Order Code RL31672
CRS Report for Congress
Received through the CRS Web
Terrorism in Southeast Asia
Updated November 18, 2003
Mark Manyin
Coordinator
Richard Cronin, Larry Niksch, Bruce Vaughn
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

Terrorism in Southeast Asia
Summary
Following the defeat of the Taliban regime in Afghanistan, U.S. attention turned
to radical Islamist groups in Southeast Asia, particularly those in the Philippines,
Indonesia, Malaysia, and Singapore that are known or alleged to have ties to the Al
Qaeda terrorist network. For more than a decade, Al Qaeda has penetrated the region
by establishing local cells, training Southeast Asians in its camps in Afghanistan, and
by financing and cooperating with indigenous radical Islamist groups. Indonesia and
the southern Philippines have been particularly vulnerable to penetration by anti-
American Islamic terrorist groups.
Members of one indigenous Al Qaeda affiliate, Jemaah Islamiyah, is known to
have assisted two of Al Qaeda’s September 11, 2001 hijackers and have confessed
to plotting and carrying out attacks against Western targets, including the October 12,
2002 bombing in Bali, Indonesia that killed approximately 200 people, mostly
Western tourists. The Bali attack signalled a shift in Jemaah Islamiyah’s tactics,
from targeting Western military and government installations to focusing on “softer”
targets such as tourist resorts, Western business, and schools serving Westerners.
The August 2003 bombing of the J.W. Marriott Hotel in Jakarta, thought to be
carried out by Jemaah Islamiyah, appears to fit this pattern. Arrests in Thailand and
Cambodia in the spring and summer of 2003 may indicate that the network has
established and/or stepped up operations in those countries, as well as Laos and
Burma.

To combat the threat, the Bush Administration has pressed countries in the
region to arrest suspected terrorist individuals and organizations, deployed over 1,000
troops to the southern Philippines to advise the Philippine military in their fight
against the violent Abu Sayyaf Group, increased intelligence sharing operations,
restarted military-military relations with Indonesia (including restoring International
Military Education and Training [IMET]), pledged hundreds of millions in aid to
Indonesia and the Philippines, and has signed a multilateral counterterrorism
agreement with the Association of Southeast Asian Nations (ASEAN). The
responses of countries in the region to both the threat and to the U.S. reaction
generally have varied with the intensity of their concerns about the threat to their own
stability and domestic politics. In general, Singapore, Malaysia, and the Philippines
were quick to crack down on militant groups and share intelligence with the United
States and Australia, whereas Indonesia and Thailand began to do so only after
attacks or arrests revealed the severity of the threat to their citizens. That said, many
governments view increased American pressure and military presence in their region
with ambivalence because of the political sensitivity of the issue with both
mainstream Islamic and secular nationalist groups. Indonesia and Malaysia are
majority Muslim states; the Philippines has a sizeable and historically alienated and
separatist-minded Muslim minority.
This report will be updated periodically.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background — The Rise of Islamic Militancy and Terrorism in Southeast
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Rise of Al Qaeda in Southeast Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Jemaah Islamiyah Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
History of Jemaah Islamiyah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Major Plots and Attacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Focus Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Shifts in Jakarta’s Counter-Terrorism Policy . . . . . . . . . . . . . . . . . . . . . 9
The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Phase One of U.S.-Philippine Military Cooperation . . . . . . . . . . . . . . 10
The MILF and the MNLF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Philippine Communist Party (CPP) . . . . . . . . . . . . . . . . . . . . . . . 12
Phase Two of U.S.-Philippine Military Cooperation? . . . . . . . . . . . . . 12
Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Cambodia and Burma: New Countries of Convenience? . . . . . . . . . . . . . . 19
Options and Implications for U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Multilateral Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Role of Congress/Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
The “Leahy” Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Impact of the September 11 Attacks . . . . . . . . . . . . . . . . . . . . . . . . . . 25
FY2002 Foreign Operations Appropriations — Seven Criteria for
IMET and FMF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FY2002 supplemental appropriation for combating terrorism
(P.L. 107-206/H.R. 4775) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FY2003 Foreign Operations Appropriations
(P.L. 108-7/H.J.Res. 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FY2004 Appropriations Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Other CRS Products Dealing with Terrorism in Asia . . . . . . . . . . . . . . . . . . . . . 31
Maps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

List of Figures
Figure 1. Southeast Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Figure 2. Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Figure 3. Malaysia and Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Figure 4. The Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
List of Tables
Table 1. U.S. Assistance to Indonesia, FY2002-FY2004
International Affairs Budget Function 150 . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 2. U.S. Assistance to the Philippines, FY2002-FY2004
International Affairs Budget Function 150 . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 3. U.S. Assistance to Thailand, FY2002-FY2004
International Affairs Budget Function 150 . . . . . . . . . . . . . . . . . . . . . . . . . 30

Terrorism in Southeast Asia
Most Recent Developments
President Bush’s recent trip to Asia highlighted the importance of counter-
terrorism cooperation with regional friends and allies. At the October 2003 Asia
Pacific Economic Cooperation (APEC) summit in Bangkok, Thailand, regional
leaders agreed to “dismantle, fully and without delay, transnational terrorist groups.”1
The Administration hopes that this statement will provide a regional impetus to anti-
terrorist activities, as well as help foster an environment that will promote effective
bilateral cooperation throughout the region. An example of multilateral cooperation
was provided in August 2003, when the Kuala Lumpur-based Southeast Asia
Regional Center on Counter Terrorism held its first training course.2 However, at the
APEC summit several Southeast Asian leaders expressed concern that the United
States was emphasizing security issues — including terrorism and North Korea’s
weapons of mass destruction programs — at the expense of trade and economic
issues, which traditionally dominate APEC summits. These issues are viewed by
regional leaders as critically important to stability in Southeast Asia. President
Bush’s Asian trip also included brief stops in the Philippines, Indonesia, Singapore,
and Australia, where the President repeatedly emphasized the importance of counter-
terror cooperation.
In other developments, in August 2003, Riduan Isamuddin (also known as
Hambali), an important coordinator of Jemaah Islamiyah and Al Qaeda activities,
was arrested by Thai forces, reportedly acting on a tip from the U.S. Central
Intelligence Agency. On September 3, 2003, an Indonesian court convicted Abu
Bakar Baasyir of plotting to overthrow the Indonesian government but dropped more
serious charges, including accusations that he is the leader of Jemaah Islamiyah.
Baasyir was sentenced to four years in jail. Prosecutors had asked for a 15-year
sentence. Baasyir has said he will appeal the sentence.
Overview
Following the defeat of the Taliban regime in Afghanistan, U.S. attention has
turned to radical Islamist groups in Southeast Asia, particularly those in the
Philippines, Indonesia, Malaysia, and, to a lesser extent, Thailand, that are known or
alleged to have ties to the Al Qaeda terrorist network. Many of these groups threaten
the status quo of the region by seeking to create independent Islamic states in
majority-Muslim areas, overthrow existing secular governments, and/or establish a
1 “2003 Leaders Declaration: Bangkok Declaration on Partnership for the Future” Asia-
Pacific Economic Cooperation, [http://www.apecsec.org.sg].
2 U.S. Department of State,”Counter-terrorism Current Events,” October 23, 2003,
[http://www.state.gov].

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new supra-national Islamic state encompassing Indonesia, Malaysia, Singapore, and
the southern Philippines. In pursuit of these objectives, they have planned and
carried out violent attacks against civilian and non-civilian targets, including
American and other Western institutions. Additionally, Al Qaeda has used its
Southeast Asia cells to help organize and finance its global activities — including the
September 11, 2001 attacks — and to provide safe harbor to Al Qaeda operatives,
such as the convicted organizer of the 1993 bombing of the World Trade Center,
Ramzi Yousef.
Combating anti-American terrorism in Southeast Asia presents the Bush
Administration and Congress with a delicate foreign policy problem. Most regional
governments also feel threatened by home-grown or imported Islamic militant groups
and therefore have ample incentive to cooperate with the U.S. antiterrorist campaign.
Despite mutual interests in combating terrorism, Southeast Asian governments have
to balance these security concerns with domestic political considerations. Although
proponents of violent, radical Islam remain a small minority in Southeast Asia, many
governments view increased American pressure and military presence in their region
with ambivalence because of the political sensitivity of the issue with both
mainstream Islamic and secular nationalist groups. The challenge is to find a way to
confront the terrorist elements without turning them into heroes or martyrs in the
broader Southeast Asian Islamic community. Furthermore, the continued activities
of Al Qaeda and Jemaah Islamiyah will require a coordinated, international response
in a region where multinational institutions and cooperation are weak.
Background — The Rise of Islamic Militancy and
Terrorism in Southeast Asia
Southeast Asia has been the home of indigenous Islamic militant groups for
decades. Traditionally, the linkages among these groups were relatively weak, and
most operated only in their own country or islands, focusing on domestic issues such
as promoting the adoption of Islamic law (Sharia) and seeking independence from
central government control. The Philippines has had a violent Muslim separatist
movement for more than a century. The Moros of Mindanao and the Sulu
Archipelago, including the island of Jolo, fought a stubborn, bloody, and ultimately
futile insurgency against the American occupation of the southern Philippines
following the Spanish American War (1898). Until recently, however, the activities
of several Muslim extremist groups in the Philippines had been confined mainly to
the relatively isolated Muslim-majority regions in the South. In Indonesia, various
schools of Islamic thought have competed for followers and public attention, but
most have not called for an Islamic state. Moderate groups — both modernist and
traditionalist — formed the main legal opposition to the Suharto regime which ended
in May 1998. Abdurrahman Wahid (Gus Dur), the first democratically elected
President after the collapse of the Suharto regime, and Amien Rais, currently speaker
of the upper house of parliament, are leaders of the two largest Muslim political
parties. Both have pursued a largely secular political agenda.
Likewise, mainstream Islam in Malaysia has been largely apolitical, although
the late 1990s saw a potentially significant electoral swing towards a radical Islamist

