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U.S. Department of State
96/07/25 Remarks to American Chamber of Commerce, Indonesia
Office of the Spokesman



                      U.S. Department of State 
                      Office of the Spokesman 
 
                        (Jakarta, Indonesia) 
____________________________________________________________________ 
Text As Delivered                                     July 29, 1996 
 
 
                             REMARKS BY 
              SECRETARY OF STATE WARREN CHRISTOPHER 
                TO THE AMERICAN CHAMBER OF COMMERCE 
 
                        Jakarta, Indonesia 
                          July 25, 1996 
 
Good morning.  Thank you, Lou, for that nice introduction.  I understand 
that the last guest here was my friend, Jesse Jackson.  One thing I can 
tell you -- I won't be able to talk as fast or as long as Jesse Jackson 
did.  (Laughter)  That may disappoint some of you, and relieve others.  
(Laughter) 
 
I was last here on a rather historic day in November of 1994 -- the day 
of the APEC leaders' meeting at Bogor where they adopted the trading 
rules with respect to APEC.  Since then, of course, we've been 
developing a blueprint to carry out the decisions that were made.  I 
can't come here without reminding myself -- and perhaps saying a word to 
you -- that with me at that time was Ron Brown, who served so 
effectively and whom we all miss so much in Washington.  I hear that his 
successor and my long-time friend, Mickey Kantor, was back here, and I 
think Mickey would make no bones about the fact that you can't replace 
Ron Brown, all you can do is to try to fill that niche as well as you 
can. 
 
I am delighted to be back with a Chamber whose companies make history 
every day as you contribute to the really spectacular rise of Indonesia 
and this part of the world.  This time I have come to Jakarta, as you 
know, to participate in two of the ASEAN programs -- one is the ASEAN 
Post-Ministerial Conference and the other is the ASEAN Regional For
of all economic power in the world, but clearly it's dwarfed and 
overshadowed by the ASEAN Regional Forum, because that forum now 
contains both China and India as well. 
 
Most fundamentally, beyond my attendance at those meetings, I am here 
because the United States has a great and growing stake in safeguarding 
security, promoting prosperity, and encouraging openness in this region 
that's so critical to our interests.  Two-way trade between the United 
States and ASEAN surpassed $100 billion last year, and American 
development in the region now exceeds $25 billion.  It's no surprise 
that our Commerce Department has designated this ASEAN area as one of 
the world's Big Emerging Markets, and certainly it is that. 
 
ASEAN is the entity here, but Indonesia is the largest market in the 
ASEAN group, and it's a rapidly growing presence of American business 
that really brings me here.  Indonesia is the key focus of the United 
States as we seek to promote American economic interests in this region.  
Every day, in one way or another, Embassy Jakarta goes to bat for 
American businesses and helps you try to score orders and secure 
investments -- from the Paiton power plant in East Java, to the 
communications networks in West Java, to the forestry communications in 
Eastern Indonesia.  I was up rattling around this morning in the way you 
do because of this time change, and I was looking through something 
called the Asian Business Review.  I was very interested to see an 
interview with my long time friend and colleague, John Bryson, of 
Southern California Edison -- a company that is now Mission Energy -- 
and their project here.  I guess it's the Paiton power plant.  It 
certainly brought home to me how active American business is in 
Indonesia.   
 
Broadening beyond the energy sector where we used to be so dominant is a 
whole range of new American interests.  As I look down the list of who's 
coming this morning, and see how broad you are, it's clear that there is 
tremendous diversification.  Our Embassy of course also has the job of 
tackling the tough issues like enforcing intellectual property rights -- 
something I raised yesterday -- relaxing investment restrictions in key 
sectors, and expanding bilateral air service.  I guess you all would 
like to be able to go to the United States directly through Japan, and 
that's something that we need to work on. 
 
Yesterday I signed an important tax amendment with Indonesia, that had 
taken a fairly long time coming -- more than two years to be exact.  As 
you know, by bringing tax rates imposed on U.S. companies in line with 
those faced by your major competitors, this agreement will give our 
firms greater incentive to come to Indonesia, and the prospect of 
greater reward for being here.  I want to thank your Chamber for your 
successful work on this issue with the Treasury Department and with our 
Embassy team.  I wouldn't be at all surprised to hear that some of you 
had raised this issue, because it's clearly something that needed to be 
done and we got to work on it and the Indonesian Government was 
ultimately very cooperative. 
 
