VZCZCXRO8130
OO RUEHDT RUEHPB
DE RUEHJA #1947/01 3290913
ZNR UUUUU ZZH
O 250913Z NOV 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3926
INFO RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RHMFIUU/HQ USPACOM PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 04 JAKARTA 001947 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR U/S BURNS 
DEPT FOR EAP, EAP/MTS, EAP/MLS 
NSC FOR D WALTON 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON MARR ID
SUBJECT: SCENESETTER FOR THE VISIT OF UNDER SECRETARY BURNS 
TO INDONESIA 
 
SENSITIVE BUT UNCLASSIFIED -- PLEASE HANDLE ACCORDINGLY 
 
¶1.  (SBU) SUMMARY:  Under Secretary Burns, Embassy Jakarta 
warmly welcomes your visit.  Ten years of political and 
economic reform have made Indonesia democratic, stable, and 
increasingly confident about its leadership role in Southeast 
Asia and the Muslim world.  Indonesia has held successful, 
free and fair elections; has weathered the global financial 
crisis; and is tackling internal security threats.  With this 
as backdrop, the GOI views your visit as a chance to engage 
the United States as a true partner in support of bilateral, 
regional, and global objectives.  Your participation in the 
Bali Democracy Forum will support regional democratization 
efforts, including those directed at Burma, while 
demonstrating high-level American support for a pet project 
of President Yudhoyono.  Bilateral Strategic Consultations 
should give you an opportunity to conclude a number of key 
initiatives under the Comprehensive Partnership such as 
return of the Peace Corps, push for progress in other 
important areas such as health cooperation, and discuss 
regional and strategic issues.  President Yudhoyono is facing 
domestic political issues that could derail his agenda if not 
handled correctly.  END SUMMARY. 
 
BILATERAL RELATIONS CONTINUE TO DEEPEN 
 
¶2.  (SBU) Your visit comes at a turning point in 
U.S.-Indonesia relations.  The GOI views the establishment of 
the bilateral Comprehensive Partnership as a way to deepen 
engagement with the United States across the board on the 
basis of a relationship between true partners.  The success 
of Indonesia's democratization and reform process and its 
inclusion in the G-20 have given the country new confidence. 
This confidence can help the United States work better with 
Indonesia to achieve our aims in Asia and elsewhere.  Under 
President Yudhoyono, the GOI has made significant efforts to 
play a more prominent and constructive role in regional and 
global affairs.  The Indonesian military has taken on 
peacekeeping duties in Lebanon, Sudan, and the Democratic 
Republic of the Congo.  Yudhoyono has staked out an ambitious 
position putting Indonesia in the front ranks on climate 
change.  As home of the ASEAN Secretariat, Jakarta seeks a 
greater leadership role in ASEAN, and it is succeeding.  GOI 
officials spearheaded efforts to enshrine democracy and human 
rights in the ASEAN Charter.  Indonesia has played an 
important but largely behind-the-scenes role in encouraging 
democracy and human rights in Burma. 
 
BALI DEMOCRACY FORUM AND STRATEGIC CONSULTATIONS 
 
¶3.  (SBU) Your participation in the Bali Democracy Forum 
(BDF) will support Indonesia's efforts to play a greater 
regional role and will give a high-level American imprimatur 
to a project of strong personal interest to President 
Yudhoyono.  The BDF aims to encourage democratization by 
exposing participants, notably Burma, to democratic values 
and practices.  This year's Forum will be the second meeting 
of the BDF and will be co-chaired by Japan.  In the longer 
term, the Institute for Peace and Democracy, established as 
the programming arm of the BDF, plans to convene technical 
workshops for regional government officials and experts to 
strengthen democratic institutions. 
 
¶4.  (SBU) Your participation in the Strategic Consultations 
will both give you an opportunity to discuss key regional and 
bilateral issues with Indonesian counterparts and help 
institutionalize an expansion of high-level consultations 
under the Comprehensive Partnership.  We anticipate that some 
initiatives under the Partnership, such as the return of the 
Peace Corps and a science and technology agreement may be 
ready for closure, and that consultations at your level might 
lead to progress in other areas, such as health, education, 
military-to-military, and nonproliferation cooperation.  A 
session of the talks devoted to regional issues will focus on 
key issues including Afghanistan, Iran, the Middle East, and 
Burma. 
 
