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UNCLAS SECTION 01 OF 04 JAKARTA 002644 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR S, D, P, EAP A/S HILL FROM AMBASSADOR HUME 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON SOCI TBIO ID
SUBJECT: TRANSFORMATIONAL DIPLOMACY IN INDONESIA 
 
JAKARTA 00002644  001.2 OF 004 
 
 
¶1. (U) This message is Sensitive but Unclassified -- Please 
handle accordingly. 
 
¶2. (SBU) Summary:  Indonesia, the fourth most populous 
nation, is a crucial test for transformational diplomacy. 
Just ten years ago it was an authoritarian, military 
dominated state weakening under the pressures of the Asian 
financial crisis.  Now it is the one state in the region to 
earn Freedom House's "free" rating and its economy is growing 
at over six percent.  U.S. diplomacy promotes this progress, 
including through large economic assistance and public 
diplomacy programs.  Real challenges remain:  to secure 
accountability for past human rights abuses by the military; 
to strengthen the police force; to reduce corruption; to make 
the economy more attractive for direct foreign investments; 
and to improve education.  What lessons can transformational 
diplomats learn from progress to this point, and what have 
become the crucial issues that policy makers need to 
confront?  End Summary. 
 
The Context and Circumstances 
----------------------------- 
¶3. (SBU) From independence in 1949 until the fall of 
President Suharto in 1998 the Indonesian state was comparable 
to the colonial state created by the Dutch and maintained by 
the Japanese during World War II.  The legitimacy of 
President Sukarno's government came from its liberation of 
the nation from the colonial power; elections were not the 
basis for Sukarno's hold on power.  After Sukarno, for the 
next three decades Suharto based his legitimacy and that of 
his government on delivering security and economic growth. 
The sources of authority were the military and the crony 
capitalists who built industrial and trading conglomerates 
and amassed enormous fortunes.  It was a top-down power 
structure, and Suharto ruled like a sultan. 
 
¶4. (SBU) The Asian economic crisis of 1997 forced the 
collapse of Suharto's government within a year.  Between 1998 
and 2004, Indonesia had five different presidents; the 
economy first shrank, then stagnated; the military, rather 
than guaranteeing security, fomented violence, especially in 
East Timor; in turn, East Timor voted for independence in a 
referendum and then was occupied by a United Nations force; 
and comparable crises simmered in Aceh and Papua at the 
western and eastern extremities of the Indonesian 
archipelago.  It seemed as likely as not that the state would 
break apart.  Instead a series of political leaders, with 
broad political support, created the basis for a renewed 
state dedicated to the principles of democracy and the rule 
of law, as well as committed to providing ordinary citizens 
with security, economic opportunity, and basic social 
services.  In late 2004, the election of Susilo Bambang 
Yudhoyono, a former general, as president confirmed the 
national determination to make a new start. 
 
Political Change 
---------------- 
¶5. (SBU) Two reforms have changed the fundamentals of the 
state in Indonesia.  First, direct, democratic elections are 
now used at every level of government to select the 
president, the parliament, regional governors, provincial 
parliaments, mayors, and town councils.  In the last four 
years Indonesians have voted peacefully in over 200 
elections, without interference by the military. 
International and local observers have repeatedly certified 
these elections to be free and fair.  Incumbents now 
understand that they have but a few years to govern before 
having to answer to another vote.  The point of reference for 
government has shifted from the security of the state to the 
benefit to the voters.  The second reform has been 
decentralization of the state from Jakarta to the provinces, 
with special statutes for the troubled Papua and Aceh 
regions.  Resources, comprising up to forty percent of the 
total state budget, and responsibility have shifted for such 
services as education and health.  Local officials are slowly 
learning how to design, implement and manage these services. 
But it is clear that accountability in government is now 
closer to the people. 
 
