San Jose Mercury News, Saturday, March 1, 2003  

Southeast Asia Bracing for Backlash: Economic Ripple Effect Feared if Terrorists Retaliate for Iraq War  

By KARL SCHOENBERGER, Mercury News  

KUALA LUMPUR, Malaysia – The glitter of this prosperous Southeast Asian capital was muted by a massive deployment of police over the weekend. Iraq was the topic of contentious debate, but the word terror was in the back of people’s minds as Malaysia opened an annual summit of non-aligned nations with edgy, post-Sept. 11 security. 

The same police force that gained international acclaim for uprooting an underground network of Islamist terrorists was out in force. A legion of 8,500 police officers closed roads, patrolled neighborhood mosques and subjected guests at five-star hotels to rigorous airport-style security searches. 

There’s good reason for the jitters. Experts warn that the looming possibility of a U.S.-led attack on Iraq, which evokes anger even among moderate Muslims in Asia, raises the odds of a terrorist strike against so-called “soft targets” where Americans and other Westerners gather, such as hotels or international schools. A war in Iraq also could cause ripple-effect damage to the region’s fragile economies, creating the kind of poverty and despair that help nurture militant Islamist groups, said a senior Malaysian police official. 

“We are worried about the consequences of an Iraqi war,” said Hasan Ahmad, deputy director of Malaysia’s National Police Special Branch, the crack internal-security unit that started arresting regional terrorist suspects even before Al-Qaida attacked New York and Washington. “If oil prices go up and the economy gets really bad, then we’re concerned about the repercussions.” 

The carnage at a popular nightclub in Bali, Indonesia, in October—wheremembers of the militant Islamist group Jemaah Islamiyah confessed to planting the bomb that killed 193 people—has transformed attitudes in the region. 

Indonesian authorities had largely dismissed the possibility of direct links between local militants and Al-Qaida operatives, and they were reluctant to crack down on troublemakers for fear of strengthening the Islamic political opposition. But now even the religious parties are acknowledging the gravity of the problem and support tough counterterrorism measures. Cooperation with U.S. counterterrorism investigators improved dramatically. 

“The Bali bombing has created a widespread awareness of how dangerous these religious radicals are,” said Edy Prasetyono, head of international relations at the Jakarta, Indonesia, think tank, the Center for Strategic and International Studies. 

‘Criminals’

 “My own family are very conservative Muslims. Our women wear the veil. But they’re really mad at these guys. They see them as criminals now, and that’s a big change.”

Meanwhile, American residents in Southeast Asia are taking more precautions.  Families of diplomats and non-essential American staff have been sent home by the U.S. Embassy in Jakarta. 

In Malaysia, parents of children enrolled in Kuala Lumpur’s International School have been feeling “a lot of angst,” said an American resident, ever since schools in Jakarta were closed temporarily in November because of a terrorist threat. The school is erecting a concrete barrier around the campus. The American Embassy in Kuala Lumpur is encircled in fortress walls. Americans are advised by the State Department to exercise extreme caution in traveling to the region. 

Evidence that Americans are avoiding Malaysia on account of the risk of terrorism is anecdotal, but persistent. Several congressional aides invited by a Malaysian organization to visit the country in February opted out at the last minute, expressing concerns over security in the midst of an “orange” terror alert in the United States. 

American Malaysian Chamber of Commerce officials say they don’t detect a significant drop in investment or a rise in relocation of operations to other countries. But fewer expatriates are coming to live in Kuala Lumpur since Sept. 11, leaving operations up to local Malaysian managers. 

Southeast Asia, with its porous jungle borders and thousands of remote islands, is ideal terrain for international terrorists to hide, train and plot attacks, experts say. Malaysian police are holding some 65 alleged terrorists in detention, most of them Indonesian nationals and all allegedly belonging to cells taking orders from Jemaah Islamiyah’s fugitive operational leader, Riduan Isamuddin, more commonly known as Hambali. 

As many as 1,000 Jemaah members remain at large in Indonesia, the Malaysian Special Branch’s Hasan said. Although Hasan is rueful that Hambali slipped out of his grasp, he’s confident the group has been chased out of the Malaysian Peninsula, where it maintained a presence in the southern city of Johor and in the nearby city state of Singapore for logistics planning and fundraising until police raided their safe houses in December 2001. Singapore authorities arrested 21 militants, including 19 Jemaah members, for allegedly planning to bomb the U.S. and other Western embassies. 

Hambali’s escape route has been tracked through Thailand, which shares a rural highlands border with Malaysia, but there are few clues about his current whereabouts.  Thailand’s top counterterrorism police official, Maj. Gen. Tritot Ronnaritivichai, described the hunt in a recent issue of the Far Eastern Economic Review. Hambali and other senior Jemaah operatives took safety in Muslim villages on the Thai side of the border before splitting up. 

Tritot denied the allegation, reportedly made in an internal FBI document, that rogue elements of the Thai military had trained 20 to 30 Jemaah members in explosives and light weapons at a jungle camp in southern Thailand. 

Many analysts maintain that there is credible evidence to suggest that the loosely organized collection of Islamist radicals that constitute Jemaah’s ranks has links to the Al-Qaida network, but do not necessarily share objectives. Others go a step further, and argue the group serves as a franchise for Al-Qaida. 

“I believe Jemaah Islamiyah is part and parcel of Al-Qaida,” said ZacharyAbuza, a political scientist at Simmons College in Boston and the author of the forthcoming book, “Tentacles of Terror: Al Qaeda’s Southeast Asian Network.” 

And yet Southeast Asia is a diverse region with varying levels of economic development and differing country by country in terms of Muslim populations and Islamic unrest. 

Malaysia, a nation of 22 million people that is less than 60 percent Muslim, is a success story in economic globalization, a powerhouse in assembling semiconductors and other light industrial products for export. But its materialistic secular society is the object of contempt for conservative Muslims, who are gaining influence at the ballot box in regional elections as well as increasingly setting the fashion for women’s headdress in the capital. 

At the same time, Malaysian leaders are struggling to ward off the negative image the country has acquired as a hot spot on the front lines of global terrorism—and as one of the places where conspirators met to plan the Sept. 11 attacks. They complain they have been unfairly lumped together with Indonesia, their giant, impoverished and politically unstable neighbor, and that the association with Islamist terrorism is scaring away American investors and tourists. 

“A lot of people are afraid to come to this part of the world, and it’s not just tourists,” said Noordin Sopiee, chair of Kuala Lumpur’s Institute of International and Strategic Studies. “The bad image is hurting business, too. People don’t want to invest here because they’re misinformed, and scared.” 

Fear of danger 

The perception of danger can be nearly as damaging as the real terrorist attack, analysts warn. 

“I think Malaysia has done an absolutely superb job in their anti-terrorism efforts. They have a terrorism problem there, but they’ve cracked down, and there hasn’t been an incident since Sept. 11,” said Robert Broadfoot of Hong Kong-based Political and Economic Risk Consultancy, who advises clients on personal safety as well as business risk assessment. “But there’s a communication gap that can get in the way of business.” 

U.S. Ambassador to Malaysia Marie Huhtala, a State Department veteran who hails from San Jose, said a lot of the fear for security in Kuala Lumpur arises form misperceptions. 

“You have to clearly distinguish between Malaysia and Indonesia,” she said. “The ruleof law is very strong in Malaysia, and the government wants to keep it that way. And itwants to hang on to American investment.”

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