VZCZCXRO0718
OO RUEHDT RUEHPB
DE RUEHJA #0006/01 0050819
ZNR UUUUU ZZH
O 050819Z JAN 10
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4219
INFO RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 04 JAKARTA 000006 
 
SENSITIVE 
SIPDIS 
 
H PLEASE PASS TO CODEL BOND 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON MASS OREP ID
SUBJECT: SCENSETTER FOR CODEL BOND'S VISIT TO JAKARTA 
 
REF: STATE 129927 
 
¶1.  (U) This message is Sensitive but Unclassified.  Please 
handle accordingly. 
 
¶2.  (SBU) SUMMARY:  Senator Bond, 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.  These 
developments have created an opportunity to deepen our 
relationship through the United States-Indonesia 
Comprehensive Partnership.  This emerging effort deploys 
"smart power" to build greater cooperation in defense, 
counterterrorism, health, education, trade, science and 
technology, and on key international issues such as 
Afghanistan.  In a recent demonstration of this approach, we 
have signed agreements to bring the Peace Corps back to 
Indonesia and to expand our Fulbright program.  We are doing 
more.  With this as backdrop, Indonesian leaders will look to 
your visit as a chance to engage the United States as a true 
partner in support of shared bilateral, regional, and global 
objectives.  END SUMMARY. 
 
KEY MOMENT IN UNITED STATES-INDONESIA RELATIONS 
 
¶3.  (SBU) Your visit comes at an important time in 
U.S.-Indonesia relations.  The GOI views the establishment of 
our bilateral Comprehensive Partnership as a way to deepen 
engagement with the United States across the board. 
Indonesians want to move beyond the old donor-recipient model 
to build a relationship between true partners.  The success 
of Indonesia's democratization and reform process, and the 
country's inclusion in the G-20, have given Indonesians 
heightened confidence. The United States and Indonesia are 
deepening cooperation to achieve key aims in Asia and beyond. 
 
 
¶4.  (SBU) Under President Yudhoyono, Indonesia has begun to 
play a more prominent and effective role in regional and 
global affairs.  The Indonesian military has taken on 
peacekeeping duties in Lebanon, Sudan, and the Democratic 
Republic of the Congo.  Indonesia already provides capacity 
building assistance to the Afghan government in agriculture, 
education and health, and is considering doing more. 
Yudhoyono has staked out an ambitious position putting 
Indonesia in the front ranks on climate change.  As the 
largest member of ASEAN and home to the ASEAN Secretariat, 
Jakarta seeks a greater leadership role in the regional 
organization.  For example, Indonesian 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. 
 
THE COMPREHENSIVE PARTNERSHIP AS SMART POWER 
 
¶5.  (SBU)   The emerging  United States-Indonesia 
Comprehensive Partnership will implement the "smart power" 
strategy that you have long recommended for Southeast Asia, 
including in your recent book.  President Yudhoyono proposed 
the Partnership during a November 2008 speech in Washington. 
Secretary Clinton's visit in February 2009 began a dialogue 
with Indonesian leaders about the key elements of that 
Partnership, including cooperation in education, trade and 
investment, development assistance, health, and science and 
technology.  The postponement of President Obama's November 
visit, which Indonesians both inside and outside government 
highly anticipated, has slowed the pace of progress on the 
Partnership but has not curbed Indonesian enthusiasm. 
 
¶6.  (SBU) Important elements of the Comprehensive Partnership 
have moved forward.  We recently signed an agreement to bring 
the Peace Corps back to Indonesia and we have signed several 
memoranda of understanding to expand our Fulbright program, 
which the Indonesian government has agreed to partly fund. 
Additionally, we continue to explore deepened 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.  In an example of the latter, Indonesia hosted the 
second Bali Democracy Forum on December 10-11.  Under 
Secretary Burns led the U.S. observer delegation. 
 
JAKARTA 00000006  002 OF 004 
 
 
 
¶7.  (SBU) Reaching the Indonesian people directly will be 
critical to the Partnership's success.  A key element of this 
will be education--Mission Jakarta's top priority.  We aim to 
double the number of Indonesian students in the United States 
and do the same for American students here.  We have proposed 
an innovative public diplomacy venue--The American Place--to 
be located in a busy Jakarta shopping center.  The American 
Place will provide a space for educational outreach 
activities, cultural programming, and other activities of 
interest to Indonesians--especially young people.  The 
American Place will be open and welcoming, not hidden behind 
high walls and razor wire. 
 
¶8.  (SBU) The Partnership will expand already robust regional 
security cooperation and deepen cooperation with the 
Indonesian military (TNI).  We seek to enhance TNI's 
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 diseases which regional 
climate change could exacerbate. 
 
POLITICAL CHALLENGES FOR A VIBRANT DEMOCRACY 
 
¶9.  (SBU) The Yudhoyono administration faces some domestic 
political challenges.  Chief among these is an ongoing 
scandal 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 some say were 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.  While authorities have freed the 
two KPK officials, many Indonesians feel that Yudhoyono's 
failure to take swift and decisive action in the matter 
exacerbated the crisis. 
 
