It is both a pleasure and honor for me to be here today, and I would like to thank Andrew Cochrane and the organizers of this event. Four years after 9/11, it is time to step back and as “Are we safer?”

In the perspective of Southeast Asia, the threat has always been tangential. Despite the categorization as the “Second Front,” only 9 Americans have been killed in terrorist attacks in Southeast Asia since 2001; others have been wounded and kidnapped, but the overall death toll is low. Yet, there have been a number of confirmed plots against US Government and corporate interests that have gone awry or have been thwarted. These include bomb plots on the US Embassies in Manila, Singapore and Bangkok. US citizens have been killed in both Bali, Indonesia and the Philippines.

The greater threat to the United States is to our interests and our allies. We are bound by treaty to protect Thailand and the Philippines, while we have a very intense interest in the consolidation of democracy in Indonesia, the world's most populous Muslim country, and one whose predominantly moderate version of Islam is an ideological counter to the intolerance and violence of Wahhabism.

Economically, the US and Southeast Asia are inextricably linked. The US invests more than $90 billion in ASEAN states, making us the largest investor the region. Southeast Asia is the third largest overseas market for the US with $48 billion in exports in 2004. Some economists have estimated that the 2002-2003 attacks in Indonesia led to a 1% loss of GDP. A region whose collective GDP growth is now 5.8% annually is essential to US economic interests.

In many ways our allies, and thus us, are faced with a growing terrorist threat in the region. The global terrorist threat is more diffuse. While Jemaah Islamiyah, the regional affiliate of Al Qaeda, has suffered significant setbacks with the arrest of much of its leaders, and some 300 foot soldiers, the organization is far from spent. JI has perpetrated one major attack per year in Indonesia since 2002, including Bali, the most lethal terrorist attack in the world since the 9/11 attacks on New York and Washington. There are eight reasons why the terrorist threat in the region remains high.

1. Despite concerted counter-terror efforts,18 known leaders still at large. They have significant experience, bomb-making expertise, and charisma. They are proven leaders, operatives and recruiters, who represent the full socio-economic and educational spectrum, including middle class with technical backgrounds.

2. Abu Sayyaf

The radical Abu Sayyaf have regenerated from a group of kidnappers into a bonafide terrorist organization, who have stepped up ties to JI and hence improved their technical proficiency. They have been responsible for a number of lethal bombings, including the February 2004 bombing of the Superferry that killed 116 people, and several attempted bombings.

3. Sectarian Violence

More JI activity/resources in the next few years will be focused not on targeting Western interests (though they will not stop that) but rather on fomenting sectarian violence. Mainly because targeting western interests has been counterproductive. We can see a sharp spike in the amount and rate of communal violence. What concerns me is that this will not be of concern to US officials and policy makers, though it should. Al Qaeda and its affiliates have always been quick to inject themselves into sectarian conflicts and situations where they believe a Muslim community is being systematically persecuted and/or where the state is not protecting the interests of the Muslim community. Al Qaeda does not start these conflicts, but they offer financial support, propaganda assistance, establish charities and new financial conduits, training and personnel. In time they hijack what was otherwise a local parochial issue, and link the jihad against the near enemy with that of the far enemy. This is how they recruit a new generation of jihadis and forge transnational networks.

To that end, the upsurge in violence in such remote locations such as the Malukus and Sulawesi, as well as Southern Thailand, where more than 800 people have been killed in the past 20 months, that seem peripheral to US interests, should be of prime concern to the US Government.

4. Technological Proficiency

The Abu Sayyaf is a case in point. Training, conducted by JI members in MILF camps (including two of JI's top bomb-makers, Dulmatin and Umar Patek), have substantially improved the lethality and sophistication of their bombs. Throughout the 1990s, their primary means of attack were with hand-grenades and rocket-propelled grenades. JI-designed bombs that have been used in Indonesian, triggered by circuit boards and mobile phone are now routinely used. On two occasions Philippine security forces have intercepted/seized blueprints for a Bali-style truck bomb. Earlier this year, Philippine security forces raided an ASG safehouse and found C4 explosives melted down and injected into toothpaste tubes and shampoo bottles. They concluded that these small bombs were intended for use on planes. Philippine intelligence officials have concluded that JI has passed on the formulas for eight different types of bombs to the ASG and MILF.

Learning is also evident in the case of the Thai militants. The average size of bombs in the first half of 2004 was around 2-3 kilograms. By the end of the year, the average was closer to 5 kilogram, and the triggering devices had become far more sophisticated. Mobile phone detonators have become the norm. In the summer of 2004, insurgents attempted to employ accelerants, such as tanks of cooking propane to their bombs. Insurgents have used time-delayed bombs to target security services; and in one case, a bomb was rigged to the victim's car door. In February 2005, they detonated their first car bomb. Learning comes from all quarters: at the height of the Iraqi insurgency, Thai militants began to employ roadside IEDs beginning in August 2004. Al Qaeda manuals down-loaded from the internet have been recovered in Thai madrassas. Militants are now able to manufacture bombs up to 10 kilograms of various compositions and designs on a regular basis.

In short, while Al Qaeda's training camps in Afghanistan no longer exist, technological transfer by personal instruction and the internet is transforming terrorism. Moreover, we need to be concerned about the bleed out from Iraq. While Afghanistan gave Al Qaeda its first generation of members, they were guerilla fighters who had to be taught urban terrorism. In Iraq today, the insurgents are quickly steeped in urban terror operations and that knowledge will quickly proliferate.

5. The MILF continue to give JI members sanctuary, which has allowed them to regroup and train a new generation of members. The peace process between the MILF and the GRP continues to falter as Manila is mired in its own parochial squabbles. The MILF have no incentive to cut ties, nor have they really been punished for allowing the sanctuary and training to continue.

6. Maritime Terrorism

There is no evidence that JI is engaged in preparations for maritime terrorism, but two things deserve mention: first, Al Qaeda have shown an intense interest in perpetrating maritime terrorist incidents in the region. We should not forget that Al Nashiri, Al Qaeda's chief of naval operations was arrested en route to Southeast Asia. Second, a major attack in the Strait of Malacca would have a devastating impact on the world economy.

7. Global Connectiveness

Thai authorities have now arrested two people involved in the burgeoning marketplace of forged travel documents. Both have links to Islamic militants, while one is wanted by British authorities in direct connection with the 7 July terrorist attacks in the UK. That Thai authorities have made two recent seizures of 638 passports is commendable, but it highlights the fact that Thailand remains an important back office – especially for forged documents – for trans-national criminal organization and terrorist organizations.

Other members of that cell have clear ties to Southeast Asia. Today's terror cells are more transnational than ever, and increasingly we find terrorist in disparate parts of the world, connected to one another by periods of study in third countries. Issan al-Brittani, for example spent several years in Southern Thailand forging relations with local militants.

8. Still high levels of Anti-American sentiment

While America had the moral high ground following the September 11 attacks, we quickly squandered it, mainly due to Iraq.

Despite the superb work of US forces and the exceptional generosity of the US Government, corporate sector and citizens alike in the wake of the devastating Tsunami last December, anti American sentiment is still high across the region. The invasion of Iraq convinced Muslims of Southeast Asia that the war on terror is patently anti Muslim. This has politically constrained our allies in the region and hampered counter-terror efforts.