When President Clinton and I came in 3  years ago, we made a very 
strong vow, a resolution, to promote American business across Southeast 
Asia and around the world as a whole -- really a double resolution.  
First, business deserved a higher priority than it had gotten in the 
past, and second, Asian business deserved a higher prioritiy.  The 
President's priorities on economics are reflected in his passing of 
NAFTA and GATT, and helping to forge the Bogor commitment here in APEC.  
It created the first Leaders Meeting at APEC, which has really 
transformed that forum from a sleepy organization to the point of 
creating  jobs at home and opening markets abroad.  We are trying to put 
the bottom lines of American business on the front lines of American 
diplomacy.  And I do believe that it is working.  As I look back 3  
years -- you can't see it day-by-day -- I certainly see a much greater 
emphasis on helping America business, promoting American business around 
the world.   ASEAN governments can be pivotal to the strategy that we're 
trying to follow. 
 
Very important meetings are coming up between now and the end of the 
year.  In December, Singapore will host the first ministerial meeting of 
the World Trade Organization, and, a month earlier, in November, the 
Philippines will host  this year's APEC summit.  One of my priorities 
here this week has been to lay out the goals in trade and investment for 
those two important meetings.  Let me mention two or three of our goals.  
We believe that the Singapore WTO ministerial should commit to 
implementing the Uruguay Round, and to concluding the Round's 
"unfinished business" -- especially in services.  The United States and 
ASEAN can both benefit from reaching agreements in 1997 that embrace 
high standards of openness in financial services and telecommunications. 
Those are chapters not yet finished and need some more work.  At 
Singapore, we should also agree on priorities for the next decade.  We 
should consider an agreement to eliminate tariffs on high-tech products 
and move forward toward comprehensive liberalization on government 
procurement.   
 
With our winning roster of low-cost, high-quality suppliers, the United 
States has a very strong interest in opening procurement markets in this 
region and around the world, and we definitely will make that a 
priority.  We also think that the new WTO, in its first ministerial 
meeting, should address the relationship between trade and core labor 
standards.  We recognize that different countries have different 
comparative advantages at different stages of development, including 
different wage levels.  But we believe there are ways to expand trade 
and protect workers at the same time.  If we are to keep a consensus at 
home for further trade liberalization, American companies must do their 
part in upholding internationally-recognized standards around the world.  
In order to keep the consensus that we need in the Congress, and with 
our workers and citizens at home, we really need to do our part by 
upholding those standards around the world. 
 
Now at the APEC meeting in November in Manila, we must begin carrying 
out what's called the Osaka Action Agenda, which is the plan to bring us 
to open trade, liberalized trade, in this area of the world, by 2010 for 
industrialized countries, and by 2020 for all the others.  This Osaka 
Action Plan provides a practical blueprint for achieving this .  We are 
very much encouraged by the start that the APEC member economies have 
made in developing their Action Plans, and they'll be very carefully 
vetted at the meeting in Manila -- a meeting that comes only a couple of 
weeks after our election.  I have thought to myself, smiling, that 
either President Clinton will be there having just won and will be 
taking kind of a victory lap, or it might be quite another kind of event 
if Senator Dole has won.  (Laughter)  But President Clinton is planning 
to be there one way or the other.   
 
We worked hard to try to make sure APEC gained practical relevance to 
business around the Pacific Rim. When I was here in Jakarta two years 
ago, I pushed for an APEC Business Advisory Council, which was created.  
If you haven't done so, I would urge you to get involved, at least 
through your Chamber or some of you directly, in the work of this APEC 
Business Advisory Council.  It's important that a Chamber as important 
as yours have its voice heard.   
 
The ASEAN economies are well on their way to becoming world-class 
business environments, with an increasingly capable workforce, very 
competitive companies, and reform-minded governments.  I think that, 
nevertheless, as far as they've come, the region can attract even more 
investment and trade if several challenges are met.   
 
