Asia-Pacific News

Islamic State claims responsibility for attack in Jakarta

Leslie Shaffer and wires
Terrorists attack Jakarta

The Islamic State has claimed responsibility for a bomb and gun attack in Jakarta, Indonesia, according to Reuters.

"A group of soldiers of the caliphate in Indonesia targeted a gathering from the crusader alliance that fights the Islamic State in Jakarta," the terrorist group said in a statement cited by Reuters.

The attack in the center of Indonesia's capital left at least seven people dead. The first of at least six explosions — some of which were believed to be suicide attacks — were reported by local media at about 11 a.m. local time (11 p.m. New York time).

Jakarta police said on Twitter that the explosion occurred in front of the Sarinah mall. Media reported that a police post outside the mall was blown up.

The area is home to luxury hotels and some embassies, as well as the mall.

Indonesian police hold rifles while walking behind a car for protection in Jakarta January 14, 2016. Several explosions went off and gunfire broke out in the center of the Indonesian capital on Thursday and police said they suspected a suicide bomber was responsible for at least one the blasts.
Beawiharta | Reuters

"The attack was likely timed to hit busy lunchtime traffic and was centered on the convergence of Wahid Hasyim street and Medan Merdeka, close to Jakarta's high security area. The location is a short drive from the U.S. embassy and other government offices," consultancy Stratfor said in a report on Thursday.

One blast was in a Starbucks cafe and security forces were later seen entering the building, Reuters reported. Starbucks said one customer was injured and that it planned to close all of its Jakarta stores until further notice.

Later, another bang was heard in Jakarta in front of Sarinah, but this proved to be caused by a tire bursting, according to Reuters.

Armed members of the Philippines' Bangsamoro Islamic Freedom Fighters.
The terror groups on Southeast Asia's doorstep

Indonesia is the world's most populous Muslim country and has struggled with homegrown terrorist groups.

The last time the country suffered a major militant attack was the twin suicide bombings at the JW Marriott and Ritz Carlton hotels in July of 2009.

More recently, authorities said they had foiled a plot by Islamic militants to attack government officials, foreigners and others, AP reported.

"We haven't seen anything like this in Indonesia — a sort of international focused attack— for a number of years now," Steve Wilford, Asia-Pacific director for global risk analysis at consultancy Control Risks, told CNBC.

Wilford noted that there are also around 30 organizations in Indonesia claiming affiliation with Islamic State.

"There's at least 500 Indonesians known to be in the Levant (the area of the Middle East that includes Syria). It's very unclear how many have actually come back."

US embassy warning

Both the U.S. and Australian embassies warned travelers to avoid the immediate area. The Australian embassy also urged "a high degree of caution" in the country as a whole due to a high threat of a terrorist attack.

Malaysia also raised its alert level to its highest level.

The attacks may complicate efforts to revive the country's flagging economy and Indonesia's President Joko Widodo's initiative to drive tourism growth.

ANZ estimated the attack could shave 0.25 percentage point off Indonesia's economic growth forecast for the first quarter.

"He (Widodo) is aiming to lift tourism's contribution to GDP from 9 percent in 2014 to 15 percent by 2019. Foreign tourist arrivals had grown by 7.19 percent last year and this pace of growth could be expected to slow in 2016 given today's events," ANZ said in a note on Thursday.

CNBC's Katy Barnato and Reuters contributed to this report.