SCENESETTER FOR HDAC CODEL VISIT JUNE 30 TO JULY 2

UNCLAS SECTION 01 OF 03 JAKARTA 001041

SIPDIS

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

E.O. 12958: N/A
TAGS: PGOV KDEM ID
SUBJECT: SCENESETTER FOR HDAC CODEL VISIT JUNE 30 TO JULY 2

REF: JAKARTA 977 AND PREVIOUS

JAKARTA 00001041 001.2 OF 003



1. (SBU) SUMMARY: U.S. Embassy Jakarta welcomes CODEL
Price to Indonesia. You will arrive one week before
Indonesia's second direct Presidential elections, July 8.
This is a critical time for building relations between the
U.S. and Indonesia, the world's second and third largest
democracies. Incumbent candidate President Yudhoyono, a
staunch reformist, initiated in 2008 a new comprehensive U.S.
-Indonesia partnership including cooperation on education,
environment, trade and investment, science and technology,
defense cooperation and interfaith dialogue. Secretary
Clinton and Foreign Minister Wirajuda's respective visits in
2009 reinforced this partnership. President Obama may follow
up with a visit to Indonesia in November.


2. (SBU) SUMMARY: (CONT) Indonesia is institutionalizing
its democratic transition through reforms, successful
elections, and building governance institutions. Indonesia's
legislative branch is transforming rapidly, partly thanks to
HDAC's strong support, which complements broader U.S.
government initiatives to encourage democratic reform in
Indonesia. April 9 legislative elections, including in Aceh,
were deemed peaceful and successful. HDAC continued
successful engagement with the Indonesian legislature (DPR)
has facilitated progress on a range of issues affecting U.S.
interests in Indonesia. END SUMMARY.

U.S. INDONESIA COMPREHENSIVE PARTNERSHIP


3. (SBU) President Yudhoyono proposed that the United
States and Indonesia form a comprehensive partnership in a
November 2008 speech in Washington. Secretary Clinton
endorsed the idea during her February 2009 visit to Jakarta.
We are working with the Indonesian Government on three broad
areas of cooperation: political and security, economic; and
socio-cultural.


4. (SBU) In the political and security arena, we hope to
complete a Defense Cooperation Agreement, work with Indonesia
in promoting democracy and interfaith dialogue and cooperate
in peacekeeping, nonproliferation and disaster relief. Our
economic cooperation will include an Overseas Private
Investment Corporation Agreement. The United States and
Indonesia are also pursuing a Science and Technology
Agreement, expanded health cooperation, and a debt-for
conservation swap under the Tropical Forest Conservation Act.
The US is also a key partner in the Coral Triangle
Initiative and was one of the major delegations in supporting
the World Oceans Conference in Manado. On socio-cultural
cooperation, we hope to conclude a Peace Corps country
agreement soon, and aim to have volunteers in the country by
the end of 2009. On education, we have signed a new
Fulbright Agreement and are working to increase the number of
Indonesian students in the United States and to build
partnerships between Indonesian and American Universities.
We hope to launch the Partnership during a possible
Presidential visit to Indonesia later this year.

PRESIDENTIAL ELECTIONS JULY 8


5. (SBU) Three pairs of candidates are contesting the July
8 Indonesian presidential elections: President Yudhoyono and
former Central Bank Governor Boediono; Vice President Jusuf
Kalla and retired General Wiranto; and former president
Megawati Sukarnoputri with retired General Prabowo Subianto.
Both Prabowo and Wiranto, controversial for alleged past
human rights abuses, originally nurtured presidential
ambitions.


6. (SBU) Incumbent Yudhoyono (whose Partai Demokrat won
the legislative elections),is seen as the reformist, clean
candidate. He is still a favorite at this point. Some
praised his choice of a non-partisan, economically savvy,
U.S. educated technocrat as running mate. However, the
opposition has labeled Boediono as a "neoliberal" who is too
sympathetic to foreign interests.


7. (SBU) If a candidate gets over 50 percent of support on
July 8, he or she will win the presidency outright. If no
candidate achieves that mark, there will be a second round in
September involving the top two finishers.


