Ambassador Donovan at UIN Syarif Hidayatullah, Jakarta

Ambassador Donovan at UIN Syarif Hidayatullah, Jakarta (State Dept. / Budi Sudarmo)

Selamat pagi and thank you for the warm welcome; it is such a pleasure to be here at UIN today.  Your school is one of the top educational institutions here in Indonesia and we certainly hope to see more of your students studying in the U.S., and American students studying here in the future.

I have officially been the U.S. Ambassador to Indonesia for about four months now, and while I know I still have a lot to learn about your country I certainly have liked what I have seen and I have seen much that is familiar to me.  I have traveled to a number of different cities and provinces in the last few months and have been consistently impressed with the pride Indonesians have in their tolerance for different religions, ethnicities, traditions and cultures.  Just as the United States is a country made up of many different peoples and cultures Indonesia finds strength in the same qualities in their own country.  It is no wonder that our countries’ mottos are Bhinekka Tunggal Ika and E Pluribus Unum – out of many, one.

These qualities ensure that our two peoples have an instinctual understanding of each other, and that our countries are natural partners both in terms of our bilateral relationship and in tackling regional and global priorities such as environmental conservation and maintaining peace and security in Southeast Asia.  This partnership is one of the reasons why I have the honor of leading such a large and diverse Mission here in Jakarta. It is also the reason our Vice President will be visiting here in a few days on a trip that includes only our allies in the region, Japan, Korea, and Australia – and our important partner Indonesia.  Our Embassy here is our seventh largest in the world, and for the next few minutes I would like to explain a little about what all of us are doing to help strengthen our partnership, expand our trade ties and to encourage people to people exchanges between our two great democracies.

As I noted previously, the United States and Indonesia have a long history of partnership and cooperation.  Based on that foundation President Jokowi traveled to the United States in 2015 and elevated our bilateral relationship from a comprehensive partnership to a Strategic Partnership.  This agreement focuses on increasing cooperation in several areas including maritime, defense, economic growth, energy, and cooperation on global and regional issues, and it serves as the bedrock on which we hope to further expand our ties in the future.


Economic Ties

I would like to especially focus on our partnership in terms of economic growth since I know that U.S. companies are eager to support Indonesia’s economic development.  President Jokowi has called for private companies to help improve Indonesia’s infrastructure, create jobs, and help Indonesia increase productivity and move up the value chain.  Iconic American companies have been here for 100 years, and as Indonesia has grown and changed, American companies have grown and changed along with you.  American companies are here, building power plants and train engines, airports and airplanes, helping to keep Indonesians healthy and well fed, and letting us tweet, facebook, google and uber.

While others have joined the United States in seeing the opportunities in Indonesia, U.S. companies remain among the largest investors here.  A 2014 report from the American Chamber of Commerce in Indonesia identified 845 trillion rupiah in U.S. investment from just 35 companies between 2004 – 2012.  The total number is no doubt even higher.  Those investments have continued since the Jokowi administration took office, with significant investments by American companies in the consumer goods sector, natural resources, and digital content.  Some of these companies are attracted to Indonesia by the country’s natural wealth in oil and gas, minerals, and plantation agriculture.  Others are interested in the size of its domestic market and the potential for further growth in Indonesia’s middle class.

But U.S. investors are increasingly attracted to Indonesia because they see opportunities to serve not only Indonesian consumers, but the 600 million plus ASEAN consumers, or even billions of global consumers.  Indonesia can be the base for these companies with the right set of policies in place, perhaps most importantly greater regulatory consistency and predictability.

U.S. entrepreneurs are also involved in small scale businesses that are benefiting both Americans and Indonesians. On a recent trip to Bali I saw an excellent example of this on the margins of the “Our Oceans” conference.  We have all heard that consumers in the U.S., Europe and some parts of Asia have been clamoring for seafood that is sustainably harvested, and at a dinner focused on the issue I met an American and his Indonesian partner who have taken advantage of this market and have since seen impressive growth.  Thomas Kraft is a seafood buyer who is based in Hawaii and, working with his Indonesian counterpart in Bali he has installed GPS units on a number of fishing boats who supply them with fish.  By using those GPS units both the U.S. and Indonesian partners can know exactly when the fish are caught, how long they have been out of the water and exactly what is being shipped to Hawaii for distribution.  Based on the efficiency of the operation Mr. Kraft told me that he can get up to 2000 kilograms of fish shipped to his warehouse and have it sold and in restaurants throughout the U.S. on the same day.  These efficiencies are satisfying market demand, creating jobs in the United States and helping Indonesian fishing families make more money which supports the local economy.  This story is just a small example of what we can achieve when our two countries work together, and I believe that this is just the beginning of our economic cooperation which will provide major benefits for both of our countries in the future.


