Speech before the Los Angeles World Affairs Council on March 7, 2001:  

His Excellency Dorodjatun Kuntjoro-Jakti
Ambassador of the Republic of Indonesia to the United States

  Ladies and Gentlemen.  It is really a pleasure for me to be here today at this very important organization in Los Angeles.  I remember almost one year ago there was a national conference of the Asia Society in Washington, and one of the themes was understanding Islam.  I was then requested to host the closing event in our Embassy and I was so glad that I had the opportunity at that time to meet so many of you from around the United States.

  I managed to get out forty times last year from Washington, D.C. and [found] it’s not easy to explain Indonesia to an American audience.  Even more difficult is to convince our American friends that in Indonesia we have approximately an accumulated investment of 38 billion U.S. dollars.  This is according to the data from the U.S. Department of Commerce Economic and Statistics Administration.  Even Indonesians think that it the Japanese are the number one investors in Indonesia.  Yes, if you exclude mining, Japan is by far the number one investor in Indonesia, but if you include mining, then the United States by far is the number one investor in Indonesia.   Please realize that it is due to the heavy participation of American oil and gas companies in Indonesia, also mineral companies like Freeport, for example, that Indonesia today is the number one producer and exporter of liquid natural gas in the world. 

  I was so glad that two weeks ago when I was in Houston, Texas, I was [told] by the representative of Exxon Mobil that they just found another huge gas field in the island of Jaffa onshore, and they told me that it is one of the biggest findings in the last twenty years.  Now, for us this is fortunate because it’s really adjacent to one of the huge IPP, project plant.  Of course, we still have a lot of problems with this power plant item, really an investment of the United States, but we believe that by 2003 or 2004, Indonesia has to really move in another direction in the investment strategy and energy because, even in the midst of crisis, I just couldn’t believe my eyes when I saw that in the statistics.  Our consumption of electricity last year, 2000, grew by 9 percent and in 1990 it was only 5 percent.  So actually we are recovering and come 2003, 2004, I think we must have another IPP, individual power plant, and hopefully it will be done by whoever is interested in doing that in Indonesia.

  But this gas field, onshore in Jaffa, I believe that we will use this opportunity really to develop further the island so that we will have a better diversification scheme in our economy—[to] go out from the present over-dependency to commodities, hopefully, more and more into manufacturing. 

  Let me start my presentation by posing to you how difficult it has been in the last three years for us to really turn around this huge unsinkable aircraft carrier called Indonesia.  Why call it the “unsinkable aircraft carrier?”  Because we are the largest archipelago in the world in the equatorial belt.  This is a country which has three and one-half times zone spread, and if you put that in the European map, the whole area is similar to the distance between Moscow to Dublin and right around to Rome.  It fits perfectly your map except yours is a land mass, ours is just a body of water, about 70 percent of the Indonesian territory is just the sea.  That’s the reason why Indonesians call this area where they live on “land and sea,” the only country in the world that does not call the place where they live a fatherland or a motherland, but indeed we call it “land and sea.” 

  Now, the population is really 203 million now, we’re number four in the world, after China, India and the United States and then Indonesia.  Ninety percent of the population is Islamic by religion, but as we move towards the eastern part of Indonesia we will really see more and more Christian population, while Islam is more and more on the west side of Indonesia.  The whole area can probably accommodate around 300 ethnic communities.  We have about 2,000 dialects in Indonesia, and the joke in Indonesia is that every 100 kilometers the food changes.  So, we have everybody’s religion in the world.  Underneath you have the oldest strata of beliefs.  We don’t call it an animistic religion, we call it beliefs.  Above it came Hinduism from India.  That’s the reason why the Netherlands called this Netherlands [Dutch] India to really distinguish it from the British India.  After Hinduism came Buddhism and then after that Islam, and after that Christianity.  All came to Indonesia because of trade, and up to this day Indonesia is one of the most amazing phenomena.

  Here we have a large population country, number four in the world, but its economy is approaching sixty percent in international trade by now.  Indonesia was set up as an economic system by the Dutch at the colonial era as the main supplier in the world for coffee, tea, chocolate, rubber, and spices.  But, of course, now we move out from that to farm, oil and so on.  It’s really amazing how in the last fifty years we have changed.  I was so startled to see the data again from the U.S. Department of Commerce CD-rom that last year, in the midst of the crisis, our exports to the United States was the highest in the history of the Republic of Indonesia.  We reached about 10.4 billion U.S. dollars last year.  In 1990 it was 9.6; in 1998 it was 9.3 and in 1997 it was 9.1.  So we continue the export of everything from Indonesia, and the United States is the most important trading partner for us.   The most diversified structure of our exports is to you.  We export only approximately half billion U.S. dollars of oil to the United States.  Japan is our number one trading partner, but most of that consists of oil and gas.

