Dini Djala, North Sulawesi and West Kalimantan – At a crowded refugee camp in Bitung, North Sulawesi, some 3,000 children pass their days jumping rope, throwing ball or playing a game they call "war." The girls pretend to be nurses, busily tending the wounded, while the boys take up fake guns to fight mock battles.

"They love playing war," says Lengkana, an aid worker and psychologist working with the youngsters, who fled sectarian killing in nearby North Maluku: "When I ask the kids what they want to be when they grow up, they answer: 'We want to become soldiers, so we can kill Muslims.'"

Hardly the sort of response you would expect from children barely out of their teens. But in this squalid, fetid camp there is little to cheer about. And the hopelessness is repeated in dozens of similar camps across the country that house many of Indonesia's internal refugees.

According to government figures, more than 1 million Indonesians are currently classed as "internally displaced people," torn from their homes by years of ethnic violence or economic deprivation. The refugees face often dismal prospects.

Disease and alcoholism are rife in the camps, and thousands have already died from diarrhoea and respiratory illnesses. The most desperate are forced into lives of begging, prostitution and crime.

But it's not just individuals who are suffering. The displacement of so many people has worrying long-term implications for the fragile process of nation-building. "We are strangers in our own land," complains Hasan, 18, a Madurese refugee. Sociologist Imam Prasodjo of the University of Indonesia warns that if such sentiments spread, "our sense of togetherness as a nation will disappear. Our dream of the Indonesian nation may be gone."

Prasodjo blames the crisis on the government's "half-hearted" measures. Caring for the refugees has been costly; officials say more than 1 billion rupiah ($107,000) is spent every day to provide rice and 1,500 rupiah pocket money for each refugee. But Prasodjo says the aid is always late, and at least some of it is lost through corruption. Indeed, in many camps, the cash flow has stopped and the rice is delivered only haphazardly, say social workers.

Aid distribution also hasn't been helped by a bewildering series of administrative changes ordered by the government, which led to responsibility for the refugees being shifted between four separate ministries before ending up late last year with the Ministry of Health and Social Welfare and the People's Mobility and Population Board – an entirely new government body. Social workers say the reshuffles have brought confusion. But Emil Agustiono, chief of the Crisis Centre at the Health and Social Welfare Ministry, counters that the changes have only been at the top, while front-line officials have remained unchanged.

Increasingly, the uprooted Indonesians rely on foreign organizations for help. But, apart from the East Timorese, they are not regarded as true refugees as they have not fled their own country, which means the United Nations is unable to do much. Instead, it is increasingly being left up to independent organizations such as Midecins Sans Frontires (Doctors Without Borders) and the Red Cross to help deliver aid and medical care.

To improve aid distribution and monitoring of the refugees' plight, sociologist Prasodjo wants the government to establish a commission for the internally displaced. But the government has not heeded his proposal. Indeed, its policy on the refugees can be summed up in two words: Go home. "These camps can't exist forever," says the ministry's Agustiono. "We prefer a process of reconciliation, not relocation." Still, government officials admit that as of June last year, fewer than 30,000 refugees nationwide had been permanently resettled or returned home.

In areas to which refugees have fled, the response from local communities is frequently resentful, sometimes violently so. With an eye to the local population, provincial governments have also tended to offer refugees a cool reception.

In North Sulawesi, the local government is taking a tough stance towards its roughly 30,000 refugees, who come mostly from the Moluccas. Believing that locals are increasingly worried about the potential for ethnic and sectarian violence as a result of the refugees' presence, the provincial government's chief humanitarian relief official, Lona Lengkong, has a simple message for the refugees: "Don't create problems."

But the problems have already arrived. Lengkong says that when he visits the Bitung camp and catches the refugees drunk and gambling, he shouts and threatens to "first turn off the lights, then take away the food!" His warnings are serious: Amid complaints from locals that refugees were getting free government services for which locals had to pay, the local government removed doctors from the camps and refugees must now pay for their children's schooling. "We will no longer treat the refugees like first-class citizens," Lengkong declares.

First class, however, hardly describes most refugees' lives. Families often share at best about three square metres of dirt floor. Rice is generally plentiful – for now – but other foods are not. Nor is medical care.

