Indonesia: Showdown at Sulawesi

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February7, 2007: In East Timor, the remaining 2,000 peacekeepers have managed to make the streets much safer. But the gangs remain, as do the political divisions and frictions that brought down the last government. There is no progress in solving those problems, and the anarchy and civil war could easily return. The economy is also a mess, which means massive unemployment and poverty. No progress there either.

February 3, 2007: The terrorism in Indonesia is hurting tourism, but not as much as many feared. The three terror bombings in 2005, brought tourist revenues down from $4.5 billion in 2005, to $4.4 billion in 2006. Bali, where the bombings took place, was worst hurt, with a 6.6 percent decline. But nationwide, the decline was under three percent. However, this was at the cost of several hundred million dollars in lost business. Many tourist businesses in the country cut their prices sharply, to keep people coming, and increased security, and costs, to reassure the people who did come. Tourism accounts for about two percent of all economic activity in the country, and is an even greater source of foreign currency. More terrorist attacks could do major damage to tourism income.

February 2, 2007: In Sulawesi, the most wanted Islamic radical, Basri, was captured after a shoot out with police. A key associate of Basri was also caught. The government is moving slowly to isolate and destroy the influence of Islamic radicals on Sulawesi. The Islamic groups have concentrated their resources and key personnel at Sulawesi, to make, what the government hopes, is a last stand.

 

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