INDONESIA - The Political Leadership.

There has been a great deal of change in Indonesia since 1998, when the long dictatorship of Suharto was overthrown. The transition to democracy has been fragile and slow. But it has allowed for a fairly strong and pragmatic leader to emerge in the person of Susilo Bambang Yudhoyono, a man of experience.

Susilo on Sept. 20, 2004, was the first president to be directly elected by the people in the history of Indonesia. He defeated the incumbent President Megawati (Mega) Sukarnoputri, a housewife turned politician who had lost much of her popularity since early 2004 (see her background and that of her predecessors in Vol. 60, Gas Market Trends No. 12).

Mega's Indonesia Democratic Party-Struggle (PDI-P) fared badly in the legislative elections in April 2004, when the country's former ruling Golkar Party won the largest number of seats in parliament. The April elections were followed by an opening round of direct presidential elections in July. A run-off took place on Sept. 20, when Mega conceded defeat to Susilo.

A retired four-star army general, Susilo had vowed to improve the country's socio-economic conditions, boost security and maintain the unity and long-term stability of Indonesia, and step up the fight against Islamic militancy.

With Indonesia having more Muslims than any other country, Susilo's political leadership has committed itself to upholding the country's secular political values and institutions. The leadership is relying on two segments of Indonesian society are are critical to its efforts to maintain a steady course: the military and the majority of moderate Muslims.

The military has a strong secular and nationalist tradition. It can be counted on to oppose any bid for power by Islamist political forces. The political leadership is careful not to let public order deteriorate to an extent that might tempt the military to step back into political spheres which it vacated after Suharto's downfall.

The moderate Muslims are the strongest barrier to radical and anti-democratic tendencies, as well as the most effective potential allies of the US in the war on terrorism. How the US goes about establishing a democratic foundation in the Middle East will have a profound impact on public opinion in Indonesia and throughout the Muslim World.

In this respect the US role in Iraq and the US-led war against global terrorism - now focusing on Osama Bin Laden's Wahhabi network Al-Qaeda and its affiliates - are important where the Indonesian political leadership is concerned. Workable steps to establish a federal democracy in Iraq will strengthen the US credibility in South-East Asia.

If the US can make a credible case that it is a reliable ally of Muslim democrats anywhere, it will have gone a long way towards putting ties with the Islamic World on a more enduring basis. This would strengthen the local as well as regional positions of Jakarta's political leadership - with emphasis on Indonesia's geo-strategic status as the biggest archipelago in the world and the most vital link between the Middle East and the Far East.

Indonesia's geo-strategic position is of particular importance to the US as well. The Strait of Malacca, between Indonesia's island of Sumatra and the Malay Peninsula, has been the scene of attacks on passing oil and gas tankers by political groups, notably including the Free Aceh Movement and Jemaah Islamiyah (JI).

Both organisations are Indonesian and dangerous, with JI affiliated to Al-Qaeda, and the Aceh group consisting of separatists. If the latter manage to secede, the danger of Indonesian dismemberment will be come extremely serious in view of so many separatist movement in this archipelago. There is always the danger of a JI-Qaeda operating blocking energy traffic along the Strait of Malacca.

Indonesia faces territorial disputes, mainly a potentially major problem with China, including one with Malaysia over petroleum-rich offshore areas. The one with Malaysia is being negotiated peacefully in the hope the two states would have a diplomatic settlement (see OMT No. 10).

In view of these and other dangers, the political leadership in Jakarta needs to modernise its armed forces as well as bolster its navy on a large scale. President Susilo is hoping a strategic alliance with the US could help boost Indonesia's military capabilities on the scale required.

Senior defence sources in Jakarta recently prediced a revival soon of a strategic alliance between the US and Indonesia, with the administration of President George W. Bush eager to restore military links largely to help combat terrorism. US Secretary of State Condoleezza Rice has recently moved to reinstate US military training assistance for Indonesia, an important step towards restoring full military ties.

Formal US military relations with Indonesia were cut more than a decade ago because of allegations of human rights violations by Indonesian forces. The Bush administration has run into a reluctant Congress.

Ms Rice, however, testifying on Feb. 17 before the Senate Appropriations Committee on the proposed 2006 budget, expressed confidence the move would go through. She said: "I do believe the time may have come to do that".

The world's largest exporter of LNG, Indonesia has become a net oil importer consuming about 1.2 million b/d but producing less than 950,000 b/d. In view of this, the leadership in Jakarta is debating whether or not it should leave.

The aircraft carrier, USS Abraham Lincoln, recently wrapped up a month-long emergency relief mission and left the waters off Indonesia's tsunami-afflicted Aceh Province, on the island of Sumatra. But left in the Lincoln's wake are ripples of interest in both the US and Indonesia for a return to closer ties.

In Indonesia, the month-long US presence has helped to polish America's image, which political observers say had been tarnished by the war in Iraq. The Christian Science Monitor on Feb. 9 quoted Ulil Abshar Abdalla, an Islamic scholar and liberal Muslim activist, as saying: "The tsunami in Aceh showed that people in the West were serious in giving aid to Muslim counties. It will shift perceptions of the West as a bloc".

Prominent Islamic leaders thanked US Deputy Secretary of Defence Paul Wolfowitz at a meeting at the US Ambassador's residence in Jakarta. Ulil said: "It was the first time, I'd heard [the Islamic leaders] say thanks. It made me very happy".

Wolfowitz, a former ambassador to Indonesia and now to become president of the World Bank, has been among those calling for closer military ties with the world's largest Muslim country. Speaking to reporters in Jakarta in January, Wolfowitz said: "We would also like to see how the TNI [the Indonesian military] has endeavoured to put itself under the control of civilian supremacy".

Supporters of mending the 13-year rift between the US and Indonesia's military argue that Jakarta could be a more central ally in the war on terrorists, including JI and other South-East Asian groups linked to Al-Qaeda.

Indonesia's naval forces are of vital importance and need to be upgraded. Apart from policing the Straits of Malacca, a major world shipping lane and a lifeline for energy consumers in the Far East, they provide security along the shipping lanes between South-East Asia and Australasia.

The Straits of Malacca are prone to pirate attacks, and, intelligence agents say, possibly a major marine terrorist attack. The International Maritime Bureau (IMB) has been warning since mid-2003 that a lack of appropriate security along the waterway makes it very simple to hijack an oil tanker, bring it to port and use it as a weapon.

Hijacking a tanker carrying LNG and using it as weapon would be far more dangerous. LNG tank explosions would be devastating. Even tankers carrying LPG can become dangerous bombs in the hands of terrorists. Petroleum Argus on Nov. 24, 2003, reported that the "kidnapping of tanker captains in the region, without any requests for ransom money, has provided increasing evidence that groups such as JI or the Aceh separatists could be learning how to pilot tankers, with an eye on using them as weapons in future attacks.