[Congressional Record Volume 149, Number 145 (Thursday, October 16, 2003)]
[Senate]
[Pages S12726-S12730]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REPORT ON U.S.-INDONESIA RELATIONS
Mr. LUGAR. Mr. President, today I rise to commend to Senators the
Report of the National Commission on U.S.-Indonesian Relations issued
today by the United States-Indonesia Society. This report is the
culmination of more than one year of work by the Commission, whose co-
chairs are former Secretary of State George Shultz, my fellow Hoosier
and former Congressman Lee Hamilton, and George Russell, Chairman
Emeritus of the Frank Russell Company.
This report will be an important point of reference for members of
Congress and the public as a whole as the future course of Indonesia-
U.S. relations is debated. I, for one, believe that the significance of
Indonesia to Asia and to the world is often underappreciated. A
relatively new democracy, Indonesia is home to the world's largest
Muslim population and overall is the world's fourth most populous
nation. The U.S. trade deficit with Indonesia is decreasing. U.S.
exports of goods to Indonesia in 2002 were $2.6 billion, up 2.4 percent
from the previous year and U.S. imports from Indonesia were $9.6
billion, down 4.6 percent from 2001.
The Commission's report examines the U.S.-Indonesia relationship and
outlines policies and programs that ``will help strengthen the nation's
prospects for success.'' Education, democratization, economic growth
and security are areas for emphasis highlighted by the Commission.
The report goes into considerable detail about many aspects of life
inside Indonesia, citing the challenges and hopes of this fellow
democracy. For example, the report notes that the roles of the military
and police are changing, with the goal of the Indonesian government
being to make the police, rather than the military, fully responsible
for internal security.
Important reference is made to ongoing conflict in the province of
Aceh as well as unrest in Papua connected to issues surrounding the
special autonomy law. Of special significance to justice-seeking
citizens in the United States and Indonesia, the Commission highlighted
the need for a full and thorough investigation into the murder of an
Indonesian and two Americans, and the wounding of eight others in an
ambush last year near Timika in Papua.
My purpose today is not to concur in all of the report's findings,
but rather to recommend it to my colleagues as a helpful point of
reference in future deliberations by this body on a wide range of
issues regarding Indonesia.
Those Members interested in viewing the full report may contact the
United States--Indonesia Society for a copy. I conclude my remarks by
commending the ongoing work of Paul Cleveland, President of the United
States--Indonesia Society and Edward Masters, Co-Chair of the Society's
Board of Trustees for their tireless and outstanding commitment to
stronger Indonesia--U.S. relations.
I ask unanimous consent to print the Executive Summary in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
REPORT OF THE NATIONAL COMMISSION ON U.S.-INDONESIAN RELATIONS
Strengthening U.S. Relations With Indonesia: Toward a Partnership for
Human Resource Development
The National Commission on U.S.-Indonesian Relations
Honorable George P. Shultz, Co-Chairman--Thomas W. and
Susan B. Ford Distinguished Fellow, Hoover Institution,
Stanford
[[Page S12727]]
University; Honorable Lee Hamilton, Co-Chairman--Director,
The Woodrow Wilson International Center for Scholars; Mr.
George Russell, Co-Chairman--Chairman Emeritus, Russell
Investment Group; Honorable Edward Masters, Vice Chairman--
Co-Chair of the Board of Trustees, United States-Indonesia
Society; Admiral Dennis C. Blair--Senior Fellow, Institute
for Defense Analyses; Honorable Paul Cleveland--President,
United States-Indonesia Society; Dr. Richard J. Ellings--
President, The National Bureau of Asian Research; Professor
Donald K. Emmerson--Director, Southeast Asia Forum, Asia-
Pacific Research Center, Stanford University; Dr. Ellen L.
Frost--Visiting Fellow, Institute for International
Economics; and Professor R. William Liddle--Professor of
Political Science, Ohio State University.
Preface
This report is the culmination of more than one year of
effort by members of the National Commission on U.S.-
Indonesian Relations. We first assembled in September 2002 to
discuss increasingly evident and pressing concerns: that
Indonesia is a frontline state in the war on terrorism; that
it is in the midst of one of the most significant political
transitions and economic recoveries in its history; that,
despite its size and strategic location in Southeast Asia, it
is one of the least well-known or understood countries in the
United States; and that it would be enormously beneficial for
the U.S.-Indonesia bilateral relationship, which has become
strained in recent years, to move to a more balanced and
sustainable footing.
