1999 Year End Press Statement
Throughout 1999, bilateral relations between Indonesia and the U.S. have reached the lowest and highest points in many years. Tension between the two countries was apparent during the violence erupting after the Popular Consultation in East Timor, and President Clinton’s announcement of the suspension of U.S.-Indonesia military relations upon his departure to the APEC Summit on September 9, 1999. However, significant improvement in the relations was evident after the election of President Abdurrahman Wahid, and the informal visit to Washington, D.C. of the newly elected fourth president of Indonesia in November 1999. In beginning of the year, the Indonesian Government has succeeded in introducing various reforms, especially in holding the June 7th Elections, which is considered to be the most free and fair parliamentary elections in Indonesia. The democratic reforms and the assertive approach in the effort by Indonesia in finding a lasting solution to the East Timor issue, were noted positively by the U.S. Administration and other luminaries, and expressed on many occasions. However, the positive developments, such as the flourishing freedom of the press, the release of political prisoners, and encouragement of pluralistic political aspiration depicted in the 48 political parties participating in the general elections, were overshadowed by other unfortunate incidents. Tendency to focus mainly on religious and ethnic strife in some parts of Indonesia, and the post- Popular Consultation violence in East Timor; as well as other human rights related issues, has on occasion put aside other positive developments altogether. In the midst of adverse opinions, the important role Indonesia contributes in maintaining regional security is still deemed important, and the U.S. has shown support for the democratic reforms in Indonesia, which will eventually bring about domestic and regional stability. The U.S. has provided $ 30 million of assistance for the June 7th Elections through UNDP coordination to monitor the elections and other technical assistance. The Elections was a success and has brought Indonesia into a peaceful transition towards democracy. During the visit of President Abdurrahman Wahid to Washington on November 10-12, 1999, President Clinton welcomed the new president as the leader of the world’s third largest democracy, and emphasized to continue pursuing partnership with a strong, stable, prosperous and democratic Indonesia. The U.S. President also supports the territorial integrity of Indonesia, and acknowledged the challenging task in preserving democracy in a country as widespread and diverse as Indonesia. On this occasion, President Wahid emphasized the importance of American-Indonesian relations, although there are shifts in Indonesia’s new policies. With regard to the East Timor issue: President Wahid reiterated Indonesia’s commitment in honoring the result of the Popular Consultation in East Timor and gave his assurance in resolving the refugees problem in the area. One of the priorities of the present Indonesian Government is to ensure and uphold human rights, and for this purpose, a state minister is assigned to deal with this particular issue. Continued investigations into human rights violations in East Timor and elsewhere; including alleged violations by members of the Armed Forces, are currently being conducted. On many occasions, President Abdurrahman Wahid emphasized on the importance of the integrity of the Indonesian Armed Forces as a state institution. However, due process of law will be held against alleged human rights violations by individual members of the Armed Forces, as well as other perpetrators. President Wahid has a wide-range of support for the reform he has initiated with regard to civil supremacy and the promotion of professionalism in the military. In this context, future military cooperation between Indonesia and the U.S. remain important, particularly in non-combatant training with respect to human rights. Currently, cadets studying in the U.S. are being treated unfairly when school funding is financed by the Indonesian military, and are not judged by their own merits or conducts. Such issues need to be addressed, as reforms in the military are continuously progressing. Indonesia is still in the early stages of economic recovery, and will need several years ahead to reach pre-crisis condition. Structural financial and banking reforms and the restructuring of the private sector are currently being carried out, and are imperative to the recovery effort. Growth and stabilization has been undermined in recent months by the Bank Bali scandal, causing the IMF and World Bank to suspend scheduled disbursement. Negotiation headed by Indonesian economic ministers in August/September failed to convince both organizations to release the much needed funds. The election of President Abdurrahman Wahid in October and the establishment of the new government have to a certain degree restored international confidence. The agreement reached late last year between the IMF and Indonesia; allowing a two-year extension of assistance for the economic reform program and additional funding, indicate an improved understanding between the IMF and the new government. The World Bank’s assurance to continue assistance beyond Indonesia’s lending limit, and its agreement to cancel slow implementing on-going loans worth $ 566 million, also demonstrate renewed confidence in Indonesia. During his visit to Washington in November 1999, President Wahid met with the top executives of the IMF, the World Bank, and U.S. Exim Bank, and exchanged views on the economic situation in Indonesia, including assistance in overcoming the economic problems. President Wahid also spoke with the American public and business community in a meeting sponsored by U.S.