Security Cooperation

Our partnership also extends to defense cooperation, and I’m proud to say that the United States is currently Indonesia’s oldest and largest military engagement partner — we train hundreds of Indonesian military personnel both in the US and here, and we conduct nearly 200 joint exercises, exchanges, and other military-to-military engagements every year.  One example you may have heard of was the Cope West exercise held in Manado in November of last year.  It was the first time in 19 years that our fighter pilots have trained together. This was far too long a break and I certainly hope to see more exercises like this one in the future, especially since we are both using the same equipment, F-16 fighter aircraft which are uniquely suited to Indonesia’s desire to have greater visibility of its maritime domain.  We recently delivered four more of these aircraft that have been completely rebuilt with the latest in weapons and radar technology, and we will deliver the last of the 24 that were granted later this year.  Indonesia will also take delivery from the US industry of its first Apache helicopters later this year.  The Apache is the most sophisticated attack helicopter in the world and a critical component of US Army aviation. Our two military’s will begin to train together this year on Apache operations in the littoral environment as part of our annual Garuda Shield exercise.  The more our militaries cooperate, through exercises such as COPE West and Garuda Shield that involve our navies and our ground forces, the better prepared we will be to cooperate as partners to assist other countries when they experience natural disasters, and to maintain a secure and stable region.

Our two countries also agree on the need to enhance security engagement on a broader scale.  In the post-Cold War Era, the world has become an increasingly complicated place, with multiple conflicts and an increased threat of asymmetric or nontraditional warfare.  The ability of our people to live in peace and improve their lives economically is dependent on our countries’ joint efforts to provide security. Indonesia has made major contributions to Asian regional security as well to global security concerns through its UN peacekeeping efforts.  We are proud to be partners in these global and regional efforts, and look forward to continuing this cooperation.

In addition to military cooperation, our countries are also working together in law enforcement channels to face a common threat, that of terrorism both within our borders and trans-nationally. Both our nations have been the victims of terror attacks over the past 15 years Indonesia, led by its law enforcement agencies, has had impressive successes in stopping terrorists and bringing them to justice, and we will continue to work with, and learn from, our partners here as we work to defeat this common foe.


Maritime Cooperation

I’m sure all of you have heard President Jokowi talk about Indonesia as a “maritime fulcrum” in the past few years, and he has rightly recognized the important place that your country holds as a maritime nation in a critical economic region.  Asia and SE Asia in particular are the engine of the world economy, and many of the goods that our countries produce flows through your waters.  That is why an important part of our strategic partnership is focused on maritime issues including maritime security, economy, resources and fisheries conservation, safety and navigation, science and technology, and infrastructure.

We are cooperating closely with Minister Susi and her ministry to provide equipment, training and know-how to combat the scourge of illegal, unregulated and unreported fishing in your waters.  Fishing is an incredibly important part of Indonesia’s economy, especially in the smaller islands, and we are proud to provide assistance where we can to help ensure the livelihoods of fishermen in these regions, and to provide a market for their catch.

We are also seeking ways to help accelerate the development of port infrastructure and security, and several U.S. consultants from some of our nation’s busiest ports have been here to provide their expertise to reduce dwelling times and to ensure that goods can move smoothly through your maritime network.

In addition, through our development agency USAID and others, we are working at the grassroots level and with the national government to help manage the bountiful resources that you have in your waters through the promotion of sustainable fisheries, the restoration of coastal mangrove communities and the marketing of sustainably caught fish which consumers in the U.S. crave.

Through these efforts we hope to see more stories like the one I told earlier about the fish merchant in Hawaii which has resulted in greater income for fisherman here, and an abundance of sustainably caught fish in restaurants throughout the U.S.


USAID/MCC development assistance

I mentioned USAID a few moments ago, and I would like to stress that the economic, military and political cooperation that I have described also provide a foundation for the work that our development agencies are doing in Indonesia. On many levels USAID and the Millennium Challenge Corporation are working with our partners in the government here to help achieve the goals that President Jokowi has laid out for the country.  USAID alone invests approximately 1.3 trillion rupiah a year to support Indonesia’s quest for strong democratic institutions, inclusive economic growth, the elimination of diseases, and a healthy environment.

As a result of our partnership the government here and USAID have helped more than 2.4 million Indonesians get better access to water, 776,000 people gain access to clean water, and 300,000 people get better sanitation in 2015. USAID’s peatlands restoration initiatives have significantly helped cut the risks of fires and flooding in Sumatra, Kalimantan and Papua. In the area of education, USAID has partnered with Indonesian education institutions to train over 170,000 teachers and school principals to improve teaching methodology for more than 7.4 million students.

A second aspect of our development partnership is the Millennium Challenge Corporation (MCC) compact with Indonesia.  The MCC is a grant agreement which totals 7.8 trillion rupiah over five years and it is being implemented by Indonesians, for Indonesians. The MCC model focuses on policy reforms, economic growth opportunities that deliver tangible results and shared learning on what is and is not working. Here in Indonesia, our government partners created a new national trust fund to manage this grant, governed by eminent trustees from Indonesia’s public and private sectors.  In 2018, the compact will successfully complete its five years of MCC-funded operations. However, several of the initiatives launched under the compact have already demonstrated success and will continue to be receive funding from the private sector and the Government of Indonesia.