The members of the National Commission on U.S.-Indonesian
Relations represent a diverse range of backgrounds,
interests, and opinions from the worlds of policymaking and
diplomacy, the military, business, and academic. We were
charged with drafting a consensus report that reflects the
breadth of U.S. interests in Indonesia, of consulting widely
with current and former policymakers, and others, in
Washington and Jakarta, and of suggesting ways that the U.S.
Congress and Administration might move toward a relationship
which over the longer term will serve the interest of both
countries.
In our work, we have been supported by the hardworking
staff and representatives of the three institutions
sponsoring this initiative--the Asia-Pacific research Center
at Stanford University, The National Bureau of Asian
Research, and the United States-Indonesia Society--to whom we
offer our sincere appreciation. Thanks are also due to our
colleagues on the Commission, who gave freely of their time
and expertise, as well as for the valuable counsel of a large
number of Americans and Indonesians who contributed their
insights to this report. In particular, we wish to
acknowledge and commend the work of Edward Masters, former
U.S. Ambassador to Indonesia, Co-Chairman of USINDO, and Vice
Chairman of this Commission, who has expended great effort
over many months on the unenviable task of drafting a report
that reflects our general consensus of opinion.
Two final notes: First, although it reflects the views of
various public and private Indonesians with whom the general
concept of a ``partnership'' has been discussed, this report
is written from a U.S. standpoint. If the partnership concept
is formally accepted by the two governments, we hope this
report can serve as the basis for more detailed discussions
to ensure that both sides have an equal opportunity to
express their views, and that any programs adopted have the
full support of the two governments and relevant private
organizations.
Second, the National Commission and this report represent a
non-governmental effort to explore ways to improve relations
between the third and fourth most populous countries in the
world. In an international environment driven by the
challenges and opportunities of globalization and beset by
the problems of global terrorism, we are convinced that
strong and positive relations between the United States and
Indonesia are, and will remain, a key component of a
prosperous and peaceful future.
Executive Summary
Indonesia, the world's fourth most populous nation and
third largest democracy, is the pivotal state in Southeast
Asia. It has exercised major influence in the region and
plays an active and constructive international role. It has
vast natural resources and is strategically located astride
major lines of communication between the Pacific and Indian
Oceans. Half of the world's merchant fleet capacity passes
through straits with Indonesian territory on one or both
shores. Including its oil and mineral sectors, Indonesia is
home to about $25 billion in U.S. investment, with more than
300 major U.S. firms represented there.
Two additional factors are of particular importance today:
Indonesia has the world's largest Muslim population--more
than all the Middle Eastern Arab states combined. The vast
majority of Indonesia's Muslims have historically been noted
for their moderation. Theirs is one of the few Muslim-
majority nations in which Islam is not the state religion;
and given its size and importance, Indonesia is critical to
stability in Southeast Asia. It has been the anchor of the
Association of Southeast Asian Nations (ASEAN) and a key
player in the ASEAN Regional Forum, the only organization in
the Asia-Pacific region that brings the United States
together with Japan, China, ASEAN and others to discuss
security issues.
Today Indonesia faces major faces major problems: a
difficult transition from authoritarian rule to democracy;
slow economic growth combined with inadequate job creation;
capital outflow; endemic corruption; ethnic and sectarian
violence; a weak judiciary; and a serious threat from
domestic and international terrorists. The October 12, 2002
bombings in Bali were the most grievous instance of terrorism
since the September 2001 attacks on the United States. The
carnage in Bali was a wake-up call for Indonesians and their
government, and Indonesia joined the fight against terrorism.
Local police arrested more than 90 suspected terrorists, but
more are still at large as shown by the August 5, 2003 attack
on the J.W. Marriott Hotel in the heart of the capital city
Jakarta. Fourteen people (all but one were Indonesians) died
as a result of that attack and 150 were injured.
There are continuing problems, but the news from Indonesia
has not by any means been all bad. Since 1999 the country has
had a free and fair national election and two peaceful
presidential successions. Its media are among the most free
in Southeast Asia. Civil society is flourishing, and more
than 5,000 non-governmental organizations are active
across a broad range of sectors. Constitutional reform and
decentralization have made the government less top-down.
For the first time, beginning in 2004, the president and
vice president will be directly elected. In this process
of reform, the leaders of major Muslim organizations have
played a constructive role in defining relations between
religion and the state. The ceasefire agreement in Aceh
has failed, but those between hostile ethno-religious
groups in the eastern islands are holding. And the
Indonesian economy, despite its vulnerabilities, has
stabilized in important respects.