This week I urged ASEAN to toughen enforcement of intellectual property 
rights, to reach an agreement on financial services -- an AFTA agreement 
on financial services -- to open up telecommunications competition, to 
support liberalization of air transport throughout the Asia- Pacific 
region, and to develop fair and consistent guidelines for government 
procurement contracts. 
 
And now let me mention something that, for a long time, I guess two 
decades, has been a favorite subject of mine.  I called on the ASEAN 
governments to help confront the reality of illicit payments and to 
promote transparent competition across the board, a challenge that I 
want to focus on for just a couple of minutes before I conclude this 
morning.  I don't need to tell you what a pernicious set of problems the 
illicit payments problem is, especially for American companies, bound as 
we all are by our laws. This is just a massive problem -- costing U.S. 
firms tens of billions of dollars, I think, in lost business every year 
-- and, unfortunately, it's global.  Let me tell you a little bit about 
what we're trying to do. 
 
Responding to an initiative that I launched a couple of years ago,  the 
25 OECD nations agreed two years ago to take what they called "concrete 
and meaningful" steps to stop illicit payments by their firms.  You 
never quite know when those words are used whether they're ever going to 
be put into action.  But I'm glad to say this spring the OECD nations 
took steps to reach agreement to deny the tax deductibility of bribes -- 
and to criminalize them.  I think that puts some real teeth behind that 
program.  We will press all of our major trading partners and 
competitors in the OECD to carry out these commitments through their 
national legislation.  We are waging this fight on other fronts as well.  
We reached agreement with our Latin neighbors on the Inter-American 
Convention Against Corruption.  This is a provision which will 
criminalize transnational bribery of public officials.  I think that's 
the right way to go -- denying tax deductions is a good start, but 
ultimately I think you need to criminalize transnational bribery of 
public officials. 
 
More broadly, we are also focusing on transparency in bidding 
procedures, especially in government procurement contracts. We're doing 
that through the WTO, and through APEC.  I am really determined to do 
everything I can to help American business abroad to be able to compete 
on a level and fair playing field.  It's a fundamental principle at the 
heart of our fight against corruption that we need to have a dedication 
on the part of these governments to accountability -- really try to get 
at both sides to get the government to feel very accountable, and then 
to ensure that businesses realize that there's going to be a penalty if 
they get involved in these illicit payments.  The growing 
interdependence of the global economy, the growing presence of U.S. 
companies all around the world in emerging markets, has only reinforced 
my  long-standing interest in promoting accountability and transparency 
on the part of these governments.   
 
Let me also mention just one other challenge before I conclude, and that 
is the importance of promoting a healthy global environment.  
Governments and businesses increasingly recognize that pitting economic 
development against environmental protection is what President Clinton 
has called a "false choice."  Both are necessary -- that is, economic 
development and environmental protection -- both are necessary, and they 
are very closely linked.  That is one reason why I have launched an 
initiative at the State Department to integrate environmental issues 
into every aspect of our diplomacy.  I've tried to insist that in each 
of our conferences and bilateral and multilateral meetings we ask 
ourselves whether there aren't environmental issues that ought to be 
raised, trying to lift the level of that in much the same way that ten 
years ago we tried to make sure that econommic issues were put on the 
agenda.  Countries and companies, I believe, that fail to be 
environmentally conscious inevitably limit their growth, limit their 
productivity.  You're familiar with Indonesia's many environmental 
challenges.  We're working through AID to try to reduce pollution.  We 
are promoting sound management of tropical forests and coral reefs.  And 
we are supporting environmental NGO's.  
 
You also know that pro-environment policies in Indonesia offer 
tremendous opportunities, as well as sometimes considerable controversy.  
Multi-million dollar investments by U.S. companies are providing 
Indonesia with geothermal power that is both clean and cheap.  We are 
helping our firms sell clean production technology for use in the pulp 
and paper, textile, and oil and gas industries. I feel that, while 
diplomacy can be important, business that promotes environmentally sound 
techniques might accomplish as much for the environment as you could by 
several additional treaties. 
 
