As an archipelago comprising some 17,500 islands, Indonesia has an ethnically and religiously diverse population – a characteristic long the source of both opportunities and challenges. Indeed, different perceptions of this diversity have engendered conflict in recent decades. However, the past few years have seen a major reduction in political risks and a corresponding increase in foreign investment and interest. Political risk in Indonesia today thus bears little comparison with what it was when the current period of Reformasi began in 1998, with the fall of Suharto.
SEPARATISM & REGIONALISM: Under Suharto, there were four main areas of the country suffering from separatist or religious conflicts: Aceh, in northern Sumatra; Central Sulawesi; the Malukus; and Papua. The territory of East Timor, occupied by Indonesian forces in 1975, was also a site of conflict, although with different causes than the others. During the decade that followed, successive governments in Jakarta moved to tackle these disputes, with generally good results.
RESOLUTIONS: One of the first moves was in 1999, when a vote was held in East Timor regarding independence. The East Timorese voted overwhelmingly in favour, with this unfortunately followed by an outbreak of violence between secessionists and integrationists. However, in 2002 the territory finally gained independence and relations between the two states have improved considerably. East Timor is now moving toward becoming a member of the Association of South-East Asian Nations with Indonesian support.
The conflict in Aceh has also been largely resolved. The tsunami of 2004, which hit Aceh particularly badly, had the effect of bringing the warring parties to the peace table. Aceh received special autonomy within Indonesia, the Indonesian army withdrew from the province and the guerrillas, known as GAM, disarmed. Direct elections for governor were held in 2006, with GAM leader Irwandi Yusuf winning office.
In Central Sulawesi, violence between Christian and Muslim communities in 1999 and 2000 eased with the signing of the Malino II Accord in 2001. However, violence has occurred sporadically and tensions remain, with government agencies and NGOs working to overcome hostility between the communities.
A similar story pertains in the Malukus, and particularly in the capital, Ambon. Violence between Christians and Muslims has been intense for more than a decade, with the most recent outbreak in September 2011.
While peace is generally kept, the two communities continue to mistrust each other. More positively, the most recent outburst was tackled by grassroots “peace provocateurs” who seem to have achieved success. A special unit for dealing with these issues in Papua, called UP4B and based in the vice-president’s office, was established by presidential decree in September 2011.
Papua, meanwhile, has seen one of the most long-running separatist conflicts in Indonesia. Over the years, the armed wing of the Free Papua Organisation, the National Liberation Army, has conducted violent attacks, not only against Indonesian army and police, but also against foreign investments and foreigners, mainly operating in the mining sector.
ADDRESSING EXTREMISM: Radical Islamic groups have also posed a risk to the country over the past decade, such as hotel bombings in Jakarta in 2009.
However, recent times have seen the main groups of Indonesian jihadis – Jemaah Islamiyah and Jamaah Ansharut Tauhid – take significant hits. The February 2010 break-up of a jihadi training camp in Aceh led to a successful shutdown of many networks. The Indonesian authorities have a well-trained and -equipped anti-terrorism force, the National Anti-Terrorism Agency.
Many arrests and successful prosecutions have been made, with mainstream Islamic groups also being mobilised against the extremists.
Risk has declined in recent years, although in certain specific areas, tensions remain. Attempts to address these challenges continue, with additional units and forces being mobilised, including a new rise in the number of corporate security firms offering their services.
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