The country is now at a critical juncture in its democratic
transition and economic recovery. This is therefore an
opportune time for the United States to rethink its approach
to Indonesia. A failure of democracy there would hurt not
only Indonesians. It would reinforce the stereotype that a
Muslim-majority nation cannot manage a democratic system.
Given the size and importance of Indonesia, we believe that
success of that nation's democracy would not only provide a
better life for its people but also reduce vulnerabilities to
radicalism and have an impact beyond Indonesia's borders.
For these multiple reasons, the National Commission on
U.S.-Indonesian Relations recommends that the United States
and Indonesia enter into a ``Partnership for Human Resource
Development'' in which the two nations pledge to work
together on joint programs to promote in Indonesia an
effective democracy, sustainable development, and the rule of
law. The idea of a formal partnership is new to this
important bilateral relationship. We believe this concept is
essential to increase the prospects for success and to ensure
that both nations buy into these programs and are committed
to make them succeed. In other words, that both accept
ownership.
Events in the coming five years, including national
elections in 2004 and their consequences, will determine the
fate of Indonesia's democracy and the nature of the new
leadership generation expected to emerge before the following
elections in 2009. Accordingly, we recommend that the United
States pledge $200 million annually in additional assistance
funds to this partnership during this five-year period. The
Commission believes that Indonesia would be a good candidate
for funding under the Millennium Challenge Account. Whatever
the source, it is important that these be add-on funds that
do not disrupt important ongoing assistance programs.
These additional funds would be used to strengthen existing
programs and initiate new programs in four critical fields:
1. Education--work with Indonesian officials to strengthen
the nation's educational system at all levels, including
Islamic schools, and rebuild ties with U.S. educational
institutions. Before the fall of Suharto, Indonesia's
experience with democratic systems and practices was limited
to a few years in the 1950s, so that most Indonesians living
today have had no direct experience with democracy. As a
result, Indonesia's democracy must be built from the ground
up. A key prerequisite for success is an informed electorate.
Education is the key to success and is also essential to give
greater depth to the management level in virtually all
sectors. We therefore attach special importance to education
and urge prompt, large-scale U.S. support.
2. Democratization--improve governance, speed and deepen
legal reform, strengthen parliament and the electoral system,
and help ensure the effectiveness of decentralization.
3. Economic Growth--improve the investment climate,
strengthen Indonesia's private sector, expand trade,
facilitate the resumption of full debt servicing.
4. Security--strengthen the police and, when practicable,
resume carefully crafted military education programs that
will strengthen those elements willing to promote reform.
In addition to these funding priorities, ongoing U.S.
assistance for emergency relief and improved health should be
continued. Bolstering the ethical rationale for such support
is the contribution it can make to reducing hardship and thus
limiting the grievances that can be used to incite cycles of
violence and repression.
Indonesia today offers a unique but temporary window of
opportunity for the United
[[Page S12728]]
States to help this nation of 230 million people build an
effective democracy based on a civil society and a market
economy under the rule of law. The time to rise to the
occasion is now.
Strengthing U.S. Relations With Indonesia: Toward a Partnership for
Human Resource Development
introduction
Congressman Jim Leach, head of the East Asia Subcommittee
in the House of Representatives International Relations
Committee, said in a 2001 Congressional hearing that ``there
is no country in the world of such vital importance that is
less understood than Indonesia.'' He went on to say that ``it
is strongly in the interest of America and the world for
Indonesia to succeed.'' As members of the National Commission
on U.S.-Indonesian Relations, we share this view.
This important nation of 220 million people, occupying some
of the world's most strategic real estate, faces formidable
problems: a complicated political transition which has
produced three governments in as many years; complex and
politically sensitive economic problems left from the 1997-98
financial crisis; ethnic and religious strife resulting in
thousands of deaths and hundreds of thousands of displaced
persons; continued armed rebellion in Aceh and Papau; and a
significant increase in violence by radical Muslims. The
October 2002 bombing in Bali, in which more than 200 people
were killed, was the most serious terrorist attack worldwide
since the September 11, 2001 attacks on the United States. To
show their continuing capability, Indonesian militants
attacked the J.W. Marriott Hotel in Jakarta in early August
2003 resulting in 14 deaths and 150 injured.
In coping with these problems, Indonesia is handicapped by
the legacy of more than 40 years of authoritarian rule--weak
institutions and poor administrative capabilities.
Nonetheless, the nation has made important progress. It has
shown a commitment to openness, development, political
stability, economic reform, and, since the Bali bombings, to
rooting out terrorists. This progress, the remaining
challenges, the stakes for U.S. national interests, and our
recommendations for U.S. policymakers are outlined in this
report.