Mutleben Tumada, 31, who fled Halmahera island in North Maluku and now lives in a camp in Manado, the capital of North Sulawesi, asked the local hospital to treat his arm after it was nearly hacked off during an attack on his village. The surgeons asked him for 3 million rupiah. Tumada's neighbour in the camp, Herkanus Dadasa, 43, who watched his mother and two daughters die in a bombing on Halmahera, snarls at the government's apparent lack of compassion. "Why don't they take care of their own people? Why are we victimized in our own country?"

The tensions are fuelling violence within the camps. "There are lots of fights now," says None Ayowaila, 51, a refugee at Mega Belia Camp in Bitung, North Sulawesi. The chief of the camp, Thadeus Leftungun, a 60-year-old former police officer who fled his home in Ternate, North Maluku, thinks the camp should be disbanded.

But he's worried about whether his family could survive outside, where he fears they would face discrimination from locals – something he has already experienced: "Whenever there is misunderstanding, the locals never let us forget who we are," he says. Adds local legislator Bonny Sompie: "The refugees get blamed for any problems we now have, from traffic jams to higher crime and even increasing real estate prices."

In West Kalimantan's capital Pontianak, such finger-pointing can turn fatal. In October, six people died in fighting between the Malay and Madurese communities. Armed Malay gangs roamed the city, hunting down Madurese, while rocks and Molotov cocktails were thrown into the camps, where refugees cowered in fear.

But for all the problems they face, many refugees are resigned to calling the camps home. Masiah, an ethnic-Madurese was twice driven from her home in Sambas regency, West Kalimantan, in ethnic fighting.

Eventually, she and 20,000 other ethnic-Madurese boarded a ship to the small island of Madura, their ancestral home, but where most no longer had any land or family. Despite being given land by the local government, fewer than half the refugees stuck it out, and soon they were on their way back to West Kalimantan to live in camps in Pontianak, some distance from Sambas.

There, they are are making the most of what they have, using cash they earn from hard labour to build small shacks; the campgrounds – previously sports stadiums and other public facilities – now resemble shanty towns.

Today, Masiah is resigned to staying put. But she is aware that as refugees, they are outcasts, and exposed to exploitation – her husband earns a little more than a dollar a day on construction sites. "Without our cheap labour," she says, "Pontianak could not prosper."

Still, officials in West Kalimantan keep trying to convince the refugees that it's safe to go home, and are cutting down on aid to encourage the refugees to do so.

But not many are willing to take the risk. "The few who have ventured back to their villages have wound up dead," says Madurese community leader Haji Sulaiman. He makes up for shortfalls in government aid with donations he corrals from the private sector.

In North Sulawesi, relief official Lengkong worries that withdrawing aid too fast, too soon, may be detrimental – to the local population. If resettlement plans fail again, Lengkong says he will keep the camps open, because at least in the camps the refugees' hostilities can be contained, and not seep out into the streets.

His voice heavy with worry that North Sulawesi too may fall into sectarian and ethnic conflict, he says: "It is better for us to give than to receive, so later we will not become refugees too."

A restless people

With over 1 million "internally displaced people," Indonesia has more than a third of the region's total of 2.4 million IDPs. In Asia, only Afghanistan – with an estimated 200,000 IDPs and a further 1.2 million refugees in neighbouring Pakistan – has a more serious problem.

According to government figures, more than 400,000 refugees are scattered throughout the Moluccas, fleeing continuing violence in the islands that has claimed more than 4,000 lives. Thousands more have fled to nearby provinces such as North Sulawesi.

More than 60,000 Madurese have still not returned to their villages in Sambas regency, West Kalimantan, from where they were violently driven out in March 1999 by their ethnic-Malay and Dayak neighbours.

Many now live in refugee camps elsewhere in West Kalimantan, while some have gone to Madura, the poor island off Java from which their families originally came.

West Timor still shelters some 100,000 East Timorese who are awaiting repatriation in the face of protests from pro-Jakarta militia groups, which continue to resist the refugees' return home.

The refugee population of Aceh, where a separatist movement is seeking independence from the rest of Indonesia, fluctuates depending on the intensity of fighting, with many people leaving their homes for only short periods. In 1999, the number of refugees in Aceh mushroomed to more than 200,000, but most eventually returned home.