KUALA LUMPUR The political and economic fallout from the Bali bombing hangs like a radioactive cloud over Southeast Asia, poisoning the region long after the sound of the explosion has died away.

The immediate victims were the nearly 200 people, mostly young Western tourists, blown up as they danced on a warm tropical night on a paradise island renowned for its peace, surf and laid-back style.

But the bombing is still taking a toll on regional economic recovery, civil liberties, religious tolerance and relations with the rest of the world.

The blast came on October 12, exactly one year, one month and one day after the September 11 attacks on New York and Washington, which the United States said had changed the world.

While nobody would make a similar claim for the Bali bombing, it remains the most deadly terrorist attack since those in the US, and dragged Southeast Asia irrevocably into the global terrorism war.

JI main suspect

The main suspect in the massacre, the Jemaah Islamiyah (JI) network of militant Muslims, has ties to the al-Qaeda organisation of terror mastermind Osama bin Laden, blamed for the US atrocity.

A self-confessed bomber under arrest in Indonesia, Amrozi dubbed "the grinning assassin" after his cheerful appearance at a press conference told police he wanted to "kill as many Americans as possible" because "America oppresses the Muslims".

Most of those killed in Padi's Bar and the Sari Club were in fact Australians and Britons, but al-Qaeda sees them as legitimate targets anyway because they are allies of the US.

Malaysian Prime Minister Dr Mahathir Mohamad says the link between local Islamic militants and al-Qaeda grew out of their joint involvement in the war against the Soviet occupation of Afghanistan.

The Malaysian authorities have arrested more than 70 alleged militants, many linked to JI, since mid-2001. All are held under the Internal Security Act (ISA) which allows for indefinite detention without trial.

Acceptance of such draconian legislation is one of the insidious effects of the fallout from the terrorist bombings.

Praise M'sian govt

Western countries, which previously criticised Malaysia's human rights record, now praise the government for its cooperation in the war against terrorism.

And in Indonesia, where civil liberties were resurgent after the end of the Suharto dictatorship in 1998, the Bali blast has led to the introduction of detention without trial for up to six months.

The wider impact, however, has been on the economies of the region, which were just picking themselves up from the floor after the devastating financial crisis of 1997-98.

Tourism is a crucial source of revenue for many countries, and it has taken a body blow.

In Indonesia, tourism employs more than seven million people and last year brought in 4.7 billion dollars in revenue, or about 10 percent of gross national product, with Bali being a prime destination.

Bali hotels saw occupancy rates plummet to single digits after the bombing and they remain at around 36 percent.

Many out of job

If the tourists fail to return, some 2.7 million people across Indonesia could find themselves out of a job, Tourism Minister I Gede Ardika has said.

But it is not only Indonesia that is suffering the fallout.

Leaders of the 10-member Association of Southeast Asian Nations (ASEAN) complained at their annual summit in Phnom Penh in November that a bad situation was being made worse by Western governments warning their nationals against travelling in the region.

Those governments responded by saying they were only doing their duty to their citizens, driving a wedge between nations which all say their primary aim is the elimination of terrorism.

That wedge was hammered deeper by Australian Prime Minister John Howard's warning last month that Canberra felt entitled to take pre-emptive action against terrorists in neighbouring countries if they threatened Australia.

Act of war

Southeast Asian nations, which had sympathised with Australia over its losses in Bali, reacted with outrage. Mahathir said any such action would be seen as an act of war.

So, as with the attacks on the US, the victims are losing sympathy in response to what is seen as a heavy-handed, indiscriminate reaction in which the powerful nations of the world are targetting Islam rather than terrorism.

Mahathir, who has led mainly-Muslim Malaysia for more than two decades and become something of an international spokesman for moderate Islam, has warned repeatedly that this perception will give rise to more terrorism. — AFP