CRS-3
party, Parti Islam se-Malaysia (Pas), which calls for making Malaysia an Islamic
state. Despite noteworthy gains in November 1999 elections, Pas still only has 27
seats in the 193-seat parliament and controls just two of Malaysia’s 13 states, but at
least until recent efforts by the Malaysian government to link Pas to Islamic
extremists, its influence had been growing.3
The emergence of radical Islamic movements in Southeast Asia in the 1990s can
be traced to the conjunction of several phenomena. Among these were reaction to
globalization — which has been particularly associated with the United States in the
minds of regional elites — frustration with repression by secularist governments, the
desire to create a pan-Islamic Southeast Asia, reaction to the Israeli occupation in the
West Bank and Gaza Strip, and the arrival of terrorist veterans of years of fighting
in Afghanistan. The forging of connections between Al Qaeda and domestic radical
Islamic groups in Southeast Asia is part of this trend.
The Rise of Al Qaeda in Southeast Asia
Since the early-to-mid 1990s the Al Qaeda terrorist network has made
significant inroads into the region. Al Qaeda’s Southeast Asian operatives — who
have been primarily of Middle Eastern origin — appear to have performed three
primary tasks. First, they set up local cells, predominantly headed by Arab members
of Al Qaeda, that served as regional offices supporting the network’s global
operations. These agents have plotted attacks against Western targets and provided
safe haven for other operatives fleeing U.S. intelligence services. Al Qaeda’s Manila
cell, which was founded in the early 1990s by Osama bin Laden’s brother-in-law,
Mohammed Jamal Khalifa, was particularly active in the early-mid-1990s.4 Later,
the locus of activity appears to have expanded to Malaysia, Singapore, and — most
recently — Indonesia. Al Qaeda’s leadership also has taken advantage of Southeast
Asia’s generally lax financial controls to use various countries in the region as places
to raise, transmit, and launder the network’s funds. By 2002, according to one
prominent expert on Al Qaeda, roughly one-fifth of Al Qaeda’s organizational
strength was centered in Southeast Asia.5
Second, over time, Al Qaeda Southeast Asian operatives helped create an
indigenous, semi-autonomous arm, Jemaah Islamiyah, a regional terrorist network
3 Mark Baker, “Mahathir Claims Rival Party Has Terrorist Links.” Sydney Morning Herald,
August 6, 2001.
4 For instance, after he coordinated the 1993 bombing of the World Trade Center in New
York, Ramzi Yousef, relocated to the Philippines, where he and the Manila cell hatched
plots to blow up 11 airliners in a two-day period (what was known as the “Bojinka” plan),
crash a hijacked airliner into the Central Intelligence Agency’s headquarters, and assassinate
the Pope during his visit to the Philippines in early 1995. Filipino police discovered the
Bojinka plot, which was in the final stages, in January 1995 only because a fire broke out
in Yousef’s apartment, filling it with poisonous gas from the bomb-making chemicals.
Yousef fled to Malaysia, was arrested in Pakistan, and extradited to the United States, where
he was sentenced to life imprisonment for his role in the 1993 bombing and the Bojinka plot.
5 Report to the UN Security Council by the Security Council Monitoring Group, ‘1267’
Committee
, Security Council Report S/2003/669, July 7, 2003, p. 15.

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often described as a “mini-Al-Qaeda” that has plotted attacks against Western targets.
Jemaah Islamiyah is suspected of carrying out the October 12, 2002 bombing in Bali,
Indonesia, that killed approximately 200 people, mostly Western tourists.
Third, Al Qaeda’s local cells worked to cooperate with indigenous radical
Islamic groups by providing them with money and training. Until it was broken up
in the mid-1990s, Al Qaeda’s Manila cell provided extensive financial assistance to
Moro militants such as the Abu Sayyaf Group and the Moro Islamic Liberation Front
(MILF). Thousands of militants have been trained in Al Qaeda camps in Afghanistan
or in the camps of Filipino, Indonesian, and Malaysian groups that opened their doors
to Al Qaeda. Al Qaeda reportedly provided funds and trainers for camps operated
by local groups in Indonesia, Malaysia, and the Philippines. Indonesian intelligence
officials also accuse Al Qaeda of sending fighters to participate in and foment the
Muslim attacks on Christians in the Malukus and on Sulawesi that began in 2000.6
Al Qaeda operatives’ task was made easier by several factors: the withdrawal of
foreign state sponsors, most notably Libya, that had supported some local groups in
the 1970s and 1980s; the personal relationships that had been established during the
1980s, when many Southeast Asian radicals had fought as mujahideen in
Afghanistan; and the weak central government control, endemic corruption, porous
borders, minimal visa requirements, extensive network of Islamic charities, and lax
financial controls of some countries, most notably Indonesia and the Philippines.7
Over time, Al Qaeda’s presence in the region has had the effect of
professionalizing local groups and forging ties among them — and between them and
Al Qaeda — so that they could better cooperate. In most cases, this cooperation has
taken the form of ad hoc arrangements of convenience, such as helping procure
weapons and explosives.
The Jemaah Islamiyah Network
In the weeks after the September 11 terrorist attacks, a pan-Asian terrorist
network with extensive links to Al Qaeda was uncovered. The network, known as
Jemaah Islamiyah (Islamic Group), has cells in Malaysia, Singapore, Indonesia, the
Philippines, Australia, and Thailand. To achieve its goal of creating an Islamic state
in Southeast Asia (centered in Indonesia), Jemaah Islamiyah leaders have formed
alliances with other militant Islamist groups to share resources for training, arms
procurement, financial assistance, and to promote cooperation in carrying out attacks.
Specifically, there is considerable evidence that Jemaah Islamiyah has engaged in
joint operations and training with the Filipino separatist group, the Moro Islamic
Liberation Front (MILF).8 In October 2002, shortly after the attack in Bali, the
6 Zachary Abuza, “Terrorism in Southeast Asia,” in National Bureau of Asian Research,
Strategic Asia 2002-3.
7 Zachary Abuza, “Tentacles of Terror,” unpublished October 21, 2002 draft, p. 3.
8 See, for instance, Singapore Home Affairs Ministry White Paper, The Jemaah Islamiyah
Arrests and the Threat of Terrorism
, J anuary 7, 2003, p.7-9,
(continued...)

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United States designated Jemaah Islamiyah as a foreign terrorist organization.
Thereafter, the United Nations Security Council added the network to its own list of
terrorist groups, a move requiring all U.N. Members to freeze the organization’s
assets, deny it access to funding, and prevent its members from entering or traveling
through their territories. Since December 2001, over 150 suspected and admitted
Jemaah Islamiyah members, including a number of key leaders have been arrested.
Many of these arrests have been due to more extensive intelligence sharing among
national police forces. The Bali bombing spurred Indonesian officials to reverse their
previous reluctance to take on Jemaah Islamiyah network.
History of Jemaah Islamiyah
The origins Jemaah Islamiyah network stretch back to the 1960s, when its co-
founders, clerics Abu Bakar Baasyir and Abdullah Sungkar, began demanding the
establishment of sharia law in Indonesia. In the 1970s, they established Al Mukmin,
a boarding school in Solo, on the main island of Java, that preached the puritanical
Wahhabi interpretation of Islam founded and propagated in Saudi Arabia. Many
suspected Jemaah Islamiyah activists who have been arrested are Al Mukmin alums.
In 1985, Baasyir and Sungkar fled to Malaysia, where they set up a base of operations
and helped send Indonesians and Malaysians to Afghanistan, first to fight the Soviets
and later to train in Al Qaeda camps. In appears that sometime in the mid-1990s,
Sungkar and Baasyir merged their evolving network into Al Qaeda and began setting
up a sophisticated organizational structure and actively planning and recruiting for
terrorism in Southeast Asia. These apparently began in 2000, with bombings in
Jakarta, Manila, and Thailand that were thought to be unrelated events until
confessions were made by captured militants in 2002 and 2003.
The fall of Indonesia’s Suharto regime in 1998 provided a major boost to
Jemaah Islamiyah. Almost overnight, formerly restricted Muslim groups from across
the spectrum were able to operate. Baasyir and Sungkar returned to Solo, preaching
and organizing in relative openness there. Simultaneously, Jakarta’s ability to
maintain order in Indonesia’s outer islands decreased dramatically, and long-
repressed tensions between the Muslims and Christians began to erupt. In 1999 and
2000, the outbreak of Muslim-Christian violence in Ambon (in the Malukus) and
Poso (on Sulawesi) provided Jemaah Islamiyah and Al Qaeda with vehicles to raise
funds and recruit hundreds of men to fight in and fan the sectarian conflict, in which
thousands died. After the violence petered out, many of these jihadis became active
members in Baasyir’s network.9
8 (...continued)
[http://www.mha.gov.sg/wp/complete.zip]; Abuza, “Terrorism in Southeast Asia,” in
National Bureau of Asian Research, Strategic Asia 2002-3.
9 Jemaah Islamiyah formed two militias to fight in the conflicts: Laskar Mujahidin for
Ambon and Laskar Jundullah (“Militia of God”) for Poso. For more on Jemaah Islamiyah’s
history, see Abuza, “Terrorism in Southeast Asia,” and Dan Murphy’s three part series,
“How Al Qaeda Lit the Bali Fuse,” Christian Science Monitor, June 17-19, 2003.

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Major Plots and Attacks
Jemaah Islamiyah first came to public attention in December 2001, when
Singapore’s Internal Security Department (ISD) raided two Singapore cells for
plotting bombing attacks against American, Australian, British, and Israeli
installations and citizens in Singapore. A video tape subsequently found by U.S.
forces in Afghanistan confirmed the Al Qaeda connection with the plot. Follow-on
arrests netted plotters in Malaysia and the Philippines. Reportedly, the Jemaah
Islamiyah cell in Malaysia coordinated the plot, including the procurement of bomb-
making materials, preparing forged travel documents, and communications with Al
Qaeda.
Subsequent investigation and arrests led the FBI to link Jemaah Islamiyah to the
September 11 attack on the United States. Two of the September 11 hijackers and
Zacarias Moussaoui, who is under U.S. indictment for his alleged involvement in the
September 11 plot, apparently visited Malaysia and met with cell members in 2000.
Additionally, the FBI claims that Malaysian cell members provided Moussaoui with
$35,000 and a business reference.
In June 2002, the Indonesian police arrested a suspected Al Qaeda leader,
Kuwaiti national Omar al-Farouq, at the request of the CIA and turned him over to
the U.S. military. After three months of interrogation, al-Farouq reportedly confessed
that he was Al Qaeda’s senior representative in Southeast Asia and disclosed plans
for other terrorist attacks against U.S. interests in the region. These included a joint
Al Qaeda/Jemaah Islamiyah plan to conduct simultaneous car/truck bomb attacks
against U.S. interests in Indonesia, Malaysia, Singapore, the Philippines, Thailand,
Taiwan, Vietnam, and Cambodia around the one-year anniversary of the September
11 attacks.10 On the basis of this and other information, in September 2002, the Bush
Administration closed U.S. embassies in several countries for several days and raised
the overall U.S. threat level from “elevated” (yellow) to “high”(orange). Under
interrogation, Al-Farouq reportedly identified the radical Indonesian cleric Abu
Bakar Baasyir as the spiritual leader of Jemaah Islamiyah and one of the organizers
of the planned September 2002 attacks. For months, Malaysia and Singapore had
also accused Baasyir of being a leader of Jemaah Islamiyah and had joined with the
United States in asking Indonesia to arrest him.
The Bali Bombings. The danger posed by Jemaah Islamiyah and Al Qaeda
was underscored by the October 12, 2002 bombings in a nightclub district in Bali
frequented by western tourists. Synchronized bomb blasts and subsequent fires in a
nightclub district popular with young tourists and backpackers killed approximately
200 and injured some 300, mainly Australians and Indonesians, but also including
several Americans as well as Canadians, Europeans, and Japanese. The bombings,
the most deadly since the September 11, 2001 attacks in the United States, appeared
to mark a shift in Jemaah Islamiyah’s strategy; the FBI has reported that in early
10 Romesh Ratnesar, “Confessions of an Al-Qaeda Terrorist,” Time, September 23, 2002.

