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Cablegate: Scenesetter for Epa Administrator Lisa Jackson

VZCZCXRO1820
OO RUEHDT RUEHPB
DE RUEHJA #1749/01 2891127
ZNR UUUUU ZZH
O 161127Z OCT 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3609
INFO RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 JAKARTA 001749

SIPDIS

DEPT FOR EAP, EAP/MTS, EAP/MLS, EAP/RSP, S/ECC, OES
NSC FOR J. BADER
EPA/OAI RAKHI,CASAT, BUCKLEY

E.O. 12958: N/A
TAGS: PREL KGHG SENV ECON KDEM ID
SUBJECT: SCENESETTER FOR EPA ADMINISTRATOR LISA JACKSON

1. SUMMARY: Mission warmly welcomes EPA Administrator Lisa Jackson
and her presidential delegation to Indonesia. You are arriving on
the eve of President Yudhoyono and Vice President Boediono's
inauguration. Ten years of political and economic reform have made
Indonesia democratic, stable, and increasingly confident about its
leadership role in the region. Indonesia has held free, fair and
successful elections; is establishing itself as an international
leader on climate issues; and has weathered the financial crisis.
Moreover, the Indonesian government and people are resolute in
overcoming the terrorist threat. Our developing Comprehensive
Partnership will bolster Indonesia's reform efforts and advance U.S.
interests. Your visit will be seen as a sign of high-level U.S.
engagement with Indonesia. President Obama is wildly popular in
Indonesia and his leadership has served to strengthen U.S. -
Indonesian relations. END SUMMARY.

FREE, FAIR AND SUCCESSFUL ELECTIONS

2. Indonesia's April 9 legislative and July 8 presidential
elections were free, fair, and successful. The Election Commission,
working hand-in-hand with provincial and local level counterparts,
overcame daunting logistical challenges -- 451,000 polling stations
spread among many islands -- in order to achieve this impressive
result. President Yudhoyono's reformist policies were clearly
endorsed by the Indonesian people. 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 President Yudhoyono's
landslide reelection victory in July. Seen as the reformist, clean
candidate, he further shored up his credentials by choosing a
non-partisan, economically savvy, U.S.-educated technocrat as
running mate. Together they captured 60.8 percent of the vote and
28 of the nation's 33 provinces. The President's next step will be
selecting his Cabinet ministers. We expect that the new ministers
will be announced on October 21. The President's selections will be
an important indicator of how he intends to move forward with his
reform agenda.

A REGIONAL ANCHOR

3. With 45 percent of ASEAN's population, Indonesia is the natural
leader of Southeast Asia. The success of Indonesia's democratic and
reform process has given the country new confidence in its
stability, sovereignty and territorial integrity. This new
confidence can help the United States work well with Indonesia to
achieve our aims in Asia. Indonesia sits at the crossroads of
transit between East Asia, South Asia, and the Middle East and will
be critical to ensuring balanced and stable relations in the region.
As home of the ASEAN Secretariat, Jakarta seeks a greater
leadership role in ASEAN and it is succeeding. GOI officials
spearheaded efforts to enshrine democracy and human rights in the
ASEAN Charter. During late July's ASEAN summit, Foreign Minister
Wirajuda pressed the Burmese regime hard to release jailed democracy
activist Aung San Suu Kyi. In its host of the Bali Democracy Forum,
Indonesia has promoted democracy in Asia.

ENVIRONMENTAL CHALLENGES

4. Indonesia is richly endowed with biodiversity and natural
resources. As the third largest global emitter, Indonesia is key to
any global solution for climate change. While Indonesia alone does
not have the influence to determine a global deal on climate, its
non-articipation or failure to achieve reductions woul cause any
global solution to fail. Roughly 80%of Indonesia's green house gas
(GHG) emissions cme from the annual degradation of forests and peat
lands, and that number accounts for about 5% of wrld emissions.
While industrial sources of emissons in Indonesia are predicted to
rise several fld in the coming few decad es, destruction of foress
and peat negatively impact the world today. I addition, the cost
for GHG reductions from foress and peat could be much cheaper than
other soures of global reductions.

