It's always perplexing in Washington, as in most Westerncapitals, that when one attends a seminar about Islam, it isgenerally focused on the Middle East, with perhaps an occasionalnod to Pakistan and the Islamic bomb.

Indonesia, the most populous Islamic nation in the world, seldomrates a mention. There are 200 million Indonesian Muslims (out of atotal Indonesian population of 230 million), more than can be foundon the entire Arabian peninsula and many more than live in the nexttwo most populous Muslim states, India and Pakistan. Yet Arabdisdain for the peoples of the region (charging, for example, thatthey don't even speak Arabic, the language of the Prophet), adisdain generously reciprocated by Southeast Asians for the Arabworld, has kept Southeast Asian Muslims on the margin of Muslimdebate and out of Western consciousness. That low profile has beengreatly to the benefit of the stability and independent evolutionof Islam in Southeast Asia. But this is set to change, both becauseof the increasing economic and strategic strength of Southeast Asiaand the spread of Islamist terrorism.

There is today a life and death struggle under way in Indonesiaand its Southeast Asian neighbors over who owns Islam, a contestthat is almost as important as any political battle facing theinternational community. In many ways it is a conflict ofglobalization, though not in the usual sense. For in this battlethe interests of the West lie overwhelmingly in the triumph of thelocal, the ethnocentrically particular and the traditional--againstthe interests promoted by global communications technology and thespread of internationalist ideas.

In Indonesia, as in much of Southeast Asia, the central struggleis between local Islam, which is characteristically tolerant,moderate, syncretic and pluralist, and globalist Islam emanatingfrom the Middle East, which is paranoid, intolerant, extremist andviscerally hostile to the United States and the larger West. Themost important manifestation of this clash of ideas are theactivities of Al-Qaeda-linked terrorist groups in Southeast Asia,pre-eminent among them Indonesia's Jemaah Islamiyah (JI),responsible for the terrorist bombing in Bali in 2002 that killedmore than 200 civilians.

But the deeper difficulty lies in the interaction betweenterrorist groups and their sympathizers on the one hand andemerging mainstream political Islam on the other. These two strandsof Islamic thought share a disturbing amount of common ideologicalground. This means that extremists, despite the fact that the vastmajority of Indonesians rejects their violent methods, can have aprofound, perhaps decisive, influence on the development ofIndonesian politics.

Similar struggles of different intensity are underway in theMuslim communities of Malaysia, the Philippines, Thailand,Singapore and Brunei, and in the smaller scattered Muslimcommunities of the region. While there's no need to panic yet,Western policymakers must understand that there is a long, bitterfight ahead.

Surveying the Region

Malaysia is generally the most Islamically conservativeSoutheast Asian society of any consequence. Only about a tenth thesize of Indonesia, its recently retired long-term leader, MahathirMohamad, made a career of baiting and lambasting the West. Butalthough much that Mahathir said was offensive, particularly hisweird remarks about Jews controlling the world, he was at heart anopponent of Islamic extremism.

The key fault line in Malaysia is racial, but the racial and thereligious overlap. The majority Malay population is Islamic, butChinese and Indians, overwhelmingly not Islamic, together make upnearly 40 percent of the population. Mahathir's government pursueda policy of "affirmative action" for the Malays, the bumiputras("sons of the soil"), who are not as wealthy as the Chinese. Theminority races in Malaysia thus feel a permanent sense of grievancebecause government policies discriminate against them. However, atthe same time as he railed against the West, Mahathir pursuedsensible pro-growth policies very friendly to Western investment.As a result, the Malaysian economy has grown strongly now for twoand a half decades. Chinese and Indians have felt that even in theface of official discrimination, there is room for them to getahead. It has been a classic case of a larger pie making everyone alittle fatter.

That is not to say political Islam has been quiet. RehmanRashid, in his scintillating memoir, Malaysian Journey, recountsthat the 1979 Iranian revolution had an electrifying effect onyoung Malays, convincing them that Islam had a political destiny.But as the squalid reality of Iran under the ayatollahs becameclear, Malays turned against the Iranian model. The Chinese andIndian minorities, of course, were terrified of it.

