O 132332Z DEC 04
FM SECSTATE WASHDC
TO AMEMBASSY JAKARTA IMMEDIATE 
ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
AMEMBASSY LONDON IMMEDIATE 
AMEMBASSY WELLINGTON IMMEDIATE 
AMEMBASSY TOKYO IMMEDIATE 
AMEMBASSY CANBERRA IMMEDIATE 
AMEMBASSY LISBON IMMEDIATE

C O N F I D E N T I A L STATE 265884 
 
 
JAKATRA PASS DILI AS ACTION 
 
E.O. 12958: DECL: 12/08/2014 
TAGS: KAWC KJUST PHUM PREL USUN TT ID JA NZ PO
UK, S/WCI, EAP, IO, DRL, AS 
SUBJECT: THE DEPUTY SECRETARY'S DECEMBER 7, 2004 MEETING 
WITH EAST TIMOR PRESIDENT XANANA GUSMAO 
 
¶1. (U) CLASSIFIED BY DEPUTY SECRETARY ARMITAGE FOR REASONS 
1.4 (B) AND (D). 
 
¶2. (U) DECEMBER 7, 2004, 4:40 P.M., IN THE DEPUTY 
SECRETARY'S OUTER OFFICE. 
 
¶3. (U) PARTICIPANTS: 
 
U.S. 
- THE DEPUTY SECRETARY 
- EAP A/S JAMES A. KELLY 
- EAP DAS MARIE T.HUHTALA 
- AMBASSADOR GROVER JOSEPH REES 
- D SPECIAL ASSISTANT CHRISTIAN CASTRO 
- EAP/IET DESK OFFICER SAMEER SHETH (NOTETAKER) 
 
EAST TIMOR 
- PRESIDENT XANANA GUSMAO 
 
- AMBASSADOR JOSE L. GUTERRES 
- DCM CONSTANCIO PINTO 
- INTERNATIONAL RELATIONS ADVISOR DOMINGOS ALVES 
 
¶4. (C) SUMMARY: IN A FRIENDLY AND WARM ATMOSPHERE, DEPUTY 
SECRETARY ARMITAGE DISCUSSED A WIDE RANGE OF ISSUES WITH 
VISITING EAST TIMOR PRESIDENT GUSMAO. AFTER 
CONGRATULATING PRESIDENT GUSMAO ON RECEIVING THE NATIONAL 
DEMOCRATIC INSTITUTE'S HARRIMAN AWARD AND THE BIRTH OF HIS 
THIRD CHILD, THE DEPUTY SECRETARY ASKED PRESIDENT GUSMAO 
ABOUT HIS VIEWS ON THE CHALLENGES EAST TIMOR FACES, ITS 
RELATIONS WITH INDONESIA, OIL REVENUES, REFUGEES, AND WHAT 
ASSISTANCE THE U.S. COULD PROVIDE THE NEW NATION. 
PRESIDENT GUSMAO SAID RELATIONS WITH INDONESIA WERE STILL 
"FRAGILE." ON ACCOUNTABILITY FOR 1999 ATROCITIES, HE SAID 
HE WOULD TRY TO CONVINCE INDONESIAN PRESIDENT YUDHOYONO AT 
A DECEMBER 14 MEETING TO ACCEPT A UN COMMISSION OF 
EXPERTS, BUT HE ALSO EXPRESSED SKEPTICISM ABOUT GOI 
WILLINGNESS TO FACE THE ISSUE. PRESIDENT GUSMAO ALSO 
CANDIDLY GAVE HIS VIEWS ON THE JUDICIAL SECTOR IN HIS 
COUNTRY. END SUMMARY. 
 
------------------------------- 
EAST TIMOR - INDONESIA RELATIONS 
-------------------------------- 
 
¶5. (C) PRESIDENT GUSMAO SAID RELATIONS BETWEEN EAST TIMOR 
AND INDONESIA WERE STILL "FRAGILE." HE AGREED WITH DEPUTY 
SECRETARY ARMITAGE'S ASSESSMENT THAT SUSILO BAMBANG 
YUDHOYONO (SBY) APPEARED TO BE MORE REASONABLE THAN FORMER 
PRESIDENT MEGAWATI. HOWEVER, PRESIDENT GUSMAO CAUTIONED 
THAT THE GOET DID NOT EXPECT ANY BIG CHANGES IN INDONESIAN 
POLICY BECAUSE SBY, THOUGH A FORMER GENERAL, STILL NEEDS 
THE SUPPORT OF THE INDONESIAN MILITARY. HE HOPES SBY WILL 
BE ABLE TO FULFILL HIS PROMISES OF REFORM BUT EXPECTS THAT 
HIS TASK WILL NOT BE EASY. WHEN ASKED ABOUT BITTERNESS 
BETWEEN THE TWO NATIONS, PRESIDENT GUSMAO ANSWERED THAT 
THE BITTERNESS REMAINS IN THE HEARTS OF THE INDONESIAN 
GENERALS, SOME OF WHOM ADMIT WHAT THEY DID IN EAST TIMOR 
IN 1999 WAS WRONG BUT AVOID DISCUSSING THE ISSUE.    WHEN 
ASKED ABOUT EAST TIMORESE REFUGEES, PRESIDENT GUSMAO 
REPLIED THAT THERE WERE ABOUT 29,000 SCATTERED THROUGHOUT 
INDONESIA AND THAT MOST HAD SETTLED THERE PERMANENTLY. HE 
SPECULATED THAT ABOUT HALF MAY CHOOSE TO RETURN TO EAST 
TIMOR SOME DAY. 
 
