VISIT OF THE SECRETARY OF DEFENSE TO JAKARTA

C O N F I D E N T I A L SECTION 01 OF 03 JAKARTA 000346 SIPDIS SIPDIS DEPT FOR EAP, T, PM, EAP/MTS, EAP/MLS, EAP/RSP SECDEF FOR USDP/ISA/AP P.IPSEN JOINT STAFF FOR P.CLEMMONS NSC FOR E.PHU E.O. 12958: DECL: 02/22/2Q48 TAGS: PREL MARR MASS PGOV ID SUBJECT: VISIT OF THE SECRETARY OF DEFENSE TO JAKARTA Classified By: Ambassador Cameron R. Hume, reasons 1.4 (b+d). ¶1. (C) SUMMARY: Secretary Gates' February 25 visit comes at a most opportune time. Our military-to-military relationship with Indonesia has made solid progress during the past two years and now is the time to move forward. Indonesia needs to decide whether it is ready to take that step, and needs to make some key decisions on defense capabilities and military reform. A possible F-16 sale here would provide ballast to this relationship by creating a strong constituency for the relationship in the U.S. Congress and public. The Secretary's meetings with President Yudhoyono and his defense SIPDIS and security ministers offer an opportunity to shape their thinking on how this relationship should proceed. Indonesians would welcome his assurance that--regardless of U.S. election results--there is no turning back on our commitment to Indonesia and the region. END SUMMARY. WE'VE COME A LONG WAY ¶2. (C) Since the lifting of U.S. sanctions on Indonesia in 2005, the relationship has rebounded and is now showing the hallmarks of normality. Foreign Military Financing (FMF) and IMET have risen to $15.7 million and $1 million, respectively. Foreign Military Sales (FMS) are on the rise as Indonesia seeks to restore existing U.S. equipment to operability. The annual bilateral Strategic Dialogue is a serious, substantive exchange, and USPACOM's Theater Security Cooperation Plan is full of meaningful activities that represent a coherent strategy for cooperation and growth. Both we and the Indonesians see this as a promising partnership that holds great potential for future development. MOVING FORWARD ¶3. (C) Washington, USPACOM and Mission Jakarta have worked hard to move the relationship forward, including in the following ways: -- C-130 transfers: We are helping Indonesia procure spare parts for its ageing C-130 fleet in order to overcome the effects of a decade of sanctions. We concluded a blanket end-use and retransfer agreement to allow the transfer of C-130 aircraft parts to Indonesia, and are now facilitating the return of engines and other parts. USAF Deputy U/S Lemkin recently presented to DefMin Sudarsono and TNI Air Chief Subandrio a comprehensive U.S. plan for refurbishment, upgrades and new procurement of F-16 fighters, C-130J and C-27J transport aircraft and AT-6 turboprops, plus a range of exchanges, training and exercises. -- Maritime Surveillance: We have launched a $45 million project to provide maritime surveillance systems for Indonesia's Malacca Strait and Sulawesi Sea to give Indonesia visibility over critical commercial shipping and terrorist transit routes. This Section 1206 assistance supplies maritime radars linked by a computer-based communications network. The Indonesia project is part of a regional strategy to provide a common operating picture, enhancing the maritime security of all. After much cajoling, the Indonesian Navy has agreed to contribute the necessary land and infrastructure for the project. The Malacca Strait system is expected to become operable in 2009. -- TNI Army Special Forces (KOPASSUS): We are finally re-engaging with this elite unit, which we shunned for years due to its poor human rights record. Resumption of ties with KOPASSUS is the right thing to do because this unit is key to Indonesia's national security and the protection of U.S. personnel here in the event of a crisis. In our debates within the Administration and with Congress, we have stressed that human rights training is a key ingredient of this re-engagement. Our first activity with KOPASSUS is a non-lethal Joint Combined Exchange Training in April. This re-engagement will help the TNI break ties with the past and JAKARTA 00000346 002 OF 003 become a modern, professional force compatible with democracy while it acts under civilian control. -- Defense Resource Management Study (DRMS): This multi-year project helps the Indonesian Department of Defense manage its defense resources in line with its strategic priorities, with the goals of increased transparency and withdrawal of the TNI from private businesses. WHERE WE ARE NOW ¶4. (C) These activities illustrate that both sides want to make the relationship work, to put the past behind us and to build a strong partnership for the future. To be sure, consensus is not seamless on either side, and there are differences between us which limit how close we can become. The Indonesians remain unsure of U.S. reliability as an arms supplier and seek to remain true to their non-aligned tradition, causing Jakarta to seek multiple partners and arms suppliers. Nationalist and Islamic sensitivities color Indonesian perceptions of U.S. foreign policy, especially