Acts of terrorism, arrests of terrorists, and judicial convictions dominated the Southeast Asian political scene this past quarter.  The Jakarta Marriott bombing, the capture of Hambali – Jemaah Islamiyah’s (JI) most notorious fugitive – and the conviction of several of the Bali bombers as well as JI’s spiritual leader, Abu Bakar Bashir, capped a tumultuous three months during which the Philippine government put down an abortive military mutiny, ASEAN and U.S. relations with Burma further deteriorated, and new efforts to improve security collaboration within the region were made.  U.S. intelligence played a significant role in terrorist apprehensions; however, Washington’s unwillingness to give Southeast Asian authorities access to terrorists in U.S. custody somewhat soured relations with regional allies.

Riduan Isamuddin – alias Hambali – reportedly Osama bin Laden’s top lieutenant in Southeast Asia and the only Southeast Asian member of his inner circle, was seized by U.S. Central Intelligence Agency and Thai police officials in Ayutthaya, Thailand in mid-August.  Immediately spirited away to an undisclosed location for interrogation by the United States, Hambali is considered the single most important catch in the U.S.-Southeast Asian anti-terror effort.  Believed to be JI’s chief of operations, responsible for a series of bombings in Indonesia including Bali in October 2002 and the recent Jakarta Marriott blast, Hambali allegedly supplied the financing and recruited the bombmakers in the Bali night club explosion that killed over 200 people.  Based on the interrogation of other captured terrorists, U.S. officials believe that Hambali organized a pivotal meeting in January 2000 in Malaysia where the bombing of the destroyer USS Cole was planned and the Sept. 11 attacks discussed.  Hambali has also been formally charged by the Philippines with the bombing of a commuter train in 2000 that killed 22 people.  Additionally, Malaysia and Singapore want to question him about terrorist plans in their states.

At the time of his capture, intelligence officials believe the JI leader had been organizing recruits for future hijackings of commercial airliners. Hambali has been traveling through Southeast Asia and was apprehended with a large amount of cash that came from

confederates in Pakistan, according to intelligence officials.  At an early 2002 meeting in Thailand, he presided over a decision to focus attacks on soft targets such as nightclubs, hotels, and schools.

Hambali’s capture required collaboration among Cambodian, Thai, Indonesian, Malaysian, and U.S. authorities. Phnom Penh, Jakarta, and Kuala Lumpur provided tracking information while Thai and U.S. officials conducted the raid and arrest after the JI leader made the mistake of using his cellphone, thus pinpointing his location in an apartment house in Ayutthaya.  Thai officials now acknowledge – after earlier denying – that their country had become a safe haven for transnational criminals involved in forged documents, narcotics, and weapons trafficking as well as being a transit point and planning venue for regional terrorists.  After Hambali’s capture, Prime Minister Thaksin Shinawatra issued two controversial executive decrees amending the Criminal Procedure Code and Anti-Money Laundering Act, meting out harsh punishments to perpetrators of terror offenses. Under interrogation, Hambali described plans to bomb the U.S., British, Australian, Israeli, and Singapore embassies in Bangkok.

Mutual congratulations for capturing Hambali have been somewhat dampened, however, because of U.S. unwillingness to make him available for either direct interrogation or trial in Southeast Asia.  Indonesia, Malaysia, Thailand, the Philippines, Singapore, and Australia all want access to Hambali because he is believed to be the prime mover behind Islamist terror attacks throughout the region.  Because U.S. officials believe he had a major role in the Sept. 11 attacks, they do not plan to turn him over to another country for a long time.  While Washington is sharing some transcripts of Hambali’s interrogation with Southeast Asian authorities, the JI leader remains incommunicado. The United States may also hope that sharing Hambali’s information could be part of a quid pro quo by which Southeast Asian governments would be more forthcoming with their intelligence on terror groups.