  So, ladies and gentlemen, it’s really very difficult to turn around the Indonesian economy in a time of financial crisis, 1997-98, especially because we have to do that together at the same time with our initiative to democratize Indonesia.  Also, now starting this year, we tried to introduce a daring scheme of decentralization in Indonesia to bring democracy to the people shut off and really to increase the sense of participation of the general population in the government.  This is going to be a long winding process of decentralization, which will last maybe beyond ten years, my guess.  I know that because I have been working in so many of these regions in the last thirty years as advisor to governors.  But we have to do all of this, the democratization of Indonesia, the decentralization of Indonesia, at the same time when we’re hit by the economic crisis.  But we use this economic crisis as an opportunity to refunctionalize the institutions.  We begin with one of the unbelievable exercises called general election 1999.  Why do I call it “unbelievable?”  Because aside from asking support from the United States at the time --and I was so glad that the United States responded with approximately 100 million U.S. dollars of support that we get from the world--to move this exercise of the freest election in the world, we obtained close to thirty million U.S. dollars of support from the United State government, the administration of President Clinton.

  Now, we have to register at that time 150 million voters in just three months’ time.  We ended up with 146, or something like this, political parties and I had a nasty question in Washington.   “Why is this?”  I said, “Well, we should entertain ourselves with the possibility of 400 political parties if you have the metrics of ethnicity, dialect, food and everybody’s religion and everything like that.”  A committee of 11 was set up by the venerable Dr. Majid.  He’s a respected Islamic leader, a graduate of the University of Chicago for Comparative Religion, if I’m not wrong, under one of the most important experts on comparative religion, Professor Leonard Binder.  So, he and the eleven decided to go through this list of political parties and, based on a certain criteria that we used, we finally came to a decision that only about 46, or something like that, were permitted to join the election and everybody accepted.  Of course, you have a lot of demonstrations, as usual, but after the election we ended up with only six parties, major parties, and the ten Islamic parties lost their cause, three Christian parties lost their cause, and six socialists parties, one Marxist-Leninist, we still have that, one Trotskyite, we still have that, one Social Democrat party and three Labor parties.

  So Indonesia took the initiative to really move immediately, exactly during the crisis, because if we consider changes--especially fundamental changes as we see in Indonesia--as a threat, as a danger, then we fail to see it as a sign of opportunity.  I think the spirit of Indonesia is that we see these changes finally as an opportunity.  Why?  Because we have seen enough problems arising from the use of an authoritarian régime approach in Indonesia from 1945 to just 1998.  So, ladies and gentlemen, we are really trying to do everything which, even without an economic crisis, is going to be difficult with the kind of diversity that we have in Indonesia.  The danger is always there to disrupt the stability, not only in the region, but also globally.

  Please realize that the Indonesian sea lanes of communication, the Strait of Malacca which we share with Malaysia and Singapore, is currently used by 3,000 ships per day.  I try to draw the attention of the CINCPAC and Naval Institute in Annapolis and so on.  Come to think of it, if you have an accident that blocks this Strait for, let’s say one week, who’s going to divert the 20,000 ships waiting at the mouth of this Strait and the South China Sea and in the Nicobar area over here?  The other sea lanes of communication of most importance, of course, is the Strait of Sunda, and in passing the very shallow dangerous Strait of Kalimantan.  The third one is off Bali.  This is the widest and deepest strait that can be used by even tankers and oil carriers, tankers the size of 400,000 tons, and so on. You pass through this Lombok Strait, you go to the Strait of Makassar where Unocal found one of the biggest oil and gas source off shore at a depth of more than, I think, one kilometer, which only American companies can do.  And you move out to the southern part of the Philippines.  The fourth sea lane of communication, of course, is Ombai Wetar, strait north of East Timor and our islands in the Timor area.  You move to the Malaccas, you come out in the Philippines.  This is the only strait that can be used by nuclear submarines carrying ICBMs without the necessity to surface.  So during the Cold War, at the height of the Cold War, the Russian base in Camranh, which came to them in 1975 after the fall of Saigon, and Subic Bay--the submarines used this strait and, of course, this is a source of worry to all of us after seeing what happened to Kursk, that submarine Kursk in Russia for example. 

  Ladies and gentlemen, forty percent of the world’s shipping tonnage has to pass through Indonesia every year.  Sixty percent of the energy needs of northeast Asia has to be supplied by tankers coming from the Middle East through the Indonesia sea lanes of communication to their side.  I think this is going to accelerate in the future.  So, stability in Indonesia is of utmost importance.  But we would like very much to have that stability not imposed by an authoritative government, but through democracy.  This is not going to be an easy task.