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2002, senior Jemaah Islamiyah leaders — meeting in Thailand — decided to attack
“soft targets” in Asia such as tourist sites frequented by Westerners.11
The Bali bombing spurred the Indonesian government to reverse its previous
reluctance to investigate Jemaah Islamiyah. In the days after the blasts, senior
Indonesian officials acknowledged for the first time that Al Qaeda was operating in
Indonesia and was cooperating with Jemaah Islamiyah.12 With the substantial aid of
Australian and U.S. investigators, Indonesian police have arrested several suspects,
including Ali Gufron (also known as Mukhlas), who is thought to be a senior Jemaah
Islamiyah commander and an associate of Baasyir. Trials began in the spring and
summer of 2003. On August 7, 2003, Islamic militant Amrozi was sentenced to
death by a Indonesian court for his involvement in the Bali bombings. The
government also announced a series of decrees that strengthen the hand of the
government in dealing with terrorism. In the days after the bombing, Indonesia also
formally supported the United States’ petition to the U.N. that Jemaah Islamiyah be
added to the U.N.’s list of terrorist groups.
The Bali bombing also spurred the Indonesian government to arrest Baasyir. He
had long been viewed by U.S. officials as directly involved with terrorism, but until
the Bali bombing the Indonesian government had refused to acknowledge his role or
arrest him for fear of an anti-government backlash. Although several of those
charged with carrying out the Bali attack have implicated Baasyir in the attack, the
lack of sufficient evidence led Indonesian authorities to charge him with involvement
in a past terrorist plots, including an attempt to assassinate Megawati Sukaranoputri
when she was Vice-President. Baasyir’s highly publicized trial began in the spring
of 2003. Baasyir denies leading Jemaah Islamiyah, though he acknowledges training
at his Al Mukmin school all of the 13 suspects arrested in Singapore in December
2001.13 On September 3, 2003, an Indonesian court convicted him of plotting to
overthrow the Indonesian government but dropped more serious charges, including
accusations that he is the leader of Jemaah Islamiyah. Baasyir was sentenced to four
years in jail. Prosecutors had asked for a 15-year sentence. Baasyir has said he will
appeal the sentence.
According to authorities in the region, Jemaah Islamiyah has continued to plan
attacks against Western targets. In May and June 2003, for instance, three Muslim
Thais were arrested for allegedly planning to bomb Western embassies in Bangkok
— including the U.S. embassy — and Thai beach resorts popular among Western
tourists. In July 2003, Indonesian authorities arrested eight suspected Jemaah
Islamiyah members in connection with the seizure of a large cache of explosives on
the central Island of Java, but authorities indicated that some of the bomb-making
material had already made it to Jakarta. The suspects reportedly said their targets
were soft targets, such as hotels, churches, and shopping malls. In their possession
11 Jay Solomon and James Hookway, “Bali Bomb Suspect Used Thailand as Staging Area,”
The Wall Street Journal, November 7, 2002.
12 Ellen Nakashima and Alan Sipress, “Al Qaeda Linked to Blast by Official,” Washington
Post
, October 15, 2002.
13 Abuza, “Tentacles of Terror,” p.72.

CRS-8
was found a map of the area in Jakarta that includes the J.W. Marriott Hotel, where
on August 5, 2003, a car bomb exploded, killing over ten people — mostly
Indonesians — and injuring dozens. The raid also turned up evidence that several
U.S. companies were being targeted.14 Later that month, Riduan Isamuddin (also
known as Hambali), an important coordinator of Jemaah Islamiyah and Al Qaeda
activities, was arrested by Thai forces, reportedly acting on a tip from the U.S.
Central Intelligence Agency.
Focus Countries
Indonesia
Background. Indonesia’s attractiveness to Islamic terrorist groups appears to
derive primarily from weak central government control and considerable social and
political instability and its overwhelmingly Muslim population. Central government
control in Indonesia has declined progressively since the 1997-99 Asian financial
crisis and the replacement of the authoritarian regime of President Suharto in 1998,
which had been in power since 1965, with a more democratic but weaker central
government. Indonesia’s President Megawati, who is under pressure from Islamic
political parties, has condemned anti-American violence and pledged to protect U.S.
assets and citizens but also publicly opposed the U.S.-led military campaigns in
Afghanistan and Iraq.15 Muslim-Christian strife in the country’s remote regions has
attracted the involvement of thousands of foreign Islamic radicals, including,
apparently, some with Al Qaeda connections.
For the most part, Indonesian Islam is viewed as moderate, but radical groups
have grown in influence by taking advantage of the country’s many internal
problems. These include separatist movements in several provinces, a severe
economic recession following the Asian financial crisis, an ongoing power struggle
among the Indonesian elite for control of the government, and clashes between
Christians and Muslims in small islands such as Malaku that have been on the
receiving end of forced “transmigration” from Java and other of the more densely
populated islands. Radical groups such as Laskar Jihad and the Islamic Defenders
Front also reportedly have received assistance from elements within the Indonesian
military (TNI) in organizing, securing arms, and transport to locales throughout the
Indonesian archipelago.16
Even the more extreme groups traditionally have been concerned primarily with
domestic issues such as promoting the adoption of Islamic law (Sharia). In the 1999
national elections, only a small minority of the Muslim parties favored radical
14 Richard Paddock, “U.S. Firms Targeted in Jakarta,” Los Angeles Times, August 11, 2003.
15 Richard Paddock, “Indonesia Presses U.S. to Stop Bombing Asia,” Los Angeles Times,
November 2, 2001.
16 “Al-Qaida Planned Indonesia Attack,”Associated Press, January 23, 2002. This report
cites Indonesian military sources and western intelligence sources that the Indonesian army
committed at least $9.3 million to finance Laskar Jihad.

CRS-9
Islamic agendas, and overall the Muslim parties drew less than one-fifth of the vote.
More recently, however, the U.S.-led campaign against Islamic terrorism and war in
Iraq have had negative political resonance with a variety of groups currently
jockeying for power and influence. Megawati has been said to fear that cooperating
too closely with U.S. demands for arrests and other measures could leave her
vulnerable to attack not only by radical Islamists, but perhaps more importantly, by
secular nationalists.17 Among other factors, Megawati’s policies are influenced by
the political threat posed to her position by Vice President Hamzah Haz, leader of the
largest Muslim party who has personal ties with leaders of militant Muslim groups
and espouses a fundamentalist Islamic doctrine, and by the chairman of the upper
house, Amien Rais.
Shifts in Jakarta’s Counter-Terrorism Policy. Until Indonesia’s policy
reversal following the October 2002 Bali bombing, U.S., Singaporean, and Malaysian
officials expressed dissatisfaction with the level of Indonesia’s cooperation against
terrorism. The Bali attack spurred Indonesia to take the terrorism threat more
seriously. Jemaah Islamiyah’s killing of Indonesian civilians was likely a key factor
in the Indonesian government’s decision to take a much stronger stand and cooperate
with U.S. authorities, despite a marked fall in Indonesians’ favorable impressions of
the United States (discussed below). In addition, the trial of Baasyir has brought
much evidence of Jemaah Islamiyah’s terrorist activities to light, bringing home the
extent of the terrorist threat in Indonesia. The danger was highlighted in the summer
of 2003 by the J.W. Marriott bombing in mid-July 2003, which was preceded by
several arrests, including an Indonesian police raid that uncovered a possible Jemaah
Islamiyah assassination plot of four members of the Peoples Representative Council
(DPR).18 Mitigating against backtracking by the government on its counter-terror
stance is Indonesia’s need for foreign investment from abroad and the strong position
of large Muslim organizations such as Nahdlatul Ulama and Muhammadiya. These
moderate groups, which have publicly have supported the arrest of Baasyir and the
Megawati government’s new anti-terrorism measures, have become natural allies of
the government in the war against terror because they too would lose should a radical
form of Islam come to power.
President Bush’s three-hour visit to Bali on October 22, 2003, was designed to
strengthen bilateral counter-terror ties. In a joint statement, Bush and President
Megawati pledged “to enhance their bilateral cooperation in the fight against
terrorism, including through capacity building and sharing of information,”
specifically referring to military-to-military relations19 (see the “Options and
Implications for U.S. Policy” section below). President Bush also announced a $157
million program to help improve the quality of Indonesian schools. The initiative is
aimed at reducing the influence of Muslim boarding schools, many of which preach
a radical brand of Islam that calls for the establishment of sharia law, sometimes
17 December 2002 conversation with Zachary Abuza.
18 “A Number of Pesantrens in Central Java Targets,” Jakarta Suara Pembaruan, July 16,
2003, FBIS.
19 “Joint Statement Between the United States of America and the Republic of Indonesia,”
The White House, October 22, 2003.

CRS-10
through violent means, by strengthening secular public education. A number of
these schools are run by suspected or confessed Jemaah Islamiyah members, who use
them to identify and recruit members. While government-to-government cooperation
between Washington and Jakarta seems to be improving, Indonesian polls indicate
that the United States remains unpopular in Indonesia. According to recent polling
data released by the State Department only 15% of Indonesians today have a
favorable opinion of the United States as opposed to 75% three years ago.20
The United States and Indonesia presently cooperate on counter-terrorism in a
number of areas with assistance going to the police and security officials,
prosecutors, legislators, immigration officials, banking regulators and others. U.S. -
Indonesian counter-terror capacity building programs include the following:
! $12 million for the establishment of a national police counter-
terrorism unit;
! $4.9 million for counter-terrorism training for police and security
officials over the period 2001-03;
! Financial intelligence unit training to strengthen anti-money
laundering, train counter-terror intelligence analysts, and an analyst
exchange program with the Treasury Department;
! Training and assistance to establish a border security system as part
of the Terrorist Interdiction Program; and
! Regional counter-terrorism fellowships to provide training on
counter-terrorism and related issues to the Indonesian military.21
The Philippines
The Philippines condemned the September 11, 2001 attacks and offered ports
and airports for use by U.S. naval vessels and military aircraft for refueling stops.
Philippine President Gloria Macapagal-Arroyo and President Bush agreed on the
deployment of U.S. military personnel to the southern Philippines to train and assist
the Philippine military against the terrorist Abu Sayyaf group. The two Presidents
announced on November 20, 2001, $92 million in U.S. military assistance and $55
million in U.S. economic aid for Muslim regions in the Philippines for 2001 and
2002.22
Phase One of U.S.-Philippine Military Cooperation. The number of
American military personnel deployed between January 2002 and July 31, 2002 was
nearly 1,200, including 150 Special Forces. The exercise, dubbed “Balikatan” or
“shoulder-to-shoulder,” included the deployment of over 300 troops, primarily Navy
20 Ellen Nakashima, “U.S. Policy Censured in Indonesia,” The Washington Post, October
21, 2003.
21 Information drawn from State Department Fact Sheet “Summary of Counter Terrorism
Assistance for Indonesia,” 10/03 update.
22 Steven Mufson, “U.S. to Aid Philippines’ Terrorism War,” Washington Post, November
21, 2001; “Arroyo’s Meeting With Bush at White House, US Economic Package Reported,”
GMA 7 Television, November 21, 2001, translated by FBIS.

