US embassy cable - 04JAKARTA8872

S E C R E T  JAKARTA 008872 
 
 
E.O. 12958: DECL: 09/21/2014 
TAGS: PGOV, PREL, PHUM, KDEM, KISL, ID 
SUBJECT: THE TASKS AHEAD FOR YUDHOYONO 
 
REF: A. JAKARTA 8399 (YUDHOYONO'S ASSOCIATES) 
     B. JAKARTA 7130 (YUDHOYONO AND THE USG) 
     C. JAKARTA 6801 (YUDHOYONO'S ABILITY TO GOVERN) 
     D. JAKARTA 5207 (YUDHOYONO ON ELECTION) 
     E. JAKARTA 5072 (INTRIGUE AT BAPETEN) 
 
Classified By: Political Officer David R. Greenberg, reason: 
1.4 (b) and (d). 
 
1. (C) Susilo Bambang Yudhoyono's projected win in the 
September 20 presidential runoff marks a resounding victory 
for Indonesian democracy.  The challenger defeated a 
President who had forged an alliance with Indonesia's oldest 
and largest political parties, while credible reports 
indicated the government bureaucracy would pull out all the 
stops for the incumbent.  We attribute Yudhoyono's victory to 
three main factors: Indonesian dissatisfaction with the 
status quo; Yudhoyono's personal popularity; and the free and 
fair nature of the electoral process -- something few here 
take for granted. 
 
2. (S) Yudhoyono will have little time to revel in his 
victory, however.  He has only a few weeks to form a cabinet. 
 A near-term revamping of the leadership of Yudhoyono's 
Democratic Party (PD) appears likely.  Yudhoyono also likely 
will devote some attention to upcoming congresses in other 
political parties, which could set the tone for his relations 
with the legislative branch for the next five years.  The 
Ambassador had a productive discussion of governance issues 
with Yudhoyono in June, and we are confident he shares many 
of our priorities.  End Summary. 
 
A TRIUMPH FOR DEMOCRACY 
----------------------- 
 
3. (U) In February and early March of this year, under 10 
percent of the public identified Yudhoyono as the best 
candidate for President, according to credible International 
Foundation for Election Systems (IFES) polling.  He placed 
slightly behind President Megawati and People's Consultative 
Assembly (MPR) Chairman Amien Rais.  However, Yudhoyono 
quickly acquired momentum in the polls after he resigned his 
position as Coordinating Minister for Political and Security 
Affairs, following a public spat with First Gentleman Taufik 
Kiemas.  IFES found Yudhoyono easily surpassing Megawati in 
late March, then breaking far from the pack of other 
candidates with over 30 percent support in mid-April. 
 
4. (U) After the first-round presidential election, Megawati 
assembled a coalition that included Indonesia's oldest and 
largest parties, teaming her Indonesian Democratic Party - 
Struggle (PDI-P) with Golkar, the United Development Party 
(PPP) and other small parties, which together represented a 
majority of the popular vote in the April legislative 
election.  Two large parties -- the National Awakening Party 
(PKB) and National Mandate Party (PAN) -- adopted formally 
neutral positions.  Yudhoyono wound up formally supported by 
only four parties represented in the 2004-2009 parliament: 
his own Democratic Party, formed from scratch only two years 
ago; the Crescent Moon and Star Party (PBB); the Prosperous 
Justice Party (PKS); and the Indonesian Justice and Unity 
Party (PKPI).  Together, these four parties -- none of which 
existed in any form before 1999 -- will hold just over 20 
percent of the seats in parliament.  Yudhoyono's coalition 
looked like an awkward alliance, given the diverse 
ideological positions of the parties and prior friction 
between the two staunchly Islamist members, PKS and PBB. 
 