Our broad conclusion is that the United States and
Indonesia should enter into a ``partnership'' to strengthen
Indonesia's fragile democracy, reduce the problems that lead
to radicalism, and improve this important bilateral
relationship. The basic development decisions must be made by
the Indonesians themselves, but U.S. assistance can be
critical to their success. Under the partnership the two
nations can work together on programs where their national
interests converge. This will enable U.S. policymakers to
recognize Indonesia's priorities, understand what the
Indonesians are willing to do, determine how the United
States might best assist, and monitor progress. The
partnership will also give Indonesia ``ownership'' of the
agreed programs and ensure that these programs have the
full support of both governments.
We believe there are few better investments for the United
States at this critical time than to help strengthen
democratic behavior and institutions in the world's largest
Muslim-majority nation and one which is striving to build a
viable democracy. The price of failure would be serious for
Indonesia, for the region, for the Muslim world, and, not
least, for the United States.
u.s.-indonesian relations in perspective
Why is Indonesia important to the United States?
Indonesia is the pivotal state in Southeast Asia. The
world's fifteenth largest and fourth most populous nation, it
exercises strong influence in Southeast Asia and plays a
constructive international role. It has huge natural
resources and a strategic location astride major sea lines of
communication--half of the world's merchant fleet capacity
passes through the Straits of Malacca, Sunda, and Lombok.
Including the oil and mineral sectors, Indonesia is home to
an estimated $25 billion in U.S. investment, with more than
300 major U.S. firms represented in the country.
There are two additional factors of great importance today:
Indonesia has by far the world's largest Muslim population,
and historically Indonesia's Muslims have been noted for
their moderation. It has the two largest Muslim social and
educational organizations in the world--the Nahdlatul Ulama
and Muhammadiyah--each of which is moderate and has more than
30 million members. Indonesia is one of the very few Muslim-
majority nations in which Islam is not the state religion.
Indonesian Islamic scholars have had a moderating impact on
debate within the Muslim world on the relationship between
religion and the state. This influence will be enhanced if
Indonesia succeeds in its efforts to develop a viable and
nonsectarian democratic system; and a stable and responsible
Indonesia is critical to regional stability. It is the anchor
of the Association of Southeast Asian Nations (ASEAN) and a
key player in the ASEAN Regional Forum (ARF), the only
organization in the Asia-Pacific region that brings the
United States together with Japan, China, the ASEAN nations,
and others to discuss security issues. The cohesion and
effectiveness of ASEAN have eroded significantly due to
Indonesia's preoccupation with domestic crises. Instability
in Southeast Asia has already provided openings for Islamic
radicalism.
In short, an unstable, hostile or unpredictable Indonesia
would adversely affect U.S. interests and objectives, tilt
the international balance toward radical Islam, complicate
transit through strategic sea and air routes, hamper efforts
to combat piracy and drug trafficking, and weaken a
potentially constructive regional counterpoint to China.
What is the current U.S.-Indonesian relationship?
U.S. relations with Indonesia have been close for much of
the country's history. The United States played an important
and supportive role in Indonesia's transition to
independence, and the country was a reliable strategic
partner from the mid-1960s through the end of the Cold War.
Bilateral relations suffered during the late 1950s when the
United States intervened in domestic strife in Indonesia and
during the post-Suharto transition, which saw three
presidents in as many years. Although relations are generally
good today, there are negative undercurrents stemming from
differing demands and expectations over the war in Iraq and
its aftermath, priorities in the war on terrorism, and the
most appropriate steps in Indonesia's democratic transition.
Since September 11, 2001, U.S. strategic priorities have
been driven by the demands of the war on terrorism.
Washington was frustrated through much of 2002 by the limited
extent of Jakarta's commitment to support this war in
Southeast Asia and the reluctance of many Indonesians to
recognize that terrorism was an urgent internal problem. Such
frustrations were not unique to the U.S.-Indonesian
relationship, but similarly affected Jakarta's relations with
its neighbors in Southeast Asia.
The initial reaction of many Indonesians to the Bali
terrorist attacks of October 12, 2002, was that their
countrymen were incapable of such a horrible act. Some blamed
outsiders, including the CIA, which was accused of
precipitating the bombings in an effort to draw Indonesia
into the war on terrorism. The well-conducted police
investigation into the bombings and their aftermath (which by
mid-September 2003 had led to the arrest of more than 90
suspected Indonesian terrorists) clearly showed that
terrorism is an Indonesian as well as an American problem.
