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Cablegate: President,S National Day Speech Upbeat, but No

VZCZCXRO1868
OO RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2248/01 2281002
ZNR UUUUU ZZH
O 161002Z AUG 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5817
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHBY/AMEMBASSY CANBERRA PRIORITY 1015
RUEHKO/AMEMBASSY TOKYO PRIORITY 0673
RUEHBJ/AMEMBASSY BEIJING PRIORITY 4219
RUEHUL/AMEMBASSY SEOUL PRIORITY 4135
RUEHWL/AMEMBASSY WELLINGTON PRIORITY 1656
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1314
RUEHPB/AMEMBASSY PORT MORESBY PRIORITY 3398
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0655
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS SECTION 01 OF 02 JAKARTA 002248

SIPDIS

SIPDIS
SENSITIVE

DEPARTMENT FOR EAP, EAP/MTS, EAP/MLS, INR/EAP

E.O. 12958: N/A
TAGS: PGOV ECON PTER ID IR
SUBJECT: PRESIDENT,S NATIONAL DAY SPEECH UPBEAT, BUT NO
SURPRISES

JAKARTA 00002248 001.2 OF 002


1. (U) This message is Sensitive but Unclassified -- Please
handle accordingly.

2. (SBU) Summary: President Yudhoyono's annual National Day
speech offered a generally upbeat assessment mixed with a
sober recognition of the challenges facing the country. The
speech covered democracy, terrorism, national unity and
separatism, Indonesia's approach as a non-permanent UNSC
member and its national economic development priorities. A
speech by Speaker of the House Laksono focused on legislative
priorities. Mission will email a copy of the speech to
EAP/MTS when it becomes available. End Summary.

SBY's Speech
------------

3. (U) On August 16, President Susilo Bambang Yudhoyono
delivered the annual national address on the eve of
Indonesia's National Independence Day, August 17. The
nationally televised speech, which is the equivalent of the
U.S. President's State of the Union address, was delivered
before the Indonesian House of Representatives (DPR).
Ambassador Hume attended. Key speech's key themes included:

-- National Unity: Yudhoyono stressed Indonesia's national
resilience over its 62 years of independence. Predictions
early in the Sukarno era and again after the fall of Suharto
that Indonesia would break up into smaller, ethnic units had
been proven false, the President commented. Indonesia had
weathered separatist challenges and stood unified facing the
future. Repeating a standard theme from previous years, he
emphasized that Pancasila (the five basic principles) had
held the country together and would remain inviolate. Under
no circumstances would the government support any change in
these basic constitutional principles.

-- Responsibilities of Democracy: Nearly a decade into the
democratic era, Yudhoyono stated, Indonesia must now pay
attention to the responsibilities of democratic government.
Harmony and balance were ideals that Indonesia prized and
they should be preserved. The challenge for Indonesia now
was learning to use its freedom constructively. Rule of law
and tolerance were fundamental to the success of democracy.
Separatism would not be tolerated. At the same time,
Indonesia must successfully manage the challenges of
globalization, ensuring that development was directed toward
a peaceful, just and democratic society. The continuing mud
flow in Sidoardjo in eastern Java was a problem that must be
resolved. The government would continue to take the lead, in
coordination with others.

-- Ethnic Conflict: The president singled out Poso (Central
Sulawesi), Maluku (Moluccas), Aceh and Papua as areas of
ethnic conflict where the government had succeeded in
preserving domestic peace and security. (Note:
Well-targeted police raids and personal intervention by
Yudhoyono and Vice President Kalla in the first half of 2007
largely ended spiraling violence between the Muslim and
Christian communities in Poso. Yudhoyono's visit to Ambon,
Maluku, in July was marred by a protest which involved the
hoisting of the banned Malukan flag. End Note.) Aceh
continued along the road established by the Helsinki peace
process and MOU, although scattered conflicts pointed up the
need for further confidence building between GAM and other
groups. Yudhoyono acknowledged the central government needed
to take an active role in developing Papua, pledged to assist
Papua and West Papua (Papua Barat) and noted his recently
issued presidential instruction to this effect. Papua should
not become a source of discontent that could threaten
Indonesia's national unity.

-- Terrorism and the United Nations: On terrorism, Yudhoyono
praised the national police and other institutions in
tracking down, capturing and prosecuting terrorists. Despite
these successes, however, Indonesia must look below the
surface and address the roots of terrorism, including
"backwardness, poverty, injustice, extremism, radicalism and
a culture of violence." Indonesia's success would benefit
Indonesian society demonstrate Indonesia's accountability to

JAKARTA 00002248 002.2 OF 002


the international community. On Indonesia's approach in the
United Nations Security Council, where Indonesia will serve a
second year as a non-permanent member in 2008, Yudhoyono
stated that Indonesia would continue to collaborate with
other members on the basis of a "free and active" foreign
policy (a reference to Indonesia's tradition of
non-alignment) and would emphasize peaceful over military
solutions to conflicts. He also noted that Indonesia would
host the UN's 13th Council of Parties meeting on climate
change in Bali in December 2007.

-- Economic Development: Coming on the heels of solid
economic growth figures in the last quarter, Yudhoyono
identified multiple national priorities in 2008 meant to spur
economic growth and reduce poverty and unemployment. The
eight priorities were: increase investment; encourage
exports; enhance employment opportunities; revitalize the
fishing and forestry sectors and promote village development;
accelerate infrastructure development; increase the access to
and quality of education and health; increase the
effectiveness of the war on poverty; and fight corruption and
accelerate bureaucratic reform. In addition to these items,
the government would continue to develop its capability to
respond to natural disasters, reduce the risk of natural
disasters and address avian influenza. Infrastructure
development remained crucial, with an emphasis on land, air
and sea transportation, electricity and irrigation. The
government would give priority to areas recently hit by
natural disasters. On the positive side, Indonesia had
achieved extensive progress on the economic front in the past
ten years. Indonesia had foreign exchange reserves of
US$50.9 billion, a stable exchange rate, a reduced debt ratio
and a healthier balance in the financial sector. (Note:
Mission is continuing its review of the economic-related
portion of the speech and will report further.)

Speaker's Remarks
-----------------

4. (U) In his remarks, House Speaker Agung Laksono recalled
highlights and themes of Indonesia's national independence
struggle and the major changes since the fall of President
Suharto in 1998. Emphasizing the importance of Pancasila as
the basis for all Indonesian national institutions, he called
for continued unity as Indonesia faced the future. Laksono
reviewed the legislative agenda for 2008, including the
national budget, institutions of government and political
parties, fiscal reforms, national implementing legislation
for international agreements and bilateral treaties. He also
discussed the controversial proposed Defense Cooperation
Agreement with Singapore and the EU flight ban on Indonesian
airlines, as well as the Constitutional Court's recent ruling
to allow independent political candidates to run in elections.

Upbeat, but Sober
-----------------

5. (SBU) As he has a right to be, Yudhoyono was upbeat about
the incredibly fast pace of the country's democratization as
well as guardedly confident regarding its overall
macroeconomic situation. That said, he was honest, noting
the many challenges facing the country. Papua and the
generic warning against separatism were stark. The president
also dwelt a bit on the mud flow issue, stressing that the
GOI was serious about dealing with it. The president's
inclusion of "radicalism and extremism" among the underlying
causes of terrorism marks a significant advance over previous
statements which basically mentioned "poverty" as the key
cause of terror.
HUME

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