Malaysian Islam took a different path and so did its dominantpolitical party, the United Malays National Organization.Mahathir's rebarbative anti-Western rhetoric obscured the noveltyand importance of the experiment he was undertaking in Malaysia. Bylinking traditional Islamic piety with East Asian economicdynamism, Islam became a friend of economic modernization, and viceversa. It may not have worked perfectly, but it was better thananything else then on offer in the Islamic world, with the possibleexception of Turkey.

Mahathir fused ethnic identity, religious allegiance and usefulregional imperatives. The 1980s and 1990s, up until the 1997regional economic crisis, were good times for Southeast Asianeconomies. Mahathir called his policy "Look East" and exhorted hiscountrymen to "learn from Japan." Under Mahathir, Malaysia boomed.Now Kuala Lumpur, Penang and other Malaysian cities are solidlymiddle class, with everything that implies for social and politicalstability.

For a time it looked as though a fundamentalist Islamic party,PAS, would challenge the ruling coalition, especially afterMahathir fell out with and jailed his former deputy, Anwar Ibrahim.But the 9/11 attacks further discredited Islamic extremism. At themost recent elections early in 2004, Mahathir's successor, AbdullahBadawi, a more moderate leader who has dropped most of Mahathir'santi-Western posturing, won a large victory over PAS.

Malaysia is thus one of very few predominantly Muslim nations inthe world to succeed at widespread economic development and toexperience the consequent development of a middle class and thesocial stability that results. It has spawned some terrorists,including leading JI figures. But it has been ruthless in interninghome-grown extremists and cooperates well with the United Statesand other governments on counter-terrorism. The government stillfinds plenty on which to criticize the United States. But it issurely preferable to have a government that criticizes the UnitedStates but produces a strong, stable society, than one that praisesthe United States but cannot handle the challenge of extremism.

Sadly, the Philippines falls into the latter category. ThePhilippines is the strangest nation in Southeast Asia and the onewith the strongest Islamic extremist movement. It is predominantlyCatholic (though with strong mystical influences) and more Americanthan anywhere else in the region. Hispanic in political culture, itis schizophrenic at many levels of national identity.

There are approximately four million Filipino Muslims out of atotal population of 85 million. Concentrated in Mindanao in thesouthern part of the Philippines archipelago, this community hasnever accepted rule from Manila. They resisted Spanish and Americancolonialism as well as conversion to Catholicism, and they werenever fully pacified after independence. The Muslims in the southare called Moros, originally a derogatory derivation of the word"Moors", whom the Spanish had long experience in fighting. TheMoros' political evolution is a telling sign of the way Islamicextremism has replaced all other ideologies as the dominantexpression of serious discontent among Muslim communities.

Mindanao's modern insurrection was first led by the MoroNational Liberation Front (MNLF), which had quasi-Marxist roots.But it was displaced by the Moro Islamic Liberation Front (MILF).The change in nomenclature signified a fundamental change inideological momentum. The so-called peace process in the southernPhilippines, like so many such processes around the world, isperennial, always hopeful, but never successful. Even when anagreement can be reached, rejectionists simply split and form a newgroup.

The MILF is a very strange beast. It may have as many as 12,000men under arms. State Department officials would like to list it asa terrorist organization but don't because that would torpedo thepeace process, such as it is. The United States has also held outmany carrots for the MILF, including telling members privately thatthey could have veto rights over tens of millions of dollars ofU.S. assistance. But nothing has enticed them into giving up theirdemand for a new, separate Muslim nation, which naturally theManila government cannot countenance.

The MILF-controlled areas of the south provide both the trainingcamps and the vital rest and recreation hinterland for the region'sIslamist terrorists, especially JI operatives from Indonesia. TheMILF claims it is not part of broader Islamist terrorism, but thereis no doubt that they have provided, and continue to provide,training camps for JI terrorists. This allows JI to constantlyreplenish its stocks through new training programs, even thoughsome 200 JI operatives have been captured or killed in SoutheastAsia in the last three years. In exchange, JI trains MILF cadres insome skills, especially sophisticated bomb-making.

