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Cablegate: Aceh: Capacity-Funding Gap Threatens Long-Term Transition

VZCZCXRO9488
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0225 0360615
ZNR UUUUU ZZH
R 050615Z FEB 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 7894
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHKO/AMEMBASSY TOKYO 1487
RUEHBJ/AMEMBASSY BEIJING 4700
RUEHBY/AMEMBASSY CANBERRA 1966
RUEHUL/AMEMBASSY SEOUL 4388
RUEHRL/AMEMBASSY BERLIN 0564
RUEHLO/AMEMBASSY LONDON 0844
RUEATRS/DEPT OF TREASURY WASHDC
RUEHBS/USEU BRUSSELS
RUEAIIA/CIA WASHDC
RUEKJCS/SECDEF WASHDC
RHEHNSC/NSC WASHDC
RHHMUNA/USCINCPAC HONOLULU HI
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/JOINT STAFF WASHDC

UNCLAS JAKARTA 000225

SIPDIS

SIPDIS
SENSITIVE

DEPT FOR EAP/MTS AND EEB/IFD/ODF
USAID FOR ANE/AA WARD

E.O. 12958: N/A
TAGS: EAID EINV PGOV PREL ID

SUBJECT: Aceh: Capacity-Funding Gap Threatens Long-Term Transition

Ref: A) 07 JAKARTA 2623 - Aceh transition issues; B) 07 JAKARTA 3219

- Aceh budget

1. (SBU) Acehnese government capacity is severely limited and is
insufficient to absorb the central government budget allocations,
according to Minister for State-Owned Enterprises and former Aceh
peace negotiator Sofyan Djalil. In a January 29 meeting with the
Ambassador, Djalil said that this capacity-funding gap threatens
Aceh's longer-term development and undermines the provincial
government's ability to deliver key public services. (ref A).

2. (SBU) Limited government capacity, not insufficient revenue, is
the key issue for Aceh, according to Minister Djalil. The
capacity-funding gap in Aceh is due to the poorly functioning
bureaucracy in Aceh. Djalil regarded Governor Irwandi as a smart
man, but noted that his institutional capacity is weak.

3. (U) Aceh provincial government revenue is growing rapidly.
Despite massive needs, the government is unable to spend the funds
properly. In 2007, the provincial budget was $411 million (ref B).
Aceh was only able to spend around 75% of the budget. Difficulty
with budget execution is expected to worsen this year because
provincial government revenues will double in 2008 to more than $850
million. There are several reasons for the explosive growth in
revenue, most notably the special autonomy fund designed to finance
provincial development as well as Aceh's entitlement to a greater
share of central government revenues generated within the province.
The special autonomy funds are to be used to pay for infrastructure
and development programs over the next 20 years.

Sofyan Djalil Bio Note
----------------------

4. (U) Minister Djalil was the State Minister for Information and
Communication when the Helsinki Peace Accords were signed. He and
Hamid Awaludin were the two Indonesian negotiators of the Helsinki
MOU. Djalil also played a key intermediary role for the President
and Vice President during the Aceh Monitoring Mission and was a key
interlocutor with GAM members. Governor Irwandi and many senior GAM
members trust him. Minister Djalil was born in Aceh, but left in
1976. Many observers view Djalil as among the most reform-minded
members of SBY's Cabinet.

© Scoop Media

 
 
 
 
 
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