Indonesia and Malaysia: Border Disputes and Emerging Trends

Tensions have been flaring between Indonesia and Malaysia since March 2, when Indonesian warships began entering disputed territory off the coast of Indonesia's East Kalimantan province and Malaysia's Sabah state. The dispute was sparked Feb. 16 when Petronas, Malaysia's state oil company, awarded a production-sharing contract to Royal/Dutch Shell in the East Ambalat block of the Sulawesi Sea. Indonesia quickly protested the decision, saying the block was within its territory and a contract already had been granted to Unocal. Following a March 9 meeting of foreign ministers, both countries said that the dispute would be resolved through peaceful negotiations, but the driving factors behind it could lead to more confrontation and conflict.