Throughout Mindanao, as throughout much of the Philippines,crime is rampant, and the MILF has integrated itself into thecriminal world. At the same time, corrupt members of thePhilippines armed forces have aided the MILF. In July 2003 a youngnaval lieutenant, Antonio Trillanes, attempted a farcical coup inthe Philippines. The coup failed, and he was duly arrested. But theevent prompted regional analysts to look into research papers hehad written while at the Philippines National College of PublicAdministration. The papers described in shocking detail theinvolvement of the Philippines navy in dozens of incidents ofseaborne smuggling of military and other supplies to the MILF.

A smaller Islamist terrorist outfit, the Abu Sayyaf group, ispredominantly involved in kidnapping for ransom but has begun inrecent years to carry out bombings. It is much more overtly linkedto Al-Qaeda, and among its leaders are veterans of the Afghan waragainst the Soviet Union.

The broader picture in the southern Philippines is of thefailure of the state. Substantial Philippines military operations,backed at times by hundreds of U.S. troops in a so-called"advisory" role, have made little progress against either AbuSayyaf or the MILF. Until its military becomes more effective, andnumerous other arms of the state can deliver the services and orderthey are supposed to, the prospect is for more of the same. In manyways it is the most disturbing piece in the Southeast Asianjigsaw.

Though not nearly as challenging as the Philippines, Thailandhas the potential to become yet another sore spot in the region.The Thai state is effective and its economy, like Malaysia's, ismoving forward. But trouble is brewing. There are about fourmillion Thai Muslims, out of a total population of some 60 millionpredominantly Buddhist Thais. Most Thai Muslims live in a fewsouthern provinces that border Muslim Malaysia.

Historically, there has been separatist agitation in the south,but in recent years this had settled down. High profile Muslimsserved in senior positions in the cabinet--former foreign ministerSurin Pitsuwan is an example--and the growing economy had improvedeveryone's lot. But 2004 produced an extraordinary spate ofkillings and terrorist attacks in the south. As with similarattacks in the Philippines, these have not gotten much publicity inthe West because they have not been directed against Westerntargets.

The level of violence in southern Thailand has been quiteshocking. In the first eight months of 2004, according to privatebut reliable Thai estimates, some 500 people died as a result ofradical Islamist violence. The Thai Government would argue thatthis is an overestimation, but the number of deaths is certainly inthe hundreds. There have been attacks on police stations and othergovernment buildings, burnings of schools, beheadings of Buddhistfigures and suicide attacks on government soldiers.

Undoubtedly, Prime Minister Thaksin Shinawatra's government hasbeen clumsy in its dealings with southern Muslims. The worstepisode was the grotesque overreaction to a riot in Narathiwatprovince in October. After the riot, the military crammed most ofthe rioters, some of them injured, into army trucks. After hours inthe tropical heat, more than seventy of the rioters died, fromsuffocation, broken necks and convulsions. This was an entirelyunrepresentative act by the military, and the government hasapologized and promised an inquiry. Although the episode wasindefensible and a great boon to the terrorists, the most salientfact about the separatist violence is that the campaign was in fullswing months before this tragedy occurred. No one thinks that theThai terrorist and criminal groups in the south are being directedby Al-Qaeda, or even JI. Indeed, some government spokesmen dismissmuch of the violence as mere criminality on a large scale. But JIhas operated in Thailand, and some southern Thai Muslims served inAfghanistan, fighting the Soviets. Moreover, it is clear that someThai militants cross the border into Malaysia, where they getideological guidance and other support.