CRS-11
engineers, to the Southern Philippines to undertake “civic action” projects such as
road-building on Basilan, an island that is the center of Abu Sayyaf’s activities. The
Balikatan exercise reportedly resulted in a significant diminishing of Abu Sayyaf
strength on Basilan. Armed Forces of the Philippines (AFP) operations improved as
a result of U.S. assistance in intelligence gathering, the supplying of modern
equipment, and aid in the planning of operations.23
In consideration of the Filipino Constitution’s ban on foreign combat troops
operating inside the country, Washington and Manila negotiated special rules of
engagement for the Balikatan exercise. U.S. Special Forces personnel took direction
from Filipino commanders and could use force only to defend themselves.
The Abu Sayyaf Group. Abu Sayyaf is a small, violent, faction-ridden
Muslim group that operates in the western fringes of the big island of Mindanao and
on the Sulu islands extending from Mindanao. It has a record of killings and
kidnappings and has had links with Al Qaeda. Abu Sayyaf kidnapped three
American citizens in May 2001. One was beheaded in June 2001. The family of the
other two, a missionary couple, the Burnhams, has disclosed that in March 2002 they
made a ransom payment of $300,000 to Abu Sayyaf, but the couple was not released,
presumably because the payment was mistakenly delivered to a rival Abu Sayyaf
faction. The payment reportedly was facilitated by U.S. and Philippine officials,
including the Federal Bureau of Investigation.24 In June, Filipino army rangers
encountered the Abu Sayyaf groups holding the Burnhams. In the ensuing clash, Mr.
Burnham and a Filipino female hostage were killed, but Mrs. Burnham was rescued.
Terrorist bombings on Mindanao increased in late 2002 and 2003. The attacks
initially were thought to be the work of Abu Sayyaf, until February and March 2003,
when the AFP accused the Moro Islamic Liberation Front (MILF) of major
bombings.
The MILF and the MNLF. The U.S. focus on Abu Sayyaf is complicated by
the broader Muslim problem in the southern Philippines, including the existence of
two much larger groups, the Moro National Liberation Front (MNLF) and the MILF.
Both groups have been in insurrection against the Philippine government for much
of the last 30 years; their main political objective has been separation and
independence for the Muslim region of the southern Philippines. Evidence, including
the testimonies of captured Jemaah Islamiyah leaders, has pointed to strong links
between the MILF and Jemaah Islamiyah, including the training of Jemaah Islamiyah
23 Gloria, Glenda M. Training days. Manila Newsbreak (internet version), July 8, 2002.
Schmitt, Eric. By aiding needy Filipinos, G.I.’s could help rout the rebels. New York Times,
June 15, 2002. p. A6.
24 Bonner, Raymond and Schmitt, Eric. Philippine Officials Detail the Trap, Set with U.S.
Help, that Snared a Rebel Leader. New York Times, September 22, 2002. p. NE16. Lerner,
Mark. Hostage’s Father Says Abu Sayyaf Broke Deal. Washington Times, April 26, 2002.
P. A15.

CRS-12
terrorists in MILF camps. Singapore officials often have stated that the MILF is a
“key ally” of Jemaah Islamiyah.25
The MILF and the MNLF have tenuous cease-fire agreements with the
Philippine government. The cease-fire with the MILF became shaky in February and
March 2003 when fighting broke out at an MILF stronghold on Mindanao and the
MILF blew up several electric power grids on the island. The AFP accused the MILF
of responsibility for bombings, including a bombing at the airport in the city of
Davao which killed 21 (including an American missionary) and injured over 150,
although reports mentioned other groups, including Jemaah Islamiyah, as possible
suspects. The government and the MILF concluded a new truce agreement in June
2003; and the government has asked several Muslim countries, including Malaysia,
to monitor the cease-fire. President Bush promised U.S. diplomatic and financial
support if the MILF was sincere in seeking a negotiated settlement.26
The Philippine Communist Party (CPP). The CPP, the political head of
the New Peoples Army (NPA), also has called for attacks on American targets and
claims responsibility for the murder of an American hiker and the firing on an
American transport aircraft in January 2002 on the island of Luzon. The Bush
Administration placed the Communist Party of the Philippines and the NPA on the
official U.S. list of terrorist organizations in August 2002. It also pressured the
government of the Netherlands to revoke the visa privileges of Communist Party
leader, Jose Maria Sison, and other CPP officials who have lived in the Netherlands
for a number of years and reportedly direct CPP/NPA operations.
Phase Two of U.S.-Philippine Military Cooperation? The United States
and the Philippines have attempted to negotiate a second phase of U.S. training and
support of the AFP since late 2002. The negotiations have experienced difficulties
in determining the “rules of engagement” for U.S. personnel and the terminology to
be used in describing Philippine-U.S. cooperation. The basic issue has been whether
any facets of the U.S. role could be considered a combat role. The two sides initially
announced that U.S. training of AFP light reaction companies would take place in
northern Luzon and again on Mindanao. The objective was to train 16 light infantry
companies by the end of 2003 for use against both Muslim insurgents and the NPA.
Funding was to come from a $25 million military aid package included in the
FY2002 emergency supplemental appropriations. In July 2002, the two governments
had decided that, except for aerial surveillance, U.S. military personnel would not be
involved in the stepped-up Philippine military campaign against Abu Sayyaf on Jolo
Island south of Basilan where Abu Sayyaf has concentrated strength. President
25 Wain, Barry and McBeth, John. A Perilous Choice for the Presidents. Far Eastern
Economic Review
, October 3, 2002. p. 17-20. Bonner. Raymond. Southeast Asia Remains
Fertile for Al Qaeda. New York Times, October 28, 2002. p. A1. Singapore Home Affairs
Ministry White Paper, The Jemaah Islamiyah Arrests and the Threat of Terrorism, January
7, 2003, p.7-9, [http://www.mha.gov.sg/wp/complete.zip].
26 Bumiller, Elisabeth. Bush Affirms U.S. Is Ready to Send Troops to the Philippines. New
York Times
, May 20, 2003. p. A15.

CRS-13
Arroyo favored greater U.S. involvement, but U.S. military leaders reportedly had
reservations.27
However, the continued Abu Sayyaf bombings led the Defense Department to
consider a more extended U.S. assistance program in the southern Philippines,
focusing on the Abu Sayyaf concentrations on Jolo. U.S. officials also cited stronger
evidence of connections between Abu Sayyaf and international terrorist groups. In
February 2003, Pentagon officials described a plan under which the United States
would commit 350 Special Operations Forces to Jolo to operate with Army and
Marine units down to the platoon level of 20-30 troops. Another 400 support troops
would be at Zamboanga on the Mindanao mainland. Positioned offshore of Jolo
would be a navy task force of 1,000 U.S. Marines and 1,300 Navy personnel
equipped with Cobra attack helicopters and Harrier jets.28
The Pentagon description of the plan was that U.S. troops would be in a combat
role. This and subsequent statements indicated that the Special Operations Forces
on Jolo would participate in AFP offensive operations against Abu Sayyaf and that
the Special Operations Forces would not be limited to using their weapons for self-
defense. The U.S. Marines were described as a “quick reaction” force, undoubtedly
meaning that they could be sent on to Jolo to reinforce AFP units. The Cobra
helicopters and Harrier jets would give AFP commanders the option of requesting
U.S. air strikes in support of AFP operations or transporting Filipino troops on U.S.
helicopters.
These rules of engagement went beyond the U.S. role on Basilan in 2002. In
that exercise, there was no offshore Marine and naval air capability, and the plan for
U.S. Special Operations Forces on patrol with AFP units restricted their use of
weapons only for self-defense. That plan never was implemented on Basilan; U.S.
forces did not participate in AFP patrols. Moreover, the Basilan operation set a
deadline of July 1, 2002, whereas Pentagon officials asserted that the Jolo operation
would have no time limit.
President Arroyo and AFP commanders reportedly had agreed to the plan for a
second U.S.-Philippine joint military activity in a meeting on February 4, 2003.29
The announcement of the plan caused immediate controversy in the Philippines.
Filipino politicians and media organs criticized the plan as violating the
constitutional prohibition of foreign troops engaging in combat on Philippine soil.30
Filipino Muslim leaders warned of a Muslim backlash on Mindanao. Filipino experts
27 Villanueva, Mirichu and Pareno, Roel. Arroyo Scolds US General. Philippine Star
(internet version), July 11, 2002. New US-Philippine Exercises Against Rebels Planned.
Reuters News Service report, July 10, 2002.
28 Graham, Bradley. U.S. Bolsters Philippine Force. Washington Post, February 21, 2003.
p. A1.
29 Nakashima, Ellen and Graham, Bradley. Missed Signals Forced Suspension of U.S.-
Philippine Mission. Washington Post, March 3, 2003. p. A12.
30 Nakashima, Ellen. Philippines Debates U.S. Combat Role Against Rebels. Washington
Post
, February 23, 2002. p. A30.

CRS-14
and civic leaders on Jolo warned that the people of Jolo would not support a U.S.
combat role, partly because of the history of U.S. military involvement. During the
Philippine wars following the U.S. annexation of the Philippines in 1898, U.S. forces
commanded by Generals Leonard Wood and John J. Pershing conducted extensive
combat operations against Muslim forces on Jolo, inflicting thousands of civilian
casualties.
At the end of February 2003, the Bush and Arroyo administrations decided to
put the plan on hold and re-negotiate the rules of engagement for U.S. forces. In May
2003, U.S. military officials said that the joint cooperation program aimed at Abu
Sayyaf on Jolo would be delayed until the new training was completed. During
Arroyo’s official state visit to the White House on May 19, 2003, the United States
announced a new $65 million program for the training of several AFP battalions (and
$30 million for economic aid on Mindanao), and designated the Philippines a Major
Non-NATO Ally.31 During his one-day visit to Manila in October 2003, President
Bush described the U.S.-Philippines military alliance as a “rock of stability in the
Pacific” and committed the United States to “provide technical assistance and field
expertise and funding” to help modernize the Philippines military. He also stated that
the United States and the Philippines have a common objective of bringing Abu
Sayyaf to justice and to continue to work together to dismantle Jemaah Islamiyah.32
Singapore
Singapore has been at the forefront of anti-terrorist activity in Southeast Asia.
A terrorist attack on the city-state could jeopardize its standing as the region’s
financial and logistical hub. Singaporean officials maintain that important port
facilities and other major targets remain vulnerable.33 Since Jemaah Islamiyah cells
were first raided in December 2001, dozens of other suspected Islamist militants have
been arrested, providing detailed insights into Jemaah Islamiyah and Al Qaeda’s
structure, methods, and recruiting strategies. Singapore also has tightened its
surveillance of financial records, increased patrols in the Straits of Malacca, and
increased intelligence cooperation with regional countries and the United States. In
June 2002, Singapore and the United States signed an agreement to allow U.S.
customs officials to inspect cargo containers in Singapore bound for the United
States: part of a global U.S. program to prevent terrorists from smuggling weapons
of mass destruction into the United States. The government of Singapore has outlined
measures that it has taken to dismantle JI operations in Singapore in a white paper
entitled “The Jemaah Islamiyah Arrests and the Threat of Terrorism.”
31 Major Non-Nato Ally status allows the U.S. and the designated country to work together
on military research and development and gives the country greater access to American
defense equipment and supplies
32 “Remarks by the President to the Philippines Congress,” Manila, Philippines, October 18,
2003. [http://www.whitehouse.gov].
33 Jason Szep, “As Iraq war nears, alert needed in Asia - Singapore,” Reuters, March 13,
2003.

