ENSURING COMPREHENSIVE PARTNERSHIP LONG-TERM SUCCESS: JAKARTA REACTION TO NIC REPORT

S E C R E T SECTION 01 OF 02 JAKARTA 001511

SIPDIS

STATE FOR P/SPECIAL ASSISTANT LAURA ROSENBERGER
STATE FOR INR PASS TO NATIONAL INTELLIGENCE COUNCIL
NSC FOR JEFF BADER AND DES WALTON

E.O. 12958: DECL: 09/10/2019
TAGS: KDEM KISL PINR PREL XB
SUBJECT: ENSURING COMPREHENSIVE PARTNERSHIP LONG-TERM
SUCCESS: JAKARTA REACTION TO NIC REPORT

JAKARTA 00001511 001.2 OF 002


Classified By: CLASSIFIED BY DCM TED OSIUS FOR REASONS 1.4 (B) AND (D)


1. (C) SUMMARY: The Comprehensive Partnership with Indonesia
offers an opportunity to guide Indonesia toward the "ASEAN
Leader" scenario in the February 2009 NIC Report, "Indonesia:
Scenarios for the Future and Implications for US Interests.
Above all, Indonesia,s future depends on the quality of
governance. A U.S.-Indonesia Comprehensive Partnership can
nudge Indonesia toward its potential as "ASEAN Leader" by
empowering governance reform. End Summary.

Why does Indonesian governance matter?


2. (C) Good governance is the oxygen needed so Indonesia can
progress. Unless governance and public service delivery
improve, popular disenchantment could erode democratic gains.
With U.S. support, Indonesia can continue to showcase that
Islam and democracy--along with pluralism--can prosper
together. Should the U.S. wish to improve the chances of
Indonesia becoming an "ASEAN Leader," it must assist the
reformers within the Indonesian government. These reformers
will push bureaucratic reforms and help the government to
deliver tangible economic improvements.

The U.S. Can Nudge Indonesia Toward its Potential


3. (C) Indonesians are receptive to U.S. support for their
improvements in governance. When the Indonesian government
decided to intensify its pursuit of terrorists, the State
Department,s support to Indonesia,s anti-terrorism police
detachment made a difference in the detachment,s ability to
curb terrorism. When Indonesian police leaders decided to
reform the police forces, Department of Justice-led
police-to-police cooperation yielded wide-reaching
institutional reforms, such as the new use of force policy.
Once President Yudhoyono committed to environmental
leadership, the U.S. supported these environmental governance
priorities by being an active partner in the Coral Triangle
Initiative and World Ocean Conference.


4. (C) Governance reform largely depends on leadership.
Because of the differences in ministers, quality and
intentions, the difference between the Ministry of Finance
and the Ministry of Forestry is vast, for example. There are
thus opportunities for the U.S. to boost the effect of
reformers within the government. These opportunities can be
tangible--as FBI cooperation with the Corruption Eradication
Commission demonstrated. These opportunities can be
symbolic--as President Yudhoyono read out loud the
Ambassador,s editorial praising the macroeconomic leadership
of Finance Minister Sri Mulyani. These opportunities can also
be long-term investments, such as educating Indonesia,s
future leaders.

Valuable Levers of Influence


5. (S) What levers of influence are available to the U.S. in
Indonesia? Post strongly supports the NIC recommendation to
"continue and expand US programs to strengthen bureaucratic
efficiency, civil society, educational institutions, the
police, and the judiciary." To the extend U.S. policy can
have an impact on the daily lives of Indonesians, U.S. policy
will be more effective.


6. (C) Indonesians care about governance because the majority
see governance as inextricably linked to their economic
opportunities. President Yudhoyono,s popularity ratings
have closely followed the prices of basic commodities.
Economic issues dominated the recent Presidential election
campaign. Recently, the Indonesian Survey Institute asked
Indonesians what issues "are most urgent." Out of all issues,
76 percent of Indonesians said "people,s welfare and
economic opportunities" are most urgent. Religion remained at
a mere 1 percent. Islamic political parties have suffered
losses in recent elections because they stressed Islamic
values over tangible issues such as good governance.


7. (U) By improving government performance, Indonesia has a
better chance to prosper economically--and avoid threats that

JAKARTA 00001511 002.2 OF 002


diminish with economic growth. As the WSJ recently wrote,
"Foreign businesses say that a corrupt legal system and
bureaucracy are major deterrents to doing business in
Indonesia." The quality of governance will thus have a
direct impact on foreign direct investment and other factors
determining Indonesian economic health. Should Indonesian
institutions be able to enhance economic predictability,
threats to Indonesia will decrease--from regional separation
to radical religious movements.


8. (C) Empowering individual reformers abroad is one proven
way to improve governance at home in Indonesia. Prominent
Indonesian officials receive attention overseas (in
multilateral fora such as ASEAN and APEC) and then return to
Indonesia strengthened to pursue reform at home. For
example, President Yudhoyono used his London G-20
participation to demonstrate his international stature, which
played well in the lead-up to elections. U.S. programs to
empower these reformers internationally can lead to domestic
policies favorable to U.S. interests, such as anti-corruption
reform that improves the investment climate.


9. (C) Post believes fostering a peaceful civil society is
another lever available to push governance reforms. Such
investments, through people-to-people programs and public
diplomacy, enable broader political support for governance
reform. Engagement with Islamic groups here helps to keep
them within the moderate camp, as our engagement with Islamic
civil society groups during the Gaza crisis demonstrated.
There are splits within Islamic political parties, such as
those within the Prosperous Justice (PKS) political party.
We should support the reformers and more moderate leaders.
President Yudhoyono,s anti-terrorism governance strategy may
be more effective because it has received the backing of
religious leaders.


10. (C) The quality of democratic governance in Indonesia
will determine Indonesia,s future course more than anything
else. The Comprehensive Partnership will thus only succeed
if it improves governance. A more robust partnership
between the world,s third and fourth largest countries can
have positive effects beyond our country,s borders. Support
for individual bureaucratic reformers, who can create
institutional reforms, is vital to good governance
improvements. The dedication of U.S. resources to support
the Comprehensive Partnership can influence whether Indonesia
just muddles through or becomes the ASEAN Leader we know it
can become.


11. (U) This cable was prepared by three of Embassy
Jakarta,s entry-level officers.
HUME