Your advice, your help, is really indispensable in enabling us to take 
advantage of opportunities we have to explain why the Asia-Pacific is so 
critical to America's future.  I really look forward to working with you 
as we probe these interlocking interests, we probe these tremendous 
opportunities we have in this area to try to ensure that the coming 
Pacific century is an American century as well.  We're here to stay.  
America is a Pacific power, and will remain a Pacific power.  American 
leadership in the Pacific is critical.  All of the nations of the area 
want us to stay.  They look to us for leadership.  And I think all of 
you who are American businesses here should be proud of -- and I know 
you are, as I am -- of the reception that America gets wherever we go.  
 
Now, Mr. Clinton, I'll be glad to try to respond to questions.  I want 
to tell you that if they're detailed, or even if they're very difficult, 
I may call on Joan Spero and Winston Lord, to answer. 
 
QUESTION:  Mr. Secretary, is the Clinton Administration a bit softer on 
human rights as compared to the Bush Administration?  As the newspaper 
says, you have been meeting the Human Rights Commission here.  What were 
the main issues discussed?  Thank you. 
 
SECRETARY CHRISTOPHER:  I don't think there's any significant difference 
between the Bush Adminstration and our administration in its concern for 
human rights.  Different administrations have different ways of 
addressing those issues, but human rights has become a well-settled part 
of American foreign policy and diplomacy.  Our annual human rights 
reports are now respected around the world as really the key measure of 
progress in human rights.  Our Assistant Secretary, John Shattuck, is 
recognized around the world as one of the finest and most effective 
human rights advocates.  One of the things I've tried to do is to fully 
integrate human rights into the rest of our policy.  I was really very 
pleased and proud to see the extent that John Shattuck has become a full 
member of our team in Bosnia.  Too often I've found that human rights 
assistant secretaries, human rights officials, were off at the side 
shooting at the problem from a particular vector and I don't think 
that's the most effective way to do it.  If they're actually involved in 
the decision discussion, they begin to see the problem and how they can 
most effectively integrate their own cares and concerns. 
 
I'm glad you asked about the Indonesian Human Rights Commission.  When I 
was here before, I met with them.  They were just a fledgling 
organization at that time, just getting started, with quite an uncertain 
future.  I found that they have established themselves, 
institutionalized themselves, in a most effective way.  Their chairman 
died a couple of weeks ago but the two vice chairs were very active, the 
Commission was in full attendance, and what we did was just go through 
the whole range of human rights issues.  They've broken themselves down 
into subcommittees and subgroups, and I think they've established an 
ability to be effective in human rights here that would have surprised 
many who looked at it for the first time.  They've developed the 
capacity to issue white papers or reports on human rights abuses, and 
without being too euphoric about it or going beyond what the facts would 
allow, I think it's a very healthy development.  I hope it continues in 
that vein, and I have every reason to think it will.  In the course of 
our meeting, we must have talked about ten or twelve human rights 
issues, from matters involving the press to religion to, of course, the 
usual (inaudible) of East Timor, and some new problems in Irian Jaya. 
 
QUESTION:  What about the destruction of churches in the various places 
in Indonesia?  Was that discussed also, sir? 
 
SECRETARY CHRISTOPHER:  We did discuss that, but not in any detail.  
 
QUESTION:  Mr. Secretary, as you've noted in your speech, the U.S. 
security umbrella has long been very important for the stability of 
Southeast Asia and ASEAN.  On the other hand, ASEAN has been coming 
forward with the zone of peace and neutrality -- basically, a nuclear 
free zone.  It's been a proposal that's been on the table for decades 
now.  I'm wondering, how do the two balance out in our policy in that 
regard? 
 
SECRETARY CHRISTOPHER:  Well, I don't see them being incompatible.  We 
are going to maintain our security presence, be a Pacific power.  We're 
going to maintain approximately 100,000 American armed forces in the 
Pacific -- about the same amount that we have at the present time in the 
European Theater and that will not change.  We have five important 
alliances here which are very healthy --  we are leaving from here, as a 
matter of fact, in a couple of hours to go down to Australia for our 
annual meeting with respect to the Australians on the U.S.-Australia 
alliance.  We also have alliances with Thailand, the Philippines, Japan, 
and Korea.  Our relations with Japan are particularly healthy and strong 
at the present time, as they are with Korea.  So we're in good shape.   
 