CRS-15
Malaysia
Malaysia’s former Prime Minister Mahathir Mohammed, a longstanding
promoter of non-violent Muslim causes, openly criticized Islamic terrorists after
September 11, including Palestinian suicide bombers. In a show of appreciation for
his cooperation in the U.S. anti-terrorism campaign, Mahathir was invited to
Washington, DC, and met with President Bush in mid-May 2002. During that visit
the United States and Malaysia signed a Memorandum of Understanding (MOU) on
counter-terrorism. The text of that document became the basis for a subsequent
declaration on counter-terrorism that the United States and ASEAN signed at the
August 2002 ASEAN Regional Forum (ARF) meeting.34
The Bush Administration also has decided to downgrade U.S. human rights
concerns over Malaysia’s use of its Internal Security Act (ISA) to imprison political
opponents without trial, especially since he has employed the ISA against suspected
members of Jemaah Islamiyah and the Kampulan Mujiheddin Malaysia (KMM).35
Mahathir’s successful visit to Washington, DC, in May 2002 symbolized the
fundamental change in the U.S. posture toward him since the September 11 attack.
However, Mahathir criticized the U.S. attack on Iraq and new U.S. visa restrictions
on Malaysians who wish to go to the United States. Thus far there are no indications
that Mahathir’s successor Prime Minister Badawi will make a significant policy
departure from his predecessor.
Thailand
For months after the discovery of the Jemaah Islamiyah network, Thai officials
emphatically denied mounting evidence that Al Qaeda and Jemaah Islamiyah
members operate in their country or that militant Thai Muslim secessionist groups
have ties to foreign terrorist networks.36 New evidence has surfaced that Thailand’s
34 U.S. Embassy, Malaysia, Speech by U.S. Ambassador Marie T. Huhta, Rotary
International Dinner Forum, Kuala Lumpur, Malaysia February 22, 2003.
[http://usembassymalaysia.org.my/amsp0222.html].
35 The KMM is a small, militant group calling for the overthrow of the Mahathir government
and the creation of a pan-Islamic state encompassing Malaysia, Indonesia, and the southern
Philippines. Founded in 1995, the group is estimated by Malaysian authorities to have fewer
than 100 members. According to Singaporean and Malaysian authorities, the KMM has
close links to Jemaah Islamiyah and radical Islamist groups in the Malukus and the
Philippines. U.S. State Department, Patterns of Global Terrorism 2001, p. 123-24,
[http://www.state.gov/s/ct/rls/pgtrpt/]. The KMM’s links to Malaysia’s main opposition
party, Parti Islam seMalaysia (PAS), are controversial. After the September 11, 2001
attacks, Prime Minister Mahathir explicitly linked PAS to the KMM and international
terrorist movements, and went on a political offensive against the party, which had made
gains in recent local elections. Several of the alleged KMM members arrested are allegedly
PAS members, including some senior party leaders. Abuza, “Tentacles of Terror,” February
5, 2003 draft, p. 40.
36 See, for instance, Dana Dillon, “The Shape of Anti-Terrorist Coalitions in Southeast
Asia,” Heritage Lectures, No.773, Delivered December 13, 2002, [http://www.heritage.org
(continued...)

CRS-16
public denials were used as a cover for close, covert counter-terrorism cooperation
between the U.S. Central Intelligence Agency and Thailand’s Counter Terrorism
Center (CTIC), which was established in early 2001 to provide better cooperation
among Thailand’s main security agencies. The CIA reportedly has assigned
approximately 20 agents to the CTIC and in 2002 provided between $10 million and
$15 million to the center. Acting on CIA intelligence, the CTIC took the lead in
capturing Hambali, and also has captured a number of other suspected JI operatives.37
President Bush’s summit with Prime Minister Thaksin Shinawatra seemed to indicate
that U.S.-Thai anti-terrorist cooperation has been close; the two leaders announced
their intent to launch negotiations on a bilateral Free Trade Agreement, and President
Bush announced his decision to designate Thailand as a major non-NATO ally in
recognition of its support of the U.S. war against terrorism.
Bangkok publicly embraced a more active anti-terrorist campaign in May and
June 2003, when Prime Minister Thaksin’s government announced the arrest of three
Thais in the southern province of Narathiwat for allegedly planning to bomb Western
embassies in Bangkok — including the U.S. embassy — and Thai beach resorts
popular among Western tourists. The arrests, which were announced while Thaksin
was in the United States for a summit with President Bush, came a week after three
Thais from a Wahabi sect were arrested on terrorism charges in Cambodia. Another
Cambodian Muslim arrested in June 2003 had spent the previous three years studying
in southern Thailand. Thai officials said the arrests showed that foreign-linked
terrorist groups have set up cells in Thailand’s predominantly Muslim southern
provinces.38 Islamic secessionist groups have operated in Thailand’s Muslim-
majority southern provinces for decades, though violent attacks by Islamic militants
largely disappeared in the years following the passage of the 1997 constitution, which
granted the provinces greater autonomy over local affairs.
Evidence demonstrating increased Islamic terrorist activity in Thailand had been
mounting since late 2001. Confessions of detained Al Qaeda and Jemaah Islamiyah
suspects indicate that the groups use Thailand as a base for holding meetings, setting
up escape routes, acquiring arms, and laundering money. In January 2002, Hambali
is reported to have convened a meeting of the networks’ operatives in southern
Thailand at which the group decided to target “softer” targets such as the nightclubs
in Bali that were attacked in October 2002. A number of Al Qaeda and Jemaah
Islamiyah figures, including convicted World Trade Center bomber Ramzi Yousef,
have taken advantage of lax border controls and tourist-friendly visa requirements to
flee to Thailand to escape arrest in other Southeast Asian countries.39 Under
36 (...continued)
/Research/AsiaandthePacific/index.cfm]; Shawn Crispin, “Thailand — In Denial,”Far
Eastern Economic Review
, November 12, 2002.
37 Leslie Lopez and Shawn Crispin, “A Thai-CIA Antiterrorism Team,” The Wall Street
Journal
, October 1, 2003.
38 Shawn W. Crispin, “Thailand Now Says Terrorists Have Cells in Muslim Provinces,”
Wall Street Journal, June 10, 2003.
39 Western intelligence sources reportedly estimate that Thai immigration authorities detain
(continued...)

CRS-17
interrogation, captured Al Qaeda operative Omar al-Farouq reportedly has confessed
to his attempts to cooperate with Gerakan Mujahideen Islam Pattani, a small
separatist group in Thailand whose founder fought with the Mujahideen in
Afghanistan.40 One prominent anti-terrorism expert has called attention to a
previously unknown underground network, called Jemaah Salafiya, that allegedly is
affiliated with Jemaah Islamiyah.41
Additionally, Al Qaeda and Jemaah Islamiyah members reportedly have
purchased weapons on Thailand’s large black market in arms. Fears that radioactive
contraband has entered the Thai open market were heightened in June 2003, when
Thai and U.S. agents worked together to arrest a Thai citizen for trying to sell 30kg
of cesium-137, a substance used for medical purposes that could be attached to
conventional explosives for use in a “dirty bomb.” Reportedly, the arrested
individual has confessed to smuggling the cesium into Thailand from Laos, where
some authorities believe more is being hidden.42 Finally, the confluence of these
confessions with a sudden surge of violent attacks in 2002 in Thailand’s southern
provinces worried some terrorism experts that Islamic militants had become re-
energized.43
Australia
Australian involvement alongside the United States in the war against terror has
been staunch, as was highlighted by President Bush in his address to the Australian
Parliament on October 22nd, 2003. In his address, the President pointedly
acknowledged the valuable contribution made by Australia’s special forces in the
war against terror in Afghanistan and in Iraq. Prime Minister Howard was visiting
Washington on September 11, 2001, as part of the celebration of the 50 year
anniversary of the ANZUS alliance. Shortly after the attacks of that day, in which
22 Australian lives were lost, Australia evoked the ANZUS Treaty to come to the aid
of the U.S. and subsequently committed Australian military forces to fight in
Afghanistan and Iraq. Australia’s commitment to the war on terror was redoubled
as a result of the Bali bombing, which killed 89 Australians. Imam Samudra stated
in his confession of his role in the Bali bombing that Australians had been targeted
in the Bali attack for their ties to the United States and for their involvement in East
39 (...continued)
on average one person a day, usually from South Asia, for traveling with forged documents.
“Canada Helps Thais Combat Terror,” Far Eastern Economic Review, September 19, 2002.
40 Abuza, “Tentacles of Terror,” February 5, 2003 draft, p.84.
41 Ellen Nakashima, “Terrorists Find Easy Passage into Thailand,” Washington Post,
January 27, 2003.
42 Shawn W. Crispin and Gary Fields, “U.S.-Thai Seizure Triggers Fears of ‘Dirty Bombs’,”
Wall Street Journal, June 18, 2003.
43 Ellen Nakashima, “Terrorists Find Easy Passage into Thailand,” Washington Post,
January 27, 2003; A. Davis, “Thailand — The Next Al Qaeda Target?” Jane’s Terrorism
& Security Monitor
, November 1, 2002.

