Transcript: USTR Zoellick August 11 Indonesia Press Conference
(Outlines ways U.S. can assist during "critical" time)U.S. Trade Representative (USTR) Robert B. Zoellick, speaking at a press conference in Jakarta August 11, said he had come to Indonesia to both convey America's strong support for Indonesian President Megawati and her initial reform actions, and to "relay some of the United States' initial thoughts about how we could be supportive of Indonesia at this critical time."
Zoellick said he had suggested to Megawati and Indonesian officials during his visit that there were seven ways the United States could help Indonesia. He said the Bush administration would:
1. Extend an invitation for Megawati to come to Washington for an official working visit with President Bush on September 19;
2. Further the work of U.S. aid programs to Indonesia by focusing the aid in areas helpful to the new government and by trying to get Congress to maintain funding at the present level of approximately $200 million a year;
3. Work with President Megawati and her new team to try to move promptly to complete the Letter of Intent for the International Monetary Fund (IMF), so that the disbursements can flow and so that the Paris Club negotiations restructuring official debt can proceed on plan on September 10 and 11;
4. Recreate a Trade and Industry Council to try to enhance U.S.-Indonesian cooperation on a range of issues, from the World Trade Organization (WTO) round, to Asia-Pacific Economic Cooperation (APEC) forum and Association of Southeast Asian Nations (ASEAN) issues, to the bi-lateral agenda;
5. Restore some basic military-to-military contacts between the United States and Indonesia, focusing on the critical areas of reform of the Indonesian military and support for the professionalization of the military;
6. Expand U.S.-Indonesian foreign policy contacts, especially those related to the transnational agenda, and in particular those related to terrorism; and
7. Ensure that the engagement process moves forward by having on-going visits to Indonesia by U.S. officials.
With regard to the seventh item, Zoellick said his visit was to be followed shortly by that of Assistant Secretary Kelly, the assistant secretary of State for East Asian and Pacific affairs. He added that a visit by Admiral Blair, the Commander-in-Chief of U.S. forces in the Pacific, was likely -- and possibly Secretary of State Powell when he is in the region for the APEC summit meeting in October.
In response to reporters' questions, Zoellick suggested the most important economic challenges Indonesia faced were to develop a sound fiscal program so that the new government will be supported by IMF disbursements; to proceed with the additional privatizations, especially within the banking system; to move forward with asset dispositions; and to create the right legal climate for investment.
Zoellick said he spoke with Indonesian officials during his visit on a range of economic topics, "but we focused most on the IMF program."
"We talked about how that IMF program could be very beneficial in terms of dealing with issues ranging from the budget to the Central Bank, and sending a positive message to the international community," he said.
In response to a reporter's question, Zoellick noted that the United States is looking at the prospect of a free trade agreement with Australia "because we consider Australia to be an extraordinarily good friend of the United States ...."
"So when a good friend makes a suggestion like that, it deserves a serious analysis and consideration," Zoellick said.
Following is the official transcript from the Office of the USTR:
(begin transcript)
U.S. Trade Representative Ambassador Robert B. Zoellick
Press Conference
Regent Hotel, Jakarta
5:20 p.m., Saturday, August 11, 2001Official Transcript
Hello, my name is Bob Zoellick. I want to thank all of you for coming. As you know this is a time of important transition for Indonesia, and therefore President Bush asked me, as a member of his Cabinet, to come to Indonesia to convey in person the strong United States' support for a democratic, unified and economically successful Indonesia. He also asked me to convey in person his strong support for President Megawati, and his compliments on the early actions that she has taken in dealing with the broad agenda of reform that stands ahead of her.
It is our sense that the initial steps that the President and her team have taken have gotten them off to an exceptionally strong start. This started with how the President handled the transition from President Wahid. Also the selection of a first rate cabinet: the consultations that she engaged in with the Parliament in the process of selecting the Cabinet. But also a number of other steps, which I think standing together, send the right signals across a number of different policy areas. She expanded the ad hoc human rights tribunal with the Parliament. For her new members of Cabinet, she put an emphasis on financial disclosure requirements. She selected a civilian Defense Minister and she has given directions about moving ahead with an OPIC agreement, OPIC being the Overseas Private Investment Corporation that ensures foreign investment for the United States.
The President also asked me to come here to listen to the suggestions of the new team, about how we could be supportive. Over the course of the past few hours I have had the chance to see the President and a number of members of her Cabinet, including the Political and Security Coordinating Minister, the Foreign Minister, the Trade and Industry Minister and tonight I will have an opportunity over dinner to talk to members of the economic team led by the Coordinating Minister for Economic Affairs and the Finance Minister as well. I just want to again personally thank all these individuals who have been exceptionally gracious, recognizing that this is their first day in office. I know six months ago what it was like on my first day in office and they have all been extremely courteous and kind in terms of giving me their time but also giving me a sense of their agenda. Like one of the newspaper articles that I read on my flight here, I think this is a Cabinet that was well worth the wait. They are a group of people that are focused on the agenda. They are realistic about the challenges that they are facing, but they are approaching them with a very positive and energetic attitude. So I leave these meetings with a strong sense of encouragement and a very positive attitude about the colleagues that I and my fellow Cabinet members in the United States will have to work with.
