ACEH -- AMID CHALLENGES, PEACE PROCESS PROCEEDS

UNCLAS SECTION 01 OF 05 JAKARTA 000858

SIPDIS
SENSITIVE

DEPT FOR EAP, EAP/MTS, EAP/MLS, EAP/RSP
NSC FOR E.PHU

E.O. 12958: N/A
TAGS: PGOV ECON PINS PHUM ID
SUBJECT: ACEH -- AMID CHALLENGES, PEACE PROCESS PROCEEDS

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1. (U) This message was coordinated with Consulate Medan.
It is Sensitive but Unclassified.


2. (SBU) SUMMARY: Although rising criminal violence and a
poor medium-term economic outlook continue to hamper progress
in Aceh, the political outlook in the province has improved.
While several issues will need careful management in Jakarta
and Aceh, the prospects appear good for continued peaceful
transition, leading up to regional parliamentary elections in
April 2009.


3. (SBU) SUMMARY (Cont'd): Positive factors in this
scenario include increased attention to the task of
governance and institutionalization of the peace process with
Jakarta. Moreover, the splintering of the GAM ("Free Aceh
Movement") camp could lead to some internal violence but
should give rival parties significant opportunity as the
province heads into the election campaign. Overall,
prospects appear cautiously favorable for the direct election
of the first post-conflict provincial legislature within the
next year. END SUMMARY.

PEACE PROCESS MOVING FORWARD


4. (SBU) The military and police in Aceh, which remain under
national commands, are less of an issue than previously, and
their operations in Aceh are gradually becoming more
consistent with national norms. The police are not
particularly effective, but the new police chief, who is a
native Acehnese, has Irwandi's support, and performance is
slowly improving. The military has by and large receded into
the background, and is working to win the confidence of the
civilian population, although that process will take time.
Its chief, however, is not Acehnese, and the long-term role
of the military in Aceh remains an issue in the peace process.


5. (SBU) Aceh and Jakarta are working together through the
Forum for Communication and Coordination (FKK) to resolve
outstanding issues relating to the Helsinki MOU, which the
government of Indonesia and GAM signed in August 2005,
formally ending the conflict. The FKK, created to be the
eyes and ears of the national Coordinating Ministry for
Politics, Law and Security in Aceh, had the ostensible role
of coordinating with Aceh elements on security issues after
the signing of the MOU. It has since become the main
dialogue partner in the peace process. The body is headed by
a TNI general who coordinates closely with the ministry's
Aceh group, composed of officials from military, police,
finance, home affairs and the state planning agency.


6. (SBU) On the Aceh end, the dialogue has been broadened,
with Irwandi's support, through a recently-created Commission
to Support Peace in Aceh (CoSPA). Launched in February by
the BRA's Aceh Peace Research Center, it includes Aceh
government officials, military and police officials and
international observers from the United States and the EU.
The participation of the Aceh provincial government and
senior provincial judicial and legislative officials attests
to CoSPA's acceptance within the Aceh government. CoSPA has
not been formally endorsed by Coordinating Minister Widodo
but has his support, and FKK representatives play a leading
role in it, effectively making it a part of the Aceh-Jakarta
dialogue through the FKK. Recent meetings have discussed the
establishment of a Truth and Reconciliation Commission for
Aceh and progress on establishing a Human Rights Court for
Aceh to try cases arising from the conflict. It intends to
explore mechanisms to establish a joint claims commission as
required under the MOU.


7. (SBU) There is a mutual recognition that a gap remains
between the Helsinki MOU and the LOGA, but Jakarta and GAM
differ over the extent to which the gap can be closed and how
that might be done. The national government considers the
LOGA to be comprehensive and final in terms of defining

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Aceh's regional autonomy. A set of implementing regulations
currently being drafted, however, allows leeway in
interpreting the LOGA's provisions, thereby closing the gap
with the MOU. Irwandi is working with the FKK to resolve the
outstanding issues. Jakarta appears to want to resolve all
issues and release the regulations through presidential order
before the end of 2008, well ahead of the April 2009 DPRD
elections. That may be overly optimistic.