U.S. reticence about providing access to Hambali has created some tension, particularly with Indonesia.  When Abu Bakar Bashir – alleged spiritual leader of JI – was sentenced to only four years after a lengthy trial in Jakarta, Indonesian prosecutors stated they could have made a stronger case if they had been able to question Hambali about Bashir’s role in JI.  There has also been an unseemly scramble in Thailand by Thai police, intelligence, and military units to claim a $10 million reward for Hambali’s capture.  As the reward’s distributor, determining who should receive what amount created serious headaches for the CIA, though a distribution was made in September. Intense rivalries among Thai police, military, and intelligence mean that each closely watched how its counterparts were rewarded. The CIA wanted to insure that the rewards went to those units actually involved in Hambali’s capture and were not siphoned off by senior officers.

Jakarta Marriott Bombed During Bali Bomber Trial

The Aug. 5 bombing of the Jakarta Marriott, believed to be one of the most secure Western hotels in the capital, showed once again how brazen Islamist terror has become in Indonesia. The Marriott was regularly used for U.S. diplomatic functions and was a favorite venue for Western businesspeople.  The attack occurred during the trials of the Bali bombers and followed an Indonesian law enforcement discovery of a massive cache of explosives in central Java.  That JI could carry out such an operation in the heart of the city despite enhanced security suggests that the organization is capable of further attacks; both Indonesian and U.S. officials have warned that they are to be expected.  Moreover, the Marriott explosion was the fifth bombing in Jakarta in 2003 – earlier attacks included the Parliament and the airport, none as devastating as the hotel explosion that killed 16 and wounded 150.

JI consists of many independent cells, each capable of mounting attacks.  The attack on a Western institution in the heart of the capital seemed designed to create fear in the expatriate community and further undermine Indonesia’s struggling economy.  Indonesian President Megawati Sukarnoputri responded to the Marriott bombing by admitting at an ASEAN conference: “It has become clear that no single country or group of countries can overcome this threat alone.”  ASEAN should consider becoming a “full-fledged security community.”

Despite the arrest of scores of terrorists in Indonesia in recent months, there are still several thousand Indonesians who have been trained in al-Qaeda camps in Afghanistan.  Indonesian intelligence believes that JI has formed a special suicide squad of two dozen men.  Documents found in July 2003 raids in central Java listed probable terrorist targets that include such U.S. companies as Halliburton, Exxon-Mobil, and Unocal.  With 10,000 U.S. citizens living in Indonesia, half in Jakarta, terrorists will not lack for targets.  Moreover, JI bombers now seem much more willing to cause casualties among fellow Muslims by choosing such soft targets as malls, hotels, and restaurants.  Indonesians with ties to Americans are also considered fair game.

Even Vice President Hamzah Haz, linked to Indonesia’s largest Islamic political party, who had branded the United States “king of terrorists,” backtracked after the Marriott bombing.  Insisting “we are not anti-American.  In fact, we have to work together,” Haz denounced the bombers as “having nothing to do with Muslims in Indonesia.”  While moderate Muslim leaders decry terrorism in the abstract, they have been loath to criticize JI specifically, arguing it is inappropriate for one Muslim to criticize another.

Meanwhile, the Indonesian courts convicted a number of the Bali bombers in August and September, attesting to JI’s responsibility.  Abu Bakar Bashir, the group’s spiritual head, was sentenced to four years for a plot to overthrow the government but was not found guilty on the more serious charge that he was JI’s leader.  Nor was he charged with the Bali bombings.  The possibility exists of bringing him to court again if any future police interrogation of Hambali implicates Bashir.  However, there is no indication at this time that the United States is prepared to extradite Hambali to Indonesia.  Information shared by the United States revealed, nonetheless, that Hambali authorized all terror bombings in Indonesia from the December 2000 church bombings through Bali and the Marriott.  The cost for preparing the hotel blast was estimated at $50,000.

One of the Bali bombers, during his trial, claimed that the atrocity was a “jihad” warning to the United States and its allies that a holy war was begin waged against “infidels” who oppressed Muslims in Afghanistan and elsewhere.  Indonesia’s Security Minister Susilo Bambang Yudhoyono warned that terror attacks across Southeast Asia are being planned despite the disruption of JI leadership and a number of its cells.  These fears are apparently confirmed by information released by U.S. officials in mid-September based on the interrogation of Hambali.  According to CIA reports, al-Qaeda had plans to attack two U.S.-managed hotels in Bangkok as well as commercial airliners using Bangkok’s vulnerable international airport.  The attacks were planned to coincide with an Asia-Pacific Economic Cooperation (APEC) gathering scheduled for October in the Thai capital.