¶6. (SBU) The Indonesian people have made clear, repeatedly, 
 
JAKARTA 00002644  002.2 OF 004 
 
 
that they want a democratic government committed to the rule 
of law, and their choice, not outside pressure, is the basis 
for this remarkable change.  The United States has become a 
partner in these changes through its own policies and 
programs.  USAID funding has supported the conduct of 
elections and the training of grassroots politicians.  Public 
diplomacy funding has introduced Indonesians, through 
education and exchange programs, to U.S. democracy.  Other 
programs provide training for institutional capacity building 
at the local level, improving the prospects for 
decentralization.  The democratic transformation is far from 
complete, but it is well under way. 
 
Security 
-------- 
¶7. (SBU) Before 1998, the Indonesian military was the bedrock 
of state power, and it retains enormous influence and 
capacity.  The military's three missions are now defined as 
performance of humanitarian missions beyond the capacity of 
civilian authorities, participation in UN authorized 
peace-keeping missions, and maritime security.  The last 
incident in which the military was accused of major human 
rights violations took place in 2000, although there has been 
little accountability for earlier violations.  Department of 
Defense experts are now working with the Indonesian military 
to design a budget process that will make the entire military 
budget subject to approval by parliament, increasing 
transparency and accountability and enabling the military to 
divest itself of problematic money-making operations.  In 
2005, The United States resumed training of military 
officers, security assistance for military sales and numerous 
joint exercises, but it has not resumed training with 
Indonesia's Army Special Forces (Kopassus) because of past 
human rights violations.  Australia cooperates closely with 
Kopassus. 
 
¶8. (SBU) The police, separated from the military in 2001, now 
have first-line responsibility for internal security, 
including counter-terrorism.  Indonesia's new civilian police 
force is working on three transitions:  from a force that 
protects the state to a force that protects the citizens; 
from an inquisitorial criminal justice procedure (which puts 
a premium on confessions) to an evidence-based procedure; and 
from a poorly trained force that deployed massive numbers to 
a well trained professional force under tight control.  USG 
programs, funded at over $7 million yearly, have made a huge 
contribution to these changes.  At Indonesia's request, U.S. 
experts designed the full range of training programs for the 
new force, helped rewrite the criminal procedure code, 
trained the Detachment 88 Anti-Terrorist Unit, designed a new 
'use of force' policy, and provided other critical support. 
One area where we need a concerted, long-term effort is 
countering police corruption.  USG employees and contractors 
work within the police force to promote reforms by working 
directly with the police.  However, current United States 
policy limits our training of the elite Mobile Brigade 
(Brimob) because there has been inadequate accountability for 
earlier human rights violations.  The Australian Federal 
Police do train with Brimob, which would be the first line of 
defense in the event of an attack on a diplomatic facility 
here. 
 
Economic Change 
--------------- 
¶9. (SBU) Ten years after the 1997 Asian financial crisis the 
Indonesian macro-economy has recovered but not fully 
reformed.  The fortunes built up during the heyday of crony 
capitalism still dominate the economy.  The only (relatively) 
reformed sector is banking, due to bankruptcies and forced 
consolidations.  The Jakarta stock market has just had a 
record year, and balance sheets are robust.  Nevertheless, 
the six-percent growth rate is too anemic to reduce 
joblessness and, other than in the extractive industries, 
Indonesia fails to attract a proportional share of the direct 
foreign investment going to Southeast Asia.  U.S. firms 
already here make money, but their representatives caution 
that new or smaller players would have to take on a reliable 
local 'partner' to protect their investments.  The sanctity 
and enforceability of contracts remain problems.  There is 
progress in protecting intellectual property rights, but 
 
JAKARTA 00002644  003.2 OF 004 
 
 
corruption is widespread. 
 
¶10. (SBU) Our $60 billion anti-corruption programs aim to 
reverse this situation.  Some programs provide training for 
investigators and prosecutors assigned to the special 
anti-corruption court, where the prevailing conviction rate 
is 100 percent.  Other programs target the general court 
system, both to improve transparency (publishing the text of 
decisions on the web) and to raise efficiency by improving 
management of court dockets.  In one program aimed at 
encouraging judges to produce a code of ethics, all 
participants admitted to taking payments from parties before 
the court (but denied payments influenced their decisions). 
The anti-corruption drive led by President Yudhoyono has 
widespread public support, but the problem is so engrained in 
the local economy that progress is slow. 
 
