[Congressional Record (Bound Edition), Volume 149 (2003), Part 19]
[Extensions of Remarks]
[Pages 27115-27116]
[From the U.S. Government Publishing Office, www.gpo.gov]




       REPORT OF NATIONAL COMMISSION ON U.S.-INDONESIAN RELATIONS

                                 ______
                                 

                          HON. EARL BLUMENAUER

                               of oregon

                    in the house of representatives

                       Tuesday, November 4, 2003

  Mr. BLUMENAUER. Mr. Speaker, recently, the National Commission on 
U.S.-Indonesian Relations released a report that focuses on how to 
create a long-term, strong relationship between the two nations, and 
why that is important for the United States.
  The report, which was the work of a combined group of academics, 
former diplomats, and business people took a year to research and 
write. Indonesia is an important country for the United States due to 
its strategic location in Asia and because much of the world's sea 
borne commerce passes through or next to Indonesian territory. It is 
active in forums, such as Asia-Pacific Economic Cooperation, where 
other key nations such as China, Japan and Korea are active. Finally, 
it is the world's fourth most populous nation and the world's largest 
Muslim nation.
  Indonesia is also important for the United States because it is a 
democracy striving to strengthen itself in the face of growing Islamic 
fundamentalism. If the United States cannot help Indonesia move further 
down the path toward democracy, we stand little chance of helping other 
Muslim nations do the same, a goal that is so crucial in our global 
fight against terrorism.
  The key finding of the Commission is a simple one--the United States 
and Indonesia can best help each other by creating a new partnership, 
one that the Commission calls a ``Partnership for Human Resource 
Development.'' From the U.S. perspective, this means investing in 
Indonesian education, democracy building, economic growth and security.
  I also believe the United States can play a critical role in helping 
Indonesia handle its massive urbanization trend and the infrastructure, 
health, and environmental challenges that result. There are now 50 
cities in Indonesia with a population of at least 100,000, with eight 
of these cities in excess of a million residents.
  Our relationship with Indonesia will continue to play a critical role 
in Southeast Asia and the world. The National Commission's report is 
worthy of our review and action. I commend the work of the Commission 
and I urge my colleagues to read the report. I ask that the Executive 
Summary of it be included with my remarks.

                           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.
       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 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

[[Page 27116]]

     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 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.

                          ____________________