  WHAT SHOULD BE THE U.S. RESPONSE TO THE JAKARTA MARRIOTT BOMBING? The Marriott bombing will certainly hurt Indonesian tourism and foreign investment, which will in turn harm Asian economic recovery and thus American economic well-being. How's that for a domino effect? And if Jemaah Islamiyah could pull off an attack like this, I would wonder if they or another Al Qaeda affiliate can't hit Kuala Lumpur or Singapore, which would be another great blow. So what should the United States do? The U.S. should move most directly to counter the economic loss. Australians are already involved in the law enforcement effort. The U.S. needs to give aid to Indonesia - economic aid, not military aid. Indonesia is facing a domestic terrorist threat and is still siding with the United States against militant Islam, and for that, Indonesia should be compensated economically. Direct economic aid would probably not be enough. An American free-trade agreement or a drop in economic barriers to Indonesian goods that could help the Indonesian economy would be better.
What's interesting is that a recent free trade agreement with Singapore may allow Indonesia to piggyback on Singapore's free trade agreement urlLink to whatever extent the U.S. is willing to be lax in enforcement . That's a lot easier for the Bush Administration than passing a new trade agreement with Indonesia, and this "independent sourcing" looophole could be exploited immediately.
What seems clear to me is that the major bombing-related economic loss will come in tourism and is unlikely to be made up in that sector because fear of travel to Indonesia seems rational in light of the Bali and Jakarta bombings. Therefore, the U.S. will have to do what it can to promote growth in other sectors, and I think relaxing economic barriers is the right answer. 
