By 
                Scott B. MacDonald
                
              
                In early August, the JW Marriott Hotel in Jakarta was bombed. 
                The bomber was an Islamic radical, who drove a van into the front 
                of the hotel, killing 12 people and wounding over a hundred others. 
                Most of those killed or injured were Indonesian. The Marriott 
                bombing follows the Bali bombing of October 2002, two other bombings 
                in Jakarta (one at the parliament) and an alleged plot to kill 
                the countrys president Megawati Sukarnoputri. Although Indonesian 
                authorities are reluctant to admit it, the rise of Islamic terrorism 
                runs the risk of polarizing society and endangering the relatively 
                secular nature of the government. It also casts a large shadow 
                over the future of the countrys fledgling democracy as well 
                as the attractiveness of Indonesia as a place for foreign investment. 
                While the Indonesian government is a considerable distance from 
                being ousted from power, local radical Islam and its foreign links 
                to al-Qaeda and Jemaah Islamiah (JI) represent a very challenging 
                problem with long-term implications for Southeast Asias 
                largest country as well as the rest of Asia.
                
                There are two sides of the coin in looking at Indonesia and Islamic 
                terrorism. On one side of the coin, Indonesia has a long tradition 
                of a tolerant form of Islam, which has functioned as a support 
                for political stability. It has also been a pillar of Indonesian 
                nationalism, a force that helps bind the country together. This 
                was especially the case during the struggle for independence during 
                the 1940s. During the Suharto years, Islam was carefully controlled 
                and there was an emphasis placed maintaining a secular society, 
                able to accommodate a Muslim majority, but carving out a tolerance 
                for the Hindu, Christian and other smaller religious communities. 
                With the end of the Suharto years and the advent of Indonesian 
                democracy, the role of Islam in society suddenly became more central. 
                Indeed, with the departure of East Timor, the overall numbers 
                of Muslims as a percentage of the total population increased.
                
                The other side of the coin is that as the Islamic face of Indonesian 
                society has become more distinct and more mainstream, the door 
                has also opened for radicals within the same community to emerge 
                from the shadows, developing international ties to like-minded 
                groups and recruiting more followers. Certainly the shift to a 
                more open political system has brought about a higher degree of 
                uncertainty in Indonesia. Together with the round-robin of presidential 
                leadership since 1997 and tough economic times until recently, 
                radical Islam has become attractive as it projects a clear-cut, 
                simple answer to complicated issues. 
                
                Another aspect of the rise of radical Islam in Indonesia is that 
                the political class is seeking to manipulate this force. With 
                the unpopularity of the American war against Iraq and the close 
                U.S. alignment with Israel vis-à-vis the Palestinians, 
                another Islamic people, radical Islamists have been quick to articulate 
                their views and to find a sympathetic audience in the majority 
                of Indonesians. This by no means infers that most Indonesians 
                favor radical Islam, the creation of a theocratic state along 
                the lines of Iran, or are inclined to attack the West and its 
                allies. What it does mean is that radical Islam touches a sensitive 
                spot in the countrys identity  the West has long looked 
                down on Islamic peoples. In a sense, there is a sense of grievance. 
                After all, the Dutch long colonized Indonesia and took its natural 
                resources. Western companies made money in the country, and Suharto 
                was long supported by the United States. In addition, it is argued 
                the IMF made life miserable for many Indonesians with its poorly 
                conceived economic policies.
                
                The danger is that elements of the political elite are still playing 
                to radical Islamic groups, or at the very least pandering to public 
                sentiment vis-à-vis the unfairness of an international 
                order dominated by the United States. The comments of Vice President 
                Hamzah Haz in calling the United States, the king of terrorists 
                for its war crimes in Iraq certainly must be seen in this 
                context. Haz was responding to international criticism that Indonesia 
                had been lenient in sentencing Abu Bakar Bashir, the spiritual 
                leader of JI, to only four years of jail. Haz is the leader of 
                the conservative Islamic United Development party (PPP). He has 
                in the past been willing to be seen courting some of the countrys 
                more radical Islamic figures. 
                
                While some groups are playing to the Islamic radicals, others 
                remain strongly opposed or are waiting for their turn to take 
                advantage of potential weakness in central authority. President 
                Megawait Sukarnoputri is conducting a war against Islamic separatists 
                in Aceh (on the northern tip of Sumatra) and is seeking to contain 
                separatists in other regions. At the same time, presidential elections 
                loom in early 2004. If the President slips in conducting the war, 
                if she pushes too hard on Islamic groups in a predominantly Islamic 
                country, or if she appears to be in the lap of the United States, 
                her political prospects are likely to weaken. Moreover, she must 
                tread softly with the military. Any loss of power from the civilian 
                part of the political spectrum could be gained by the military, 
                one of the few cohesive institutions in the country. In the past, 
                it has also been one of the most influential. If civilian leadership 
                is inadequate, there are leaders within the armed forces that 
                might be tempted to step into the picture, probably in the shadows, 
                much like Indonesian puppet plays. 
                What complicates matters for Indonesia is that it is not a small, 
                insignificant country. Rather, it is a pivotal nation, located 
                astride major lines of communication and trade between East Asia 
                and the Middle East and Europe. It is also the worlds largest 
                Islamic nation and a major producer of oil and natural gas. For 
                all these reasons, what happens in Indonesia matters. Consequently, 
                the approach of the Megawati government to radical Islamic terrorism 
                is a concern to more than just the local population. It is a point 
                of concern to Washington, Tokyo, Beijing, Manila, Singapore and 
                Manila. The failure to implement Financial Action Task Force (FATF) 
                money-laundering regulations, which are aimed at hurting illegal 
                financial activities in the country -- which could aid Islamic 
                terrorist groups -- gives the impression that Indonesia is soft 
                on tackling the problem.
                
                Perceptions remain important in a globalized world  like 
                it or not. This is important for attracting foreign investment 
                as well as how the country interacts with the rest of the region. 
                While the U.S. has often pushed too hard on Indonesia and certainly 
                played to the sense of Islamic grievance, Indonesias political 
                elite also has to consider its responsibility to its citizens 
                in providing sustainable economic development, a better standard 
                of living, and clear government. Supporting men with bombs willing 
                to kill their fellow Indonesians in grisly acts of violence is 
                not going to build a better future for the country.