GETTING DOWN TO GOVERNING


8. (SBU) With slightly more than one year in office under
their belts, Governor Irwandi Yusuf and Vice Governor Muhamad
Nazar seem to be finally figuring out how to govern. The
same can be said generally of district and municipal leaders.
GAM-affiliated or otherwise, those with technical or
academic backgrounds have learned quickly and appear to be
managing their districts reasonably well. Difficulties
remain in the central highlands, where the indigenous Gayo
joined anti-independence militias during the GAM conflict and
remain at odds with Irwandi.


9. (SBU) One of the main criticisms of Irwandi's
administration had been his neglect of the business of
governing, due in large part to his extensive travels during
the first year after his election in December 2006. That
picture has begun to change for the better in recent months.
In March, after conducting a meritocratic "fit and proper
test" and personal interviews, Irwandi appointed 42 people to
senior positions on the basis of their test results,
experience and qualifications. The move has built trust
between Irwandi and the bureaucracy and demonstrated his
readiness to work with the bureaucracy, representatives of
which he has begun to include in key meetings. The move has
also lent credibility insofar as Irwandi did not stock his
cabinet with loyalists.


10. (SBU) The friction between the governor and Aceh's
parliament during Irwandi's first eight months in office has
also subsided substantially. The relationship has matured,
reflecting a mutual recognition of their respective roles in
governing the province. Little more than a rubber stamp
during the conflict, the provincial legislature is, with
Irwandi's cooperation, beginning to carry out its duty to
review the budget and help run the province. Although months
behind schedule now, the budget is bouncing between the
parliament and the executive, as the parliament for the first
time ever exercises its authority to ask questions.

GAM FRAGMENTATION OFFERS CHANCE FOR RIVAL PARTIES


11. (SBU) There is no question that the level of criminal
violence in Aceh is dramatically higher than anywhere else in
Sumatra, if not the rest of Indonesia. There have been some
killings, and the provincial police chief is investigating
three to four kidnappings per month. With few exceptions,
the motive has been money, not politics. Fights have broken
out between GAM and other groups, and among rival GAM groups.
Many blame the violence on GAM, while GAM blames it on
regular criminals and ex-militia. In many localities, GAM
groups are essentially simple preman (gangs of petty thugs),
with little or no ideological affinity for independence. At
current levels, neither the crime nor GAM's involvement in it
appear to be significant enough to affect long term political
stability of the province. They do, however, interfere with
the provision of government services and deter investment and
job creation.


12. (SBU) In the meantime, GAM continues to fragment, and
Malik Mahmoud, one of the former expatriate GAM leaders and
the current head of GAM insofar as it still exists as an
organization, is becoming less and less relevant and less
able to influence the behavior of individual members. Malik,
as he is known in Aceh, and Irwandi remain estranged, and the

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eight GAM-affiliated district leaders are all generally close
to Irwandi, as are several other prominent ex-GAM leaders.
As Governor, Irwandi thus easily controls far more real power
than Malik. GAM's application for formal status as a
political party with a new name, flag and symbol is still
being reviewed in Jakarta. Whether approval will be
forthcoming is an open question.


13. (SBU) At least six different groups have formally
applied to register as political parties; none have been
approved so far. None of these parties has a platform
promoting sharia law, and public support for sharia law
appears to be declining. Irwandi has worked to minimize the
scope of Sharia activities in practice. At the same time,
Hizbut Tahrir Indonesia (HTI) and the Islamic Defenders Front
(FPI) are significantly expanding their influence in Aceh,
particularly on university campuses.


14. (SBU) National and rival local parties hope to prevent a
GAM victory in the 2009 legislative elections. Their
prospects of doing so appear significant. Although still
regarded as the champion of Aceh's autonomy and cultural
identity, GAM lacks broad support, and the elements of its
fractured organizational structure do not work together.
Nazar's proto-party, SIRA (Aceh Referendum Information
Center) has a machine as good as or better than GAM's, is
less controversial and is capable of peeling the
intellectuals away from GAM, when SIRA formally establishes
itself.