¶10.  (SBU) Public outcry over rumors of the possible receipt 
by the President's party, campaign donors or family of funds 
used to save a small Indonesian bank have also rocked the 
administration.  Both opposition and coalition parties 
supported a formal Parliamentary inquiry into the bank 
bailout.  Administration critics have targeted Vice President 
Boediono, who was Central Bank Governor at the time of the 
bailout, and Finance Minister Sri Mulyani Indrawati, for 
their roles in deciding to save the bank.  Boediono and 
Indrawati, both highly respected technocrats, enjoy strong 
support from both investors and members of the business 
community who favor continued economic and bureaucratic 
reform. 
 
¶11.  (SBU) On November 23, President Yudhoyono delivered a 
public message on both issues that some Indonesians 
criticized 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, his presidency 
could be imperiled.  (Note:  there has been no evidence to 
date of Yudhoyono or his family's involvement in corruption 
in this case.)  In the interim, these controversies have 
undermined the President's ambitious 100-day plan to launch 
his second term. 
 
¶12.  (SBU) Despite these scandals, 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  impressive 
reelection 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 RESILIENT ECONOMY; PARTNERSHIP NEEDS WORK 
 
 
JAKARTA 00000006  003 OF 004 
 
 
¶13.  (SBU) With 2009 GDP growth estimated at 4.3-4.4 percent, 
Indonesia was 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 orders booked with several Indonesian airlines.  General 
Electric and Electro-Motive are competing for a several 
hundred million dollar locomotive deal.  The Export-Import 
Bank seeks to establish infrastructure and clean energy 
facilities to finance U.S. business deals and looking for 
ways to decrease the costs for lending in Indonesia. 
 
¶14. (SBU) Despite these promising signs, trade and investment 
is the weakest area 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.  Many companies with investments in Indonesia 
claim that recent policy shifts have already negatively 
affected their business plans. The conclusion of a new OPIC 
investment incentive agreement would attract more U.S. 
investment to Indonesia. 
 
¶15.  (SBU) Like many countries, Indonesia has a significant 
number of agricultural trade barriers.  However, Indonesia 
recognizes that increased food production and distribution is 
a key part of its food security goals.  Companies like 
Monsanto seek to enter the market with biotech crops that 
will improve Indonesia's agricultural output and help develop 
the internal distribution networks.  We are working with 
Monsanto and other companies to spread the word about the 
positive impact that U.S. technology can have on Indonesia's 
food security goals. 
 
MILITARY-TO-MILITARY COOPERATION GROWS 
 
¶16.  (SBU) Security cooperation programs have expanded 
greatly since the United States ended sanctions in response 
to Indonesia's democratization.  IMET remains 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. 
With foreign military sales to Indonesia we aim to improve 
airlift capability and aviation safety.  Indonesia will 
likely receive $20 million in foreign military grant aid for 
2010, up from $15.1 million for 2009.  U.S. Pacific Command 
coordinates Indonesian military participation in Global Peace 
Operations Initiative-funded training programs and plans to 
contribute $5.5 million in funding to support the GOI's 
desire to develop a permanent peacekeeping training center 
facility. 
 
¶17.  (SBU) The last hurdle to fully normalized military 
relations is resumption of cooperation with Army Special 
Forces (KOPASSUS).  KOPASSUS is Indonesia's most capable 
fighting force and plays a key role in counteterrorism, 
peacekeeping and other critical missions.  However, working 
with KOPASSUS remains controversial, including with some 
Members of Congress, because of KOPASSUS' involvement in past 
human rights violations, chiefly in Aceh and East Timor. We 
are working to find a way forward that is consistent with the 
requirements of the Leahy Amendment.  Indonesian officials, 
including President Yudhoyono, continue to regard the 
prohibition on U.S. training for KOPASSUS as a major irritant 
to mil-to-mil relations. 
 
OVERCOMING SECURITY THREATS 
 
¶18.  (SBU) While we work with Indonesia to address the 
underlying causes of violent extremism, we also work together 
to put terrorist groups out of operation.  The GOI's response 
to the July 17 terrorist attacks in Jakarta 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. 
 
JAKARTA 00000006  004 OF 004 
 
 
 
¶19.  (SBU) While the Indonesian effort has been impressive, 
USG assistance has been a 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 INP through numerous developmental programs 
administered by the Department of Justice's International 
Criminal Investigative Training and Assistance Program.  The 
Indonesian National Police, including elements that receive 
USG assistance, 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.  The United States holds one 
Indonesian national, Riduan bin Isomuddin (aka Hambali) at 
the Guantanamo Bay detention facility.  We expect that he 
will be tried in U.S. District Court. 
 
WE ARE MAKING PROGRESS 
 
¶20.  (SBU) USG efforts to engage Indonesia are paying off.  A 
December 2009 Department of State poll conducted in ten 
cities showed that eight-in-ten Indonesians had a favorable 
opinion of the United States--up from a bare majority in 
April.  Large majorities of the Indonesian public believe 
that the United States is a positive force in the world 
because of the USG's efforts in disaster relief, development, 
democracy promotion, and protection of women's rights.  Most 
dramatically, those who participated in Mission activities, 
including exchange programs and educational and cultural 
outreach, were far more favorably disposed to the United 
States than those who had not. 
 
HUME