RESPECTED ECONOMIST LIKELY AS YUDHOYONO'S RUNNING

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 000852

SIPDIS

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

E.O. 12958: DECL: 05/15/2019
TAGS: PGOV PDEM ID
SUBJECT: RESPECTED ECONOMIST LIKELY AS YUDHOYONO'S RUNNING
MATE

REF: JAKARTA 826 AND PREVIOUS

Classified By: DepPol/C Stanley Harsha, reasons 1.4 (b+d).


1. (C) SUMMARY. President Yudhoyono on May 15 reportedly was
about to announce esteemed economist and Central Bank
Governor Boediyono (one name only) as his Vice Presidential
candidate, opting for loyalty, competence and honesty over
patronage, special interests, and popular support.
Boediyono's cautious nature, however, raises concerns that
the Yudhoyono Government could become even more indecisive.
Meanwhile, political party coalitions remained murky as
former President Megawati could still not decide on her
running mate with just a day remaining before the May 16
official deadline to declare a ticket. END SUMMARY.


2. (C) President Yudhoyono is likely to choose as his VP
running mate someone who can help with his administration's
top priorities of promoting economic growth and fighting
corruption. A prudent and well-respected technocrat,
Boediyono brings a strong track record of sound economic
policymaking. As former President Megawati's Finance
Minister (2001-04),Boediyono was key in getting tax reform
legislation passed. Serving as economics coordinating
minister under Yudhoyono, he was instrumental in the passage
of an investment bill. Yudhoyono appointed him as the Bank
of Indonesia (Central Bank) Chair in May 2008, to return
credulity to the corruption-plagued institution.

MR. CLEAN


3. (C) Boediyono, age 66, exemplifies the characteristics
Yudhoyono wants in his Government if elected to a second
term: loyal, humble, and honest. Calm and tight-lipped,
Boediyono is polite by nature, like Yudhoyono, a product of
traditional Javanese upbringing. He lives with his wife in a
small home with worn furniture, and drives an old Toyota
Camry, turning down the luxury car that comes with his BI
position. His clean reputation is untarnished, in total
contrast to the current Vice President Kalla, the ultimate
political and business player.

REFORM MINDED, BUT INDECISIVE


4. (C) Foreign and Indonesian businessmen praised the choice,
saying Boediyono, despite his low-key manner, is a reformer.
One deputy coordinating minister for the economy told us,
"There are few people out there capable of consistently
driving real reforms and he is one of them. His one major
flaw: he is viewed as even more indecisive than the famously
waffling Yudhoyono, a combination which worries many who
already see the Government as too cautious. Several people
who know him well say he takes forever to make a decision,
although he does delegate. Yudhoyono also takes a long time
to decide issues but does not delegate, and Kalla oftentimes
took the initiative to make policy decisions without
consulting the President.


5. (C) Given Boediyono's reputation as pro-U.S. and
pro-foreign investment, nationalists and protectionists are
critical of this choice. Small protests were staged when
reports of Boediyono's appointment appeared certain on May
15, claiming Boediyono to be pro-U.S., "neo-liberal" and not
protecting Indonesian workers.


6. (C) The workaholic's favorite hobby is reading the Koran,
yet conservative Muslim party leaders, particularly from the
Prosperous Justice Party (PKS),lambasted Boediyono's
appointment, based on his secular policy outlook. He has not
reached out to Muslim organizations, PKS leaders complained.
PKS threatened to drop out of the Yudhoyono coalition over
Boediyono's appointment.


7. (C) With the Yudhoyono/Boediyono team likely and the
Golkar running mates of Vice President Yusuf Kalla and
Harnura Party head Wiranto (one name) confirmed, two teams
are now place to contest the July 2009 Presidential elections.

MEGAWATI STILL NO RUNNING MATE


8. (C) Megawati continued to vacillate, the flirtation
between PD and Megawati's Indonesian Democratic Party of
Struggle (PDI-P),apparently floundering as quickly as it
emerged in recent days (reftel). Megawati was not sold on
giving up her Presidential aspirations.


9. (C) Megawatis' tense negotiations with former general

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Prabowo, head of Gerindra Party, resumed in earnest on May
14, Prabowo still pining to run for President rather than as
VP. Prabowo was rumored to be asking for Megawati's
endorsement for a Presidential run in 2014 and nine Cabinet
positions, with Megawati balking at this exorbitant demand.
Neither Megawati nor Prabowo have any choices left but to
stick together, however, if they want to make a run
this year.


10. (C) The rest of the Partai Demokrat coalition was also
still being negotiated on May 15, a meeting with PKS planned
for late in the day.
HUME