LEADING ON ENVIRONMENTL ISSUES

5. We believe that President Yudhoyon is moving to make Indonesian
leadership and conributions to a global climate solution a
potentia achievement of his new administration. Yudhoyonohas a
strong record of international leadership n climate with the
hosti(ng of COP-13, the Bali Ation Plan, the Forest-11, the Coral
Triangle Inih(t v% and the World Ocean Conference. He capped those
events off with anh(istoric statement at the G-20 in Pittsburgh,
whnn he declared that Indonesia on its own could cut emissions by
26% from a "business-as-usual" (BAU) c"enario or 41% with
international assistance. Iddonesia was the first developing
country to declr"e a percentage reduction target before Copenhagen

INDONESIAN DECLARATION ON PEAT AND FORESTS


JAKARTA 00001749 002 OF 003


6. We have encouraged Indonesian leaders to take strong moves to
reduce emissions from the destruction of peat lands, including a
presidential declaration, having the force of law, to ban further
conversion of peat lands. Such a move would bring credence to the
targets that Yudhoyono voiced at Pittsburgh. But Yudhoyono would
need clear support from the U.S. and other major donors to take this
bold step. Advisors and Indonesia climate experts repeatedly say
that Yudhoyono must be armed with viable alternatives for the vested
interests if he is to effectively change behavior. Possible US
climate legislation that creates a carbon market with international
offsets, including "avoided deforestation," would provide the
incentives to Indonesia for saving its forests and peat lands. Short
of a ready announcement on U.S. legislation, there is a smaller, but
significant package of U.S. assistance that could be characterized
as seed support.

U.S. SUPPORT ON ENVIRONMENTAL ISSUES

7. U.S. bilateral activities include USAID's planned $150 million
in climate-related assistance on mitigation on forestry and energy
and adaptation on marine and water/sanitation. In addition to the
Tropical Forest Conservation Act (TFCA) recently launched in Sumatra
for $30 million, the U.S. is considering other sites for TFCA deals.
However, the totaling of the assistance packages by other major
donor nations could possibly reach up to a billion dollars. This
would make an even more compelling case for Indonesia to take
positive game-changing action. International donors resident in
Jakarta have said they welcome U.S. leadership in pressing Indonesia
for policy change and renewed engagement on donor assistance on
climate, and we have begun active coordination in Jakarta mirroring
S/ECC actions in the various international negotiation fora.

A GROWING ECONOMY

8. With estimated growth of four percent for 009,Indonesia is the
third-fastest growing economy in the G-20. Indonesians are proud of
their transition over little more than a decade from economic basket
case during the Asian financial crisis to member of the G-20,
coordinating global responses to the 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 order book with Indonesian airlines. General
Electric is competing for a several hundred million dollar
locomotive deal. The Export-Import Bank is looking for
opportunities to finance clean energy deals and is exploring ways to
decrease the costs for lending in Indonesia. And OPIC is
negotiating a new Investment Incentive Agreement with Indonesia.

OVERCOMING SECURITY THREATS

9. Indonesia's response to the July 17 terrorist attacks on two
hotels in Jakarta has been swift. The government has heightened
security nationwide, and the police have worked steadily to find the
masterminds of the attack. Noordin Mohammed Top, who is suspected
of involvement in every anti-Western terrorist attack in Indonesia
since 2002, including the July 17 bombings, was killed in a police
raid, along with three other suspects last month. While Indonesia's
counterterrorism efforts have been impressive and its capacity to
fight terrorism within its borders has improved steadily, continued
vigilance is needed, as the events of July 17 demonstrated. The
U.S. provides Indonesia key assistance for its counterterrorism
effort.

A COMPREHENSIVE PARTNERSHIP

10. President Yudhoyono proposed that the U.S. and
Indonesia launch a Comprehensive Partnership in his November 2008
speech in Washington. Secretary Clinton's visit in February 2009
was a critical step in beginning a dialogue with Indonesians about
the key elements of that partnership. Under a Comprehensive
Partnership, we will strengthen Indonesia's democratic institutions
and capacity to promote democracy beyond its borders. The
partnership will allow us to expand our already robust regional
security cooperation and deepen our cooperation with the Indonesian
military to enhance its 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 concluding an agreement on Science and
Technology cooperation, bringing the Peace Corps back to Indonesia,
and expanding education cooperation.

INDONESIA: AN IMPORTANT U.S. PARTNER IN DEMOCRACY

11. Our security relationship with Indonesia is only one dimension
of a robust partnership. Indonesia's democratic institutions are
flourishing. Indonesian consumer confidence rose in July to its
highest level in nearly five years. Although much work remains to
be done in educational reform, poverty alleviation, combating

JAKARTA 00001749 003 OF 003


corruption, improving security, and reducing environmental
degradation, Indonesia is emerging as a leader in ASEAN, G-20 and
other multilateral fora on the global stage. Our Comprehensive
Partnership with the world's third largest democracy and the largest
Muslim-majority nation is an opportunity for the United States to
promote its interests bilaterally, regionally, and internationally.


Hume#

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