The August 5, 2003 attack on the J.W. Marriott Hotel in
Jakarta by an Indonesian terrorist drove home the point.
Thirteen Indonesians and one foreigner were killed and 150
people were injured in this noon-time car bomb attack on a
hotel in Indonesia's financial district known to be
frequented by Americans. The Indonesian reaction was one of
shock and anger perhaps even greater than the earlier
terrorist attack in distant Bali. The two largest Muslim
social and educational organizations in Indonesia, the
Nahdlatul Ulama and Muhammadiyah, promptly issued a joint
statement strongly condemning this ``heinous, ruthless and
uncivilized crime against humanity'' and called it an action
which ``belies religious values.'' The two organizations
called on the government to ``further strengthen the capacity
of security officials'' to combat terrorism. These themes
were also echoed in the press. Like the Bali attack, this
terrorist act was carried out by Indonesians, probably,
according to government officials, with encouragement and
support from the regional terrorist organization Jemaah
Islamiyah.
Indonesia's growing awareness of the problem and its
increased cooperation with U.S. and regional security
counterparts, plus the willingness of moderate Muslims
to speak out against radical extremists, have helped
improve bilateral relations. Improved communications
between the U.S. embassy and the Indonesian government are
also helping, as is the fact that the U.S. ambassador is
successfully developing contacts with a broad cross-
section of opinion leaders, including more traditional
Muslim elements.
Despite such progress, there are at least two notable areas
where significant problems in the relationship remain: The
August 2002 murder of two Americans and an Indonesian working
for a U.S. company in an ambush near Timika in Papua is a
major issue. The Indonesian police have implicated military
elements in the attack. The long-running investigation into
this deplorable incident, in which US FBI agents have
participated, has not led to any charges or prosecutions.
This will plague the relationship until a credible
investigation is completed and appropriate follow-on actions
are taken; and this incident is symptomatic of broader U.S.
concerns on acountability--a problem that requires special
attention. The Leahy Amendment and various U.S. policy
statements stress the need for accountability by senior
Indonesian military and police officers for human rights
abuses in East Timor and elsewhere. The amendment bans U.S.
military education and training programs (IMET) for
Indonesian officers until there is an accounting for these
actions. A small IMET program was included in the 2003
Defense Department budget, which is not subject to the Leahy
Amendment, but there were indications in September 2003 that
these funds would not be used because of continued concern
over the slow pace of the Timika investigation.
The war in Iraq led to large demonstrations against the
United States and official and private criticism, but
government authorities took strong measures to prevent
outbreaks of violence. President Megawati, while criticizing
the coalition's lack of UN
[[Page S12729]]
support, stressed that this U.S. action did not represent an
attack on Islam. Indonesians can be expected to continue to
watch developments in Iraq closely, but unless large-scale
fighting resumes or there is a prolonged and difficult direct
U.S. occupation, we do not expect this to become a major
issue in the bilateral relationship. Indonesians have in the
past complained about a perceived ``lack of balance'' in the
Middle East policy of the United States. They hope that, with
the end of the Saddam Hussein regime, the United States will
take a more active role in resolving basic problems in the
Middle East, particularly the plight of the Palestinians, and
that the U.S. government will strongly pursue implementation
of the ``roadmap.''
Other sticking points in the relationship from the
Indonesian perspective include: The January 16, 2003
announcement that Indonesia had been added to the list of
nations whose males over 16 visiting the United States must
register with the Immigration and Naturalization Service and
be fingerprinted and photographed. Indonesians see this as
further evidence of religious profiling by the United States.
They also object strongly to what they see as the failure of
the U.S. government adequately to discuss the matter before
the rules were published in the Federal Register. This is
likely to be a continuing source of friction which will
discourage travel to the United States by students,
business representatives, and others, and add fuel to
anti-American sentiment; and Indonesian perceptions of
U.S. ``unilateralism'' and ``bellicosity.'' While
agreement with many U.S. criticisms of the problems facing
Indonesia, Indonesians resent what they see as America's
heavy-handed style and its demands that Indonesia must
take certain actions. One well-informed American scholar
has said the United States should ``demustify'' its
approach. It is important that the United States work with
the Indonesians to identify problems and agree on
approaches to solve those problems. A joint approach is
likely to be more effective than public exhortations or
the imposition of sanctions.
Top Indonesian officials have expressed deep appreciation
for quiet U.S. assistance in working out the Aceh ceasefire
in December 2002. Unfortunately, that agreement has not held
and fighting has resumed. Nonetheless, we believe that Aceh
should continue to have a high priority for the United
States, and that the U.S. government should be prepared to
offer additional help in ending the violence if this is
requested by the Indonesians. Similarly, recognizing that
responsibility for Papua lies with the Indonesian government,
we recommend that the United States also assist in reducing
tensions and violence in that area.