Thailand Commits to Antiterror Collaboration

Until June of this year, Thai officials had denied that any terrorist groups were active in the kingdom.  Violence in the predominantly Muslim south was attributed to bandits.  However, the June arrest of three Thai Muslims on charges of planning to bomb embassies and popular tourist sites in Bangkok during the forthcoming APEC meeting has led to a belated Thai recognition that JI operatives were, indeed, active in southern Thailand.  U.S. officials wish to monitor these activities and have requested permission to open a consulate in the southern city of Hat Yai.  Thai nationals were also arrested on terrorism charges in Cambodia in June. All of this prior to the August capture of Hambali in Ayutthaya make the case that JI operatives have settled in Thailand after fleeing crackdowns in Malaysia and Indonesia. Both Indonesian and Malaysian authorities have sent lists of known extremists who may have entered Thailand.

The Thai south could be fertile ground for JI.  Southern Thai Muslims follow the Wahabi strain of fundamentalism, the same strict brand of Islam followed by Osama bin Laden.  The region’s poverty and reputation for official corruption provide opportunities for wealthy patrons in Saudi Arabia to build Islamic schools and public health facilities, which in turn win converts.  However, some critics of the government crackdown in the south believe the terrorist presence may be purposely exaggerated to curry favor with the United States in order to obtain economic rewards as supportive allies in the war on terror.  In fact, much of the information on the terrorist network in southern Thailand has come from information provided by Indonesia, Malaysia, and Singapore intelligence.  Thai intelligence has only limited knowledge about Thai Muslims who trained in bin Laden’s Afghan camps and who have moved throughout Southeast Asia planning terrorist attacks.

Prime Minister Thaksin also answered President Bush’s call for help in Iraq. Thailand plans to send several hundred military engineers, doctors, and military police; the United States will pay half the costs of deploying them.  The Thai forces will focus on humanitarian and rehabilitation projects in Karbala, over 100 miles south of Baghdad and considered a relatively low risk area.

Finally, in mid-August by executive decree, Prime Minister Thaksin enacted new antiterrorism laws that included provisions for detention without trial, similar to laws on the books in Malaysia and Singapore. Opposition politicians and legal experts decried the amendments to the criminal code by administrative decree which bypassed the usual parliamentary process. Fears were expressed that the government would use its new powers to clamp down on Muslim activists in the south who were working for greater local democracy.  Moreover, senior Thai officials complained that the U.S. was pushing them to arrest and interrogate terror suspects in ways that violated civil liberties under Thai law, including military-style abduction, detention without trial, and unrestricted wire tapping.

Washington is providing plenty of incentive for Thaksin to cooperate in counter-terrorism. Thailand’s Army Corps of Engineers has been awarded multimillion dollar reconstruction contracts for Iraq; and when the Thai Parliament declined to allocate enough funds to cover several hundred Thai troops going to Iraq, Washington agreed to pay the difference.

Philippine Foibles Embarrass Arroyo Government

Long considered among Southeast Asia’s most unpredictable polities, once again the Philippines lived up to its reputation.  In mid-July, one of the region’s most dangerous terrorists serving a long prison term, JI  bomber Fathur Raham Al-Ghozi, managed to walk away from his jail cell unmolested and still has not been apprehended.  The United States expressed disappointment, while the Philippine president’s spokesman stated that U.S.-Philippine antiterrorist cooperation “should [not] be affected by this one single event.”