CRS-18
Timor.44 Australia helped East Timor become an independent nation through its
leading role in 1999 in the International Force East Timor (INTERFET) and in the
follow-on U.N. Transitional Administration East Timor (UNTAET).
Whereas Southeast Asia has been described as the “second front” in the war on
terror by senior U.S. officials, it is Australia’s area of most immediate strategic
interest. Australia has been working closely with Indonesian and other regional
authorities to combat terrorism. As of May 2003, 36 Australian Federal Police
officers remained in Indonesia to assist in tracking down suspects and to track the
money trail used to finance the attack.45 Indonesian National Police Headquarters
have also announced that Australian Federal Police have assisted in the investigation
into the bombing of the Indonesian Peoples Representative Council. In 2002, the two
countries negotiated a Memorandum of Understanding (MoU) on Terrorism, in
which they pledged to cooperate on information and intelligence sharing, law
enforcement, money laundering, and terrorist financing, cooperation on border
control systems, and aviation security. Australia also announced a $6.46 million
commitment to assist Indonesia to achieve these aims.46 Australia has established an
Ambassador for Counter Terrorism and has concluded counterterror MoUs with Fiji,
Malaysia, Philippines, and Thailand. Australia and India held their first Joint
Working Group on counterterrorism on March 7, 2003.
It appears as though JI was organizing or operating in Australia for years before
the Bali bombing of October 12, 2002. In the lead up to the Olympics in Sydney in
2000 Australia Secret Intelligence Organization and Federal Police officers inspected
what appeared to be a terrorist training camp on a property owned by the Islamic
Youth Movement near Braidwood, about 100 miles southwest of Sydney. The
Internal Security Department of Singapore reportedly alerted Australia to the
existence of JI cells in Australia sometime in 2001.47 The Philippines National
Security Adviser Golez has stated that intelligence indicates that northern Australia
was part of Al Qaeda’s plan for a wider Islamic state.48 The existence of a JI cell in
Australia was confirmed by Abu Bakar Bafana during testimony that he gave at
Baasyiryir’s trial on June 27, 2003.49 The cell is called Mantiqi 4 and appears to be
the least developed JI cell. Australian Attorney General Williams stated that Abu
Bakar Baasyir visited Australia 11 times to “establish a Jemaah Islamiyah influence
in Australia.”50 Australian Federal Police Commissioner Keelty stated in February
44 “JI Groups in Australia Watched,” The Daily Telegraph, February 11, 2003.
45 Daniel Clary, “Bali Trials List Might Widen,” The West Australian May 15, 2003.
46 “Australia-Indonesia Joint Ministerial Statement,” Jakarta, Indonesia, March 11, 2003.
47 Darren Goodsir, “JI Long Active in Australia,” The Age, April 22, 2003.
48 Grant Holloway, “JI Plans for North Australia,” CNN, October 26, 2002.
49 Mathew Moore, “Insider Says JI in Australia,” The Age, June 27, 2003.
50 “Bashir Visited Australia 11 Times on JI Business,” AFP, November 3, 2002.

CRS-19
2003 that Indonesian Chief Investigator Pastika was right that there may well still be
JI sympathizers or followers in Australia.51
Cambodia and Burma: New Countries of Convenience?
Two of the hallmarks of Al Qaeda and Jemaah Islamiyah have been their
mobility and adaptability. The heightened scrutiny placed on Jemaah Islamiyah
operations in the major countries in Southeast Asia has led to concerns that the
terrorist network would establish or step up operations in other countries that on the
surface would appear to be unlikely locales for Islamic terrorism to take root. During
Indonesian authorities’ interrogation of Omar al Faruq, the Al Qaeda leader
reportedly admitted that Jemaah Islamiyah had been attempting to forge ties with
radical Muslims in Burma.52
In Cambodia in May and June 2003, four men — one Cambodian Muslim, Thai
Muslims, and an Egyptian — were arrested in Phnom Penh for belonging to Jemaah
Islamiyah and plotting to carry out terrorist attacks in Cambodia. The three non-
Cambodians were teachers at a Saudi-funded Islamic school that Cambodian
authorities subsequently shut down, expelling fifty foreign employees. The school
was run by a charitable foundation that is suspected of laundering money for Jemaah
Islamiyah and Al Qaeda. The information leading to the arrests reportedly came
from a tip provided by the United States following the interrogation of a Singaporean
Jemaah Islamiyah operative who is said to have met with and sent funds to the
suspects in Cambodia.53 Since the withdrawal of Vietnamese troops in the early
1990s, Cambodia’s Cham ethnic group, most of whom are moderate Muslims, has
seen a rise in Wahhabi influence and funding from Wahhabi schools in the Middle
East. The Cham make up less than five percent of Cambodia’s 12.5 million
population, which is predominantly Buddhist.
Options and Implications for U.S. Policy
U.S. efforts to promote counter-terrorist cooperation in Southeast Asia generally
have focused on bilateral intelligence sharing and coordination of operations against
specific targets, and initiatives to promote regional cooperation. The exact nature of
bilateral engagement varies with the particular circumstances of each country and the
state of political relations.
Indonesia
The ongoing debate over the relative emphasis that strategic interests and human
rights concerns should play in the bilateral relationship with Indonesia continued in
51 “JI Groups in Australia Watched,” The Daily Telegraph, February 11, 2003.
52 Abuza, “Terrorism in Southeast Asia,” p.15.
53 Luke Hunt, “JI arrests throws spotlight on Cambodia’s radical Muslims,” Agence France
Presse
, May 28, 2003; Shawn Crispin, “Targets of a New Anti-Terror War,”Far Eastern
Economic Review,
July 10, 2003; Abuza, “Terrorism in Southeast Asia,” p.16.

CRS-20
United States policy circles in the summer of 2003. On one side of the debate are
those who argue that the United States must develop access to Indonesia, through its
elites, to be able to influence the nation across a range of issues, including strategic
considerations, counterterrorism, and human rights. On the other side of the debate
are those who argue that such an approach has shown few results and that the United
States needs to send a clear signal to Indonesia that Jakarta must improve its human
rights performance to be able to access the full range of benefits that can be derived
from the bilateral relationship with the United States. The latter approach has been
embodied, since 1991, in the so-called “Leahy Amendment” to the annual foreign
operations appropriations bill which has banned aid to the TNI until Indonesia
fulfilled several conditions relating to accountability for these human rights abuses.
(See “Role of Congress/Legislation” below for further details.) Set against this
backdrop is the need for bilateral cooperation in the war against terror.
United States-Indonesian anti-terrorism cooperation improved significantly after
the Bali bombing. Fears that the United States’ war against Iraq would inflame the
country were proven to be largely unjustified. Though the August 5, 2003 bombing
at the Marriott Hotel in Jakarta demonstrated that terrorists in Indonesia are still
operating, Indonesian police efforts, including widespread arrests of suspected
Jemaah Islamiyah members, have set back the radical Islamic agenda in Indonesia
and helped moderate Islamic groups improve their position. The revelation that
Indonesian police had obtained information indicating that a terrorist attack could
happen in the neighborhood of the Marriott attack, but did not inform the U.S.
Embassy or Marriott, points to limits to Indonesia’s ability to cooperate in counter
terror measures.54 About 150 people, mostly Indonesians but including two
Americans, were injured in the attack. One of the key reasons for Indonesia’s more
aggressive stance against Jemaah Islamiyah is the growing post-Bali perception that
the network is a threat not just to Western interests in Indonesia but to the Indonesian
government and society as well.
Even in the aftermath of the Bali bombing, however, in which Indonesian
counterterrorism efforts dramatically increased, the potential for a nationalist
backlash against working too closely with the United States exists, perhaps raising
the need for a heavy reliance upon relatively unobtrusive forms of counter-terrorism
cooperation. Counterterror cooperation options include intelligence sharing,
cooperation in police investigations, training in border and immigration controls, and
securing Jakarta’s approval for the dispatch of covert U.S. agents to Indonesian soil.
The latter option, however, if discovered, runs the risk of inflaming lingering anti-
American passions. The TNI generally has more effective domestic intelligence
capabilities than the national police, which until January 2001 were part of the
military establishment. The Bush Administration also has a desire to reestablish
military-to-military ties with Indonesia. The central role that the military plays in
Indonesia highlights the importance of any relationship with the military.
Although there has been much improvement, there are other several reasons why
counterterrorism cooperation may have limitations:
54 “Terror in Indonesia,” The Washington Post, 7 August 2003.

CRS-21
! The perception that the trials of military figures accused of human
rights abuses in East Timor in 1999 were inadequate
! Fear that further human rights abuses will take place in the current
suppression of rebels in Aceh
! Concern that the military is not cooperating in the investigation of
the murder of two American citizens in Papua
! Lingering concern that the Indonesian government is not doing
enough to fight the war against terror
! Although the police have increased cooperation on counterterrorism
it is not clear that the military will to the same extent. The resources
of the military far outweigh those of the police in Indonesia.
Despite lingering perceptions that the Indonesian military is not serious about human
rights, it appears that the possibility that those perceptions will have a negative
impact on counterterror cooperation in the short term is low.
The State Department has been “disappointed with the performance and record
of the Indonesian ad hoc tribunal” which has failed to “hold human rights violators
fully accountable for their crimes in East Timor.”55 By the end of the trial phase on
August 5, 2003, no one had been sent to prison for the atrocities of 1999 that left
approximately 1,000 dead in East Timor. The trials were carried out by a special
military tribunal in Jakarta that tried 17 soldiers, policemen, and government officials
for their alleged role in these incidents. Five were convicted. All received relatively
light sentences and all remain free on appeal. The tribunal acquitted 12 defendants,
and the prosecution has sought the court’s approval to drop charges against an
eighteenth defendant, the most senior military on the scene at the time of the killings.
This officer is now reported to be directing military operations in Aceh. Reportedly,
at the time of his sentencing in early March 2003, the senior-most officer convicted
for human rights violations, Brigadier General Noer Mois, the commander of the
Indonesian forces in East Timor at the time of the massacre, was teaching a course
on human rights at the Indonesian Military Academy. The officer was sentenced to
five years imprisonment for standing by while the attacks were carried out.56
Such human rights concerns could once again influence American policy makers
should Indonesian operations in Aceh lead to human rights abuses. The conflict in
Aceh may lead to further abuses which could complicate recent efforts by the
Administration to restart the military-to-military relationship. If the Indonesian
military is perceived as successful in its operations in Aceh, its clout at the center,
and role as protector of the nation, will be enhanced.
The lack of cooperation on the investigation into the murder of two Americans
at the Freeport-McMoRan Copper and Gold Inc. mine in Papua in August 2002 is a
destabilizing issue for the relationship. Deputy Assistant Secretary of State for East
55 Philip Reeker, “Daily Press Briefing,” US Department of State, August 5, 2003.
56 Jane Perlez, “Indonesia Seeks to Clear General of Timor Crimes.” New York Times,” June
9, 2003; “Indonesia Sentences General in East Timor Attacks,” New York Times, March
13, 2003; “East Timor General Jailed,”, The Guardian, March 12, 2003 (from an AP Jakarta
report.)

