Several Southeast Asian countries have large Muslim populations.The Philippines has a large Muslim minority in the south, and so has Thailand in its southern provinces.
In a region of diverse races and religions, most Southeast Asian Muslims have traditionally practiced a tolerant, moderate form of Islam, different from the austere teachings of the Wahhabis in Saudi Arabia or the Shi'ite ayatollahs in Iran.
In Indonesia, Hindu and Buddhist influences predate the arrival of Islam by centuries, and many Indonesians combine their Muslim faith with Hindu, Buddhist and traditional animist beliefs.
Islamization, however, is an ongoing process in the region. In the last three decades, globalization and developments in the Middle East have generated a rising tide of religious consciousness among Muslims in Southeast Asia.
This reflects an intense worldwide Islamic revival, aided by Saudi-funded missionary activities: building mosques and madrasahs, and sending ulemas (preachers). A national, ethnic identity is being replaced by a broader religious identity. There is greater engagement with issues that affect Muslims elsewhere, notably the Israeli- Palestinian conflict.
On top of this, political Islam is gathering strength in both Malaysia and Indonesia, boosted significantly by the fall-out from the Asian crisis.
In Malaysia, the dismissal and disgrace of deputy Prime Minister Anwar Ibrahim in 1998 helped the opposition Parti Islam SeMalaysia (PAS) to win over a significant part of the Malay ground.
There is now a political stand-off between Umno, the dominant Malay party in the ruling alliance, which stands for a modern, more secular Malaysia, and PAS, whose goal is to create an Islamic state, including hudud (ancient Islamic penal laws).
Strictly interpreted, thieves could have their hands chopped off, and adulterers could be stoned to death. Umno is fighting a tough battle to retain the support of the Muslim ground, especially among rural voters.
Indonesia's present President Megawati Sukarnoputri is the standard-bearer for the red-and-white faction, that is, the secular nationalists. In August this year, several Muslim parties tried to amend the Constitution to introduce Islamic law in Indonesia. They failed. But had they succeeded, it would have unraveled all the achievements of the secular policies since presidents Sukarno and Suharto, and exacerbated religious and ethnic tensions.
Within the wider Islamic religious and political revival, there are radical factions which use terrorism and violence in the name of Islam.
With resources and global communications, these small but fanatical groups can now mobilize worldwide networks and inflict destruction on a scale no one foresaw.
The struggle is not really between Muslims and non-Muslims, but within the Muslim world itself, between moderate and extremist Muslims.
The vast majority of Southeast Asian Muslims are peaceful and moderate in their beliefs, and militant Islam is not the natural state in Southeast Asia.
But the large Muslim populations are a natural host for extremist groups seeking concealment and political cover.
The challenge for governments is therefore to deal decisively with the extremists without alienating the majority of peaceful Muslims, or opening themselves to attack by Islamic political groups.
In Singapore, our arrests have disrupted severely the operations of the JI group.
We have gone beyond security actions and taken pains to explain the problem to our multiracial population, to prevent any division or distrust between Muslim and non-Muslim Singaporeans, and to unite all citizens in the struggle against extremism and terrorism.
In Indonesia, the government has been extremely circumspect in acknowledging and tackling the threat. The extremists have skillfully exploited religious and nationalist sentiments to garner political support and protect themselves against arrest.
In the run-up to presidential elections in 2004, opportunistic politicians are also exploiting this issue to profile themselves and score points off the government. However, the Bali bombing has changed the situation, and made it much easier for the government to act.
President Megawati cannot afford to have her actions seen as anti-Muslim or, worse, as moves at the behest of the United States or Australia. She has therefore been careful to protect her political flanks. But I believe that, in her own way, she will act resolutely because she knows that the militants' success will destroy international confidence in Indonesia, derail economic progress, and tear the country apart.
If Southeast Asian governments sustain this vigorous and effective response, they can contain the terrorist threat and restore confidence to the region gradually.
This is an excerpt from Singaporean Deputy Prime Minister Lee Hsien Loong's speech on power shifts in Asia at the Fortune Global Forum in Washington on Tuesday. - Ed