VZCZCXRO8794
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #2069/01 3510913
ZNR UUUUU ZZH
P 170913Z DEC 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 4151
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 JAKARTA 002069 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, EAP/MLS, EAP/RSP 
NSC FOR J.BADER 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON EINV EAID OVIP BURNS WILLIAM ID
SUBJECT: U/S BURNS'S DECEMBER 11, 2009 MEETING WITH 
INDONESIAN VICE PRESIDENT BOEDIONO 
 
¶1. (SBU) December 11, 2009; 9:00 a.m.; Vice Presidential 
Palace; Jakarta, Indonesia 
 
¶2. (SBU) Participants: 
 
U.S. 
---- 
Under Secretary William Burns 
Ambassador Cameron R. Hume, Embassy Jakarta 
Scot Marciel, EAP Deputy Assistant Secretary of State 
Ted Osius, Deputy Chief of Mission, Embassy Jakarta 
Laura Rosenberger, Special Assistant 
Peter Haas, Embassy Jakarta Economic Counselor (notetaker) 
 
INDONESIA 
--------- 
Vice President Boediono 
Djohermansyah Djohan, Deputy for Political Affairs, Office of 
the Vice President 
Mohammed Ikshan, Deputy for Economic Affairs, Office of the 
Vice President 
Notetaker, Office of the Vice President 
 
¶3. (SBU) Summary: Indonesian Vice President Boediono wants 
concrete progress under the Comprehensive Partnership before 
President Obama's planned 2010 visit.  In a December 11 
meeting with Under Secretary Bill Burns, VP Boediono 
discussed how to advance our partnership on trade and 
investment, a Millennium Challenge Account compact, climate 
change, science and technology, and education.  On domestic 
matters, VP Boediono dismissed the Bank Century case as 
political sniping.  End Summary. 
 
----------------------- 
Concrete Actions Needed 
----------------------- 
 
¶4. (SBU) Vice President Boediono told Under Secretary Burns 
that Indonesia wanted concrete progress on specific projects 
under the Comprehensive Partnership in advance of President 
Obama's likely visit in 2010.  He and U/S Burns agreed that 
we should seek to expand the range of our partnership in 
trade and investment, education, health, environment, and 
global issues. U/S Burns laid out several specific goals: the 
signing of a Science and Technology Agreement within the next 
two months; increasing the number of Indonesian students in 
the U.S.; and joint work on land-use management and peat to 
enable Indonesia to reduce its emissions.  VP Boediono asked 
for a list of pending issues that would benefit from his 
involvement. 
 
----------------------------------- 
Direct Investment Crucial to Growth 
----------------------------------- 
 
¶5. (SBU) VP Boediono assessed that the Indonesian economy is 
doing well but he wants to accelerate growth to seven percent 
per annum.  He said that Indonesia needs to attract $200 
billion of investment, much of it foreign, in order to reach 
its target growth rate. Indonesia's strengths are its 
democratic institutions, huge domestic economy, and strong 
economic leadership.  VP Boediono acknowledged, however, that 
poor transport and power infrastructure prevents Indonesia 
from being considered on par with the BRICs.  U/S Burns 
suggested that the U.S. could look into both military and 
civilian opportunities to cooperate to upgrade Indonesia's 
infrastructure. 
 
¶6. (SBU) U/S Burns said many U.S. firms are interested in 
Indonesia, but the investment climate keeps them away.  One 
modest step that would help improve confidence of U.S. 
companies would be an updated Overseas Private Investment 
Corporation investment incentive agreement.  He urged 
conclusion of an updated OPIC agreement before President 
Obama's visit.  This would be a symbol to U.S. companies that 
Indonesia wants their investment.  Ambassador Hume explained 
that two issues remain: the inclusion of a foreign government 
approval clause and the definition of political risk.  VP 
Boediono pledged to look into the matter. 
 
¶7. (SBU) U/S Burns informed VP Boediono that the Millennium 
Challenge Corporation Board agreed the previous day to 
reselect Indonesia as compact-eligible.  He added, however, 
that because Indonesia had graduated to lower middle income 
status, it is imperative to move quickly towards a compact or 
risk competing with other countries for fewer resources.  U/S 
Burns said Indonesia should develop concept papers for 
 
JAKARTA 00002069  002 OF 002 
 
 
possible projects over the next six months. 
 
¶8. (SBU) VP Boediono underscored that Indonesia has the 
potential to play a more important role internationally as a 
member of the G-20.  VP Boediono assessed, however, that 
Indonesia was diplomatically punching below its economic 
weight, and would need to do more in order to participate 
more fully in the G-20 and other forums.  U/S Burns pointed 
out that the Comprehensive Partnership provided a mechanism 
for increased bilateral consultations, including on the G-20. 
 Climate change is another global challenge where increased 
U.S.-Indonesia cooperation would be important, and U/S Burns 
praised Indonesia's very impressive targets, which send a 
positive signal to others. 
 
¶9. (SBU) U/S Burns noted the importance of education to 
economic growth, and pointed to this as another area for 
increased U.S.-Indonesia cooperation.  VP Boediono agreed, 
noting the important role that public libraries with books 
translated from English had played in his own education.  U/S 
Burns noted that the digital age provided more opportunities 
for such cooperation, and also urged increasing the 
opportunities for Indonesians to study in the United States. 
U/S Burns also noted that the Science and Technology 
agreement under negotiation would serve both U.S. and 
Indonesian interests.  The MOU was very close to agreement, 
and Burns urged finalizing it in the next two months. 
 
----------------- 
Political Sniping 
----------------- 
 
¶10. (SBU) There is still demand for ending corruption, and VP 
Boediono noted that good governance was a key theme in 
President Yudhoyono's and his campaign.  He said that legal 
reform will be central to the government's 100-day plan, 
especially the elimination of the "legal mafia" -- people who 
made money by fixing cases.  Ambassador Hume said that the 
U.S. provides support to all of the players in Indonesia's 
anti-corruption efforts, including the Corruption Eradication 
Commission, the National Police, the Attorney General's 
office, the Supreme Court, and the financial intelligence 
unit.  VP Boediono admitted that the political instability 
surrounding the Bank Century case could have a negative 
impact on the economy.  He characterized the case as 
political sniping, concluding that he is ready to fight 
charges of wrongdoing. 
 
¶11. (U) U/S Burns has cleared this message. 
HUME