It is the timing of the upsurge in violence in southern Thailandthat is most suggestive of JI and Al-Qaeda influence. It coincideswith an increase in Islamist terrorist violence in other parts ofSoutheast Asia and elsewhere in the Muslim world. This indicatesthat Al-Qaeda is now as important as an ideology as it is as anorganization. As an ideology it offers disgruntled Muslimpopulations a prism through which to interpret their grievances anda way to respond to them. The interpretive prism centers on Westernand infidel imperialism and the operational response is terrorism.Thailand is a generally well-run society with effectivegovernmental agencies, but what is most notable about the troublesin the south is the difficulty the police and the military have hadin coping with it. Part of the problem is that it is not a hugeleap from paranoid, conspiracy-theory-ridden Islamist extremism,which is non-violent and therefore legal, to support for terrorism.Some analysts believe that Thailand is on a knife-edge. Ifterrorism should spread to Bangkok, where at least one JI embassybombing plot has already been foiled, or to tourist destinationspopular with Westerners such as Phuket, the effect could bedevastating.

Singapore, of course, is a model of order and decorum in thistroubled region. But Singapore avoided something like its own 9/11only by the slenderest of margins. Ethnically, Singapore is theopposite of Malaysia--majority Chinese, with substantial Indian andMalay minorities. It is strictly a meritocracy, and its fourmillion people form the most affluent and stable society in all ofSoutheast Asia. Yet it came desperately close to suffering acatastrophic terrorist attack. As a result of the U.S. operation inAfghanistan, evidence was discovered that disclosed a JI plot toblow up the Singapore embassies of the United States, the UK,Israel and Australia, as well as other economic targets. Planningand logistics were at an advanced stage. One of the many shockingaspects of all this for Singaporeans was that the arrested bombplotters were mostly middle-class young Muslim men who had quite adecent education and enjoyed reasonable jobs.

Singapore may not be everyone's ideal society, but there wasnothing in these people's experience which should have led toterrorism. It was the Singapore plot which first showed us that, aswith so many Middle Eastern terrorists, it was not the lifeexperiences of Southeast Asian terrorists that counted, but theirideology.

The other Muslim state in Southeast Asia is Brunei, a tiny,oil-soaked sultanate of 350,000 souls, aptly described as a crossbetween Saudi Arabia and Brigadoon. Though the royal family spendsvast sums of money on itself, Brunei is a mostly gentle place thatspends a respectable proportion of its oil wealth on the welfare ofits people, who are pampered by regional standards. Its Islam isconservative, but this has not had very great politicalconsequences as there has been, until very recently, virtually nopolitical culture in Brunei, which is an absolute monarchy. Bruneihas started to experiment with elections and a parliament, but thetrajectory of this endeavor has yet to be firmly established.

The Future of Moderate Islam

Indonesia remains the center of Southeast Asian Islam, becauseof its size. It is the home of JI, but, as with all terroristgroups in Southeast Asia, they represent only a tiny fraction ofthe population. If there is such a thing as moderate, activistpolitical Islam, it exists in Indonesia.

On paper, Indonesia should be an emerging regional power. It isthe world's fourth most populous state, and since the fall oflong-time dictator Suharto in 1998, it has made a remarkabletransition to democracy. In 2004 it held its first direct electionfor the presidency, and the results were good news for theopponents of Islamic extremism. The winner was former general andcabinet minister Susilo Bambang Yudhoyono, a secular-nationalist.Indeed, the top four candidates were secular-nationalists with theonly Islamist coming in fifth.

Still, the election campaign uncovered some problems as well.Yudhoyono was certainly the best candidate for the job, and was thepreferred choice of both Washington and Canberra. As a formersecurity minister he was the most active senior figure in promotingeffective counter-terrorism action. And he is certainly prepared todenounce terrorism publicly. Yet not he nor Megawati Sukarnoputri,the defeated incumbent, nor the other leading figures in Indonesianpolitics, has been prepared to denounce JI by name. (After all, theterm Jemaah Islamiyah literally means "Islamic community.") Thiscreates a certain sensitivity for Indonesian leaders, but no oneoutside Indonesia doubts that JI is a formal and deadly terroristorganization. It is on the United Nations' list of terroristorganizations, yet Indonesia has declined to ban JI. It has alsodeclined to close down a network of pesantren, or Islamic boardingschools, of which many JI terrorists are alumni.