15. (SBU) Looking ahead to the provincial legislature (DPRD)
to be elected a year from now, Irwandi's nonpartisan stance,
should he choose to continue it, should allow him to work
effectively with a non-GAM DPRD, dominated either by a
national party such as Golkar or by local parties. A PDI-P
DPRD would be a problem, but PDI-P has no chance of winning
significant representation. Pragmatism on all sides will be
essential to a successful working relationship with the new
legislature.

A ROBUST BUDGET


16. (SBU) Despite its substantial gas reserves and history
of exporting commodities such as pepper and coffee, Aceh has
long been one of the country's poorest provinces. Decreased
reconstruction spending has caused the economy to cool, and
significant new investment--foreign or domestic--has yet to
materialize.


17. (SBU) Provincial finances, however, are not a problem,
due primarily to a substantial influx of revenue sharing from
Jakarta as a result of national decentralization laws, and
the special Aceh Trust Fund established under the LOGA. The
province stands to lose 25 percent of the annual block
transfer from Jakarta under the General Allocation Fund
(DAU),or approximately $15 million, due to the budget's late
submission. Even with that loss, however, the province's
financial situation is very strong, and the budget, totalling
approximately $900 million, will be nearly double the level
of last year's. That makes it nearly three times that of
North Sumatra, a larger and wealthier province.


18. (SBU) The Aceh Reconstruction Agency (BRR),established
in April 2005 in response to the massive earthquake and
tsunami disaster of December 2005, will close operationally
by the end of 2008, although it will formally remain in
existence until its five-year anniversary in April 2009. As
a fulfillment of Jakarta's commitments to Aceh following the
2004 tsunami, the BRR represents as a major success, and is
regarded as such by the international donor community.


19. (SBU) The BRR's favor has fallen among civil society
and, increasingly, the public in Aceh, however. While some
of the criticism is unfair, critics rightly note that the

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agency's strong performance in Banda Aceh has been offset by
weak performance in more remote areas. Critics complain that
BRR is out of touch with common people, is unresponsive to
local concerns, and spends profligately on itself and its
staff. Its closure is important symbolically as a cutting of
the umbilical cord, accentuating Aceh's autonomy in a
positive way. It will close before completing its work,
however, and its assets will most likely be transferred to
the State Planning Agency (Bappenas). How the responsibility
for remaining projects will be divided between Jakarta and
Aceh remains to be decided, and this will create some
friction, but it should not become a major political issue.

CHALLENGES AHEAD


20. (SBU) Several challenges remain for Irwandi in this
outlook, and his ability to manage them will affect the peace
and the political stability of the province. One of them is
GAM's formal boycott of the CoSPA, limiting the effectiveness
of the decisions and agreements that it aims to produce.
Malik and other GAM leaders continue to boycott the process,
and any ex-GAM participants in CoSPA participate as
individuals, not on behalf of the organization. Malik
objects to the presence on the CoSPA secretariat of senior
members of BRA, with which Malik is on bad terms. Malik
instead engages with Jakarta counterparts through the
so-called Roundtable, an ad hoc, informal GAM dialogue with
Jakarta. Irwandi wants GAM in the CoSPA, and Malik's
participation as the informal head of GAM would be
symbolically important because he signed the MOU on behalf of
GAM.