Social Change 
------------- 
¶11. (SBU) In 2003, former President Megawati asked President 
Bush for special help in reforming Indonesia's primary and 
secondary schools, and President Bush agreed.  This $157 
million six-year program is revolutionary.  It is changing 
classrooms in state schools, madrassas, and Islamic Pasantren 
boarding schools from rote learning to learning by doing, 
with students now working in teams at cluster tables.  Rather 
than sticking to a traditional syllabus, students now select, 
classroom by classroom, the modules to study.  Students, 
parents, and even teachers claim to be enthusiasts of these 
new methods.  Concentrated in selected areas at first, these 
changes are slowly being applied throughout the country.  But 
the university system is ill-prepared for the wave of 
inquisitive minds that will arrive on its campuses starting 
in five years, barely enough time to put in place the courses 
needed to train the next generation for jobs needed in a 
globally competitive, modernizing economy. 
 
¶12. (SBU) Health is another sector begging for reform.  Avian 
influenza is now endemic in the poultry populations of every 
province in Indonesia, and more than half of the human 
fatalities of this disease have happened here.  The public 
health system is primitive; clinics and hospitals are often 
shockingly ill-prepared for even normal cases.  One senior 
international health official said the leaders of this sector 
are "in hopelessly over their heads."  Although the U.S. 
government has major programs here to deal with the dangers 
of avian influenza and to promote immunization for childhood 
diseases, the health system requires long-term investments in 
human resources and improvement in clinical standards. 
Frankly, our local partners do not yet grasp the urgency of 
these tasks. 
 
Lessons Learned 
--------------- 
¶13. (SBU) Three lessons stand out.  First, the most important 
requirement for transformational diplomacy is a partner 
committed to democracy, anti-corruption and the rule of law 
and determined to improve the standards of governance and 
service provided to the citizens.  Second, once there is 
agreement on overall goals, the USG has offered a variety of 
programs from which the Indonesians can choose, securing 
buy-in from Indonesian partners and assurance that they want 
the offered programs.  Third, transformational diplomacy 
works slowly and at times unevenly: programs must continue 
long enough, perhaps for a decade or more, so that initial 
progress demonstrated in a pilot program is gradually so 
integrated into the institutions of government that it 
becomes part of the government's genetic code. 
 
Issues to Confront 
------------------ 
¶14. (SBU) The remarkable progress to date has brought closer 
three policy challenges that will need to be addressed.  With 
regard to the security forces, the two units with which the 
United States has restricted contacts (Kopassus and Brimob) 
are the most competent units in the military and police and 
the units most likely to be called upon in the event of a 
terrorist incident in which U.S. citizens are held hostage. 
The United States should consider and be willing to launch a 
process of re-engagement that includes both respect for human 
 
JAKARTA 00002644  004.2 OF 004 
 
 
rights and cooperation on counter-terrorism.  Second, 
education reform will begin to produce increased numbers of 
motivated and inquiring students who want scientific and 
technical education that prepares them for jobs in a 
modernizing and globally competitive economy.  Without a good 
education and jobs to follow, their resumes will read much 
like those of the 9/11 Al Qaeda operatives.  Can the U.S. 
encourage reform of university-level education in Indonesia? 
Third, in two years Indonesians will return to the polls 
either to re-elect the reform-minded Yudhoyono or to choose a 
new president.  The confusing political scene in Indonesia 
includes dynamic politicians from the center, but unrest in 
Aceh or Papua could empower nationalist political figures who 
might turn back the clock on democratic reforms.  Most 
Islamist politicians present themselves as moderate 
reformers, but some have an entirely different agenda.  The 
goals of transformation diplomacy require a partner here that 
continues the commitment to democracy, the rule of law, and 
good governance. 
HUME