in the Middle East, and U.S. security presence in the region. Doubts remain about the degree of our support for ASEAN. On our side, the biggest stumbling block remains the lack of accountability for TNI human rights abuses of the past. WITH PRESIDENT YUDHOYONO ¶5. (C) We stand on the threshold of a new relationship, which could advance U.S. and Indonesian security interests for the 21st century. But both sides have yet to decide on the kind of relationship that we want. Do we want simply to move forward incrementally or do we want to transform the relationship into a true strategic partnership? Your meetings with President Yudhoyono and his Ministers offer an opportunity to lay out this choice and to encourage them to start thinking seriously about how far they want to go. ¶6. (C) Concrete action in two key areas -- defense capabilities and defense reform -- will demonstrate a deeper level of commitment by both governments and will begin to transform public perceptions on both sides. Secretary Gates should use his speech at the Indonesian World Affairs Council to challenge the Indonesians to think boldly about what Jakarta can do in both areas. The Secretary should also emphasize that the U.S. is committed to Southeast Asia's security and that our deepening relationship with Indonesia is irreversible. BUILDING DEFENSE CAPABILITIES ¶7. (C) The TNI is trying to overcome the effect of past sanctions and the budgetary neglect of a young democracy. Indonesia's 2008 defense budget is a mere $3.5 billion, barely one percent of its GDP and a fraction of what Singapore and Malaysia spend. It is also about 15 percent less than the 2007 budget, due to across-the-board cuts. ¶8. (C) In this context, Indonesia must prioritize. The TNI Air Force, which has been the most active in U.S. procurement, last fall requested F-16 price and availability data. DefMin Sudarsono, in contrast, ranks airlift above strike capability, and TNI procurements have focused on C-130s. This emphasis reflects Indonesia's susceptibility to natural disasters and the military's traditional humanitarian assistance role. Sudarsono is aware of Indonesia's lag in5@:mQQQ( O&v7?Q"amQ+ng?QQL:.0yEvUQ (C) Given these differing perspectives, we need to be realistic in our expectations about an F-16 sale. Indonesia will not have the money for large purchases of F-16s or other JAKARTA 00000346 003 OF 003 expensive defense equipment for years to come. That said, new F-16s would hold great symbolic value, signaling both countries' commitment to a long-term partnership. They would boost the TNI's image and confidence as a professional force and encourage the TNI to continue with reform. A purchase of F-16s would also create a powerful constituency for the relationship in the U.S. Congress and public. Bottom line: push hard, but be realistic. TNI REFORM: WHOSE MOVE? ¶10. (C) TNI reform is an area where we are helping, but where continued GOI actions are needed. Indonesia needs these reforms for its own reasons, not just to respond to foreign pressure. President Yudhoyono must keep up the reform momentum to professionalize the TNI and enhance Indonesian security. At the same time, these reforms broaden U.S. support for deeper mil-mil cooperation, including KOPASSUS training. ¶11. (C) In a sea change from its first forty years, the TNI has abandoned political office, subordinated itself to civilian leadership, and re-focused its mission on external threats, leaving internal security to the police. In taking these steps, the TNI has demonstrated its commitment to democracy and civilian rule. It has supported the Aceh peace process based on the Helsinki Memorandum of Understanding. It has cleaned up its human rights record since the end of the Aceh conflict in 2004 and provides human rights training for its soldiers. The next key step is for the TNI to operate and procure equipment using a transparent government budget, obviating the need for problematic TNI business activities. The GOI and TNI have also come up short in the area of accountability for past human rights abuses. While we have made it clear that we are looking to the future in our relationship, not the past, we should note that Indonesian democracy would be strengthened by some attention to the accountability issue. 2009 ELECTION CAMPAIGN ¶12. (C) As the year advances, President Yudhoyono and his administration will increasingly be drawn into the 2009 legislative and presidential elections. Cautious by nature, SBY will be disinclined to undertake new initiatives which lack a clear consensus. Although considerable public support exists for security sector reform, the issues are controversial and require some hard decisions. We cannot do much to change the dynamics of the election process, but the Secretary should try to impress on Yudhoyono the importance SIPDIS of pushing the reform process forward over the next year. Yudhoyono is the most reform-minded and internationalist of all the candidates on the horizon and if he cannot make progress in this area, probably no one can. HUME