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Cablegate: U/S Burns's December 11, 2009 Meeting With

VZCZCXRO8794
PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #2069/01 3510913
ZNR UUUUU ZZH
P 170913Z DEC 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 4151
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 JAKARTA 002069

SENSITIVE
SIPDIS

DEPT FOR EAP, EAP/MTS, EAP/MLS, EAP/RSP
NSC FOR J.BADER

E.O. 12958: N/A
TAGS: PREL PGOV ECON EINV EAID OVIP BURNS WILLIAM ID
SUBJECT: U/S BURNS'S DECEMBER 11, 2009 MEETING WITH
INDONESIAN VICE PRESIDENT BOEDIONO

1. (SBU) December 11, 2009; 9:00 a.m.; Vice Presidential
Palace; Jakarta, Indonesia

2. (SBU) Participants:

U.S.
----
Under Secretary William Burns
Ambassador Cameron R. Hume, Embassy Jakarta
Scot Marciel, EAP Deputy Assistant Secretary of State
Ted Osius, Deputy Chief of Mission, Embassy Jakarta
Laura Rosenberger, Special Assistant
Peter Haas, Embassy Jakarta Economic Counselor (notetaker)

INDONESIA
---------
Vice President Boediono
Djohermansyah Djohan, Deputy for Political Affairs, Office of
the Vice President
Mohammed Ikshan, Deputy for Economic Affairs, Office of the
Vice President
Notetaker, Office of the Vice President

3. (SBU) Summary: Indonesian Vice President Boediono wants
concrete progress under the Comprehensive Partnership before
President Obama's planned 2010 visit. In a December 11
meeting with Under Secretary Bill Burns, VP Boediono
discussed how to advance our partnership on trade and
investment, a Millennium Challenge Account compact, climate
change, science and technology, and education. On domestic
matters, VP Boediono dismissed the Bank Century case as
political sniping. End Summary.

-----------------------
Concrete Actions Needed
-----------------------

4. (SBU) Vice President Boediono told Under Secretary Burns
that Indonesia wanted concrete progress on specific projects
under the Comprehensive Partnership in advance of President
Obama's likely visit in 2010. He and U/S Burns agreed that
we should seek to expand the range of our partnership in
trade and investment, education, health, environment, and
global issues. U/S Burns laid out several specific goals: the
signing of a Science and Technology Agreement within the next
two months; increasing the number of Indonesian students in
the U.S.; and joint work on land-use management and peat to
enable Indonesia to reduce its emissions. VP Boediono asked
for a list of pending issues that would benefit from his
involvement.

-----------------------------------
Direct Investment Crucial to Growth
-----------------------------------

5. (SBU) VP Boediono assessed that the Indonesian economy is
doing well but he wants to accelerate growth to seven percent
per annum. He said that Indonesia needs to attract $200
billion of investment, much of it foreign, in order to reach
its target growth rate. Indonesia's strengths are its
democratic institutions, huge domestic economy, and strong
economic leadership. VP Boediono acknowledged, however, that
poor transport and power infrastructure prevents Indonesia
from being considered on par with the BRICs. U/S Burns
suggested that the U.S. could look into both military and
civilian opportunities to cooperate to upgrade Indonesia's
infrastructure.

6. (SBU) U/S Burns said many U.S. firms are interested in
Indonesia, but the investment climate keeps them away. One
modest step that would help improve confidence of U.S.
companies would be an updated Overseas Private Investment
Corporation investment incentive agreement. He urged
conclusion of an updated OPIC agreement before President
Obama's visit. This would be a symbol to U.S. companies that
Indonesia wants their investment. Ambassador Hume explained
that two issues remain: the inclusion of a foreign government
approval clause and the definition of political risk. VP
Boediono pledged to look into the matter.

7. (SBU) U/S Burns informed VP Boediono that the Millennium
Challenge Corporation Board agreed the previous day to
reselect Indonesia as compact-eligible. He added, however,
that because Indonesia had graduated to lower middle income
status, it is imperative to move quickly towards a compact or
risk competing with other countries for fewer resources. U/S
Burns said Indonesia should develop concept papers for

JAKARTA 00002069 002 OF 002


possible projects over the next six months.

8. (SBU) VP Boediono underscored that Indonesia has the
potential to play a more important role internationally as a
member of the G-20. VP Boediono assessed, however, that
Indonesia was diplomatically punching below its economic
weight, and would need to do more in order to participate
more fully in the G-20 and other forums. U/S Burns pointed
out that the Comprehensive Partnership provided a mechanism
for increased bilateral consultations, including on the G-20.
Climate change is another global challenge where increased
U.S.-Indonesia cooperation would be important, and U/S Burns
praised Indonesia's very impressive targets, which send a
positive signal to others.

9. (SBU) U/S Burns noted the importance of education to
economic growth, and pointed to this as another area for
increased U.S.-Indonesia cooperation. VP Boediono agreed,
noting the important role that public libraries with books
translated from English had played in his own education. U/S
Burns noted that the digital age provided more opportunities
for such cooperation, and also urged increasing the
opportunities for Indonesians to study in the United States.
U/S Burns also noted that the Science and Technology
agreement under negotiation would serve both U.S. and
Indonesian interests. The MOU was very close to agreement,
and Burns urged finalizing it in the next two months.

-----------------
Political Sniping
-----------------

10. (SBU) There is still demand for ending corruption, and VP
Boediono noted that good governance was a key theme in
President Yudhoyono's and his campaign. He said that legal
reform will be central to the government's 100-day plan,
especially the elimination of the "legal mafia" -- people who
made money by fixing cases. Ambassador Hume said that the
U.S. provides support to all of the players in Indonesia's
anti-corruption efforts, including the Corruption Eradication
Commission, the National Police, the Attorney General's
office, the Supreme Court, and the financial intelligence
unit. VP Boediono admitted that the political instability
surrounding the Bank Century case could have a negative
impact on the economy. He characterized the case as
political sniping, concluding that he is ready to fight
charges of wrongdoing.

11. (U) U/S Burns has cleared this message.
HUME

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