CRS-22
Asian and Pacific Affairs Matthew Daley has said that it appears that Indonesian
soldiers were involved.57 Despite this, the Bush Administration decided to release
funds for limited participation in International Military Education and Training
(IMET) in July of 2003 which it had earlier suspended due to the Freeport incident.
At the same time, Congress moved to restrict future funding for military training
unless Indonesia prosecutes those responsible for the killings at Freeport.58 (See
“Role of Congress/Legislation” below for details of current legislation under
consideration concerning Indonesia.) The extent to which Indonesian authorities
cooperate with this investigation will be an important factor in determining future
IMET funding as well as the overall nature of the bilateral relationship.
Indonesians’ evolving attitude toward the United States and U.S. foreign policy
could also have a negative impact on anti-terrorism cooperation. Recent polls
indicate that the war in Iraq “...inflamed the Muslim World, [and] softened support
for the war on terrorism.” The study also found that 74% of Indonesians were “very”
or “somewhat” “worried about [a] potential United States military threat” and that
58% of Indonesians had confidence that bin Laden would “do the right thing.”
Eighty-two percent of Indonesians were also disappointed that “Iraq did not put up
more of a fight against the United States and its allies.” Postwar opinion polls in
Indonesia indicate that general support for the United States is low as “favorable
ratings for the United States have fallen from 61% to 15% in Indonesia” since last
summer.59
The Philippines
The delicate internal political situations in the Southeast Asian countries
affected by Islamic radicalism and terrorism impose serious limitations on U.S.
freedom of action. This currently is highlighted by the difficulties in Philippine-U.S.
negotiations over developing a second U.S. program of military support for Filipino
military operations against Abu Sayyaf. Moreover, the Bush Administration appears
to lack a strategy to deal with the clear evidence of MILF linkage with Jemaah
Islamiyah and Al Qaeda: MILF training of Jemaah Islamiyah personnel and the flow
of terrorists and terrorists weapons between Mindanao and the Indonesian island of
Sulawesi. The Administration faces a severe dilemma between taking more direct
U.S. action to weaken the MILF linkage with Jemaah Islamiyah and Al Qaeda and
becoming involved in a much wider war in the southern Philippines with the
attendant danger of a Filipino political backlash against the United States. During
the Balikatan operation of 2002, the Bush Administration and the Philippine
government sought to avoid a U.S. confrontation with the MILF. However,
mounting evidence of MILF support for Jemaah Islamiyah reportedly led the Bush
Administration in late 2002 to consider placing the MILF on the U.S. official list of
57 Dan Murphy, “US Rewards Indonesian Military as Probe Continues,” Christian Science
Monitor
, July 22, 2003.
58 Dan Murphy, “US Rewards Indonesian Military as Probe Continues,” Christian Science
Monitor
, July 22, 2003.
59 Pew Research Center, “Views of a Changing World 2003: War with Iraq Further Divides
Global Publics,” June 3, 2003.

CRS-23
foreign terrorist organizations. President Arroyo reportedly convinced U.S. officials
not to take that action in the interest of preserving the cease-fire with the MILF. If
Manila’s truce with the MILF collapses, the Philippine Army — elements of which
favor restarting military actions against the MILF — undoubtedly would use recently
supplied U.S. military equipment against these groups. The Philippine government
might change policy and encourage U.S. action against the MILF at least in a role
similar to that in the Balikatan exercise against Abu Sayyaf. In order to avoid this,
the Bush Administration has supported President Arroyo’s attempts to restore the
cease-fire that was on the verge of collapse in March-April 2003. However,
Philippine cease-fires with the MILF have not addressed the major U.S. interest of
ending MILF support and assistance to Jemaah Islamiyah; this has continued during
periods of cease-fire.
The Bush Administration’s strong support for President Arroyo is under
challenge because of the weakening of her political strength. She has announced that
she will not seek re-election in 2004, making her a “lame duck.” More serious was
the uprising of some 300 AFP officers and enlisted men in July 2003 in Manila’s
financial district. The uprising failed, but it pointed to Arroyo’s problems in
maintaining civilian control over the AFP. Moreover, informed Filipinos and foreign
observers reportedly find credible the accusations made by the leaders of the uprising
that the AFP is riddled by corruption, including black market sales of military
weapons to the MILF and even responsibility for major bombings on Mindanao
earlier in 2003.
Multilateral Cooperation
The ease with which Al Qaeda, Jemaah Islamiyah, and other groups have
transferred personnel, money, weapons, and information across borders indicates that
thwarting terrorist activities will require a coordinated, international response in a
region where multinational institutions and cooperation are weak. Greater border
controls in particular can help disrupt terrorists’ travel activities. The importance of
multinational intelligence-sharing and extradition agreements is underscored by the
apparent fact that many captured Al Qaeda and Jemaah Islamiyah members have
provided authorities with useful information that has led to further arrests or the
discovery of new plots. Additionally, it appears that middle and lower-level Jemaah
Islamiyah functionaries’ level of commitment may not be as fanatical as commonly
thought. Some plotters reportedly have had second thoughts about participating in
particular operations, indicating that close intelligence sharing could help
governments identify members who could be induced to desert.60
A number of Southeast Asian states have increased anti-terrorist cooperation,
both with the United States and with each other. In particular, there appears to be a
dramatic improvement in the level of intelligence sharing among national police
forces. Cooperation among Singapore, Malaysia, the Philippines, and the United
States appears to have been particularly effective, leading to the arrests of dozens of
suspected Jemaah Islamiyah members, including several top leaders. Another sign
60 Rohan Guanaratna, “Al-Qaeda’s Operational Ties with Allied Groups,” Jane’s
Intelligence Review
, February 1, 2003.

CRS-24
of increased attention given to terrorism occurred in July 2003, when the Southeast
Asia Regional Center for Counter-Terrorism opened in Kuala Lumpur. The center
will house researchers and host training sessions for regional officials. In August
2002, the United States and all ten members of the Association of Southeast Asian
Nations (ASEAN) signed an agreement to cooperate in counter-terrorism activities.
The agreement calls for signatories to freeze terrorist groups’ assets, improve
intelligence sharing, and improve border controls.61
A future area that the United States may seek to prioritize is pushing regional
governments to cooperate on shutting down Al Qaeda and Jemaah Islamiyah’s
financial flows. Notwithstanding increased police cooperation, most Southeast Asian
countries do not appear to have made commensurate efforts to locate and freeze the
assets of Islamic terrorist groups. As of July 2003, no terrorist funds had been seized
in the region, despite assessments by U.S. officials that Al Qaeda has increasingly
relied on Southeast Asia to move its money and hide its assets because authorities in
the Middle East have heightened scrutiny of the network’s operations.62
Role of Congress/Legislation
Indonesia
Following the September 11, 2001 terrorist attacks, Congress and the
Administration engaged in extensive informal negotiations over finding ways to
support increased anti-terrorist cooperation with Indonesia while continuing to insist
that the Indonesian government gain more accountability from the Indonesian
military (TNI) for serious human rights violations, both past and present. Thus far,
the Indonesian government’s efforts to reform the military and prosecute those
responsible for serious rights violations have not satisfied either the Administration
or Congress. As a consequence, foreign assistance to Indonesia since the September
11, 2001 attacks has been limited to economic assistance and anti-terrorism
assistance and training for the Indonesian National Police. Assistance to the
Indonesian military remains suspended both for policy reasons and because of a
legislative ban on Foreign Military Financing (FMF) of arms exports.
The “Leahy” Amendment. For more than a decade, Congress has restricted
the provision of military assistance to Indonesia due to concern about serious human
rights violations by the Indonesian military (TNI), most notably the massacre of
hundreds of people participating in a pro-independence rally in Dili, East Timor, in
November 1991. Congress first took the initiative by enacting legislation prohibiting
International Military Education and Training (IMET) and arms sales to Indonesia
in October 1992, under the so-called “Leahy Amendment” to the FY1992 foreign
61 United States of America-ASEAN Joint Declaration for Cooperation to Combat
International Terrorism
, August 1, 2002.
62 Abuza, “Terrorism in Southeast Asia,” p.16; Report to the UN Security Council by the
Security Council Monitoring Group, ‘1267’ Committee
, Security Council Report
S/2003/669, July 7, 2003, p. 15.

CRS-25
operations appropriation bill. Section 599H of H.R. 5368, sponsored by Senator
Patrick Leahy, of Vermont, provided that none of the funds appropriated for
International Military Education and Training (IMET) could be made available to
Indonesia unless by December 15, 1992, the Secretary of State provided the
Committees on Appropriations with a certification verifying the fulfillment by the
Indonesian government of three conditions:
(1) special emphasis is being placed on education of Indonesian military
personnel that will foster greater awareness of and respect for human rights
and that will improve military justice systems;
(2) special emphasis is also being placed on education of civilian and
military personnel that will foster greater understanding of the principle of
civilian control of the military; and
(3) the Secretary of State will use all available and appropriate means to
ensure there is progress on the East Timor situation, such as the full
availability of legal remedies under Indonesian law to all civilians
convicted in connection with the November 1991 East Timor incident,
increased access for human rights groups to East Timor, and constructive
cooperation with the United Nations Secretary General’s efforts to promote
dialogue between Indonesia and Portugal to resolve issues concerning East
Timor.” (Sec. 599H, P.L. 102-391)
In subsequent years, Congress regularly included similar or related human rights
conditions to successive annual foreign operations appropriations bills. The Clinton
Administration either acquiesced or did not object strongly to congressional
prohibitions and conditionality on military assistance to Indonesia, despite its general
opposition to legislative restraints on the President’s authority to conduct foreign
policy. Partly in response to congressional pressure, President Clinton in September
1999 suspended all military, economic, and financial aid to Indonesia. The aid cutoff
was imposed in response to a wave of mass killings and destruction of property
perpetrated by the Indonesian army and locally-recruited paramilitary in revenge for
an overwhelming vote for independence by East Timorese in an August 30, 1999,
U.N.-supervised plebiscite.63
Impact of the September 11 Attacks. The George W. Bush
Administration shared the concerns of Congress about the human rights abuses of the
Indonesian military, but especially after the September 11, 2001, terrorist attacks, the
Administration expressed concern that the inability to provide assistance and training
to the TNI would inhibit the war against terrorism.
In action on the FY2001 Foreign Operations Appropriations (P.L. 106-429/H.R.
5526) Congress made Indonesia eligible for International Military Education and
Training (IMET) for the first time in several years, but only in the “expanded”
version, known as E-IMET which emphasizes respect for human rights and civilian
63 Jim Lobe, “U.S. Suspends Military Ties with Indonesia.” Asia Times, Sept. 11, 1999
(atimes.com)

