Events in modern Indonesia bear an eerie resemblance to the calamities foretold in an ancient prophecy by a Javanese king. Herald Correspondent Louise Williams in Jakarta traces the connections - and the consequences. A thousand years ago, a Javanese king told his people of an apocalyptic future with morality lost, and a nation crying in the face of corruption, riots, crime and promiscuity.

The nation would be ruled by a powerful and wealthy king. If the people did not fight those who held them down, those who stole, womanised, gambled and drank, then God would intervene and natural and human disasters would follow - social revolutions, erupting volcanoes, rising floods and the world would be turned upside down by the felling of the forests.

This prophecy is still told now, a millennium later, because much of what it foresaw has already taken place. The king, Joyoboyo, has already been proved right, followers say. He said the Hindus would fall to the Muslims, that outsiders (the Dutch) would come to rule for 400 years and then a yellow cruel race (the Japanese in World War II) would invade before the nation was freed by a charismatic leader.

Last week, as Indonesia faced devastating forest fires and a vast cloud of smog, a crippling drought bringing starvation and disease, a fatal plane crash, an earthquake, ethnic violence, an a alarming slide in the value of the rupiah, Muslim leaders called on the nation to repent.

At a prayer meeting in south Jakarta, religious leaders warned the Soeharto Government that the coincidence of these human and natural calamities was a sign from God. "We are calling on the Government to remember that power is a mandate from Allah which has to be accounted for. No matter how great and strong a power is, Allah will one day take it back."

Amien Rais, leader of the 28-million strong Muhammadiyah organisation, said the greatest disaster facing Indonesia was the complacency and arrogance of its leaders, who no longer thought the pain of the people warranted their sympathy and let fatal riots pass without even offering condolences to the families of the victims.

The next day, the nation's biggest Islamic group, with more than 30 million members, also voiced its concern. Its leader, Abdurrahman Wahid, warned the Soeharto Government that unless it paid closer attention to the rights of the people, the masses "would take the matter into their own hands". "Hundreds of demonstrations happen every day, even if the newspapers hardly cover them," he said. "Actually the people are very patient, they want things gradually, they don't ask for everything at once. But don't think the people are stupid, that they don't have any feelings at all."

In an extraordinary, if oblique, warning, Mr Wahid, the country's most powerful religious figure, said he could call a million people onto the streets to force "whoever is causing trouble to run away".

For years the mood in Indonesia has been slowly turning. Ancient prophecies can be read whatever way you like, but in the overriding gloom which has engulfed Indonesia over the past two months, many ordinary people do believe natural disasters have a social meaning.

The past 18 months have been marked by a series of ethnic and religious riots, labour strikes have increased dramatically and more and more Indonesians are willing to challenge authority, often using violence as a substitute for the country's ineffective legal system. Mr Soeharto, long safe at the top of a political system which has effectively crushed or co-opted its opponents and neutralised the forces of instability by playing one group off against another, still seemed to stand aloof.

While millions of Indonesians were choking under the blanket of poisonous smog, he was smiling across the front pages of the national dailies astride a new national motorbike.

But when the Soeharto Government was forced to call in the International Monetary Fund in the face of the dramatic slide in the national currency, it became clear that the Jakarta regime was facing a test far bigger than spot fires of social dissent.

Economic growth and development is the source of the Soeharto regime's legitimacy. Human rights, democracy and freedom of speech have all been put on hold in the name of national stability, the essential condition for the economic growth which has delivered millions from dire poverty.

The implementation of that system, though, has been imperfect. The complacency of power breeds corruption. Major corruption in the handing out of multi-million dollar contracts to political allies or relatives, and minor corruption like the under-the-counter payments needed to secure essential documents such as identity cards.

The question now is how control will be maintained if Indonesia slides into a significant economic downturn, in a rapidly urbanising society of rising expectations.

This week thousands of workers sat idle on construction sites. Orders and materials are no longer being delivered because the cash-strapped developers cannot afford to pay. At the same time the severe drought is certain to cause crop reductions, and 7,000 people a day are estimated to be pouring into Jakarta looking for work.

Indonesia's population reached 200 million this year, 38 per cent of whom are officially acknowledged to be unemployed or under-employed. The national economy is dominated by about 200 massive conglomerates, mostly with close political connections to the President.

The 36 per cent devaluation of the rupiah over the past two months and rocketing interest rates have left many companies facing massive short-term debts in US dollars, with insufficient funds to pay.

The emerging middle class, the key group of professionals and intellectuals, are watching their gains evaporate. Home loan interest rates have risen to 30 per cent or more. The consequences of even one prominent corporate collapse are alarming. Brokers and economists are worried.

Mr Soeharto has succeeded for three decades in building an impenetrable personal fortress, his power often likened to that of a Javanese king, an absolute ruler rather than a modern political leader.

But the prospect of an economic slump comes as Indonesia is starting to accept that the aging Mr Soeharto will eventually go. Next year's presidential elections, in which he is expected to be elected unopposed for a seventh five-year term, are expected to be his last. After so many decades of closed politics, there is jostling behind the scenes to lay the groundwork for the succession.

In an atmosphere of economic uncertainty and political competition, there are fears that old and painful divisions in Indonesian society will be exposed. The economy is dominated by ethnic Chinese, and many of the recent riots have pitted the majority Muslims against the minority Chinese, with mobs burning down whole streets of Chinese shops.

The calls for a moral revival are coming mainly from large Muslim organisations. Indonesia's working-class Muslims, the factory workers, the constructions labourers, the farmhands and the food hawkers, have long been at the bottom of a power pyramid which has offered them the least opportunity for upward mobility and personal gain.

The potential for large-scale mobilisation of millions of disaffected people around calls for social justice is enormous.

Right across the spectrum in Indonesia, from the military elite to the pro-democratic intellectuals, the mantra of change is being chanted. Senior government officials acknowledge that democratisation must come, and that the pressures for reform are building.

At a recent private meeting, a retired general confirmed that the armed forces had been ordered not to shoot during this year's turbulent national election campaign, even if the mobs were hurling stones and shouting abuse at the soldiers trying to keep order.

"What is more important is to track down the roots of the riots, issues such as the social gap," he said. "We told the soldiers not to be tempted to shoot, because if there is even one victim among the people, then there would be mass rioting."