5. (C) With a hierarchical culture and a modern history of 
authoritarian rule, even many sophisticated Indonesians 
believed political party machinery would prove important, if 
not decisive, in the presidential runoff.  While internal 
divisions surfaced in the parties backing Megawati, it 
appeared that the wealth and power of the First Family could 
compensate.  Megawati's control over the government apparatus 
-- particularly the Ministry of Home Affairs, state-owned 
enterprises, the Police, and the State Intelligence Agency 
(BIN) -- worried Yudhoyono's camp, especially as National 
Police Chief Da'i Bachtiar and BIN Chief Hendropriyono 
appeared increasingly partisan. 
 
6. (C) Yudhoyono's victory thus appears as a remarkable 
triumph of a popular, articulate figure against a rival with 
more power, money, and connections.  His exposure as a member 
of Megawati's and Abdurrahman Wahid's cabinets provided a 
base for his popularity.  And yet the ruckus surrounding his 
resignation, and his emphasis on appealing directly to the 
voters instead of simply courting politicians, gave him the 
aura of an outsider and underdog.  With credible polling 
showing a clear majority of Indonesians felt dissatisfied 
with the status quo, Yudhoyono became the most viable 
alternative to Megawati. 
 
7. (C) Yudhoyono could not have won, however, without the 
systemic reforms that took place from 1999 until 2003, as the 
MPR amended the Constitution to provide for the citizenry's 
direct election of the President (instead of election by the 
MPR), and the House of Representatives passed 
government-drafted election laws that strengthened the 
independence of the General Election Commission (KPU). 
Ironically, while our contacts told us Megawati's camp would 
stop at nothing to ensure the incumbent's reelection, the 
mechanisms that Megawati herself helped to establish may have 
deterred or frustrated the more ruthless efforts.  (Note: 
Megawati, whose party won a plurality in 1999, had to settle 
for the Vice Presidency after her rivals outmaneuvered her in 
the MPR.  When the MPR redesigned the election system, 
Megawati surely felt this would work to her advantage, 
although we do not begrudge her credit for reform-mindedness 
as well.  End Note.) 
 
A CABINET MOSTLY COMPOSED OF PROFESSIONALS 
------------------------------------------ 
 
8. (C) Yudhoyono faces immediate pressure to select a 
cabinet.  He indicated publicly on September 20 that he would 
wait until after a formal KPU determination of his election 
victory before announcing a cabinet (the KPU should announce 
final results by October 5), but he would announce his 
line-up before his October 20 inauguration.  Running mate 
Jusuf Kalla told reporters September 21 that Yudhoyono would 
announce his cabinet on inauguration day.  We believe 
Yudhoyono already has a cabinet in mind, although he likely 
has guarded his plans closely so as not to alienate 
supporters hoping for cabinet positions.  He has stated 
publicly that most cabinet members will be professionals.  A 
credible source told us in early September that Yudhoyono 
particularly insists that non-partisan figures occupy the 
following key positions: Attorney General, National Police 
Chief, Chief of the State Intelligence Agency (BIN), Minister 
for State-Owned Enterprises, Minister for Energy and Mineral 
Resources, and Governor of Bank 
Indonesia (not a cabinet position).  Besides selecting 
cabinet members, Yudhoyono and his team also will continue to 
plan a restructuring of the cabinet and the creation of an 
Office of the President based on the United States model. 
 
SOME LIKELY CABINET MEMBERS 
--------------------------- 
 
9. (C) Prominent lawyer and human rights activist Todung 
Mulya Lubis likely appears on a short list of Yudhoyono's 
candidates for Attorney General.  A top Yudhoyono advisor had 
mentioned to us over the summer that Police Major General 
Sutanto -- a former East Java Police Chief -- had come to the 
team's attention as a possible candidate for National Police 
Chief.  Army Deputy Chief of Staff Djoko Santoso appears 
likely ultimately to become the next Armed Forces (TNI) 
Commander, but he would need to become the Army Chief first. 
Consequently, Yudhoyono could opt to extend the present TNI 
Commander, General Sutarto. Meanwhile, the prospects for the 
current Army Chief of Staff, Ryacudu Ryamizard, have 
diminished given his reputation for making irresponsible 
ultra-nationalist comments, and his well-known support for 
Megawati. 
 