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LEGISLATIVE ELECTIONS: INDONESIANS INCREASINGLY CONFIDENT IN
THEIR DEMOCRACY


8. (SBU) The April 9, 2009 elections were the third
successful legislative elections since the advent of
democracy in 1998. They were peaceful and Indonesians
accepted the results. This was also the first time
Indonesian voters were able to directly choose individual
representatives. The previous elections were based on party
lists. Voters embraced this move and many hope it will
strengthen member-constituent relations. The new Parliament
will be seated October 1, 2009. You will meet with both
current and incoming Parliament members. There was a high
turnover of members in the April election, so many of our
current interlocutors will not hold seats next term. Seventy
percent of the incoming Parliament Members are new; many of
them have varied backgrounds and no legislative experience.


9. (SBU) Indonesians are increasingly confident in their
democracy. Through free press and active civil society, they
are quick to demand corrections when the system is not
working. Many chastised the Election Commission (KPU) for
its ineffective administration of the legislative elections.
Voter list irregularities effectively disenfranchised
millions of voters, according to NGOs. The Constitutional
Court is reviewing allegations of fraud and other election
dispute cases until June 24. Its decisions, considered
impartial, are changing the outcomes of some of the
legislative election results and re-instilling confidence in
the credibility of the election process. Significantly, one
of the court's decisions may mean that the current Speaker of
the House, Agung Laksono (with whom you will have a courtesy
call July 1),could lose his seat.


10. (SBU) Nine parties won parliamentary seats April 9.
The top three parties are secular nationalist parties,
followed by four Islamic-oriented parties and two parties led
by former generals. President Yudhoyono's Partai Demokrat
(PD) was the winner, with 20.85% of the popular vote,
followed by Vice President Kalla's party, Golkar, and
Megawati's party, The Indonesian Party of Struggle, (PDI-P).


PEACE IN ACEH: NEXT CHALLENGE-GOVERNANCE


11. (SBU) As part of the Helsinki MOU, six local political
parties participated in Aceh's provincial legislative
elections. Local Partai Aceh (PA) won a near majority at the
legislative level (33 of 69 seats) and a majority of seats at
many of the local levels. PA leaders have requested
legislative capacity building from us. PA's ability to
govern will directly affect the prospects for continued peace
and development in Aceh.

INDONESIA: AN IMPORTANT PARTNER ON BURMA ISSUES


12. (SBU) Indonesia has played an important
behind-the-scenes role on encouraging democracy and human
rights in Burma. President Yudhoyono's Bali Democracy Forum,
attended by Burma, is meant to lure the Burmese regime into
learning about the benefits of democracy. Indonesia has
taken the lead along with Australia in the Bali Process to
deal with irregular migration issues. A key element of this
is pressing Burma to grant citizenship to Rohingyas and to
respect their rights.

CHALLENGES IN PAPUA


13. (SBU) Indonesia continues to struggle with governance
and development challenges in its eastern most provinces of
Papua and West Papua. Despite vast natural resource wealth,
Papuans continue to lag behind other Indonesians-a situation
that fuels discontent. Implementation of the region's 2001
Special Autonomy Law has lagged due to the provincial
government's lack of capacity and the reluctance of some
central government ministries to cede control over critical
areas. The Indonesian police and military have made
significant progress on human rights in Papua although
incidents still sometimes occur. A leading government think
thank has recently published a plan-The Papua Roadmap-that
charts a course for addressing Papua's development deficit
and political grievances. However, we do not expect any
action on the plan until a new government takes office.

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Mission is aware of Congress' interest in the region, and
will continue to pay close attention to developments.


MISSION/HDAC COOPERATION CRUCIAL TO PARTNERSHIP


14. (SBU) The U.S. Embassy has been continuously engaged
with the DPR, and USAID provides direct assistance to the
DPR. HDAC programs are a welcome and complementary
initiative that has facilitated progress on a range of issues
affecting U.S. interests in Indonesia. For example, the
Embassy has engaged key DPR decision makers to encourage
implementing legislation for the Cape Town Treaty. This
legislation allowed EX-IM to provide a $1 billion loan to
Indonesian companies Lion Air and Garuda Air to purchase
Boeing airplanes. Our close cooperation with the DPR will be
key for institutional capacity building and democratic
reform, particularly since the new DPR will consist of mainly
new, inexperienced members. We appreciate the opportunity to
continue to jointly encourage Indonesia's growing democracy,
and expand the U.S.-Indonesia comprehensive partnership.
NORTH