Jakarta – President Abdurrahman Wahid has nominated reform of the legal and regulatory system as central to Indonesia's economic recovery and development.

In an address to the plenary session of the House of People's Representatives, delivered in conjunction with this week's budget, Mr Wahid said legal certainty would ensure justice was enforced.

It would also reduce risks in getting up a business, he said. "Therefore, improvement in the legal and regulatory sector must be undertaken simultaneously," he said.

Mr Wahid outlined three central measures. First was to improve and delineate laws such as those involving bankruptcy and the commercial court, which would make decisions on cases of bankrupt companies. Next was to develop a system of asset listing and a law guaranteeing collaterals.

Both changes would reduce the risk on the part of a creditor. In the past, a debtor could use the same collateral to obtain a loan from another creditor, a factor that caused bad debts to swell.

A final measure would be to establish an independent and professional judiciary and reform the Government's administrative law.

This reform would be to ensure there would no longer be any overlap between a regulation issued by one government institution and another issued by a different agency.

Mr Wahid said that despite Indonesia's difficulties, reforms already under way had resulted in a "synergy" that would help efforts to overcome the crisis.

"This momentum must be maintained in future by proceeding with the reform which we have begun," Mr Wahid told the representatives.

He said transparency and responsibility would always be part of the reform process, to ensure changes were supervised and accounted for.