Implications of the Jakarta Bombings

As the smoke generated by last week's bomb attacks in Indonesia clears and the physical damage is assessed, the far more complex task of penetrating the fog that envelopes all such attacks in this country has barely begun.

The 17 July bombings at Jakarta's JW Marriott and Ritz Carlton hotels demonstrated a level of sophistication, confidence and resources absent in previous attacks against high profile targets in the Indonesian capital. They also revealed an unsettling degree of ambiguity as to who may have been responsible for attacks that specifically targeted Western business interests. Further, the bombings exposed a major and collective security failure – both by those charged with protecting the public and to certain extent the victims themselves.

While the Indonesian police and other national agencies investigate the two attacks and other incidents that may be related to the bombings, the country's foreign business community is left to consider to what extent their security has altered since the bombs exploded. Although many have publically expressed confidence that the attacks will not seriously damage Indonesia's economic prospects – a natural position for senior executives well versed in the harm carelessly employed words may have on their commercial interests – their more guarded views are certain to be less sanguine.

The nature, timing and presumed purpose of the attacks revealed what one US embassy staffer characterised as a 'surgical strike' against Jakarta's expatriate elite. Four of the nine dead were senior executives attending a regular weekly meeting at the Marriott hotel run by the long-established CastleAsia business consultancy. The death toll could have been far greater had the bomb, which appears to been carried by either a willing suicide attacker or an unwitting dupe, exploded at a slightly different angle or closer to the presumed intended target.

No group or organization has yet claimed responsibility for the attacks, though the police have declared the bombings to be the work of Islamic extremists, probably from a previously undetected faction allied to or split from the Jemaah Islamiyah (JI) terrorist network. Most local and foreign media and analysts were ahead of the police with this conclusion.

One the few to Indonesian or foreigners to show some ambivalence towards this view was newly re-elected President Susilo Bambang Yudhoyono (widely referred to as SBY in Indonesia). While some foreign commentators and analysts were quick to discount any link between the bombings and the recent elections, SBY made a number of elliptical statements that ran counter to the rapidly emerging 'narrative' of the bombings.

SBY is quoted as saying that those responsible were involved in a new form of terrorism and were people 'familiar with abducting and killing and people who once escaped the law.'

He added to the uncertainty by noting intelligence officials had discovered plans by an unnamed group to stage a revolution in response to his victory in the 8 July 8 presidential election, and also used a distinctive word - 'draculas' - to describe those he thought responsible.

Later efforts to place SBY's comments in the context of his emotional state in the immediate aftermath of the bombings were largely unconvincing and failed to placate his political opponents who viewed his remarks as an effort to link them somehow with the attacks. Despite calls for SBY to either explain to whom he was referring or publically exonerate his political opponents, the president has yet to do so.

For the international community the threat from Islamic extremists – ever present since the October 2002 Bali attacks and four subsequent attacks in Jakarta ascribed to them between April 2003 and September 2004 – is, or was, a known quantity. The assumption was that as the government and the elite had as much to lose as foreign nationals did from the attacks – until the 17 July bombings the vast majority of casualties in Jakarta were Indonesians – the campaign against those held responsible would be thorough and often ruthless. SBY's 'failure' to support the narrative that Islamic extremists were responsible for latest attacks will be unsettling as it adds a new dimension to the threat - and one with implications that could shatter confidence in the country's short- to medium-term future.

While there is no doubt hotels and other potential targets will once again tighten security (the JW Marriott was seriously damaged in a car bomb in August 2003), the obvious question for foreign business interests in the capital is whether the attacks represent a single event or the start of a protracted and targeted campaign against them. Another attack – even a relatively minor incident that produced few or even no casualties - against foreign interests would increase concerns over employee safety and could trigger a withdrawal of both personnel and dependents.

Further, such events as CastleAsia's well-established Friday breakfast meetings will have to be reconsidered – if not willingly by the participants then by their companies, insurers and security advisers. The willingness of senior business executives to routinely attend a well-established meeting at a fixed venue may well have raised some concerns with security advisers, who are employed to mix caution with realism, but were seemingly either ignored or dismissed on the basis of a belief in the adequacy of the hotel's own security measures.

It is now hard to see after nearly simultaneous bombs at two major Jakarta hotels how confidence in such precautions can be restored in the near- to medium-term. Creating an atmosphere of tension that requires individuals to constantly assess risks to themselves, the staff and their families while adding further layers of often intrusive security precautions of doubtful efficacy, can only help increase a sense of siege – which must be presumed to be the intention of those responsible for the attacks.

More broadly, Indonesia will now be subject to far closer scrutiny than the recent positive coverage that has elevated the country from its status as an economic backwater to becoming the putative second 'I' among the BRICs. The 17 July bombs will not end this ascent, but they will almost certainly slow it as greater emphasis is placed on the impact of political divisions and tensions on national stability than on the often overblown economic data favoured by the country's boosters. This will leave Indonesia a hostage to unknown forces that have just demonstrated the capability of striking as close to heart of the foreign business establishment as it possible to conceive.

The measure of this 'success' will take some time to filter through to the relevant data and statistics. Indications may emerge once the annual summer holiday exodus by many foreign business executives and their families ends in late August. The break will allow for a more reasoned assessment of the risks posed to international personnel and their dependents, and may be measured by such indicators as attendance rates at international schools and to lesser extent property valuations in favoured expat enclaves.

GM Greenwood is a consultant with Allan & Associates, a Hong Kong–based security risk and crisis management company