Why do we need to rethink U.S.-Indonesian relations now?
We hear a great deal about Indonesia's continuing problems
but much less about the real progress that has been achieved
during the past several years. This progress provides a good
base for expanded U.S. assistance in areas where Indonesia
wants and can effectively use our help to consolidate the
gains already made and to strengthen the base for democracy
and continued economic growth. The Commission sees
encouraging progress in five important areas:
The nation had a free and fair national election in 1999
and peaceful political transitions in 1999 and 2001. Many key
elements necessary for a successfully democratic system are
in place--an active and independent legislature, a
functioning party system, a free and active press, and a
growing civil society.
Constitutional reform has gone much further than most
observers anticipated. Sovereignty for the first time is
vested in the people, a system of checks and balances has
been introduced, appointed seats for the military in elected
bodies will be eliminated at the time of the 2004 elections,
and in these elections the president and vice president will
for the first time be directly elected. A new Regional
Representative Council has been created to advance the
interests of the provinces, and a new Constitutional Court
and a Judicial Commission have been formed to strengthen the
legal structure.
Indonesia's decentralization--the largest in history--
transferred many central powers and two million civil
servants to some 400 local districts and towns on January 1,
2001. Despite initial misgivings, the process has gone
reasonably well, and some of the concerns about the potential
problems--increased corruption, double taxation--have proved
to be exaggerated. Moreover, while the process is still in
its early stages, there are already sign in some areas of
grassroots democracy and local leadership.
Macroeconomic conditions have improved significantly. The
rupiah is relatively stable, interest rates are down to
manageable levels, monetary policy is sound, the banking
system has been strengthened, asset recovery is proceeding,
and inflation has fallen from 80 percent at the peak of the
financial crisis to less than 10 percent. There has also been
progress in reducing the debt ratio, which is down from 102
percent of GDP in 1999 to 67 percent in late 2003 according
to Indonesian official sources. Per capita income is
approaching 1997 pre-crisis levels, and the 13 percent of the
population living in absolute poverty, while still excessive,
is less than half the level in 1998. Citing ``good progress''
in June 2003, the IMF announced a further release of $486
million, raising the amount released under the Extended Fund
Facility arrangement to about $4 billion out of the $5
billion total.
The government moved quickly after the Bali bombings to
revise internal security regulations to give the authorities
greater flexibility in moving against suspected terrorists.
The police, who welcomed support from Australia, the United
States and others, have arrested more than 90 Indonesians
suspected of complicity in terrorist activities, and
international cooperation is continuing following the
Marriott Hotel attack.
In short, Indonesia has made progress and is now at a
critical juncture in its democratic transition and economic
recovery. This is an opportune time for the United States to
rethink its approach to the relationship. If the democratic
transition is unsuccessful, Indonesia's political situation
will become less predictable, with increased risk of
exaggerated nationalism and/or Muslim radicalism. Less
likely, although impossible to discount, is a return to
authoritarian rule.
Such negative scenarios are by no means inevitable, and it
is therefore important for the United States to identify
policies and programs that will help strengthen the nation's
prospects for success. As members of the National Commission
on U.S.-Indonesian Relations, we see a need for broad,
consistent U.S. engagement with Indonesia in four priority
areas (while anticipating that the significant U.S. health
and humanitarian assistance programs will continue):
Education. Underlying all other areas is the urgent need to
help develop Indonesia's poorly functioning educational
system and significantly expand the pool of trained
administrators. This is an essential underpinning for a
successful democracy and for continued domestic economic and
social reform. Support for education was an important
component of U.S. policy in the 1960s and it made a major
contribution to Indonesia's rapid economic growth in the
1970s and 1980s. It is now time for a similar effort to
strengthen the country's democratization programs and
administrative capabilities.
Democratization. The United States is well placed to assist
Indonesia in its efforts to strengthen the electoral system,
improve civil governance, pursue legal reform, and extend
decentralization. Helping to ensure the emergency of
Indonesia as a democratic, moderate, Muslim-majority state
directly serves the long-term national interests of the
United States.
Economic growth. There are a variety of measures that the
U.S. government could undertake to alleviate Indonesia's
financial burden, help improve the climate for investment and
trade, and facilitate economic recovery. Encouraging a
resumption of foreign investment will be a major boost to
Indonesia's economy and contribute to social and political
stability.
