The army held some drills, to test their ability to respond to such an attack. But many Islamic religious leaders here are not so sure Indonesians could carry out a "Mumbai.". Unlike the rest of the Islamic world, there is a more lively struggle between the different flavors of Islam in Indonesia. While the Islamic conservatives and radicals are prominent here, they are unable to form and keep Islamic terror groups going. The reason is that the vast majority of Indonesians have long practiced a local form of Islam that uses many aspects of pre-Islamic religions, and local cultures. The Islamic conservatives, espousing a stricter form of Islam that is native to Arabia, are seen as foreign and trying to force alien customs on Indonesians.
This makes it difficult for Islamic militants to hide, recruit and obtain financial and material support. But the Islamic radicals continue to push for the adoption of Islamic law and, ultimately, a religious dictatorship. This has caused Islamic moderates (who represent the majority of Indonesians) to more forcefully oppose the radicals.
Indonesians can be very violent when pressured (the word "amok" came from here), but are pretty mellow most of the time, until pushed too far. The Islamic radicals keep pushing, and now there is increasing pushback.
Al Qaeda's number two guy, Egyptian Ayman al Zawahri, issued an audio message praising the Indonesian terrorists executed last month (for murdering 202 people in 2002). It was this attack that turned the majority of, generally tolerant, Indonesians against the Islamic militants. Al Qaeda has acquired a reputation for mindless butchery of innocent Moslem civilians, mainly because of the Islamic terrorism practiced in Iraq, so Zawahri's praise for the Indonesian terrorists does little to help Islamic militancy in Indonesian.
The Indonesian Islamic militants have pushed an "indecency" law through parliament. This is the sort of thing where a law that won't be enforced was passed to keep the Islamic militants happy.
If the new law were enforced, it would cause serious problems. For example, in Papua New Guinea, many tribes have dress (or undress) customs that violate the new indecency law. Trying to enforce this interpretation of "indecency" in Papua would enflame the violent separatist attitudes that already exist.
On the island of Bali, the largely Hindu population threatens violence if the new law is enforced there. Christian parts of the country are equally hostile to this new law that was written with Islamic conservatives in mind.
In East Timor, the violence has subsided, but unemployment remains high, there is little economic development and most of the population remains dependent on foreign food aid for survival. Similarly, the government budget is mostly foreign aid, and there are growing problems with corruption (and attempts to suppress press reports of it.) This sort of thing tends to produce more civil unrest eventually.
December 11, 2008: Islamic militants resumed violence in the Maluku islands, burning down a church and over 40 homes of Christians. Police quickly dispersed the mob of Moslems, who had accused a Christian school teacher of criticizing Islam in the classroom. This kind of violence is not just religious, but also ethnic.
The Melanesians of Maluku are largely Christian, while the Malay migrants from other parts of Indonesians are Moslem. Islamic radicals gain a little more traction in the Maluku islands, because it gives the local Malays another weapon in their efforts to dominate the Melanesians (who the Malays tend to look down on as a bunch of savages). Religious violence is often not just about religion.
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