THE BROADER PICTURE:  THE COMPREHENSIVE PARTNERSHIP 
 
¶5.  (SBU) President Yudhoyono proposed that the U.S. and 
Indonesia launch a Strategic Partnership (later upgraded to 
 
JAKARTA 00001947  002 OF 004 
 
 
the Comprehensive Partnership) in his November 2008 speech in 
Washington.  Secretary Clinton's visit in February 2009 began 
a dialogue with Indonesians about the key elements of that 
partnership.  The absence of a November POTUS visit to 
Jakarta, which Indonesians both inside and outside government 
highly anticipated, has slowed the pace of progress on the 
Partnership but not GOI enthusiasm. 
 
¶6.  (SBU) Even without a presidential visit this year, key 
elements of the Comprehensive Partnership are moving forward. 
 Beyond the initiatives mentioned above, these include 
cooperation on climate change, an Overseas Private Investment 
Corporation (OPIC) investment incentive agreement, and, 
possibly, Indonesian training of Afghan police.  Under a 
Comprehensive Partnership, we will strengthen Indonesia's 
democratic institutions and capacity to promote democracy 
beyond its borders. 
 
¶7.  (SBU) The partnership will also allow us to expand our 
already robust regional security cooperation and deepen our 
cooperation with the Indonesian military to enhance its 
capability to provide disaster relief and participate in 
international peacekeeping operations.  We will promote the 
people-to-people ties that are critical to the success of our 
partnership, including expanding education cooperation.  In 
addition to our discussions with the Indonesians on their 
commitments to reduce emissions from deforestation, our 
cooperation is deepening on food security focusing on 
fisheries and on combating emerging and tropical disease 
whose spread will be exacerbated by climate change in this 
region. 
 
A POTENTIAL POLITICAL CRISIS FOR A VIBRANT DEMOCRACY 
 
¶8.  (SBU) The Yudhoyono administration faces a number of 
volatile issues related to corruption cases and the rivalry 
between the Indonesian National Police (INP) and the 
Corruption Eradication Commission (KPK).  The arrest of two 
KPK officials, on what appear to have been trumped-up charges 
of extortion and abuse of power led to widespread public and 
parliamentary outcry.  The fact-finding team that Yudhoyono 
formed in response in turn demanded strong Presidential 
action to resolve the case.  At the same time, public outcry 
over rumors of misallocation to the President's party or 
family of bailout funds given to save a small Indonesian bank 
rocked the administration.  The bank issue has led to a 
formal inquiry in Parliament, supported by both opposition 
and coalition parties.  This issue is further complicated by 
the fact that Vice President Boediono was Governor of the 
Bank of Indonesia at the time of the bailout. 
 
¶9.  (SBU) On November 23, President Yudhoyono delivered a 
public message on both issues that was criticized from some 
quarters as showing a lack of leadership.  The twin problems 
have taken public confidence in Yudhoyono to a low ebb. There 
is no immediate danger to Yudhoyono,s presidency.  But 
should the investigation into the bank bailout reveal 
corruption involving Yudhoyono or his family, (Note:  there 
has been no evidence of this to date) his presidency could be 
imperiled.  In the interim, the President's plans for an 
aggressive 100-day plan to launch his second term have been 
derailed. 
 
¶10.  (SBU) The foundation of Indonesian democracy remains 
strong.  The April 9 legislative and July 8 presidential 
elections were fair, free, and peaceful.  The results of the 
legislative and presidential elections affirmed President 
Yudhoyono's reformist policies.  In April, President 
Yudhoyono's Partai Demokrat (PD) won a plurality in 
legislative elections, with 20.85 percent of the popular vote 
(and over a quarter of the 560 parliamentary seats).  This 
was followed by Yudhoyono's reelection victory in July, in 
which he captured 60.8 percent of the vote and 28 of the 
nation's 33 provinces.  The cabinet for the second Yudhoyono 
administration, which came into office in late October, 
contains a number of technocrats and a larger number of 
political leaders. 
 