21. (SBU) Malik has instead continued to maintain a dialogue
with Jakarta, which in that respect competes with the
FKK-CoSPA process. The Roundtable, as this dialogue is
called, has been encouraged by Juha Christensen from
Interpeace, who was involved in the European Union's Aceh
Monitoring Mission (AMM) and sees himself as wearing the
mantle of Finnish President Ahtissaari. Jakarta counterparts
consist of former Justice Minister Hamid Awaluddin, Jakarta's
signatory of the Helsinki MOU, as well as State Enterprise
Minister Sofyan Djalil, Deputy Welfare Minister Farid Husain
and former Indonesian envoy to Finland Iris Indira Murti, all
of whom played important roles in negotiating the MOU.
Husein is also close to Kalla and a negotiator of the MOU.
None of the Jakarta participants, however, holds an office
relevant to the dialogue with Aceh.


22. (SBU) As essentially a glorified photo-op for Malik and
his Jakarta partners, the Roundtable has little intention of
contributing substantively to the resolution of the remaining
MOU issues, although at the very least it demonstrates the
two sides' continued commitment to the peace process.
Coordinating Minister Widodo is reportedly pressing Kalla to
close down the Roundtable and channel all contact with GAM
through the FKK. This would significantly increase the
weight of any results from the FKK-CoSPA process.
Ultimately, however, Irwandi has the political power as
governor and the influence as a former GAM leader to reach
agreement with Jakarta on the remaining MOU issues, and GAM
will most likely learn to live with what he decides.
Although Malik's formal endorsement of that agreement is
desirable symbolically in socializing GAM compliance, it is
not absolutely essential, and Irwandi can push the peace
process forward, with or without Malik's blessing.


23. (SBU) The Aceh Reintegration Agency (BRA),which is part
of the post-Helsinki peace process, continues to fall short
in administering the agreed programs intended to reintegrate
former GAM members into society and remains a source of GAM
discontent. BRA lacks the capacity to do more than
investigate and pay claims to victims of violence, former
combatants, and other groups which have been promised
compensation in the Helsinki MOU. Its mission historically

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has not been well defined. Its head, Nur Juli, has not been
an effective manager. Senior GAM officials accuse Nur,
somewhat disingenuously, of discriminating against certain
GAM factions in compensating victims of violence. The DPRD
has begun to play a much-needed role in balancing the
interests of provincial stakeholders by pressuring BRA to
ensure that it treats all victims of violence equally when
carrying out its programs. Although some of the GAM
complaints may be opportunistic, any headway that Irwandi can
make in GAM satisfaction with the BRA should encourage GAM to
buy into the peace process.


24. (SBU) A final dark cloud on the horizon is the proposal
that Aceh be split into as many as three provinces. Despite
low prospects of adoption anytime soon, the proposal has been
politically divisive. Launched by the ethnic Gayo and other
minority communities in the central highlands, it would carve
out a smaller second and possibly a third province comprising
the districts of Central Aceh and Gaya Lues and the most
economically backward regions along the west coast. These
communities have lobbied the DPR and national authorities
directly on this issue.


25. (SBU) Irwandi has denounced the proposal and said it
would reignite the conflict. There are only two
precedents--Banten and Riau--for the division of a province
without the governor's consent. Such a move, however, would
violate the Helsinki MOU. DPR contacts say the split isn't
going to happen anytime soon and appear sanguine. The
proposal's significance, rather, lies in its potential to
divide the province against itself and polarize relations
between Aceh and Jakarta. It has already led to violence
between GAM and ethnic Gayo. Nationalist parties, such as
the Party of Democratic Struggle (PDI-P) and Hanura stand to
profit from the agitation. Former President Megawati (PDI-P)
sees Aceh's special autonomy as a repudiation of her hard
line as president, and retired General Wiranto (Hanura),who
oversaw the imposition of martial law in Aceh, reportedly
campaigned recently in central Aceh.

SOME GROUNDS FOR CAUTIOUS OPTIMISM


26. (SBU) None of these challenges, however, is serious
enough by itself to derail the peace process or Aceh's
political stability. Irwandi's ability to manage them will
likely translate into reduced GAM resistance as the peace
process continues to inch its way forward. Barring
unanticipated conflicts and active efforts to divide the
province, there is no reason to expect the former conflict to
return, but political competition in the run-up to next
year's provincial elections will be intense.


HUME