Security. The United States can help improve the Indonesian
authorities' capabilities to guarantee security through
education for the police and, when conditions are
appropriate, for the military. Doing so will help reduce
abuses and will also contribute to social and political
stability, improve the investment climate, and coincide with
U.S. strategic objectives in the war on terrorism.
The Joint Statement issued by Presidents Bush and Megawati
following the Indonesian president's September 19, 2001 visit
to Washington provides a good basis for future relations
between the two nations. President Bush ``expressed his
conviction that Indonesia's transition to democracy is one of
the most significant developments of this era . . . [and] he
pledged his support for President Megawati's efforts to build
a stable, united, democratic and prosperous Indonesia.'' He
announced that the United States, in the ``spirit of their
shared commitment to promote reform and professionalization
of the military . . . would lift its embargo on commercial
sales of non-lethal defense articles for Indonesia'' subject
to the usual case-by-case review. The two presidents also
noted ``the importance of open markets and expanded trade for
economic growth . . . . ''
For her part, President Megawati ``condemned the barbaric
and indiscriminate acts'' of September 11 and ``pledged to
cooperate with the international community in combating
terrorism.'' She also ``reaffirmed her determination to
pursue a multidimensional approach'' to separatism in Aceh
and Papua and ``underscored her determination to improve
Indonesia's investment climate'' by ``strengthening the rule
of law, resolving outstanding investment disputes, and
protecting investors' assets and property.''
the partnership for human resource development
Ensuring a successful transition to democracy, stability,
and growth in Indonesia is not something that the United
States can do. The basic parameters must be set by Indonesia,
and the programs must be those with high priority for them as
well as for the United States. Open communication and regular
consultations are central to this. To ensure that both
countries are in full agreement on the course ahead, we
recommend creation of a formal coordinating mechanism to
facilitate dialogue on the wide range of concerns in the
bilateral relationship and to guide programs in the priority
areas outlined above. This mechanism--which might be
[[Page S12730]]
termed a ``Partnership for Human Resource Development''--
would be a standing body of senior officials from both
nations which would meet at least once a year, alternating
between the two capitals. The basic purpose would be to
ensure that both countries accept ``ownership'' of the agreed
programs and understand their responsibilities.
Membership in the partnership on the U.S. government side
should come from the Departments of State, Treasury, Defense,
Commerce, USAID, USTR, Members of Congress or their staff,
and other appropriate agencies. Specialists could be brought
in as needed on specific issues. Indonesian representation
should be comparable. To ensure that the designated members
participate fully and actively, we suggest participation not
be at the cabinet level but perhaps at the deputy assistant
secretary level, but the actual level should be set by the
two governments.
It has been suggested that the private sector also be
included in the partnership. To avoid the group becoming
unwieldy and the need to make difficult choices regarding
participation, we suggest that permanent private membership
in the partnership be limited to several broad organizations
focusing on the bilateral relationship such as the American
Chamber of Commerce in Jakarta, the Indonesia Committee of
the U.S.--ASEAN Business Council, the American-Indonesian
Chamber of Commerce in New York, and the United States-
Indonesia Society. The Indonesian side may wish to invite
participation by a similar Indonesian organization or
organizations. As issues requiring additional expertise
arise, other private sector representatives (teachers,
lawyers, NGO members and others) could be invited to
participate in partnership meetings on a case-by-case basis.
We do not envisage the creation of a large bureaucracy, but
we suggest it would be useful to have several working groups,
located in Jakarta, to handle day-to-day liaison. These might
include working groups on: civil governance and legal reform;
trade and investment; education and public affairs; military
relations; and police programs. USAID and the public
diplomacy section of the U.S. embassy could provide
leadership and continuity to these groups.
If the United States agrees to pursue such a partnership,
it should be aware of three basic factors:
1. Fixing Indonesia's problems will take many years. In
most cases it is not a matter of simply repairing something
which is broken. Many of Indonesia's problems go back to the
country's independence. The Indonesian military has been
engaged in politics, civilian activities, and independent
fund raising since the early days of the republic. Except
possibly for a few years in the 1950s, the nation has
never had an honest or credible legal or court system. The
bureaucracy has been inefficient from the start and there
has always been corruption, although it reached new
heights under Suharto. Knowledgeable Indonesians estimate
that it will take 10 to 15 years to get the military and
the legal system on track. We agree.
2. What the United States can do directly is limited. Many
of the basic reforms will have to come from within Indonesia,
and this underscores the need for a partnership. U.S.
exhortations, threats, and penalties are of minimal effect
and can be counter-productive. What the United States can do,
and do very well, is to train, encourage and support
Indonesians who can reform from within. This underscores our
strong emphasis in this report on education.
