Head for any one of the pricey business hotels in Jakarta, and you'll feel like you're entering Iraq's Green Zone. Entrances have more than one barricade and guards poke around in the taxi trunks. Soldiers are everywhere.
Yet Indonesia can be called one of the world's success stories in containing terrorism. Many of the leaders of the Marriot bombing in Jakarta and the Bali attacks have been rounded up. Moreover, moderate Islam has an influential voice in Indonesia, which boasts the largest Muslim population of any nation but is also the home of a robust democracy. When Osama bin Laden declared it was the duty of Muslims everywhere to kill Americans, Indonesian clerics condemned the statement.
Still, the character of terror is changing in Southeast Asia, and, if anything, the risk is worse than before. Steven Vickers, president of International Risk, a Hong Kong unit of FTI Consulting Inc. in New York, says that local terrorist movements are drawing strength from political, social, and religious disenchantment. Global terror networks have linked up with local militant groups, providing funding and ideological inspiration.
Jemaah Islamiah, an Indonesian terrorist group, has linked up with Abu Sayyaf, the major militant Muslim group operating in the southern Philippines. Groups fighting in southern Thailand have links to JI as well as to a smaller fundamentalist group operating in Myanmar. The danger here is that even as the terrorists work together, Southeast Asian governments do not: each tends to look at the situation as an internal problem only. No group like Europol exists to track activity across borders. Indonesia has had some success in working with Australia to crack down on JI, but these successes are unlikely to stem the tide.
One of the problems U.S. firms face is selecting the appropriate level of security. Vickers says U.S. firms make the mistake of tightening security to the point where employees are completely isolated from local life. In a counterexample often cited as best practice in hostile territory, Nepal Lever, a unit of Hindustan Lever, was able to fend off Maoists that had threatened to destroy its operations by winning local favor through the funding and organizing of a community education program. The same approach could earn dividends in the Muslim communities of Southeast Asia, where many citizens are still open-minded about a benign foreign presence.
If the bad news is that international terror is getting stronger, the good news is that terrorists have not succeeded in winning local hearts and minds, particularly in societies like Indonesia, where many are beginning to experience economic good fortune. That's why companies working in the region should view corporate social responsibility programs as necessary and often superior complements to iron gates, surveillance cameras, and a pal in the local military — no matter how necessary these may be.
Tom Leander is editor-in-chief of CFO Asia.