A VIBRANT ECONOMY; PARTNERSHIP NEEDS WORK 
 
¶11.  (SBU) With estimated GDP growth of over four percent for 
 
JAKARTA 00001947  003 OF 004 
 
 
2009, Indonesia is the third-fastest growing economy in the 
G-20.  Indonesians are proud of their transition over little 
more than a decade from an economic basket case during the 
Asian financial crisis to the only Southeast Asian member of 
the G-20, involved in coordinating global responses to the 
current economic crisis.  Although some of Indonesia's 
responses to the economic crisis have been protectionist, new 
opportunities for U.S. businesses are emerging.  Boeing has a 
huge order book with Indonesian airlines.  General Electric 
and Electro-Motive are competing for a several hundred 
million dollar locomotive deal.  The Export-Import Bank is 
considering infrastructure and clean energy facilities to 
finance U.S. business deals and looking for ways to decrease 
the costs for lending in Indonesia. 
 
¶12. (SBU) Despite these promising signs, trade and investment 
is the weakest of the three pillars of the Comprehensive 
Partnership.  Indonesian officials say they want increased 
U.S. commercial links. But the overall direction of recent 
policymaking ) from nontariff barriers to investment 
restrictions to bureaucratic interference ) signal a strong 
bias towards domestic business interests.  The conclusion of 
a new OPIC investment incentive agreement would be a tangible 
step towards attracting more U.S. investment to Indonesia. 
An Indonesian decision to continue their partnership with 
ExxonMobil on the $40 billion development of Natuna gas field 
would show that Indonesia is serious about working with U.S. 
companies. 
 
MILITARY-TO-MILITARY COOPERATION GROWS 
 
¶13.  (SBU) Since the end of sanctions following establishment 
of a democratic government in Indonesia, security cooperation 
programs have expanded greatly.  IMET is a key tool in 
supporting defense reform by providing professional military 
education opportunities.  Indonesia's IMET allocation will 
increase from $1.5 million in 2009 to $1.8 million in 2010. 
The focus of foreign military sales to Indonesia is on 
improving airlift capability and aviation safety.  Indonesia 
is expected to receive $20 million in foreign military grant 
aid for 2010, up from $15.1 million for 2009.  U.S. Pacific 
Command is actively engaged in coordinating Indonesian 
military participation in Global Peace Operations 
Initiative-funded training programs and is coordinating $5.5 
million in funding to support the GOI's desire to develop a 
permanent peacekeeping training center facility.  The 
prohibition on U.S. training for the Army Special Forces 
(KOPASSUS) continues to be viewed by Indonesia as a major 
irritant to mil-to-mil relations. 
 
OVERCOMING SECURITY THREATS 
 
¶14.  (SBU) The GOI's response to the July 17 terrorist 
attacks was swift and effective.  While the GOI is still 
pursuing a few remaining associates of militant ringleader 
Noordin Top, the killing of eight July 17 operatives, 
including Top, and the arrest of 11 others appears to have 
severely crippled Top's network.  The GOI has heightened 
security nationwide and the INP continues to combat 
terrorism.  Until the July 17 bombings, Indonesia experienced 
three-and-a-half years without a major terrorist incident, 
demonstrating how the GOI's counterterrorism efforts reduced 
the ability of militant groups to carry out attacks. 
 
¶15.  (SBU) U.S. assistance has been an important component of 
the GOI's success in locating and coordinating 
counterterrorism strikes in the wake of the post-July 17 
bombings.  The Embassy has worked to build the investigative 
support for and forensic capabilities of the National Police 
through numerous developmental programs administered by 
Department of Justice's International Criminal Investigative 
Training and Assistance Program.  The Indonesian National 
Police, including elements of the Diplomatic Security,s 
Anti-Terrorism Assistance (DS/ATA) trained Special Detachment 
88, have effectively disrupted the Jemaah Islamiyah (JI) 
terrorist network.  The USG-funded Attorney General's Task 
Force on Terrorism and Transnational Crime has successfully 
prosecuted 64 terrorists, including 43 JI members since 2006, 
and DOJ enhanced the prosecutorial capacity of the task force. 
 
 
 
JAKARTA 00001947  004 OF 004 
 
 
HUME