The MCC grant is focused on President Jokowi’s priorities and covers three main areas – Green Prosperity which is focused on creating sources of renewable energy, supporting better natural resource management, and restoring the country’s vulnerable peatlands. The second major program is a partnership with the government to tackle the problem of childhood stunting.  Over 37 percent of all children in Indonesia are stunted, which may prevent them from reaching their full lifetime earnings potential.  Breaking this cycle will be important if Indonesia is to increase its rate of economic growth over the long run. Finally, MCC is focused on helping to modernize government procurement processes.  I know that this seems like an overly technical area but I can tell you that billions of rupiah are lost through inefficient procurement practices every year, funds that could be used for many other programs that would benefit the country.  I believe that our cooperation in this area, and in the other two I have mentioned, will lead to more efficient systems, revitalized rural communities and most importantly increased economic growth in the years to come.


People to people engagement

One of our most successful programs at promoting people to people engagement between our two countries has been the reintroduction of the Peace Corps here in Indonesia.  Peace Corps volunteers spend two years in their host countries living in both urban and extremely rural areas, and in Indonesia they are devoted to teaching English in public middle schools and high schools as well as in pesantren.  The Peace Corps was renewed in 2010 and there are currently 170 volunteers here in Indonesia located mainly in Java with a few in East Nusa Tenggara. Our volunteers are U.S. Ambassadors in their own right, and they are deeply integrated into Indonesian life where many speak fluent Bahasa and have a gained a strong appreciation for Indonesian culture through their experiences in your country.

Of all of the work that our Embassy is engaged in one of the most important aspects in terms of long term impact may be our efforts to increase the people to people engagement between our two countries.  Most Indonesians know something about the United States, through movies, music, television or on-line content.  Those views may not always be 100% accurate – there are no giant robots destroying Los Angeles ala Transformers, for example – but you’d be hard pressed to find someone who doesn’t have some idea about the United States.  But many people in the U.S. don’t know much about Indonesia.  For a number of reasons Indonesia and the U.S. have historically lacked the cultural ties that we have with other countries in the region despite our common values and democracies.  For example there are nearly 4 million Filipinos in the United States right now, all of whom share stories about their experiences in our country with their families back home which eventually leads to a greater sense of mutual understanding.  By contrast there are fewer than 100,000 Indonesians in the U.S. as of last year. Although I can understand after being here for a few months why Indonesians always want to return home after their visits – as a nation you are so proud of your identity and your way of life, and family plays such an important role in your culture.  But the small size of the Indonesian diaspora in the United States means we have to work harder to build closer ties and create a greater understanding between the people of our two nations.  One way we can do this is through more students studying or teaching in each other’s countries.  I encourage all of you to take advantage of EducationUSA, the Embassy’s free, unbiased student advising services you heard about earlier.

There are comparatively few Indonesians studying at U.S. universities and colleges, about 9000 last year compared to the over 300,000 students from China.  Why is this important?  In addition to building greater understanding between our two nations, the skills and connections Indonesian students in the U.S. bring back home allow them to do more to start businesses, support their government and help their communities.  Let me give you an example.

Aria Widyanto is an alumnus of the Young South East Asian Leaders Program in 2015. He was at that time, working in a bank.  After his YSEALI fellowship program, he became aware of the enormous informal economy in Indonesia made up of people who lack access to capital from the banks which have no mechanism to assess the risk of small, rural borrowers with no credit history.  He and his partner identified this untapped resource and launched a program aimed at revitalizing the rural economy of Indonesia. Amartha runs entrepreneurial trainings for rural women and assesses their risk as borrowers through interviews and statistical analysis, then connects these rural borrowers with small-scale investors.  The women earn additional income, learn business and leadership skills and help to build local economies that help relieve the economic pressure on Jakarta and large urban centers.  The investors, usually young, urban Indonesians with a small amount of disposable income are discovering a new way to invest their savings and they generally receive around a 15-20% return on their investment.  They also have the satisfaction of helping to improve the rural economy in their country.  To date Amartha has connected 30,000 rural women in the Bogor area and in Poso with investors for loans in the range of $50 to $800. Their target is to reach 100,000 rural women by the end of the year, and one million by 2021.

Amartha’s story is just one example from the thousands that we have heard from alumni of not just the YSEALI program but also from our exchange students who have studied at some of our finest universities.  I have met with a number of alumni groups in the last few months and to a person they have each had a positive experience in the U.S., and have returned inspired to do more for their country.  Many of your leaders in government are also alumni of our educational programs including Ibu Sri Mulyani who graduated from the University of Illinois at Urbana-Champaign, and many others have traveled to the U.S. on short term exchange programs or to seek advanced degrees.

In the past few minutes I have described just a few of the many ways Indonesia and the United States are working together to address issues of bilateral and regional concern.  If I had more time I could outline many other areas in which our two countries are cooperating.  As you can see our strategic partnership is as deep as it is broad, and that our interconnectedness extends beyond our policies and our politics.  As the second and third largest democracies on the planet we have a responsibility to each other and to the world to continue our cooperation in all of the areas I have described to improve economic opportunities for our citizens, and to help ensure a secure and stable region which supports our economic ambitions.

Thank you again for the warm welcome and I would be delighted to take some questions from the audience.