Less than two weeks later, however, a cabal of junior military officers conducted a short-lived mutiny against President Gloria Macapagal-Arroyo, seizing an upscale Manila apartment and shopping complex for several hours.  While no high-ranking officers either joined or endorsed the rebellion, the young mutineers complained about corruption in the armed services, poor equipment, low wages, and bad housing.  Particularly discouraging to the United States was that several of the officers who participated in the mutiny were members of two elite rapid reaction groups selected by the Pentagon for antiterror training in 2002.  President Arroyo is unpopular with younger officers because she has neither alleviated corruption in the top echelons of the military, nor permitted the armed forces to fully attack the communist and Muslim insurgencies plaguing the country. Among the allegations of the rebellious officers was that their superiors sold weapons and ammunition to Muslim guerrillas in Mindanao who are fighting for a separate Islamic state.  In fact, when Abu Sayyaf leader Aldon Tilao was hunted down and killed last year, he possessed expensive night vision goggles that U.S. soldiers had provided the Philippine forces they had trained.

On the diplomatic front, the United States is cooperating with Malaysia to mediate renewed peace talks between the Moro Islamic Liberation Front (MILF) and the Arroyo government. President Bush in a forthcoming one-day October visit to Manila is expected to propose a “mini-Marshall Plan” for the southern Philippines that would include a $30 million development package premised on a peace agreement with an additional $20 million promised for 2004.  These allocations would be supplementary to the $74 million already allocated by the U.S. Agency for International Development, most of which is also earmarked for the southern Philippines.

Less positive, however, was President Arroyo’s denunciation in early September of a U.S. District Court decision in Hawaii to stop the transfer of almost $700 million in Swiss banks formerly held by the late dictator Ferdinand Marcos to the Philippine government.  The U.S. court injunction results from its earlier ruling awarding nearly $2 billion in damages against the Marcos estate in a class action suit filed by several thousand human rights victims of the Marcos regime.  While President Arroyo has promised to use some of the recovered funds to compensate human rights victims, she denounced the U.S. court decision as an infringement of Philippine sovereignty.  However, the U.S. court injunction claimed that the Philippines had reneged on a 1999 agreement with the court to pay at least $150 million to the human rights victims.  The U.S. court particularly singled out the Philippine Supreme Court for violating due process by vacating the 1999 agreement with no hearings and granting the entire Marcos proceeds to the government, leaving nothing for human rights claimants.  The situation appears stalemated unless some new compromise can be struck, perhaps by the Philippine Congress enacting legislation that would stipulate that a portion of the Marcos funds be used for human rights victims.

Burma still a Thorn in U.S. Regional Relations

The continued incarceration of Burma’s Nobel laureate opposition leader Aung San Suu Kyi by the country’s military rulers led to even more stringent U.S. economic sanctions, including freezing Burmese government assets and new trade restrictions on top of earlier prohibitions against U.S. investment in Burma. Nevertheless, U.S. sanctions are more symbolic than of practical effect since economic relations with the United States have been at a low level for some time.  More important are Burma’s economic ties with neighbors China, India, Thailand, and Bangladesh which continue to thrive – all having signed trade agreements with the junta in recent years.  Rangoon benefits from exports of natural gas to Thailand, as well as timber, rubies, and seafood which go through Thailand and China to world markets. U.S. restrictions will primarily harm the textile industry which exports $356 million worth of clothing annually, much of it to the United States.

Washington is particularly pressuring China to demand Aung San Suu Kyi’s release, both because of Beijing’s economic and military leverage on the junta and because Beijing is the only major power not to have denounced the Burmese regime’s actions.  Even ASEAN, which as a matter of principle does not become involved in the internal affairs of its members, appealed to the junta in June to free Suu Kyi.  In July, Malaysian Prime Minister Mahathir stated he would propose that ASEAN consider ousting Burma if Suu Kyi was not released.  However, how this could be accomplished is uncertain because there are no ASEAN provisions for excluding a state once it has membership.  Nor has any other ASEAN member reiterated Mahathir’s threat.

