On the night of Saturday, Oct.
13, a van packed with C4 plastic explosives obliterated a crowded nightclub in Indonesia's main tourist island of Bali, killing more than 180 people and injuring hundreds more. The following Monday, Indonesia's Jakarta Stock Exchange reacted strongly to the news, plunging 10 percent to its lowest level in four years.
Although the proliferation of terrorism has been linked to a weak central government, a sprawling archipelagic geography and the global terrorism phenomenon, Indonesia's recent fundamentalist uprisings are the result of internal economic changes, the decreasing rates of gross domestic investment and the loss of foreign capital.
The global emergence of fundamentalist Islamic groups is one factor in terrorism's success in Indonesia. "Indonesians practice a very secular form of Islam," Darden Prof. Leslie Grayson said. "But with 220 million people, it is dangerous if 1 percent becomes radicalized."
The small percentage that does radicalize looks abroad, especially to the Middle East, for ideological inspiration and monetary support. The Islamic fervor exhibited by the groups is not indigenous.
Controlling the spread of extremism in Indonesia is made difficult by a unique island geography. More than 17,000 islands, only 6,000 of which are inhabited, comprise Indonesia's archipelago. On a U.S. scale, the archipelago reaches from Maine to San Diego. Without a strong central government, maintaining control over the islands, and thus promoting security, is impossible. Indonesian President Megawati Sukarnoputri has not provided a cohesive, effective government. Megawati has been widely criticized by world leaders.
Decentralization, especially of the armed forces, has led to lapses in information. Foreign investors, particularly those involved in oil and resource extraction, demand a strong military presence to protect their installations. Military and police forces, which have little respect for one another, have been ineffective and unprofessional in combating terrorism and fundamentalism.
The attack in Bali has reemphasized what foreign investors long suspected -- that it was a serious gamble to invest in Indonesia. In fact, foreign investment fell by more than 40 percent in the first half of this year, months before the bombing.
While foreign investment has plummeted, the decline in domestic investment relative to the pre-Asian crisis levels has contributed to terrorism's success.
Prior to the 1997 Southeast Asian economic meltdown, Indonesia had been the poster child for economic reform. Incomes swelled while poverty rates dropped. Per capita GDP grew by 4.5 percent during the 1980s, while GDP increased by 6.4 percent. During this period, gross domestic investment boasted annual increases of almost 8 percent. Gross domestic investment refers to the construction of a nation's infrastructure, such as schools, hospitals and roads. High domestic investment leads to improvements in the quality of life, as the government can afford to provide social services, including subsidized clinics and free education.
Domestic investment is accompanied by a sense of optimism, contentedness and hope, as the benefits of growth filter down to the majority.
As long as growth was constant, Indonesians tolerated, and even supported, a dictatorial regime. How could they complain with full stomachs, decent-paying jobs and rosy-cheeked children?
For almost three decades Indonesians lived under President Mohammed Suharto's authoritarian regime. Only when the economy began to disintegrate in 1997 did mass political resistance emerge. This disruption of growth led to a change in the mindset of most Indonesians.
Perhaps, they reasoned, political upheaval could restart the growth engine. Unfortunately for the citizenry, this has not been the case. Upheaval led to democratic reforms, while the economy sank even further and the spread of terrorism was catalyzed.
In the last five years domestic investment has fallen by more than 15 percent, from 32 percent of GDP in 1997 to 17 percent in 2001. In the same period unemployment has almost doubled, up from 5 percent in 1998.
Terrorism emerges when unemployment is high and people feel neglected by their government. Indigenous social institutions, the so-called social-safety net, cannot accommodate 10 million unemployed Indonesians. Neither can the government. Terrorism becomes an effective mechanism for people to feel confidence, self-worth and to have access to social services the government no longer can provide.
Gross domestic investment and employment are the best weapons against terrorism.
"Investment is the fire hose used to extinguish the brush fires of terrorism in impoverished parts of the world," Economics Prof. Bruce Reynolds said.
Although the police and military are useful in preventing attacks and arresting leaders, they are merely treating the symptoms of terrorism rather than the cause. Providing investment and employment is the only way to destroy the roots of the organizations.
"We see a similar process in China," Reynolds said. "The Chinese government throws money at the Western provinces to prevent them from radicalizing."
By keeping the Western provinces adequately saturated with capital, the people need not look to terrorism as the solution to economic and social problems.
When a government cannot provide social services and economic prospects for its citizens, rival institutions emerge. For example, Hamas, one of the world's premier terrorist organizations, is the largest provider of health care and education to the Palestinian people. Its success is primarily due to the inadequacy of Yasser Arafat's Palestinian Liberation Organization. Although Hamas has committed a string of deadly attacks against innocent Israelis, they have been successful in supplying support, both physical and mental, to the people.
In Indonesia, however, terrorist groups are more ideological and less inclined to caretaking. They fill a niche, serving to bolster confidence while legitimizing one's existence. Geography and political system aside, a strong reemergence of economic growth is the best medicine for remedying the mindsets of struggling Indonesians.
What was caused by economic misfortune can be miraculously healed with growth. Terrorism does not pay a wage, nor does it create investment; it is a defense mechanism of downtrodden peoples, which the Indonesians certainly are not.
Jonathan Robbins is a second-year College student.
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