Now, that doesn't mean that under proper circumstances we won't be 
willing to cooperate with nuclear free zones.  They have presented us 
with a nuclear free zone concept that has some flaws from our 
standpoint.  One of the positive things coming out of my discussions in 
the last two or three days is the willingness on their part to meet with 
us to discuss whether or not we can resolve our problems.  We've joined 
other nuclear free zones, and we certainly don't rule out joining this 
one.  I think we can be an effective Pacific power, and still, in the 
right circumstances, in the right areas, be prepared to go along with 
nuclear free zones.  By saying that, I certainly don't want to indicate 
that we would forego the deterrence that comes from the maintenance of a 
nuclear capability.   
 
QUESTION:  Mr. Secretary, my question is about the relationship between 
U.S. foreign assistance and strategic business and political interests 
in Indonesia.  I ask this because I serve as an adviser to the Ministry 
of Finance here, and it seems that over the past two decades, U.S. 
technical assistance has been well received by Indonesian officials, as 
have training opportunities in the States, and if you'll look at the 
senior decision makers in Indonesia, perhaps the majority of them have 
studied in the States.  Yet, at the last CGI meeting in Paris, of about 
$5 billion pledged to Indonesia, the U.S. foreign aid assistance was 
about $50 million.  It doesn't appear on the screen. 
 
My question is:  as we're reaching a very sensitive period in terms of 
capital market development, deregulation of the real sector, trade 
liberalization -- it would seem that the strategic use of U.S. foreign 
assistance to help Indonesia through the transition would be very 
valuable.  Thank you. 
 
SECRETARY CHRISTOPHER:  We certainly do have resource problems in 
dealing with Congress these days.  I think it's in many instances 
shortsighted on the part of Congress to not provide the investments that 
gain us so much leverage around the world.  I wonder if I could ask 
Under Secretary Joan Spero if she has any comment on the particular 
matter that you raised.  Joan. 
 
UNDER SECRETARY SPERO:  There is terrible pressure on the foreign 
assistance budget -- the so-called "150 Budget".  What you need to know 
is that the Secretary of State is busy every single day dealing with the 
Congress, trying to maintain not only our foreign assistance capacities, 
but also, frankly, the ability to continue the operations of the State 
Department and a lot of the work of the people who help you every day.  
I wish I could give you a positive assesssment to say that there is a 
responsiveness on the Hill to that.  We face problems as the Congress 
tries to cut the budget, and problems as there is a lack of 
understanding about our role around the world.  I don't know if 
Ambassador Roy wants to comment on the specifics.  I can't give you the 
specifics, but I'd be happy to follow up on it. 
 
AMBASSADOR ROY:  I'll just make a very brief comment.  The trend in the 
region, and I've served in a lot of countries out here, has been to 
phase back our AID programs as development takes place in those 
countries.  This region illustrates concretely the advantages of keeping 
our markets open for the region.  They are able to substitute for the 
aid that we used to provide by taking advantage of economic development 
and expansion of trade, and it's been much healthier in terms of their 
economic growth than has been the case for countries that have 
maintained dependence on AID.  We're in that phasing-out process in 
Indonesia right now.  We're trying to ease the burden by sustaining our 
programs as long as we can, but the budgetary realities in the United 
States are that way.  We've been very frank with the Indonesians, and 
they know that our AID budget is going down.  If we can sustain them 
longer, we'll do everything we can to do so. 
 
QUESTION:  As Indonesia is starting to develop the nuclear power plant 
in Muria, Central Java, what is the U.S. standpoint on this nuclear 
power plant's development? 
 
SECRETARY CHRISTOPHER:  The siting of nuclear plants around the world, 
of course, is a controversial issue, and I think it's probably not for 
an outsider to try to address that subject in the abstract.  I noticed 
that in that interview with my friend John Bryson, who heads the largest 
energy company of its kind in the world, he was asked whether he had 
nuclear plants in mind for Indonesia, this part of the world.  He said, 
frankly, no.  He said we operate nuclear plants in the United States, 
and we operate some very successful ones, but that was not part of their 
array for here.  But I think it's a judgment that has to be made by the 
country and company involved.   
 
