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Cablegate: East Java: Presidential Hopefuls Discuss Decentralization

VZCZCXRO6263
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0057/01 1271045
ZNR UUUUU ZZH
R 061045Z MAY 08
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0210
RUEHJA/AMEMBASSY JAKARTA 0196
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHWL/AMEMBASSY WELLINGTON 0109
RUEHBY/AMEMBASSY CANBERRA 0111
RUEHJS/AMCONSUL SURABAYA 0215

UNCLAS SECTION 01 OF 02 SURABAYA 000057

SENSITIVE
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DEPT FOR EAP/MTS

E.O. 12958: N/A
TAGS: PGOV ECON EAID PREL ID
SUBJECT: EAST JAVA: PRESIDENTIAL HOPEFULS DISCUSS DECENTRALIZATION
AND ECONOMIC DEVELOPMENT BUT OFFER FEW DETAILS

REF: SURABAYA 56

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This message is sensitive but unclassified. Please protect
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1. (SBU) Summary: Four presidential hopefuls discussed the power
of decentralization on economic development at an April 30
seminar hosted by the Jawa Pos Group. All four agreed that the
central government had failed to transfer sufficient authority
to regional governments and questioned the government's
commitment to implement regional autonomy policies. While they
offered few specific examples, the prospective candidates
emphasized the importance of "ekonomi kerakyatan" (pro-poor
economic growth) policies and regional initiatives to stimulate
local economic development. End Summary.

2. (SBU) At an April 30 seminar hosted by the Jawa Pos Group and
the Jawa Pos Pro Otonomi Institute (JPIP), four presidential
hopefuls discussed the importance of greater regional autonomy
and emphasis on "ekonomi kerakyatan" (pro-poor economic growth
policies). Sri Sultan Hamengkubuwono XI, the Governor of
Yogyakarta; Sutiyoso, the former governor of Jakarta; retired
General Wiranto, Chairman of the Hanura party; and Hidyat
Nurwahid, Chairman of the People Consultative Assembly from the
Prosperous Justice Party (PKS), spoke at a session billed as an
opportunity to learn more about the vision of presidential
candidates on economic development and decentralization. Only
Hidyat Nurwahid disputed JPIP's description of him as a
presidential candidate, insisting that he had no plans to run
for president.

Decentralization Handicapped by Central Government
--------------------------------------------- --------------------

3. (SBU) All four participants agreed that the Indonesian
government was too focused on macroeconomic development and had
failed to adequately advance pro-poor economic policies. Such
pro-poor policies would center on equitable economic
participation and empower individuals to improve the welfare of
all citizens. All four speakers agreed that decentralization is
critical to achieving such economic empowerment. They
criticized the central government for failing to demonstrate a
strong commitment to implement regional autonomy policies. They
stressed that local governments have the capabilities to improve
and develop their regions, but are handicapped by central
government politics. Although decentralization has devolved the
greatest authority to the regency/city level, all speakers
focused on the dynamic between the central government and the
provinces. They concluded that the key to success of
decentralization is the political will of the central government
to allow regional autonomy to flourish.

Sultan Hamengkubuwono -- Governor of Yogyakarta
--------------------------------------------- -------------------

4. (SBU) Sultan Hamengkubuwono asserted that the concept of
"ekonomi kerakyatan" was a wholesale reversal of the New Order's
policies which emphasized growth, distribution, and stability,
but not poverty reduction and regional development. He
reiterated that decentralization is the key to achieving these
objectives by obligating local governments to empower residents.
As an example of successful initiatives, the Sultan described
how Yogyakarta had offered its well-developed marketing networks
within Asia to other provinces to help boost regional economic
development. He added, however, that while the central
government has transferred administrative responsibilities to
regional governments, it has yet to transfer real authority.

General Wiranto -- Chairman, Hanura Party
--------------------------------------------- -------

5. (SBU) General Wiranto, whose Hanura Party has been critical
of the current administration, stated that the central
government had failed to issue policies or recommendations to
promote "ekonomi kerakyatan," which he described as the
democratic involvement of citizens in the policy-making process.
Without offering examples, Wiranto said that there had been
many problems and challenges during the nine-year implementation
of the regional autonomy initiative, but decentralization had
reached the point of no return and could not be reversed.

Sutiyoso -- Former Governor of Jakarta
--------------------------------------------- --

6. (SBU) The only speaker to acknowledge openly his presidential
ambitions, Sutiyoso said that he would be a better president

SURABAYA 00000057 002.2 OF 002


than the five previous presidents because he had learned a lot
during his numerous terms as Jakarta's governor. He said that
"ekonomi kerakyatan" had been poorly implemented because
policies were capital intensive rather than labor intensive.
Sutiyoso added that the central government should stop trying to
act as regulator, controller, and operator at the same time.
Sutiyoso pointed to 29 regulations which put regional issues
such as land, investment, budgeting, education, and health under
central government authority. As an example, Sutiyoso noted
that the central government had pulled back the provincial
government's authority to issue investment permits, further
complicating investment decision making. Furthermore,
provincial budgets must be approved by the Department of Home
Affairs, creating delays and unnecessary bureaucratic
interference. Sutiyoso's comments reflect a common perception
that the central government still retains significant authority
at the local level, particularly due to its control of budget
allocations.

Hidayat Nurwahid -- Chairman, People's Consultative Assembly
--------------------------------------------- --------------
------------------

7. (SBU) Hidayat Nurwahid was the only speaker to defend the
central government's efforts, insisting that mechanisms existed
to resolve the issues raised by other speakers. He noted that
local governments could request a judicial review from the
Constitutional Court if it believed certain regulations were
impeding their efforts to develop the local economy. While he
offered no economic examples, Hidayat described how a candidate
for regent of Central Lombok requested revision of the election
law on independent candidates after he failed to garner support
from a political party. Hidayat Nurwahid also observed that the
economy must be growing because more people are able to go on
the Hajj every year. (Note: Hidayat's Islamic-oriented
Prosperous Justice Party (PKS) is part of the ruling coalition,
and Hidayat is being considered by all major parties as a vice
presidential candidate in the 2009 elections, including for
President Yudhoyono.)
MCCLELLAND

© Scoop Media

 
 
 
 
 
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