CRS-26
control of the military. However, Sec. 579 of the same legislation banned Foreign
Military Sales Financing (FMF) for Indonesia unless the President determined and
reported to Congress that the Indonesian government and armed forces were fulfilling
six requirements relating to East Timor, including facilitating the return of East
Timorese refugees from West Timor and bringing to justice “members of the military
and militia groups responsible for human rights violations in Indonesia and East
Timor.”
FY2002 Foreign Operations Appropriations — Seven Criteria for
IMET and FMF. Section 572 (a) of P.L. 107-115 (H.R. 2506) continued to allow
Indonesia’s participation in the Expanded IMET program without conditions, but
made FMF available only if the President determined and reported to Congress that
the Indonesian government and Armed Forces were effectively addressing seven
human rights issues. These were similar to the those in the FY2001 legislation, but
they also required certification that Indonesia was allowing “United Nations and
other international humanitarian organizations and representatives of recognized
human rights organizations access to West Timor, Aceh, West Papua, and Maluka,”
and “releasing political detainees.”
FY2002 supplemental appropriation for combating terrorism (P.L.
107-206/H.R. 4775). In an effort to promote anti-terrorism cooperation without
abandoning U.S. human rights concerns, Congress focused U.S. assistance on the
Indonesian national police, a body that had been separated from the Indonesian
military in 1999 as part of an effort by the post-Suharto reformist government to
reduce the role of the TNI. The FY2002 anti-terrorism supplemental appropriations
provided up to $4 million for law enforcement training for Indonesian police forces
and up to $12 million — of which the Bush Administration allocated $8 million —
for training and equipping Indonesian police to respond to international terrorism,
including the establishment of a special police counter-terrorism unit.
FY2003 Foreign Operations Appropriations (P.L. 108-7/H.J.Res. 2).
The 107th Congress failed to complete action on the FY2003 foreign operations
appropriations bill (S. 2779), which carried over to the 108th Congress. Signed into
law on February 20, 3003, the FY2003 measure includes a shorter revised list of
conditions on foreign military sales financing funding than was included in the
FY2002 appropriation. Military education and training assistance continues to be
restricted to E-IMET. The bill also earmarked $150 million in economic support
funds for Indonesia, of which not less than $10 million is to be used for programs and
activities in the troubled state of Aceh and not less than $5 million for reconstruction
in Bali. The FY2002 appropriation also provided not less than $25 million for the
Democratic Republic of Timor-Leste (East Timor).
Sec. 568 of the FY2003 appropriations bill bans foreign military sales financing
funding for lethal items to the Indonesian military unless the President certifies to
Congress that:
(1) the defense ministry is suspending members of the military who “have
been credibly alleged to have committed gross violations of human rights,
or to have aided or abetted militia groups”;

CRS-27
(2) the Government of Indonesia is prosecuting such offenders and the
military is cooperating with such prosecutions; and
(3) the Minister of Defense is making publicly available audits of receipts
and expenditures of the Indonesian Armed Forces, including audits of
receipts from private enterprises and foundations.
FY2004 Appropriations Request. The Administration has requested
$132.1 million for all programs administered by the U.S. Agency for International
Development, including P.L. 480, Title II food aid, a decrease of $11.4 million from
the $141.5 million allocated for FY2003. As passed by the House on July 24, 2003
(Roll Call No. 429), H.R. 2800, making appropriations for foreign operations for
FY2004, does not earmark or otherwise specify funding levels for Indonesia but
specifies that none of the funds provided for Foreign Military Financing (FMF) may
be made available for Indonesia. This absolute ban on funding contrasts with the
previous year’s bill, which made FMF subject to Indonesia’s fulfillment of three
conditions regarding human rights and accountability.
Congressional consideration of funding for Indonesia for FY2004 has been
influenced by at least three negative developments. First, Congress remains
dissatisfied with progress towards bringing to justice Indonesian military personnel
and police responsible for the September 1999 rampage in East Timor.
A second concern of Congress is the lack of progress towards identifying and
bringing to justice the perpetrators of the attacks on American teachers and students
from an international school in the state of Papua connected with a mine operated by
Freeport-McMoRan Copper and Gold Inc., a giant U.S.-based company which has
massive operations in the state of Papua. Congressional impatience has been
increased by reports that an FBI team sent to help with the investigation has not
received adequate cooperation. Third, some Members of Congress have expressed
concern about the current military incursion into the dissident state of Aceh, where
anti-government guerrillas are fighting for independence.

CRS-28
Table 1. U.S. Assistance to Indonesia, FY2002-FY2004
International Affairs Budget Function 150
($ in Millions)
FY 2004
Program
FY 2002
FY 2003
(Requested)
Economic Assistance
Child Survival/Health (CSH)
35.568
32.568
29.250
Development Assistance (DA)
38.704
38.704
31.691
Economic Support Funds (ESF)
50.000
60.000
60.000
Peace Corps
-
-
-
PL. 480, Title II
5.670
10.245
11.194
Total Economic Assistance
129.942
141.517
132.135
Security Assistance**
Internat’l Narcotics & Law
Enforcement (INCLE)
4.000
-
-
Internat’l Mil. Edn. & Tng. (IMET)
0.405*
0.400*
0.600
Foreign Mil. Sales Financing (FMF)
-
-
-
Nonproliferation, Anti-Terrorism,
Demining & Related (NADR)
8.000
-
-
Total Security Assistance**
12.405
0.400
0.600
Total Economic and Security
Assistance** 142.347

141.917
132.735
Source: Department of State/Congressional Budget Justifications, Foreign Operations,
FY2004, (“All Spigots” Tables)
*Civilians only for FY2002; Not used in FY2003.
** The military assistance figures do not include counter-terrorism funds from the FY2002
anti-terrorism supplemental appropriations (P.L.107-206), which provided up to $4
million for law enforcement training for Indonesian police forces and up to $12 million
— of which the Bush Administration allocated $8 million — for training and
equipping Indonesian police to respond to international terrorism.

CRS-29
Philippines
Regarding the Philippines, P.L. 107-206/H.R. 4775, the FY2002 emergency
supplemental, allocated $55 million in new military assistance and $12 million for
infrastructure improvement on Mindanao. The bill also provided $30 billion for
foreign military sales financing funding for the Philippines, but only if the President
made an official budget request including such funds, which he did not. In its
FY2003 budget request, the Administration requested over $90 million for the
Philippines, nearly half of which would be allocated toward direct military aid and
creating a stable environment in Mindanao. H.J.Res 2/P.L. 108-7 does not
specifically identify counterterrorism funds for the for the Philippines. Funding will
be allocated by the State Department from funds made available in each program
category.
Table 2. U.S. Assistance to the Philippines, FY2002-FY2004
International Affairs Budget Function 150
($ in Millions)
FY 2004
Program
FY 2002
FY 2003
(Requested)
Economic Assistance
Child Survival/Health (CSH)
25.599
24.550
22.000
Development Assistance (DA)
24.456
26.609
23.068
Economic Support Funds (ESF)
21.000
20.000
20.000
Peace Corps
2.169
2.611
2.946
PL. 480, Title II
-
-
-
Total Economic
73.224
73.770
68.014
Security Assistance
Internat’l Narcotics & Law
Enforcement (INCLE)
-
-
2.000
Internat’l Mil. Edn. & Training
(IMET)
2.025
2.400
2.700
Foreign Mil. Sales Financing
(FMF)
19.000
20.000
17.000
Foreign Mil. Sales Financing
(FMF) - Supplemental
25.000
-
-
Nonproliferation, Anti-Terrorism,
Demining & Related (NADR)
.095
-
-
Total Security Assistance
46.025
22.400
21.700
Total Economic and Security
Assistance

131.347
96.170
89.714
Source: Department of State/Congressional Budget Justifications, Foreign Operations, FY2004 (“All
Spigots” Tables)

CRS-30
Thailand
Sec. 689 of the Senate-passed version of H.R. 2800, the Foreign Operations,
Export Financing, and Related Programs Appropriations Act, 2004, specifies that
funds appropriated in the bill that are available to the “central Government of
Thailand” will be available only if the Secretary of State reports to the
Appropriations Committees that the Thai government “(1) supports the advancement
of democracy in Burma and is taking action to sanction the military junta in
Rangoon; (2) is not hampering the delivery of humanitarian assistance to people in
Thailand who have fled Burma; and (3) is not forcibly repatriating Burmese to
Burma.” The section does not include presidential waiver authority. Another
provisions, Sec. 658 of the same bill, would earmark not less than $15 million “to
support democracy activities in Burma, along the Burma-Thai border, for activities
of Burmese student groups and other organizations located outside Burma, and for
the purpose of supporting the provision of humanitarian assistance to displaced
Burmese along Burma’s borders.” The section would make the funds unavailable
“notwithstanding any other provision of law,” and also would require “the Secretary
of State, in consultation with the Administrator of the Agency for International
Development,” to report to the Appropriations Committees on the status of U.S.-
supported HIV/AIDS programs in Burma.
Because the House-passed version of HR2800 includes no similar provisions,
the differences must be resolved by the House and Senate conferees. Both Section
689 and Section 658 of the Senate bill respond to concerns in Congress that Thailand
is becoming less open to refugees from Burma, and may be moving towards closer
cooperation with Burma to prevent refugee flows. At stake could be some $12.6
billion in bilateral assistance, including $3. billion for Child Survival and Health,
$1.9 billion for Peace Corps programs, $ 2.0 billion for International Narcotics and
Drug Enforcement programs; and $2.45 billion IMET, and $1.5 billion for
counterterrorism cooperation.
Table 3. U.S. Assistance to Thailand, FY2002-FY2004
International Affairs Budget Function 150
($ in Millions)
FY 2004
Program
FY 2002
FY 2003
(Requested)
Economic Assistance
Child Survival/Health (CSH)
1.000
1.000
3.000
Development Assistance (DA)
0.750
2.250
0.750
Economic Support Funds (ESF)
-
-
-
Peace Corps
1.267
1.694
1.922
PL. 480, Title II
-
-
-
Total Economic
3.017
3.250
5.672

CRS-31
FY 2004
Program
FY 2002
FY 2003
(Requested)
Security Assistance
Internat’l Narcotics & Law
Enforcement (INCLE)
4.000
-
2.000
Internat’l Mil. Edn. & Training
(IMET)
1.748
2.400
2.450
Foreign Mil. Sales Financing (FMF)
1.300
2.000
1.000
Foreign Mil. Sales Financing (FMF) -
Supplemental
-
-
-
Nonproliferation, Anti-Terrorism,
Demining & Related (NADR)
0.720
0.050
1.500
Total Security Assistance
7.768
4.450
6.950
Total Economic and Security
Assistance

10.785
12.494
12.622
Source: Department of State/Congressional Budget Justifications, Foreign Operations, FY2004 (“All
Spigots” Tables)
Other CRS Products Dealing with Terrorism in Asia
CRS Report RL31265. Abu Sayyaf: Target of Philippine-U.S. Anti-Terrorism
Cooperation.
CRS Report RL31811. Appropriations for FY2004: Foreign Operations, Export
Financing, and Related Programs
CRS Report RL31152. Foreign Support of the U.S. War on Terrorism.
CRS Report RS20697. Philippine-U.S. Security Relations.
CRS Report RS20572. Indonesian Separatist Movement in Aceh.
CRS Issue Brief IB97004. Japan-U.S. Relations.

CRS-32
Maps
Figure 1. Southeast Asia

CRS-33
Figure 2. Indonesia

CRS-34
Figure 3. Malaysia and Singapore