The blasts that killed nearly 200 people, mostly foreign tourists, prompted President Megawati Soekarnoputri, who is previously indecisive in the global war on terrorism, to arrest Muslim cleric Abu Bakar Ba'asyir, an alleged leader of the terrorist group Jemaah Islamiyah.

Prior to the blasts, Megawati apprehended that wrongly arresting a Muslim leader would spark nationwide opposition and threaten social stability in the country which has the largest Muslim population in the world.

However, the bloody blasts helped her make up her mind. Only days after the tragedy, she signed two emergency decrees that expand power for security officials to catch suspected terrorists based on merely intelligence reports.

The terrorist attacks on Bali island, a place previously visited by more than one million tourists a year, raised worry about the future of tourism as one of the government's economic fronts amid the economic slowdown.

Last year, tourism generated US$5.4 billion in foreign exchange revenues for Indonesia which has been affected the most seriously by the financial and economic crisis in Asia in 1997. The government said the deadly bombing would bring a decline of 20percent in revenues from tourism.

In addition to the sluggish tourism industry, the rising number of foreign firms leaving Indonesia also will have serious impact on the country's ability and credibility in absorbing foreign direct investment (FDI), which has started to plummet even before the Oct. 12 blasts.

According to the data released by the Investment Coordinating Board (BKPM), the approved FDI in the first nine months of this year dropped by 11 percent to US$5.4 billion as compared with the same period of last year.

Furthermore, the domestic investment plunged by nearly 70 percent to 15.99 trillion rupiah (US$1.78 billion) in the period.

Finance Minister Boediono on Oct. 31 told parliament members the government had to alter basic assumptions used in formulating the draft budget for the fiscal year 2003 following the attacks.

The economic growth is lowered to four percent from a proposed 5 percent forecast prior to the blasts. The original draft saw the inflation at 8 percent, which Boediono revised it to 9 percent.

The target of deficit in next year's budget also was enlarged from 26.3 trillion rupiah (US$2.92 billion) to 36.6 trillion rupiah (US$4.07 billion).

It is obvious that the killing of mostly foreigners packing in the Sari Club has brought profound impact to Indonesia, once considered as one of the new Asian "tigers."

Even after Megawati's quick moves in response to the carnage, the country remains to have a long way to bring stability back to the predominantly Muslim nation.

After getting rid of Soeharto's 32-year authoritarian rules, some Islamic groups and prominent Indonesians worried that new decrees on anti-terrorism would bring a return to the days when opposition activists or Muslim clerics were arrested without sufficient charges based on the anti-subversion law.

"The decrees allow security officials to detain a suspected terror for six months based on intelligence report. It's too long for someone's freedom," said Abdul Hakim Garuda Nusantara, chairman of the national human rights commission.

The commission on Nov. 6 urged parliament members to reject the presidential decrees.

Other critics said Megawati's moves were little more but an explicit attempt to appease and please the United States, after Secretary of State Colin Powell visited Jakarta in August to strengthen what Washington sees as "the weak link in the US-led war on terrorism" and granted financial package roughly at 50 million dollars.

It is widely known that the United States was disappointed before by Megawati's reluctance to arrest Ba'asyir for the belief that Jemaah Islamiyah has links with al Qaeda.

The post-Oct. 12 challenges facing Indonesia are serious, but the attempts to cope with them are even more troublesome.

Ignoring Western governments' calls for a global war on terrorism would risk international isolation, but taking stricter measures against radical Islamic groups could weaken national support for Megawati in the 2004 presidential election.

The Indonesian people have largely regard terrorism as an affront to Islam, providing a strong basis needed by the government to combat its presence anywhere in the country.

"Terrorism is an evil to humanity while religion is absolutely a different thing. Both principally contravene each other," noted Muslim scholar Nurcholish Madjid said.

What the Indonesian people want is that Megawati doesn't take advantage of the war on terror to consolidate power and arrest her political opponents. They want that the fight against terror will remain in democratic ways and close the door to the repressive manners adopted by past rulers.

In confronting with these challenges and in view of the 2004 general election in the country, the current Megawati government has to deal with these domestic political and economic issues very carefully and prudently.

(Xinhua News Agency December 9, 2002)