Cambodia and Vietnam Dominate Indochina Concerns

A U.S. Senate subcommittee displayed Congress’ continued animus toward Cambodia in mid-July draft legislation preceding elections in that country.  The draft prohibited any funding for U.S. military training or subsidation for any tribunal set up to try surviving leaders of the brutal Khmer Rouge regime unless the Cambodian government produced a credible list of individuals who ordered the 1997 attack on the opposition Khmer Nation Party, the coup that same year against Hun Sen’s partners in a coalition government, and the violence that characterized subsequent national elections.  (U.S. Senate subcommittee members assume that Hun Sen would have to implicate himself to comply.)  Subsequent to the July 27 election, U.S. Sen. John McCain also warned Hun Sen against intimidating opponents and manipulating election results.  By late September, although winning 73 of 123 National Assembly seats, Hun Sen is short of the two-thirds majority needed to create a government. Negotiations with both Sam Raimsey’s party and Prince Ranariddh’s have so far been unsuccessful.  Both opponents insist that Hun Sen surrender the post of prime minister before they agree to a government run by his party.

U.S. economic and political relations with Vietnam constitute a mixed bag. While Vietnam’s exports to the United States are burgeoning on their way to a projected $3 billion for 2003, their very success has led to disputes over Vietnam’s alleged dumping of shrimp and catfish fillets in the U.S. market. High retaliatory U.S. tariff levels on Vietnam’s fish exports could cut into an aquaculture industry that generates 400,000 jobs and accounts for 20 percent of the U.S. frozen catfish market.

Politically, Washington is concerned about the religious persecution of unregistered Protestant churches in the northern and central highlands where hundreds of parishioners have been forced to renounce their religious affiliations. The U.S. Congress is threatening to link non-humanitarian aid to Hanoi’s human rights record, while Vietnam’s National Assembly warns that such action could jeopardize Vietnam’s cooperation on antiterrorism and Washington’s continued search for Vietnam War MIAs.  So far, no legislation has been passed by Congress.

Conclusion: Whither Regional Security Cooperation?

Regional security cooperation advanced in July with the Malaysian inauguration of a Southeast Asian Antiterrorism Center funded by the United States but administered by Kuala Lumpur.  The Center will monitor militant activities and provide training for regional officials.  Among the concerns addressed by the Center are border defenses, immigration controls, financial safeguards, and customs enforcement.  The Center’s inaugural meeting in late August convened law enforcement and banking officials from across the Pacific to discuss ways of disrupting terrorist financial flows.  Of particular interest at the meeting was the Islamic hawala system through which funds are distributed via trusted intermediaries leaving neither an electronic nor a paper trail. America’s low profile in Center activities helps governments of countries with large Islamic populations (Indonesia and Malaysia particularly) avoid the appearance of being U.S. lackeys.

Not to be outdone by Malaysia’s Antiterrorism Center, Indonesia is proposing an innovation of its own that appears to break entirely new ground for ASEAN, one of whose defining characteristics had been to abjure involvement in security issues.  As the current chair of ASEAN, Jakarta has proposed the creation of an ASEAN Security Community (ASC) to combat terrorism. The proposal represents two new developments in Indonesian policy: one is a shift in priorities after the Bali bombing; the other seems to be an effort to seize once again a leadership role within ASEAN that had atrophied in the wake of the 1997-98 financial crisis and the end of the Suharto era.

The ASC would include centers for combating terrorism, peacekeeping training, cooperation on nonconventional threats, and regular ASEAN police and defense ministers meetings.  The idea of an ASC has won cautious support within ASEAN, though Malaysia’s Mahathir insists that it must not become a defense pact.  After the August bombing of the Jakarta Marriott, President Megawati reiterated the need for the ASC and promised to raise the issue at the October Bali summit.  Both Australia and the United States are expected to welcome the ASC if it is formed for it would further facilitate antiterror cooperation.

The August APEC forum also recommended a number of antiterrorism measures to its members, more importantly adherence to the 1999 International Convention for the Suppression of Financing of Terrorism and adoption of the Advance Passenger Information System that would require all APEC member airlines to forward passenger information to their destinations prior to arrival.

All of these measures comprise ways of reassuring foreign investors that by strengthening counterterrorism cooperation, ASEAN members are proactively seeking to reduce risks to business activity within Southeast Asia. Whether the new proposals are sufficient to provide reassurance remains to be seen.