Is a Holy War Brewing?

U.S. business watches Indonesian rumblings closely

Nauful Dunggio lives thousands of miles from the seat of Islamic terror in the Middle East. But Indonesia's self-styled Islamic leader claims to be as outraged by U.S. hubris as Osama bin Laden himself--and swears that if the U.S. mounts an attack on Afghanistan, Americans in Indonesia will pay. The 32-year-old chief of the Hizbulloh Front--which claims no link with the Middle East's notorious Hezbollah--runs what he calls a training camp for prospective mujahideen (holy warriors) outside Jakarta. At one recent session in the living room of a safe house on the outskirts of Jakarta, Dunggio, with a severe crew cut and a baseball cap, watched with pride as an Islamic cleric trained 50 recruits to use their "inner spiritual power" in hand-to-hand combat. The highlight of the evening came when one recruit followed orders to grind a fluorescent bulb into a salad bowl until his hand bled. He then ate a handful of the fragments.

When his men are ready, says Dunggio, they'll fan out across the Indonesian archipelago and "sweep" all the Americans out of office buildings, five-star hotels, and gold mines. Then they'll deliver the infidels to local airports and tell them: "Because of your government's arrogance, you cannot live safely in Indonesia." If the infidels resist, Dunggio says, they'll be beaten.

MALL BOMBS. Are these guys for real? Are militant groups such as the Hizbulloh Front a real threat to American interests? The fear that they may be is sending jitters through the diplomatic and corporate compounds of Jakarta. After all, Indonesia is an unstable nation of more than 220 million Muslims, where hundreds of thousands of unemployed youths seem ripe for recruitment to the fundamentalist cause. But Indonesian Muslims have relatively little history of religious extremism, with much of the violence that erupts in the country keyed to political and ethnic grievances.

Still, in August and September, two explosions ripped through the Atrium, a glitzy Jakarta shopping center owned by Chinese-Indonesian tycoon Sofian Wanandi. A suspect in the first attack was a Malaysian trained in Afghanistan, says Wanandi, citing a report prepared by Indonesian investigators. Meanwhile, in breakaway regions such as Aceh province, secessionists have mounted attacks on U.S. oil and mining facilities. In late September, Islamic militants, dressed in black and wielding farm tools, raided hotels in the Javanese city of Solo in a fruitless search for American guests.

So far, there is little hard evidence that Islamic terrorists have made serious inroads into Indonesia--as they appear to have done in the Philippines, where a relation of bin Laden is accused of founding Abu Sayyaf, a violent group dedicated to carving out a Muslim state there. "There are only 9 or 10 of these groups, and they're very small," says Anthony Smith, an expert on Indonesian politics at the Institute of Southeast Asian Studies in Singapore. But, adds Smith, "Indonesia really needs to take it seriously and nip it in the bud."

Instead, some powerful people seem intent on inflaming matters. Late last month, Vice-President Hamzah Haz, a hard-line Muslim leader, said the September 11 attacks had "cleansed" America of its "sins." Such comments are bound to complicate matters for Indonesian President Megawati Sukarnoputri, who has put her job on the line by backing George W. Bush's war on terrorism. Megawati is in a real bind. She can't protect Americans in Indonesia without angering Islamic militants, and she can't warm up to the militants without jeopardizing Bush's offer of an additional $350 million in economic aid. And that aid is crucial for an economy that is expected to grow an anemic 1% this year.

American expatriates are plenty spooked, too--even those who have endured previous Indonesian tumult. While no attacks on U.S. investments have taken place since September 11, the potential for trouble remains. The Hizbulloh Front's Dunggio leads hundreds of students in rallies every day in front of the U.S. Embassy in Jakarta, with some demonstrators threatening to trash the building the way their "Afghan brothers" did in Kabul in late September. When Ambassador Robert S. Gelbard asked the national police chief on Sept. 27 to disperse the protesters, the chief refused on grounds that Indonesia is now a democracy. A short walk from the ambassador's residence, young unemployed men line up to join the Islamic Youth Movement, another militant group, which says it will train them at a "secret" location on Java to fight in Afghanistan.

Americans are preparing for the worst. On Sept. 28, the embassy announced that all nonessential staff were free to leave the country. Nike Inc. ordered a "precautionary" evacuation of dependents of expatriate employees. Spokesmen for ExxonMobil, Newmont Mining, and Caltex say they're adding new guards and procedures to their security details. A representative of Freeport-McMoRan Copper & Gold says it is instituting anti-hijacking procedures aboard its internal airline, Airfast, which traverses the archipelago daily. "There have been some vague and not-so-vague threats to the American community," says a U.S. businessman in Jakarta. "That causes a lot of nervousness."

GUERRILLAS. What the oil and mining companies fear is that secessionist struggles in the remote regions where they operate will morph into a holy war. By one account, bin Laden associates have sought to influence the Free Aceh Movement. Al Chaidar, an Acehnese author of Islamic books, told BusinessWeek that in early 1999 a Jordanian man calling himself a "surveyor" for bin Laden invited him to a secret meeting in Malaysia's Sabah state. The Jordanian asked if the guerrillas of the Free Aceh Movement, some of whom fought against the Soviet occupation of Afghanistan in the 1980s, were fighting a "true holy war" against ExxonMobil. He also asked if they were worthy of aid from bin Laden. Chaidar, who has described himself as a "nonviolent fundamentalist," replied that the Aceh conflict was secessionist and not religious in nature. The Jordanian left without funding the guerrillas.

Chaidar has also been contacted by the "military" wing of Darul Islam, an Islamic group that boasts 18 million members. Last year on Christmas Eve, this group was blamed when bombs exploded at churches in 18 cities. "There are real Islamic terrorists in Indonesia," Chaidar warns. "And they're very dangerous."

The threat seemed remote, however, until September 11 brought the disaffected out of the shadows. Nur Ahmad, 20, unable to earn a living selling plastic sandals on the street, signed up with the Islamic Youth Movement on Oct. 2. "I dreamed a man in a black Arabian robe and a white beard told me: `Let's go for jihad. Let's go for jihad."' he says. As tension mounts, U.S. companies are keeping a low profile. Fearing an incident that would provoke more violence, Caltex Corp. has decided not to give guns to its guards. "We'd rather have something stolen than have somebody killed," says Bob Galbraith, managing director of Caltex in Pekanbaru, Riau province. While that may not sound reassuring, it's an apt expression of the U.S. corporate mood in Indonesia these days: Make no sudden moves.

By Michael Shari in Jakarta

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