The President also asked me to relay some of the United States' initial thoughts about how we could be supportive of Indonesia at this critical time. In particular, I suggested to the President and her colleagues seven ways in which the United Sates might be of some help.
The first, as I mentioned after I left the meeting with President Megawati, was the President's invitation for her to come to Washington for an official working visit on September 19. This will be the only such visit that President Bush has in Washington at the time of the U.N. General Assembly meetings. It will give the two of them the chance to talk face-to-face and directly about the agenda that I hope we have launched today.
Second, I have talked about the further work of our aid program. As you probably know, the United States is now the second largest aid donor after Japan and we believe it is important to try to focus that aid on ways that can be helpful for this team. We have talked about making sure that we will try to work with the U.S. Congress to try to seek on-going support at similar levels, which are approximately, by the time you include humanitarian and agricultural support, about 200 million dollars a year.
The third point is the focus on the IMF program. I spoke to the President about our commitment to work with the President and her new team to try to move promptly to complete the Letter of Intent, so that the disbursements can flow and so that the Paris Club negotiations restructuring official debt can proceed on plan on September 10 and 11. The next point was in the trade area. I just finished the meeting with the Trade and Industry Minister and we agreed to recreate a Trade and Industry Council that was launched in 1996 but did not meet after 1997 to try to cooperate and enhance our cooperation on a range of issues, from the WTO round, to APEC and ASEAN issues, to the bi-lateral agenda, where I suggested that we needed to work creatively with the Indonesians to try to see how we could help support their growth and development process, and how we can also try to anticipate problems in the bi-lateral agenda ahead of the process.
Fifth was the message I sent about the restoration of some basic military-to-military contacts between the United States and Indonesia. I emphasized that these contacts would focus on the critical areas of reform of the Indonesian military and support for the professionalization of the military. These will be done within the limits that we operate under U.S. law, in particular the Leahy Amendment. That we have had consultations with the U.S. Congress about starting these in a fashion that will help support the effort to bring the Indonesian military within the civilian and democratic structure that President Megawati and her team are putting together. This is what we hope will be an effort that can develop, but it all depends on the accountability of the process as it moves forward.
Sixth, in the overall foreign policy area, we talked about trying to expand our contacts, including those related to the transnational agenda, and in particular those related to terrorism.
Seventh, to ensure that this engagement process moves forward, we talked about having an on-going set of officials come from the United States to continue to ensure that we put a focus on moving forward with this agenda. My visit will be followed by that of Assistant Secretary Kelly, the Assistant Secretary of State for East Asian and Pacific Affairs. I believe in coming weeks there will also be a visit by Admiral Blair, the Commander and Chief of our forces in the Pacific, and during this time we will also obviously have the visit of President Megawati to Washington. We hope that Secretary Powell is also looking at the possibility of a visit to Indonesia in the near future, perhaps at the time that he will be coming back out the region for the APEC summit meeting.
So these are just some early actions, but ones that we hope will get the process going of our work with Indonesia. Together, what we see these as trying to do is to further jump-start what will be very important for Indonesia's success, which is creating the right climate for private investment. As I mentioned to the President [Megawati], Indonesia's exchange rate is at a level today (at which) investment in Indonesia could be quite profitable if the overall economic climate is a good one here. This will relate to an agenda that obviously connects to other issues that the President [Megawati] and I talked about including the questions of privatization and asset disposition and creating an overall environment in which investors will see Indonesia as a good place to create jobs and build a trading system.
So, that was my agenda and I will be completing it with a dinner tonight again, where we will have a more in-depth discussion on some of these economic issues. I was, again, very pleased with the hospitality that I was shown and the seriousness in which the dialogue that we have started has begun today. I would be pleased to take your questions.
Questions and answers
Q: Ambassador Gelbard said yesterday that you would be talking with President Megawati about economic issues. Which economic issues?
Ambassador Zoellick: We talked about a range of topics. The ones that I mentioned within my list included aid, but we focused most on the IMF program. We talked about how that IMF program could be very beneficial in terms of dealing with issues ranging from the budget to the Central Bank, and sending a positive message to the international community. She shared with me some of her initial thoughts for that program. We also talked about the questions of privatization and asset disposition. We talked about the need to create the right climate for private investment in Indonesia. All of this related to the larger issues of how the new Administration could expand jobs, increase the rate of growth, deal with inflation and create the economic environment to support the process of building institutions of democracy in Indonesia.