In the right instance, very modern nuclear plants can produce power at 
relatively low cost.  Many think that there are inherent dangers that 
can't be overcome.  On the other hand, you have countries like France 
that have the majority of their energy produced by nuclear power.  The 
whole world is wrestling with the problems of the outmoded and 
inefficient nuclear plants in Ukraine.  When I was in Ukraine recently, 
I visited a hospital in Kiev where the victims of Chernobyl are still 
coming in ten years after that nuclear disaster.  It's a matter of 
balance.  As I say, I wouldn't want to be prescriptive about it.  I 
think each area and each country needs to look at the alternatives they 
have and weigh whether or not the nuclear option is the right one for 
them under the circumstances.  It's a very careful and close issue, and 
one on which I certainly wouldn't want to make a generic comment.  I'll 
take one more question. 
 
QUESTION:  Mr. Secretary, having served my first foreign service 
assignment in Rangoon, I've been very interested in the efforts to try 
to bring Burma, or Myanmar as they now call themselves, into the ASEAN 
community.  It seems that there's kind of a dichotomy between what you 
might say are the carrot and stick approach on this, and you see 
historically where ASEAN was able to play quite a role in bringing some 
reconciliation in Cambodia.  I just wonder between the approach of 
sanctions and the approach of constructive engagement.  I know there's 
been some discussions during the dialogue on that.  Do you see some 
movement towards common approaches and productive approaches from 
Myanmar?  Thank you, sir. 
 
SECRETARY CHRISTOPHER:  We have taken as a given that ASEAN would want 
to bring Burma into the ASEAN Regional Forum, and, as you know, they 
came along with India into observer status, and they will become members 
in the future.  It's probably not within our province to have resisted 
the entry of Burma on that basis.  A position that I did rather strongly 
take was that if Burma's going to come in, we should use the advantage 
of their presence to let them know our concerns and our reservations.  
I, frankly, was surprised to arrive here and find that Burma was not on 
the agenda for the formal sessions of the ASEAN Regional Forum.  We had 
a dinner on Monday night and because a number of us expressed those 
concerns, it was put on the agenda, and concerns were made known, and 
the Burma foreign minister at least heard our concerns.   
 
The concern I particularly mentioned was the importance of releasing 
prisoners.  They have a number of prisoners who basically were the 
opposition party, elected in 1991 and never able to take their positions 
in government.  Second, we emphasized the importance of a dialogue 
between that opposition party and the current military group called the 
SLORC.  Unless that dialogue takes place, Burma is likely to have an 
extremely tense relationship and not be able to focus on the many 
economic improvements they need to make.  Finally, I emphasized the 
importance of dealing with the drug problem that flows from Burma.  It's 
a source, I believe, of more than half the heroin around the world, and 
that issue really needs to be addressed.   
 
Now we're quite prepared to follow the ASEAN tradition of trying 
engagement -- constructive engagement.  Congress is pressing us to do 
more, and ultimately we may have to do more.  We would certainly find 
ourselves under enormous pressure if, following these meetings, Burma 
decided they'd gotten through these meetings, they'd gotten admitted to 
membership, and then they'd roll up Aung San Suu Kyi and her party in an 
even more repressive way.  It is an issue on which the United States has 
a rather forward-leaning position.  I'm glad to say that we were joined 
at the meeting here by Australia, New Zealand, the European Union, and 
Canada.  So I didn't feel as lonely as I felt I might be.  We're going 
to continue to pursue this, but we want to do it in the most effective 
way.  I know many of the countries of the region feel the most effective 
way is through collective critical engagement, and you have to say that 
ASEAN has been very successful working in their Asian way of improving 
the economies and making persistent, gradual, and slow progress.  So 
we'll try to confine our restlessness and, with their patience, see if 
we somehow can't get the job done. 
 
I enjoyed being here again.  I look forward to coming back.  Thank you. 
            
 
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