10. (C) We have heard Yudhoyono recognizes he should appoint 
few former Generals to his cabinet, despite the 
disproportionate number of retired military officers in his 
campaign team.  Numerous contacts believe the two most likely 
retired Generals to hold cabinet positions in Yudhoyono's 
administration are Sudi Silalahi, as Coordinating Minister 
for Political and Security Affairs (having formerly worked as 
Yudhoyono's Secretary when Yudhoyono held that position), and 
national campaign team Chairman Mohamad Ma'ruf, as Minister 
of Home Affairs.  A well-placed contact recently told us 
Yudhoyono will certainly appoint a civilian as Minister of 
Defense, and Yudhoyono had considered current Ambassador to 
the United Kingdom Juwono Sudarsono for that position, 
although Juwono's poor health (NFI) reduced the possibility 
of this appointment. 
 
11. (C) Yudhoyono had mentioned to the Ambassador in June 
(ref D) that he considered both current Finance Minister 
Boediono and noted economist Sri Mulyani as contenders for 
his cabinet.  We believe he had Boediono in mind when he told 
the press on September 20 that he might ask "two or three" 
members of the current cabinet to take positions in his 
administration. 
 
WHERE WILL THE ISLAMISTS GO? 
---------------------------- 
 
12. (C) PBB Chairman Yusril Mahendra, the current Justice 
Minister, appears highly likely to receive a position in 
Yudhoyono's administration.  Credible rumors indicate he may 
become State Secretary (SecNeg); Yudhoyono indicated to the 
Ambassador in June (ref D) that Yusril would not have 
influence over counter-terrorism matters, a prediction 
consistent with the SecNeg rumor.  Meanwhile, Yudhoyono has 
promised four cabinet seats to PKS -- two for party 
officials, and two for professionals sympathetic to the 
party.  A member of the PKS team that negotiated with 
Yudhoyono told us in early September that PKS had made four 
proposals.  Our source said Yudhoyono took on board these 
names but made no commitments regarding particular 
individuals or positions.  PKS had suggested: 
 
- PKS Chairman Hidayat Nur Wahid as Minister of Social 
Affairs; 
- PKS Board of Experts Chairman Suripto as Minister of 
Defense or Minister of Home Affairs; 
- University of Indonesia Professor Agus Nurhadi as Minister 
of Education; and 
- Lasman (phonetic) as Minister of Research and Technology. 
Our PKS source identified Lasman as a current official of 
that Ministry, but he may be Nuclear Energy Control Board 
(BAPETEN) official As Natio Lasman (ref E). 
 
KALLA'S ROLE? 
------------- 
 
13. (C) Credible reports indicate that Yudhoyono offered 
Jusuf Kalla various incentives in order to lure him onto 
Yudhoyono's ticket.  Kalla provided significant financial 
resources for the campaign, as well as inroads into Golkar's 
network.  It remains unclear how Yudhoyono will define 
Kalla's influence as Vice President, and whether Kalla will 
have the leeway to bring allies of his into the cabinet.  We 
expect that, to whatever extent possible, Kalla and his 
loyalists aim to focus on economic and financial matters. 
 
WHAT ABOUT THE DEMOCRATIC PARTY? 
-------------------------------- 
 
14. (C) It remains unclear whether Yudhoyono will appoint PD 
Chairman Subur Budhisantoso to the cabinet.  PD contacts have 
harshly criticized Budhisantoso, a University of Indonesia 
anthropology professor, as ineffective.  His unremarkable 
performance during the election, which reportedly frustrated 
Yudhoyono at times, makes him an unlikely cabinet member. 
However, Yudhoyono may want to ensure Budhisantoso receives a 
respected position, in order to allow him a face-saving exit 
from PD's top position and enable a long-awaited 
restructuring of the party's leadership.  In a recent sign of 
PD's lack of discipline, the Central Board recently suspended 
the entire PD membership of the Jakarta regional parliament. 
This move came after the PKS candidate for the parliament's 
speakership -- Achmad Heryawan, a member of the PKS Syuro 
Council (supreme body) -- failed to receive sufficient PD 
votes to win the top job, which instead went to a Golkar 
candidate.  (Ref A provides more information on associates of 
Yudhoyono, in and outside of PD, who likely hope for offers 
of cabinet jobs.) 
 
