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Cablegate: Transformational Diplomacy in Indonesia

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OO RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2644/01 2621004
ZNR UUUUU ZZH
O 191004Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6346
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHBY/AMEMBASSY CANBERRA 1210
RUEHKO/AMEMBASSY TOKYO 0823
RUEHPB/AMEMBASSY PORT MORESBY 3446
RUEHWL/AMEMBASSY WELLINGTON 1778
RUEHNE/AMEMBASSY NEW DELHI 1357
RHHJJPI/USPACOM HONOLULU HI
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 04 JAKARTA 002644

SIPDIS

SIPDIS
SENSITIVE

DEPT FOR S, D, P, EAP A/S HILL FROM AMBASSADOR HUME

E.O. 12958: N/A
TAGS: PREL PGOV ECON SOCI TBIO ID
SUBJECT: TRANSFORMATIONAL DIPLOMACY IN INDONESIA

JAKARTA 00002644 001.2 OF 004


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

2. (SBU) Summary: Indonesia, the fourth most populous
nation, is a crucial test for transformational diplomacy.
Just ten years ago it was an authoritarian, military
dominated state weakening under the pressures of the Asian
financial crisis. Now it is the one state in the region to
earn Freedom House's "free" rating and its economy is growing
at over six percent. U.S. diplomacy promotes this progress,
including through large economic assistance and public
diplomacy programs. Real challenges remain: to secure
accountability for past human rights abuses by the military;
to strengthen the police force; to reduce corruption; to make
the economy more attractive for direct foreign investments;
and to improve education. What lessons can transformational
diplomats learn from progress to this point, and what have
become the crucial issues that policy makers need to
confront? End Summary.

The Context and Circumstances
-----------------------------
3. (SBU) From independence in 1949 until the fall of
President Suharto in 1998 the Indonesian state was comparable
to the colonial state created by the Dutch and maintained by
the Japanese during World War II. The legitimacy of
President Sukarno's government came from its liberation of
the nation from the colonial power; elections were not the
basis for Sukarno's hold on power. After Sukarno, for the
next three decades Suharto based his legitimacy and that of
his government on delivering security and economic growth.
The sources of authority were the military and the crony
capitalists who built industrial and trading conglomerates
and amassed enormous fortunes. It was a top-down power
structure, and Suharto ruled like a sultan.

4. (SBU) The Asian economic crisis of 1997 forced the
collapse of Suharto's government within a year. Between 1998
and 2004, Indonesia had five different presidents; the
economy first shrank, then stagnated; the military, rather
than guaranteeing security, fomented violence, especially in
East Timor; in turn, East Timor voted for independence in a
referendum and then was occupied by a United Nations force;
and comparable crises simmered in Aceh and Papua at the
western and eastern extremities of the Indonesian
archipelago. It seemed as likely as not that the state would
break apart. Instead a series of political leaders, with
broad political support, created the basis for a renewed
state dedicated to the principles of democracy and the rule
of law, as well as committed to providing ordinary citizens
with security, economic opportunity, and basic social
services. In late 2004, the election of Susilo Bambang
Yudhoyono, a former general, as president confirmed the
national determination to make a new start.

Political Change
----------------
5. (SBU) Two reforms have changed the fundamentals of the
state in Indonesia. First, direct, democratic elections are
now used at every level of government to select the
president, the parliament, regional governors, provincial
parliaments, mayors, and town councils. In the last four
years Indonesians have voted peacefully in over 200
elections, without interference by the military.
International and local observers have repeatedly certified
these elections to be free and fair. Incumbents now
understand that they have but a few years to govern before
having to answer to another vote. The point of reference for
government has shifted from the security of the state to the
benefit to the voters. The second reform has been
decentralization of the state from Jakarta to the provinces,
with special statutes for the troubled Papua and Aceh
regions. Resources, comprising up to forty percent of the
total state budget, and responsibility have shifted for such
services as education and health. Local officials are slowly
learning how to design, implement and manage these services.
But it is clear that accountability in government is now
closer to the people.

6. (SBU) The Indonesian people have made clear, repeatedly,

JAKARTA 00002644 002.2 OF 004


that they want a democratic government committed to the rule
of law, and their choice, not outside pressure, is the basis
for this remarkable change. The United States has become a
partner in these changes through its own policies and
programs. USAID funding has supported the conduct of
elections and the training of grassroots politicians. Public
diplomacy funding has introduced Indonesians, through
education and exchange programs, to U.S. democracy. Other
programs provide training for institutional capacity building
at the local level, improving the prospects for
decentralization. The democratic transformation is far from
complete, but it is well under way.

Security
--------
7. (SBU) Before 1998, the Indonesian military was the bedrock
of state power, and it retains enormous influence and
capacity. The military's three missions are now defined as
performance of humanitarian missions beyond the capacity of
civilian authorities, participation in UN authorized
peace-keeping missions, and maritime security. The last
incident in which the military was accused of major human
rights violations took place in 2000, although there has been
little accountability for earlier violations. Department of
Defense experts are now working with the Indonesian military
to design a budget process that will make the entire military
budget subject to approval by parliament, increasing
transparency and accountability and enabling the military to
divest itself of problematic money-making operations. In
2005, The United States resumed training of military
officers, security assistance for military sales and numerous
joint exercises, but it has not resumed training with
Indonesia's Army Special Forces (Kopassus) because of past
human rights violations. Australia cooperates closely with
Kopassus.