-Indonesia Society and U.S.- ASEAN Business Council during his visit to Washington, D.C., in the effort to restore confidence in Indonesia’s economy and business prospects. In general, Indonesia and the U.S. have relatively good economic relations throughout 1999. The U.S. Department of Agriculture (USDA) and the Indonesian Logistic Agency (BULOG) have reached an agreement on a $ 40 million soft loan (PL 480) for food assistance and stabilization of food supply. Wheat supplies, provided through Program Section 416 (b), have been distributed by U.S. non-governmental organizations and their Indonesian counterparts, such as CARE, CRS, World Vision and many more. Both means of assistance have helped provide food for the poor, who were hit hard by the crisis. In 1999, the U.S. has pledged $ 184.50 million of assistance through the Consultative Group on Indonesia (CGI). U.S. Export-Import Bank has increased economic cooperation, and throughout 1999, has pledged financing export and import to Indonesia amounting to $ 588.877.602. On December 15, 1999, US Ex-Im Bank and the Indonesian Government signed a participation agreement of $278 million, composed of an Ex-Im Bank-provided loan and an Ex-Im Bank-guaranteed loan from Westdeutsche Landesbank, to support export of aircrafts by Boeing Co. to Garuda Indonesia. This continued cooperation signals a positive sign to the U.S. business community of improving economic and investment condition in Indonesia. Bilateral trade reaches about the same value compared to previous years. Total bilateral trade amounted to $ 7.937 billion or a slight decline of 1,29% decline compared with 1998. Currently 30 non-oil products from Indonesia are able to compete in the U.S. market, comprised mostly of: textile and textile products; footwear; wooden goods and crafts; natural, synthetic, and processed rubber; as well as coffee, tea, cocoa and spices. Major problems in bilateral trade are issues related to increasing charges of subsidy and dumping of Indonesia exports from U.S. producers; high frequency of detained export goods. Indonesian products are still in the IPR priority watch list, and even though Indonesia is one of the largest importer of U.S. cotton, the U.S. has not increased the quota for Indonesian textile and textile products. Promising indications of U.S. imports in agricultural commodities from Indonesia showed an increase, especially great demands for fish, spices, coconut, palm oil, fresh pineapple and juice, and plywood. As reflected in the economic relations and bilateral trade, Indonesia will face many challenges in the years to come. Foreign debt will be the most challenging problem for Indonesia’s economic recovery. One possible option would be to negotiate debt rescheduling, in which the U.S can play a major role. Debt commitment will be one of the major factors in restoring international confidence in the economy and the business climate in Indonesia. A combination of this regularization of relations with external credits prompted Moody’s Investor Service in December 19, 1999 to upgrade Indonesia’s foreign currency country ceiling for bank deposits to Caa1 with positive outlook from Ca. At the same time, the rating agency changed the outlook for the foreign currency ceiling for bonds and notes to positive. December 1999 marked the fiftieth anniversary of diplomatic relations between the United States of America and Indonesia. This historic occasion and the establishment of a new democratic government in Indonesia open a new chapter in U.S. – Indonesia relations. We perceived the overall relations between the two countries to be based on mutual respect and regard of our own national interests, which will mutually benefit both countries and peoples. Events in the near future, such as the People’s Consultative Assembly (MPR) in August 2000, convening to draft the new Guidelines of State Policy and amendments to the 1945 Constitution of Indonesia; and the U.S. Presidential Election in 2000, will shape relations in the next coming years between the U.S. and Indonesia. Looking back, the last fifty years have been a learning experience for both countries. Through discords as well as understandings, areas of agreement would grow beyond political and security discussions, economic and trade exchanges, or social and cultural interactions. Let us hope and work together that the next fifty years of relations between the United States of America and Indonesia would be as cordial as the previous ones. Happy New Year 2000 and Happy New Millennium. Washington, D.C. January 10, 2000 |
Nineteen ninety nine has been an eventful year for Indonesia, as
momentous political developments, especially the June 7th Parliamentary Elections and the election of President
Abdurrahman Wahid as Indonesia’s fourth president on October 20th, paved the way for unprecedented changes in
its history. Consequently, these changes give a renewed impetus to
Indonesia’s effort to recover from a devastating economic crisis and in
maintaining political stability. Other important developments, such as the
Popular Consultation in East Timor on August 30th, and the re-establishment of diplomatic relations between the
Republic of Indonesia and the Republic of Portugal on December 28, have also
redefined Indonesia’s foreign policy, and opened a new chapter in our
relations with the international community. Upon entering the new millennium, it
is hard not to reminisce on these past events, in particular on the significance
to the relations between the United States of America and Indonesia. 