  I’m so glad to share with you last year’s experience with IMF despite all the observers’ remarks and so on, in particular the press, I don’t think that we really have a very bad relationship with the IMF.  So many of the items agreed upon by the two parties engaged in one of the highest levels of international agreements, IMF and WTO, those are the highest levels of international agreements.  I disagree totally with anyone who continues to say in the last three years I experienced four snags.  I barely call it deadlock.  I tried to convince everyone “You call it a deadlock?”  You call it a deadlock in an international agreement of that level when one party leaves the meeting or both leave the meeting, but what happened in the four instances in the last three years?  Actually, what we are doing is continuing negotiations, and we always come to an agreement.  So I’m glad to report to you that…we kept the disbursement at that time.

  This fourth snag that we really faced since the month of December has to do with the disbursement of 400 million U.S. dollars connected to an expanded facility of 5 billion U.S. dollars for three years.  Now, this as you know is really part of the cash flow that we get from IMF which we used only [twice].  The first time was in 1967 in the transition from the Marxist socialism.  We, Indonesians, were the first that abandoned Marxism Socialism in the world, it was not in Europe.  You can imagine if Indonesia really chose Marxism Socialism at the beginning of the Vietnam war, for example.

  So ladies and gentlemen, we decided to do that.  We pick democracy now without a single pressure from outside also.  We do it alone, twice.  So for me the most important [thing] is that during that transition we always have the help of the IMF. The reason is because we continue to be a good member with a good record.  We never have a problem with IMF.  We pay our dues and so on and this is the second time that we use it.  The first time was in 1967, during the transition from socialism into democracy to an open market.  I believe it was a guided democracy managed by President Suharto.  But now we are really for the second time using that support to create an even more important system in Indonesia which I hope will have to sustain… beyond what we have seen in the economic data.

  It looks like Indonesia is now seeing the divergence of the economic system from the political system.  In 1998 I had to be in that meeting aside with IMF and World Bank, and I’m so glad to report to you that the meetings with Secretary Rubin or Secretary Larry Summers, and even two weeks ago with Secretary O’Neill, were meetings that will lead us to narrowing of the differences and again coming to terms, that we have to move quickly for Indonesia to recover in the coming years.

  When you look into all the statistics, my worry at this moment is that we have to create more employment.  You can do that only if the rate of growth of Indonesia moves from the present 4-1/2 percent last year.  When I came here in March 1998 it was minus 15 GDP growth for 1998, and now it is already 4.5 percent. In 1998 I had to request Public Law 480 food assistance.  At that time the Undersecretary August Shumacherwas very helpful.  I had to do that again in 1999.  But starting in 2000, and now, my instructions from Jakarta is no more because we have reached again full self-sufficiency. 

  So we continue our export, we have this rural area now very active again because of the good weather that we have, like California now.  We were hit by El Niño in 1998, and that’s the reason why I had to ask for aid from the United States.  So, ladies and gentlemen, we are aiming now to move to year 2004 because that will be the time when we have the next election.  But meanwhile, of course, we have a lot of sorting out in the political system, one of which is the refunctionalization of the military.  We would like very much for the military to move out from too much involvement in the area of politics, and I think we have been able to do that.  We have really an unbelievable balance finally after three years in Indonesia. The military and the police are using the block vote in the Parliament, more or less, to support or to really indicate whatever that they would like to ask, and I think this is much better than seeing the military roving the streets again in Indonesia for example.

  So we have come to that stage.  But please realize that we have only 140,000 police for a country of 203 million stretching in a sea of three and one-half times and forty percent are desk jockeys, if I may use that terminology from the NYPD  series on TV.  So, we have to strengthen the police, to wean away the military from territorial duties, we have to teach again the political parties.  We have to create a bureaucracy, a modern bureaucracy without the taint of corruptness and nepotism.  I don’t need translation for that for you.

  So, ladies and gentlemen, we still need your support.  We still need IMF, World Bank, ADB.  We have been going through two Paris Club reschedulings.  Five billion Paris Club One, Four billion Paris Club Two.  We are negotiating for the third Paris Club of almost 3 billion U.S. dollars.  We had done the first London Club.  We have moved to alternative dispute resolution, ADR, and the Jakarta Initiative Task Force, which when I came to Indonesia several weeks ago we already reached 10 billion U.S. dollars.

  Before I end my presentation to you, I am the only Ambassador from Indonesia that has to be in Jakarta every three months, and I have done the eighth consultation.  President Wahid came to the United States three times, and one time on a stopover to Caracas for the OPEC meeting, so I had really a decent twelve meetings with Presidents of Indonesia during that time in trying to really maneuver the whole political system and economic system with a good support and understanding from multi-lateral organizations and, in particular, from countries like the United States, Japan and the European Union.  I think, with all due respect to all the reporting sometimes in the newspapers, I don’t think that the difficult negotiation that we have at this stage with the IMF can be called a “deadlock.”

  Thank you very much.