John McBeth, Jakarta – For members of a visiting group of US editors, a mid-afternoon conversation with President Abdurrahman Wahid in late June ended in near-complete bewilderment. Since Indonesia couldn't expect any significant increase in foreign direct investment in the short term, the president told the bemused group, the government would have to rely on exports instead to revive the economy.

That sort of bravado underscores Wahid's innocence of the dismal science and his near-total dependence on his fractious economic team. It also tells the story of the stuttering Indonesian economy. Most independent economists estimate Gross Domestic Product will grow 3% this year after three years in the doldrums. The economy contracted 13.2% in 1998 and was flat in 1999.

This year exports are up, vibrantly so, but that is thanks to high oil prices and a newly weakened rupiah, which had fallen to 9,315 on July 7 from 7,500 to the US dollar at the end of March. Indeed, with political unrest, lagging reform and slow corporate restructuring keeping foreign capital away, sustaining the current consumer-led recovery will be difficult.

Exports in the first five months of this year totaled $23.7 billion, up 32% from the same period last year. Non-oil exports were $18.9 billion, only $400 million higher than a year earlier. But petroleum exports generated $5.2 billion, up from $3.1 billion. Analysts estimate that every $1 increase in the global price of oil adds $360 million a year to Indonesia's coffers.

Imports during the same period reached $11.1 billion, with raw materials making up about three-quarters of the total. Among Indonesia's trading partners, Canada seems to be doing better than most, with imports from that country rising 83% from last year, mostly in wood pulp for paper and packaging, cereals, fertilizer and organic chemicals for the resurgent agribusiness industry. Foreign-exchange reserves are down to $16.2 billion.

If some Chinese money has begun to trickle back, the big bucks are staying offshore. Approvals of foreign direct investment barely reached $2 billion in the first five months of the year, up slightly from 1999's $1.6 billion. At rupiah 11.6 trillion, domestic investment approvals matched the depressed levels of a year earlier.

Most economists predict a gradual slowdown of the economy. They fear mass disillusionment will start to set in when new graduates fail to find jobs. Unemployment is already at 40 million, or 28.5% of the workforce. And the only way to avoid adding to those numbers is by making enough progress in restructuring indebted companies to create new investment opportunities.

But for the meantime, some think the consumer-led strength can be sustained. "The economic situation is better than the market is reading it," says Cliff Tan, director of economic and market analysis for the Asia-Pacific region for Salomon Smith Barney-Citigroup. He believes the recovery can last at current levels well into next year.

Increased consumer spending isn't just confined to busy malls and crowded restaurants. Car sales rose 500% in the first quarter, with industry analysts expecting sales for the year to reach 240,000 vehicles, well above last year's 95,000. Personal computer sales also are on the rise, up 193% to 85,000 machines in the first quarter.

Recreational spending looks to be climbing as well. Golf courses always prosper during a slump because businessmen have time on their hands. And the Sukabumi-based Solowings Flight Club has seen its fleet of privately owned ultra-light aircraft grow from six to more than 30 in the past year. Each plane amounts to at least a $620,000 layout for its mostly Indonesian flyers. The message, it seems, is enjoy it while it lasts.