Q: I'm Maria Ressa from CNN. Sir, you said you came to show strong U.S. support for Mrs. Megawati's government, and yet this morning, Indonesians woke up to a very strongly worded warning against Americans traveling to Indonesia. How will that affect, as you said, the atmosphere for private investment, particularly for American companies and relations between the two countries right now?
Ambassador Zoellick: It's U.S. policy anywhere in the world that if we face the prospect of serious threats related to terrorism, that we alert people and we take the appropriate precautions, whether they be the people in our Embassy or they be international travelers. So we certainly hope to work with the Indonesian government on that specific issue. But, the best way I can answer the question is that I am here today, talking about these issues and the importance of these issues. I am trying to speak to others globally about the preliminary sense that I have that this is a government that is serious about reform. I know that, starting with the President of the United States, we are serious about working with Indonesians on that reform.
Q: (follow-up question by Maria Ressa of CNN): At least for us here in Indonesia, it seems that the period of political turmoil seems to be over at this point or is just settling down, as you said, to a period of some stability. But, what exactly was that warning referring to? Why now?
Ambassador Zoellick: On this one, I'll let the Ambassador deal with it. I would just make this general point: I don't think that this warning deals with particular conditions in Indonesia. It deals with other issues.
Ambassador Gelbard: The warning that the State Department issued yesterday refers to a specific threat against United States' interests and particularly against the United States Embassy. As Ambassador Zoellick says, we have an obligation to warn American citizens under such circumstances. That does not contradict, by any means, the strong message that Ambassador Zoellick gave in terms of our support for the government of Indonesia. We will continue to work very closely with President Megawati and her government on this range of issues.
Q: I'm Tantri from the Jakarta Post. As we all know, Australia and the World Bank have been discussing how to review or reduce the debts of Indonesia. Will the United States be following their steps?
Ambassador Zoellick: I am not familiar with the policy of Australia. You will have the Prime Minister here tomorrow; I presume you will be able to ask him about Australian policies. The key issues dealing with Indonesia's official debt are ones that are handled in what is called the Paris Club. There has been, in the past, a restructuring of Indonesia's official debt through this international group. The continuation of that restructuring depends on Indonesia's performance of its macro-economic plan as assessed by the International Monetary Fund. One of the points that I made, and had an opportunity to discuss with President Megawati, is the importance of the new team being able to deal with that IMF issue. I believe there is an IMF team that is planning to come to Indonesia in the near future. I left my meetings with a strong sense that the Indonesian government is focused on the issue, is serious about dealing with the issue, and I also understand that the IMF team has come with the idea of trying to focus on the key questions that need to be addressed for Indonesia in the near future. Therefore, I believe that there is a high likelihood this will proceed. If it does proceed, over the course of the next couple weeks, that will create the basis for the on-going Paris Club restructuring of official debt.
Q: You discussed the restoration of military contacts between the U.S. and Indonesia. Does it involve lifting of the ban on military sales to Indonesia.
Ambassador Zoellick: No, not at this point. As I emphasized, the focus of the military-to-military contacts are at this point trying to deal with, and be of assistance in, the reform of the Indonesian military. It's helping the civilian leaders to work with the military leaders in ensuring that the TNI operates effectively as a military within a democracy, within a constitutional system. So, that will be the nature of the activities. We certainly hope that the relationship will grow, but at this point, given the legal restrictions we are under and the need to demonstrate accountability and transparency, we need to start with these steps.
Q: I am sorry, I will speak in Bahasa. (translation): If we look at the economic situation between the U.S. and Indonesia at this time, more or less, what are the most important economic issues that the U.S. will consider?
Ambassador Zoellick: As I mentioned, one of these is the need to try to develop a sound fiscal program that would refer to the budget and spending, and that is related to the discussion of the IMF. If that moves forward positively, as I believe it will, then the new government will be supported by IMF disbursements. Second, there is the need to proceed with the additional privatizations, in particular, those related to the banking system, so as to ensure that there is an availability of credit for people wanting to open and do business in Indonesia. Third, there is the question of asset dispositions, because as many of you know, IBRA has not been able to move forward yet with disposal of assets. One of the points that I shared with my Indonesian colleagues is that the experience of the United States and other countries is that while this is always a difficult step to take, the inability to move forward to dispose of bad assets actually creates a longer-term problem because those assets continue to have an overhang on the market, meaning that people are unsure of asset valuations. The assets are often not put to productive uses and, in effect, the value of the assets continues to decline. So, that will be another important area for Indonesia's reforms. Finally, as a number of your questions touched on, it is important that Indonesia create the right legal climate for investment. Investors have opportunities all around the world. I personally believe that there are some very good opportunities in Indonesia, but it will be up to private investors to make that decision. As they make that decision, they will have to decide whether, if they do business in Indonesia, there is a transparent, clear set of rules and laws that will be followed. I would again say that in my discussions with the President and with others, I came away with a strong sense of commitment of their desire to work with the Indonesian Parliament to give that assurance so that, first, one will have a return of domestic capital to Indonesia, and then that will be followed by foreign capital. Each of those type of investments will help create jobs and that will create a better climate for political and economic success in Indonesia.