-------------- 
ACCOUNTABILITY 
-------------- 
 
 ¶6. (C) PRESIDENT GUSMAO BELIEVED THAT SBY WOULD NOT BE ANY 
MORE COOPERATIVE THAN MEGAWATI WAS WITH THE UN REGARDING 
THE ISSUE OF ACCOUNTABILITY FOR THE CRIMES COMMITTED IN 
EAST TIMOR IN 1999. PRESIDENT GUSMAO STATED THAT HE 
PLANNED TO MEET SBY IN BALI ON DECEMBER 14 AND USE THAT 
OCCASION TO TRY TO PERSUADE HIM TO ACCEPT THE UN'S 
COMMISSION OF EXPERTS.  DEPUTY SECRETARY ARMITAGE ASKED 
PRESIDENT GUSMAO IF HE ENVISIONED A LIKELY SOUTH AFRICAN 
TRUTH AND RECONCILIATION MODEL. WHEN PRESIDENT GUSMAO 
INQUIRED WHETHER THE SOUTH AFRICA MODEL NAMED NAMES, THE 
DEPUTY SECRETARY ANSWERED THAT NAMES WOULD HAVE TO BE 
NAMED AND THAT THERE MUST BE TRUTH BEFORE RECONCILIATION 
CAN OCCUR. PRESIDENT GUSMAO COMMENTED THAT FOR EAST TIMOR, 
THE MINIMUM ACCEPTABLE SOLUTION WOULD BE AN ARRANGEMENT 
THAT WOULD NAME NAMES. 
 
----------------------- 
EAST TIMOR'S CHALLENGES 
----------------------- 
 
¶7. (C) EXPRESSING CONCERN ABOUT THE JUSTICE SECTOR IN EAST 
TIMOR, PRESIDENT GUSMAO EMPHASIZED THE NEED TO BUILD 
CAPACITY IN THE SECTOR BY TRAINING GOOD PROSECUTORS, 
LAWYERS, AND JUDGES. HE STRESSED THE IMPORTANCE OF 
CHANGING THEIR MENTALITY AND IMPROVING THEIR 
PROFESSIONALISM. PRESIDENT GUSMAO ACKNOWLEDGED THAT THERE 
WERE SOME DIFFERENCES WITHIN THE GOET REGARDING THE 
APPROACH TO THIS TRAINING (NOTE: LIKELY REFERRING TO THE 
MINISTRY OF JUSTICE'S PREFERENCE FOR TRAINING IN 
PORTUGUESE AND BY CIVIL LAW NATIONS SUCH AS PORTUGAL). 
ASSESSING TIMOR'S GENERAL CONDITION, PRESIDENT GUSMAO 
INDICATED THE NEED FOR BETTER MANAGEMENT CAPACITY AND 
ESPECIALLY FOR FIGHTING CORRUPTION. DEPUTY SECRETARY 
ARMITAGE AGREED THAT THIS WOULD BE TOUGH BUT ESPECIALLY 
IMPORTANT ONCE THE MONEY FROM THE OIL REVENUES BEGINS TO 
COME IN. PRESIDENT GUSMAO REPLIED THAT AN OIL FUND WAS 
BEING CREATED WITH THE HELP OF THE IMF AND WORLD BANK TO 
ENSURE THAT ACCOUNTS ARE TRANSPARENT.   THE DEPUTY 
SECRETARY ASKED WHETHER THE PEOPLE OF EAST TIMOR WERE 
PATIENT ENOUGH TO WAIT A YEAR FOR THE OIL INCOME. 
PRESIDENT GUSMAO REPLIED THAT THE $100 MILLION LEVEL WOULD 
NOT BE REACHED FOR ANOTHER THREE TO FOUR YEARS DUE TO 
TECHNICAL DIFFICULTIES. HE ADDED THAT THE GOET'S ENTIRE 
ANNUAL BUDGET IS ONLY $75 MILLION. 
 
