Stratfor Analysis:

Analysis

Indonesian President Megawati Sukarnoputri on Aug. 25 lamented
the international travel warnings against Indonesia, noting that
they were costing the nation tourism dollars. The governments of
Indonesia and other Southeast Asian nations frequently have
criticized such warnings from the United States, Australia and
Europe as unfairly pointing out instability and danger in
Southeast Asia. Not only is tourism affected, they argue, but
trade and investment as well.

Southeast Asia, once called the "second front" in the war against
al Qaeda, long has been plagued by Islamist militant
organizations, separatist movements and insurgent armies. With
increasing focus on Jemah Islamiyaah in the wake of the Bali
bombing and more recently following the trials and arrests of key
JI members and the bombing at the Jakarta Marriott, attention
again has been focused on Southeast Asia as a key hub of
international militancy and terrorism.

This presents several problems for Southeast Asian nations.
First, the stigma of terrorism taints all business and tourist
prospects. Second, several nations in the region are Islamic, and
there is a special finesse needed to effectively deal with
alleged militants avoid leaving the government looking like a
tool of the United States or a traitor to Islam. There are also
connections between influential politicians and businesses in
several countries and alleged terrorist or militant
organizations, making effective countermeasures very difficult.

And even in the countries with a Muslim minority, there is the
concern of a backlash from that segment of society. And, given
the colonial history of most of Southeast Asia, there is a great
fear among governments and the populace of the pressures from the
United States to act against militants -- even if the governments
want to anyway.

These governments face a dilemma in dealing with alleged
terrorists and militants. On the one hand, they must demonstrate
publicly that they are serious about cracking down on terrorism
if they hope to reassure potential tourists and investors that
their country is safe. On the other hand, such public shows of
anti-terrorism zeal can backfire, leading to retaliatory attacks
by militants.

But there is also recognition of the need to act, not only
because the sense of instability and insecurity truly impacts
economic health, but also because these groups could undermine
the authority of the serving governments. However, action
presents its own set of challenges -- not the least of which
could come when key terrorism suspects face trial. This can lead
to reprisal attacks by other militants, as was suspected in the
Aug. 5 Marriott bombing. Far from reassuring the international
community of the governments' commitment to dealing with
terrorism and the stability of the nations, retaliatory bombings
only perpetuate the sense of uncertainty and danger.

Yet doing nothing, or waiting quietly, elicits very little in
terms of increased investment and tourism. So governments are
relying on an age-old solution: passing the buck. Kuala Lumpur
recently noted that Malaysians do not fund militant
organizations, Indonesians do. Malaysia is deporting suspected JI
lieutenant Mohamad Iqbal Abdul Rahman to Indonesia -- without
even waiting for Jakarta to ask for the wanted man. Kuala Lumpur
also recently has said it has no problems with the United States
trying JI bomb maker Ridhwan Isam al-Deen al-Hanbali. Given the
impending transfer of power from Malaysian Prime Minister
Mahathir Mohamad to his deputy, Malaysia has a keen interest in
passing the buck to avoid giving militants cause to stir trouble.

And this is the pattern in several Southeast Asian nations. They
blame their neighbors for terrorism, deny that there is a problem
in their country, and occasionally -- as recently seen in
Thailand -- nab one of those previously non-existent militants to
hand over to the United States or some other country. Only
Indonesia, it seems, gets stuck with the militants and most of
the militant attacks.