3. Indonesians are in a state of heightened sensitivity at
present because of what they view as U.S. ``unilateralism,''
``arrogance,'' and a tendency to lecture or threaten others.
They resent Congressional restrictions and demands that they
``must'' take certain actions. It is important that the
United States consider the public diplomacy aspects of all
bilateral assistance programs.
Monitoring arrangements. As we are recommending a
substantial increase in the American commitment to Indonesia,
so too should Indonesia demonstrate its commitment to
internal reform and partnership with the United States in
order to ensure maximum effectiveness of the additional U.S.
assistance. As the details of U.S. assistance are worked out,
we believe benchmarks should be established by the
partnership to provide for verification of progress. The
``Partnership for Human Resource Development'' can serve as a
forum for Americans and Indonesians to evaluate the progress
of the various programs and identify areas of success or
underperformance.
conclusions
Indonesia faces three critical challenges: (1) It is
striving to consolidate a fragile democratic system with
little experience and limited resources. If it fails it could
revert to authoritarianism or chaos. Some Indonesians already
speak nostalgically of the stability and economic progress of
the Suharto era; (2) Moderate Muslims, still a substantial
majority, are under challenge from a radical fringe which has
grown significantly during the past five years. The goal of
the radicals is to capitalize on domestic vulnerabilities and
international issues to win over or intimidate the moderate
majority; (3) The nation is striving, in the face of rising
economic nationalism, to work its way out of the economic
mess left by the Suharto regime. The outcome of these three
contests will be crucial to the future of Southeast Asia and
U.S. relations with the region.
The National Commission on U.S.-Indonesian Relations
recommends that the United States enter into a five-year
``Partnership for Human Resource Development'' with Indonesia
in which the two nations agree to work together in the
following areas:
We strongly believe that our top priority should be to help
Indonesia in the field of education. We need urgently to help
train the trainers and reformers. We leave to experts on both
sides to work out specific programs, but we favor a major
effort to help improve Indonesia's educational system and
expand opportunities for education and training in Indonesia
and the United States.
The United States should support expanded programs for
legal reform.
The two nations should explore ways in which the United
States could help strengthen the Indonesian parliament,
including the establishment of cooperative arrangements with
the U.S. Congress.
The United States and Indonesia should cooperate on
programs to strengthen Indonesia's administrative services
through support to Indonesia's civil service and other
bodies.
The United States should initiate discussions with other
major donors to encourage the World Bank and the Asian
Development Bank to increase fast-disbursing loans tied
primarily to macroeconomic performance rather than to
structural reforms.
The United States should work with Indonesia to reduce
obstacles to foreign direct investment and, by offering
technical assistance and lowering barriers to key Indonesian
products, help Indonesia expand its exports to the United
States. It should press other developed countries to do the
same.
Indonesia, with U.S. cooperation, should revive the U.S.-
Indonesia Energy Dialogue and other forums that will
strengthen cooperation between the private sectors in the two
countries.
Working with Indonesian counterparts, the United States
should expand support for the Indonesian police, with
particular emphasis on education and training, and the
establishment of long-term institutional relationships.
The United States should set aside plans to resume the
International Military Education and Training program for
Indonesia until the political climate is more conducive on
both sides. The government should, however, continue to be
alert to ways to expand contacts with the TNI in order to
reduce its isolation.
If Indonesia wants U.S. help, the United States should
provide appropriate assistance and support in seeking
peaceful settlements in disputed or troubled areas.
U.S. public affairs should be significantly expanded to
create additional opportunities for information and cultural
programs.
The United States should take all possible measures to
reduce the delay in issuing visas for Indonesian students,
business representatives, scholars, and others with
legitimate reasons to visit the United States.
The Commission sees this new relationship as a partnership
and hopes accordingly that the Indonesian government, for its
part, will take steps to make these programs successful.
The Commission commends the U.S. embassy and USAID in
Jakarta and Washington for the excellent programs underway to
strengthen civil governance, decentralization, and the
electoral system. A good base has been built and the
Commission recommends that these programs be expanded and
augmented as noted in this report.
The Commission also recognizes and commends the efforts of
the U.S. diplomatic mission to broaden the mission's contacts
with political, media, religious and other leaders. We
congratulate the ambassador in particular for his efforts to
open dialogue with Muslim leaders, an area that has been
neglected. These programs are of increasing importance in
these difficult times, and the Commission calls on the U.S.
government to provide full support.
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