OTHER POLITICAL PARTIES FACING SHAKE-UPS 
---------------------------------------- 
 
15. (C) Both Golkar and PDI-P will hold party congresses in 
coming months.  The outcome of leadership struggles in those 
two parties -- Indonesia's largest -- could determine the 
environment Yudhoyono faces in parliament for the rest of his 
term, as well as some of his likely rivals for the 2009 
election.  Golkar Chairman Akbar Tandjung has promised the 
National Coalition that backed Megawati's candidacy will 
remain united and form an opposition block, declining any 
cabinet positions that Yudhoyono might offer.  However, few 
Indonesian politicians relish the prospect of an adversarial 
relationship with the presidency, and Akbar's survival as 
Golkar Chairman appears in doubt.  (It appears that, in 
recent days, Akbar focused more on eliminating his enemies 
within the party than on rounding up voters for Megawati.) 
 
16. (C) Either Jusuf Kalla -- who competed for Golkar's 
presidential nomination in the party's convention process -- 
or purged former cabinet members Marzuki Darusman and Fahmi 
Idris could play a role in overthrowing Akbar and aligning 
Golkar with Yudhoyono.  Marzuki and Fahmi would benefit in 
that effort from the signal of support that Yudhoyono could 
send with a cabinet appointment.  (Marzuki also told us he 
has communicated with Yudhoyono's team about possibly 
assuming a role in PD.) 
 
17. (C) Similarly, PDI-P's future remains uncertain. 
Megawati's desire and ability to remain as Chairwoman are 
unclear.  First Gentleman Taufik Kiemas has a clear incentive 
to retain control of the party -- the more power he retains, 
the better the chances that he will escape unpunished for his 
legendary corruption during his wife's tenure.  However, many 
in PDI-P dislike Taufik and blame him for the party's poor 
performance in recent elections.  Vice Chairmen Arifin 
Panigoro and Roy Janis have told us they have an interest in 
competing for the party's chairmanship, and both claim to 
have cultivated ties to Yudhoyono.  Either a cabinet 
appointment or some other symbolic gesture from Yudhoyono 
could signal to PDI-P officials that those in the party who 
want to enjoy good relations with the President should back a 
particular alternative to the current First Family. 
 
COMMENT 
------- 
 
18. (C) While the September 20 election marks an amazing 
triumph of Indonesian democracy, Yudhoyono will have little 
time to celebrate.  His apparent victory has opened political 
floodgates, with under a month to go before inauguration.  He 
will have to form a cabinet that taps a relatively small pool 
of people who appear competent, clean, and capable at least 
of objectivity, if not loyalty directly to him.  He will need 
to balance representation of ethnic, religious, and 
professional affiliations, in a way that dispels fears of 
"militarism" and makes him appear neither overly secular nor 
ardently Islamist.  He will need to settle some debts he has 
incurred and break bad news to many supporters who had hoped 
for significant rewards.  And, even while he tries to 
strengthen his own Democratic Party, he would be wise to 
devote some attention to the turmoil afflicting Golkar and 
PDI-P, since developments over the next few months will 
determine whom he has to negotiate with for the duration of 
his five-year term. 
 
19. (S) The Ambassador and Yudhoyono had a productive 
exchange on governance and cabinet formation, among other 
matters, on June 1 (ref D).  While Yudhoyono understands the 
importance of a strong bilateral relationship, public 
accusations that he is too close to the USG have sensitized 
him to contact with us (ref B).  We are confident, however, 
that he recognizes and, to a meaningful degree, shares our 
priorities and concerns.  After his victory becomes official, 
we will seek out a meeting with Yudhoyono for a discussion of 
the challenges that lie ahead. 
 
 
BOYCE