Q: What is the main trade issue in the relations between Indonesia and the U.S.?
Ambassador Zoellick: I would say there are probably two main issues. One is, as I agreed with the new Minister of Trade and Industry, that we need to look across the broad agenda of possibilities to see whether there are ways in which we can make access for Indonesian goods easier to the U.S. market, and likewise, whether there are steps that can be taken in Indonesia to ensure that there is the availability of U.S exports. So, that is the bilateral agenda. But, the second topic relates to the global trade round, which is to be launched in Doha in about 12 weeks. That helps set the overall trade and investment climate globally in which the Indonesian growth will occur. This is a topic that I was just dealing with recently in India and have been discussing with other countries around the world. I believe that Indonesia can play a positive role in this through ASEAN where in the past Indonesia has played a significant leadership role.
Q: Susan Sim from the "Straits Times". Ambassador, I was wondering if you could answer the very first question that was posed by the Indonesian journalist earlier. He wanted to know why the United States is, quote, so aggressive in approaching Megawati, unquote. I was drawing back to twenty-one months ago when Washington was similarly upbeat about her predecessor Abdurrahman Wahid and praised him as the first democratically elected leader of Indonesia. Second question is when President Megawati was first sworn in, there was a lot of international skepticism about her capabilities. Now, you said you have had several conversations with her. Could you at least share with us your impressions of how she has performed so far as President in terms of a policy vision, coherent leadership and so on?
Ambassador Zoellick: As for the first question, we weren't in government twenty-one months ago, so I can't speak to what people did twenty-one months ago. All I can speak to is our government. There is a clear message which my presence is supposed to demonstrate in a human fashion about our commitment to this democratic transition, our commitment to Indonesia's success and our commitment to the President's leadership in that process. In addition to trying to send that signal, we are trying to engage in specifics to try to move the process forward. Again, I can't compare with what was done twenty-one months ago, whether they addressed a similar agenda. As for your second question, I was extremely impressed in my meeting with the President. We covered a wide range of topics, economic and political. She engaged in detail on the full range of them. Frankly, I learned a great deal from the discussion as I expected that I would. As I mentioned in my opening comments, I complimented her on what I thought were some very impressive early moves, sending signals in terms of the investment community, relations with the Parliament, civil relations with the military, disclosure of financial assets, setting the right tone for dealing with corruption in government. On top of that, what I think not only I, but frankly many others around the globe, have felt is a first-rate cabinet. So, I think this is an excellent start. I was delighted by my conversation and I hope my Indonesian colleagues find that it is useful to them because no one is hiding the fact that there will be difficult challenges ahead for Indonesia. I certainly found a strong sense of realism on the part of my Indonesian interlocutors. But as I mentioned, I also had a strong sense of energy and creativity as they try to come to grips with these problems. I expressed on behalf of my President, a desire of the United States to try to support them as they try to deal with this agenda.
Q: I'm Dennis Graham from Australia's SBS Television. Will President Bush attend the APEC Summit in Shanghai, is my first question. My second question, what advantages accrue to the United States from a free trade agreement with Australia, what are the prospects for such an agreement, and should, indeed, could agriculture be part of an FTA with Australia?
Ambassador Zoellick: As for the first question, my understanding is that President Bush does intend to attend the APEC Summit. As you know, Secretary Powell was just in China. He had a very good set of discussions with his Chinese colleagues. As for the possibility of an Australian FTA, this is an idea that Australia has suggested to the United States. As I have said in Congressional testimony, it is a serious idea that we are willing to consider. I believe it is important that this be seen as a bipartisan approach in Australia. I have had conversations with both the LibNat Coalition as well as the Labor Party, and I get a sense of interest across the political spectrum. But, as we assess the benefits of it, we have to look at the various sectors and make sure that both countries will be able to deal with those issues. I also have to look at this in the context of the larger U.S. trade agenda and right now I am trying to focus on launching the global WTO Round in Doha. I am moving ahead with the regional trade agreement and the Free Trade Area of the Americas. We have bilateral free trade agreements in negotiation with Chile and Singapore. So, we are looking at the prospect of a free trade agreement with Australia, and one reason that we are giving it the attention that we are is because we consider Australia to be an extraordinarily good friend of the United States, it's been a partner in good times and bad, it's a security relationship that we value and it's also an economic relationship that we value. So when a good friend makes a suggestion like that, it deserves a serious analysis and consideration, and that is how we are proceeding.
Thank you.
(end transcript)
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