Indonesia is a fascinating nation of vast ethnic varietysprawled across a diamond necklace of islands at the southern baseof Southeast Asia. Like all huge nations, it gives the impressionof being a universe unto itself. It is only really a nation at allbecause of the happenstance of colonial history. One of its fewunifying forces has been Islam. Another, somewhat as in Turkey, hasbeen the military.

Indonesia's state apparatus is more effective than that of thePhilippines but less than that of Thailand. Its response toIslamist terrorism has been characteristically unique, uneven andperplexing. There is a lot of political violence in Indonesia, asis common in such a vast and poor nation. Much of it is justcriminality, and still more is unclear in its parentage. A seriesof bombings of Christian churches around Christmas 2000 was wronglythought at the time to be the work of disaffected elements of themilitary pursuing some obscure agenda. We later learned it was thework of the Al-Qaeda-affiliated JI.

The biggest terrorist incident in Indonesia was the Bali bombingof 2002. There have been spectacular bombings since, such as at theMarriott Hotel in Jakarta in August 2003 and outside the Australianembassy in September 2004. But neither rivaled Bali in the deathsit caused. In response to the Bali bombing, the Indonesiansresponded promisingly. They welcomed the participation of theAustralian Federal Police as well as U.S. assistance, and throughhighly skilled forensic work, tracked the vehicle used in thebombing. This led in turn to the arrests of the bomb plottersthemselves.

Then, to everyone's amazement, the Indonesians ran a transparentpublic trial and convicted more than thirty terrorists ofcomplicity in the bombings. Some of them received the deathpenalty. The trials themselves were of immense importance. They areclose to unique in the Muslim world. They punctured theanti-Western paranoia that infects even moderate Islamic ideology.The relentless presentation of evidence, the long testimony ofwitnesses, including survivors and friends and relatives of thedead, did more than anything else to educate the Indonesian publicabout the reality of terrorism in their midst.

Not long after the Bali bombing, I traveled extensively inIndonesia and other parts of Southeast Asia and was dismayed by thepervasive conspiracy theories, even among genuinely moderateMuslims. The U.S. Navy had visited Bali not long before thebombings, I was frequently told, and the explosives used were of aU.S. military type (which turned out to be untrue). The bombing wasdesigned to force Indonesia into the U.S. anti-terror coalition andso on. Indonesia's president at the time, Megawati, did nothing tocounter these conspiracy theories. All of this was shattered,however, by the Bali trials, not least by the testimony of thebombers themselves, some of whom yelled as they were led intocourt: "Death to the Americans! Death to the Jews! Death to theAustralians!"

Unfortunately, this victory for counter-terrorism was at leastpartially neutralized by the government's treatment of Abu BakarBashir, the Islamic cleric at the center of the JI network. Bashirwas not charged with offenses relating to Bali but he was chargedwith being head of JI, even though JI's existence is not formallyacknowledged in Indonesia. The court decided he was innocent ofthis charge, but to do this it had to ignore the testimony of a JIterrorist in custody in Singapore.

There is not a single analyst in Southeast Asia who does notbelieve Bashir is at the center of JI. He is routinely described asits spiritual leader. Yet the attitudes of official Indonesianleaders to Bashir were disturbingly ambivalent, with Hamzah Haz,the then vice-president, visiting Bashir in jail. Bashir has beencharged with a new slew of terrorism-related offenses and remainsin jail. Perplexingly, he remains free to give media interviews. Hecontinues to deny any involvement with terrorism, but theideological content of his interviews gives a sense of the outlookof his movement. He recently told an Australian magazine, "Americawill not be a superpower if Islam stands up. It is clear [therewill be a clash of civilizations] because kafir [non-Muslims] areevil and Islam is good." When asked specifically about Indonesia,he replied:

"The world and Indonesia belong to Allah. Therefore it should beruled under Allah's law without bargaining. I believe the clash ofcivilizations will continue, but in the end Islam will definitelywin. It has been predicted by our Prophet Muhammad."

