workers but have gained little traction. ¶22. (C) Saudi diplomat Kattouah downplayed the problem. He said around 700,000 Indonesians worked in Saudi Arabia, the vast majority of whom had no difficulties. Kattouah estimated there were no more than 100 documented case of mistreatment or abuse. WINNING THE BATTLE OF IDEAS ¶23. (C) Saudi Arabia's influence on Indonesia may come to rival that of the United States. The kingdom offers a powerful antipode to the United States, offering an alternative set of values to those disenchanted with secular, democratic ways. ¶24. (C) As the world's fourth most populous country and the largest in Southeast Asia, Indonesia is key to regional stability, good relations with the Islamic world and the spread of democracy. In the battle for Indonesian hearts and minds, the United States must continue to ramp up government assistance, educational and cultural exchanges, science and technical cooperation, trade and investment, security cooperation and people-to-people contacts (see reftel for a review of key Mission priorities). In 2007, the USG granted 60,000 visas to Indonesians to travel to the United States versus the 600,000 granted by Saudi Arabia. We need to work harder, across the board, but especially in keeping the United States open to Indonesians. Failure to keep a U.S. image before Indonesian eyes leaves the field open to other influences, including those from Saudi Arabia and Iran. HUME