8. (SBU) The police, separated from the military in 2001, now
have first-line responsibility for internal security,
including counter-terrorism. Indonesia's new civilian police
force is working on three transitions: from a force that
protects the state to a force that protects the citizens;
from an inquisitorial criminal justice procedure (which puts
a premium on confessions) to an evidence-based procedure; and
from a poorly trained force that deployed massive numbers to
a well trained professional force under tight control. USG
programs, funded at over $7 million yearly, have made a huge
contribution to these changes. At Indonesia's request, U.S.
experts designed the full range of training programs for the
new force, helped rewrite the criminal procedure code,
trained the Detachment 88 Anti-Terrorist Unit, designed a new
'use of force' policy, and provided other critical support.
One area where we need a concerted, long-term effort is
countering police corruption. USG employees and contractors
work within the police force to promote reforms by working
directly with the police. However, current United States
policy limits our training of the elite Mobile Brigade
(Brimob) because there has been inadequate accountability for
earlier human rights violations. The Australian Federal
Police do train with Brimob, which would be the first line of
defense in the event of an attack on a diplomatic facility
here.

Economic Change
---------------
9. (SBU) Ten years after the 1997 Asian financial crisis the
Indonesian macro-economy has recovered but not fully
reformed. The fortunes built up during the heyday of crony
capitalism still dominate the economy. The only (relatively)
reformed sector is banking, due to bankruptcies and forced
consolidations. The Jakarta stock market has just had a
record year, and balance sheets are robust. Nevertheless,
the six-percent growth rate is too anemic to reduce
joblessness and, other than in the extractive industries,
Indonesia fails to attract a proportional share of the direct
foreign investment going to Southeast Asia. U.S. firms
already here make money, but their representatives caution
that new or smaller players would have to take on a reliable
local 'partner' to protect their investments. The sanctity
and enforceability of contracts remain problems. There is
progress in protecting intellectual property rights, but

JAKARTA 00002644 003.2 OF 004


corruption is widespread.

10. (SBU) Our $60 billion anti-corruption programs aim to
reverse this situation. Some programs provide training for
investigators and prosecutors assigned to the special
anti-corruption court, where the prevailing conviction rate
is 100 percent. Other programs target the general court
system, both to improve transparency (publishing the text of
decisions on the web) and to raise efficiency by improving
management of court dockets. In one program aimed at
encouraging judges to produce a code of ethics, all
participants admitted to taking payments from parties before
the court (but denied payments influenced their decisions).
The anti-corruption drive led by President Yudhoyono has
widespread public support, but the problem is so engrained in
the local economy that progress is slow.

Social Change
-------------
11. (SBU) In 2003, former President Megawati asked President
Bush for special help in reforming Indonesia's primary and
secondary schools, and President Bush agreed. This $157
million six-year program is revolutionary. It is changing
classrooms in state schools, madrassas, and Islamic Pasantren
boarding schools from rote learning to learning by doing,
with students now working in teams at cluster tables. Rather
than sticking to a traditional syllabus, students now select,
classroom by classroom, the modules to study. Students,
parents, and even teachers claim to be enthusiasts of these
new methods. Concentrated in selected areas at first, these
changes are slowly being applied throughout the country. But
the university system is ill-prepared for the wave of
inquisitive minds that will arrive on its campuses starting
in five years, barely enough time to put in place the courses
needed to train the next generation for jobs needed in a
globally competitive, modernizing economy.

12. (SBU) Health is another sector begging for reform. Avian
influenza is now endemic in the poultry populations of every
province in Indonesia, and more than half of the human
fatalities of this disease have happened here. The public
health system is primitive; clinics and hospitals are often
shockingly ill-prepared for even normal cases. One senior
international health official said the leaders of this sector
are "in hopelessly over their heads." Although the U.S.
government has major programs here to deal with the dangers
of avian influenza and to promote immunization for childhood
diseases, the health system requires long-term investments in
human resources and improvement in clinical standards.
Frankly, our local partners do not yet grasp the urgency of
these tasks.

Lessons Learned
---------------
13. (SBU) Three lessons stand out. First, the most important
requirement for transformational diplomacy is a partner
committed to democracy, anti-corruption and the rule of law
and determined to improve the standards of governance and
service provided to the citizens. Second, once there is
agreement on overall goals, the USG has offered a variety of
programs from which the Indonesians can choose, securing
buy-in from Indonesian partners and assurance that they want
the offered programs. Third, transformational diplomacy
works slowly and at times unevenly: programs must continue
long enough, perhaps for a decade or more, so that initial
progress demonstrated in a pilot program is gradually so
integrated into the institutions of government that it
becomes part of the government's genetic code.

Issues to Confront
------------------
14. (SBU) The remarkable progress to date has brought closer
three policy challenges that will need to be addressed. With
regard to the security forces, the two units with which the
United States has restricted contacts (Kopassus and Brimob)
are the most competent units in the military and police and
the units most likely to be called upon in the event of a
terrorist incident in which U.S. citizens are held hostage.
The United States should consider and be willing to launch a
process of re-engagement that includes both respect for human

JAKARTA 00002644 004.2 OF 004


rights and cooperation on counter-terrorism. Second,
education reform will begin to produce increased numbers of
motivated and inquiring students who want scientific and
technical education that prepares them for jobs in a
modernizing and globally competitive economy. Without a good
education and jobs to follow, their resumes will read much
like those of the 9/11 Al Qaeda operatives. Can the U.S.
encourage reform of university-level education in Indonesia?
Third, in two years Indonesians will return to the polls
either to re-elect the reform-minded Yudhoyono or to choose a
new president. The confusing political scene in Indonesia
includes dynamic politicians from the center, but unrest in
Aceh or Papua could empower nationalist political figures who
might turn back the clock on democratic reforms. Most
Islamist politicians present themselves as moderate
reformers, but some have an entirely different agenda. The
goals of transformation diplomacy require a partner here that
continues the commitment to democracy, the rule of law, and
good governance.
HUME

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