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Cablegate: Mcc Fy10 Indonesia Scorecard a "Shocker"

VZCZCXRO4402
RR RUEHLMC
DE RUEHJA #1811 3030825
ZNR UUUUU ZZH
R 300825Z OCT 09
FM AMEMBASSY JAKARTA
TO RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC
RUEHC/SECSTATE WASHDC 3695
INFO RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS JAKARTA 001811

STATE FOR EAP/MTS, EAP/EP, EEB/IFD/ODF
AIDAC FOR ANE, EGAT
USTR FOR (EBRYAN)
TREASURY FOR (BPELTON)

SENSITIVE
SIPDIS

E.O. 12598: N/A
TAGS: EAID PREL PGOV ETRD ECON KMCA MCC ID
SUBJECT: MCC FY10 INDONESIA SCORECARD A "SHOCKER"

REF: STATE 108510

1. (SBU) SUMMARY. AN EMBASSY OFFICIAL DELIVERED THE MCC FY10
SCORECARD FOR INDONESIA TO THE GOVERNMENT OF INDONESIA (GOI) ON
TUESDAY OCTOBER 27, 2009. A SENIOR INDONESIAN OFFICIAL EXPRESSED
SHOCK AT THE RATINGS AND DEEP CONCERN OVER PUBLIC PERCEPTIONS IT
MIGHT TRIGGER. THE OFFICIAL WORRIED THAT THE ANNOUNCEMENT OF THE
RATINGS COULD DAMAGE THE U.S.-INDONESIAN RELATIONSHIP IF NOT HANDLED
WELL. THE GOI IS FULLY SUPPORTIVE OF EFFORTS TO OBTAIN A GRACE
PERIOD AND APPRECIATIVE OF THE UPCOMING MCC VISIT AS A SIGN OF
SUPPORT. PLEASE SEE ACTION REQUEST IN PARA 6. END SUMMARY

2. (U) THE MCC INDONESIA SCORECARD WAS DELIVERED TO DR. IR. LUKITA
DINARSYAH TUWO, DEPUTY MINISTER FOR DEVELOPMENT FUNDING AFFAIRS IN
THE NATIONAL DEVELOPMENT PLANNING AGENCY (BAPPENAS) ON TUESDAY
OCTOBER 27, 2009. REFTEL POINTS WERE COVERED. DR. LUKITA ACCEPTED
RESPONSIBILITY FOR FURTHER DISSEMINATION OF THE SCORECARD WITHIN THE
GOI.

3. (SBU) DR. LUKITA WAS CLEARLY SHOCKED BY THE RESULTS. WHILE HE
KNEW INDONESIA NEEDED TO CONTINUE TO MEET MCC REQUIREMENTS, HE HAD
NOT FOCUSED ON THE CONSEQUENCES OF GRADUATING TO A HIGHER INCOME
GROUP ON THE STANDARDS TO BE MET. HE WAS ESPECIALLY DISTRESSED
BECAUSE INDONESIA HAD CONTINUED TO IMPROVE ITS PERFORMANCE, HAD
ESTABLISHED A SPECIAL UNIT TO WORK ON THE COMPACT, HAD FUNDS IN THE
APPROVED BUDGET FOR NEXT YEAR FOR COMPACT DEVELOPMENT, WAS SET TO
PRESENT THE RESULTS OF A CONSTRAINTS ANALYSIS, WAS PREPARING FOR THE
MCC TEAM VISIT, AND WAS PLANNING A SERIES OF PUBLIC FORA TO DISCUSS
THE CONTRAINTS ANALYSIS AND POSSIBLE PROJECTS.

4. (SBU) HE EXPRESSED DEEP CONCERN OVER POSSIBLE INTERNAL GOI
REACTIONS AND THOSE OF THE PUBLIC. HE FORESAW POSSIBLE NEGATIVE
IMPLICATIONS FOR THE BILATERAL RELATIONSHIP WHEN NEWS OF THE RATINGS
BECOMES PUBLIC. INDONESIAN ELIGIBILITY FOR A MCC COMPACT HAD BEEN
WIDELY DISSEMINATED AND CITED AS AN IMPORTANT STEP IN U.S. INDONESIA
RELATIONS. UNLESS CAREFULLY HANDLED THE NEW SCORECARD COULD DO HARM
TO THAT RELATIONSHIP.

5. (U) DR. LUKITA FULLY SUPPORTS MCC EFFORTS TO SEEK A LEGISLATIVE
FIX WHICH WILL ALLOW A GRACE PERIOD FOR ADJUSTMENT. HE ALSO
EXPRESSED APPRECIATION FOR THE PLANNED NOVEMBER VISIT OF THE MCC
TEAM AS A SIGN OF CONTINUED MCC SUPPORT.

6. (U) ACTION REQUEST. VIA SEPTEL THE EMBASSY WILL PROVIDE DRAFT
PRESS GUIDANCE FOR WASHINGTON CLEARANCE FOR USE WHEN THE RATINGS ARE
RELEASED.

HUME

1

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