¶8. (C) PRESIDENT GUSMAO DESCRIBED THE HIGH EXPECTATIONS OF 
HIS PEOPLE IN 2001, ESPECIALLY FOR JOBS. HE SAID THAT 
ALTHOUGH EXPECTATIONS HAVE LOWERED, ONE CHALLENGE IS 
CONVINCING THE UNEMPLOYED YOUTH WHO HAVE FLOODED DILI TO 
RETURN TO THEIR COMMUNITIES AND CONTRIBUTE TO THE 
AGRICULTURE SECTOR THERE. PRESIDENT GUSMAO IS TRYING TO 
WORK WITH THE WORLD BANK AND IMF TO PURSUE THIS. 
 
¶9. (C) REMARKING THAT THE USG WOULD "SAVE" ABOUT $20 
MILLION DOLLARS WHEN THE UN MISSION IN EAST TIMOR ENDED IN 
MAY, 2005, PRESIDENT GUSMAO SMILINGLY ASKED WHETHER THE 
USG COULD USE SOME OF THAT AMOUNT TO PROVIDE TIMOR WITH 
FURTHER ASSISTANCE. JOKINGLY COMMENDING GUSMAO FOR HIS 
BUSINESS ACUMEN, DEPUTY SECRETARY ARMITAGE SAID THAT THE 
USG WOULD CONTINUE ITS ASSISTANCE TO EAST TIMOR AND LOOK 
INTO OTHER WAYS THAT IT COULD HELP IN THE FUTURE, 
ESPECIALLY THROUGH MULTILATERAL ORGANIZATIONS LIKE THE 
WORLD BANK. 
 
 
-------------------- 
ARMY-POLICE TENSIONS 
-------------------- 
 
¶10. (C) WHEN ASKED ABOUT THE RELATIONSHIP BETWEEN THE 
MILITARY (A GREAT NUMBER OF WHOM ARE VETERANS) AND THE 
POLICE IN TIMOR, PRESIDENT GUSMAO AGREED THAT TENSIONS 
EXISTED. HE SAID THERE WAS SOME FEELING OF FRUSTRATION 
AND RESENTMENT AMONG THE MILITARY SINCE THE POLICE 
OFFICERS, MANY OF WHOM ONCE SERVED UNDER THE INDONESIANS, 
NOW APPEARED TO HAVE THE REAL POWER. HE SAID THERE IS A 
NEED FOR THE ARMY TO FEEL USEFUL AND NOT PSYCHOLOGICALLY 
INFERIOR TO THE POLICE. DEPUTY SECRETARY ARMITAGE SAID 
THAT HE SENSED THIS TENSION AND RECOGNIZED THE NEED TO 
IMPROVE THE ARMY'S SELF-ESTEEM. PRESIDENT GUSMAO 
EMPHASIZED THE NEED FOR WORKSHOPS AND TRAINING PROGRAMS IN 
HUMAN RIGHTS AND COUNTER-TERRORISM FOR TIMORESE POLICE 
OFFICERS OUTSIDE OF TIMOR WHERE THEY WOULD BE ABLE TO 
CHANGE THEIR MINDSETS. (COMMENT: PRESIDENT GUSMAO SAID HE 
DID NOT FAVOR MALAYSIA AS AN APPROPRIATE OUTSIDE VENUE BUT 
DID FAVOR THAILAND. END COMMENT.) WHEN THE DEPUTY 
SECRETARY RAISED A QUESTION ABOUT CURRENT COUNTER- 
TERRORISM TRAINING, AMBASSADOR REES REPLIED THAT THERE IS 
NONE BECAUSE OF RESOURCE CONSTRAINTS. DECLARING THAT "WE 
ARE ALL FRONTLINE STATES" AND TIMOR CANNOT ESCAPE ITS 
GEOGRAPHY, THE DEPUTY SECRETARY STATED THAT A SMALL SUCH 
PROGRAM COULD BE CONSIDERED. 
 
------------------------------------- 
BILATERAL AND MULTILATERAL ASSISTANCE 
------------------------------------- 
 
¶11. (C) WHEN DEPUTY SECRETARY ARMITAGE ASKED ABOUT WORLD 
BANK AND IMF ASSISTANCE, PRESIDENT GUSMAO REPLIED THAT 
BOTH ORGANIZATIONS HAVE PROMISED TO SUPPORT TIMOR AND THAT 
THE GOET WANTS TO BE CAUTIOUS ABOUT BORROWING BUT WILL 
TAKE LOANS THAT SUPPORT GOOD PROJECTS, PROVIDING A 
TRANSPARENT PROCESS IS IN PLACE. 
 
 
POWELL