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SE Asia: Political Fabric Frays

August 20, 2000

Just as the economic crisis that struck Southeast Asia in the late 1990s appears to be abating, the region faces another, even more menacing threat--political instability. Governments' mismanagement of the economy and widespread corruption that led to the financial crisis have driven large segments of the population into poverty and the arms of religious and nationalist extremists.

None of the countries in the largely poor region are likely to follow Iran into Islamic fundamentalism, but the growing political instability undermines regional security, scares away much-needed foreign capital and widens the gap with the developed world.

Malaysia's Prime Minister Mahathir Mohamad made himself infamous in Southeast Asia's 1997 financial crisis when, in an effort to deflect blame from himself, he lashed out against "ethnic Europeans" who "are of the opinion that Muslim people cannot succeed." His harangue against the West may not have been a religious call to arms, but it played into the hands of ambitious Muslim leaders. In last year's election, the Pan-Malaysian Islamic Party tripled its membership in parliament and gained control of two provinces, in which it is introducing Islamic laws. Muslim extremists last month stunned the country when they engaged in a shootout with soldiers after trying to steal weapons from military bases.

In Indonesia, the world's most populous Muslim country, sectarian violence in the Molucca Islands has killed thousands, and for the first time since 1945 the nation's highest legislative body is debating whether to incorporate the Koran into the constitution. Sectarian bloodletting and separatist violence in Aceh and Irian Jaya provinces have led to a strengthened Indonesian military and will test President Abdurraham Wahid's new government. Instability in Indonesia, which stretches across the world's busiest sea lanes, could send shock waves throughout the region.

Besides worrying investors, the situation has left regional governments anxious. Officials of the Assn. of South East Asian Nations (ASEAN) have expressed fear that unless the 10-country bloc finds ways to deal with the crises it will be sidelined in world affairs.

Establishing a credible government free of corruption, cronyism and nepotism is a challenge facing every ASEAN country. ASEAN itself, with its adherence to noninterference in the member countries' internal affairs, has made itself irrelevant in that process. But it has a role to play in fostering regional economic cooperation and creating an open trade area that would attract investors. The seed of popular discontent in Southeast Asia--as elsewhere--is poverty, and economic development is a key to eradicating it.

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