And on the U.S. president: "Bush is being used by the Jews. TheJews are the most evil men in the world."

This is a true picture of Jemaah Islamiyah's ideology. Itsinternational cooperation across Southeast Asia is impelled by itsdesire to set up a new united Caliphate across all the Muslim areasof the region, including even territories such as East Timor, whichare not now populated by Muslims but were once under Muslimrule.

JI is believed to have 25,000 to 30,000 followers in Indonesia,more than enough to make life difficult. Moreover, JI has deeproots in sections of Indonesian society both through its pesantrennetwork and because it is the successor of a much older movement,Darul Islam, which struggled in the earliest days of independenceto make Indonesia an Islamic state.

What is more worrying than this extremism, however, is the waygenuine moderates sometimes refuse to acknowledge its reality.Hasyim Muzardi, Megawati's vice-presidential running mate, saidduring the election that JI did not exist in Indonesia, even if itexisted in other countries, and that the United States wasexaggerating the terrorist threat in order to gain more influencein Indonesia.

Muzardi's comments were particularly distressing because he wasalso chairman of Nadhlatal Ulama ("Religious Scholars"), theworld's largest Muslim organization with some 40 million members.It has been the bastion of tolerance and moderation in modernIndonesia. Islam came to Indonesia on the ships of traders and fromthe mouths of Sufis. Nadhlatal Ulama honors traditional Malaycustoms and mysticism. Its approach to Islam is syncretic andrespects the rights of non-Muslims. It is big enough withsufficient resources and self-confidence to have produced its owninterpretations of Islam. Although many of its leading membersspend some time studying in the Middle East, it is proud of itsdistinctive approach to Islam.

A former leader of Nadhlatal Ulama, Abdurrahman Wahid, was oncepresident of the country. Indonesia sets a high standard ofeccentricity among its leaders, and Wahid was no exception. He wasalso a courageous democrat and the most remarkable leader of anational government the Muslim world has seen in recent years.

In his writings, speeches and interviews, he stressed thatIndonesian Islam had developed over many centuries and itscharacter would not be easily changed by Middle Eastern or otherforeign influences. He was prepared to say things no other Muslimleader would. He once told me in an interview, for example, "Israelis a democracy in a sea of misunderstanding", and that Indonesiashould have diplomatic relations with Israel. He also told me thathe did not think Palestinian leader Yasir Arafat was brave enoughto make peace.

Wahid is an unusually fearless Muslim leader, but there are manyIndonesian intellectuals in his tradition. The activities of JI aredesigned in part to challenge the leadership of moderates. Theyalso frighten off foreign investment and tourism, which arecritically important in a country as poor as Indonesia. Terroristswant the moderate state to fail so that the practice of moderationitself is discredited. So far, the Indonesian people are not buyingthe extremists' message.

In his influential book, Beyond Belief: Islamic Excursions Amongthe Converted People, V. S. Naipaul famously argued that Islamcrushes the converted peoples by casting their non-Islamichistories as illegitimate. He contends that in converted lands suchas Indonesia, the Muslim fundamentalist rage is directed againstthe local past in an effort to erase its non-Muslim aspects.However well this thesis may apply in other Muslim lands, it seemsan overdrawn proposition in connection with Indonesia, where mostpeople are proud of their country's complex and diverse history,with its long Hindu period and its Buddhist and mystical andanimist traditions.

It is true that the forces of global Islamist extremism aim toArabize and standardize Indonesian and Southeast Asian Islam. Theyare not, however, having it all their own way, and the forces ofcivilization are by no means exhausted. The region's fight to holdtrue to its vision of Islam and to honor its own ethnic andcultural traditions while embracing economic and socialmodernization is an epic struggle of our time and one in which theWest has a deep interest.