Indonesia is in a mess, but President Wahid's latest attempts to ease the turmoil have backfired. Lindsay Murdoch reports.

Indonesia is rumbling. And the political tremors are more alarming to the country's 210 million people than the infrequent earthquakes that shake Jakarta's high-rise buildings.

Soldiers, by one estimate 26,000 of them, are back in force on the streets of the capital for the first time in months, camped out in public parks and government compounds. They have orders to shoot rioters on sight.

Abdurrahman Wahid created shockwaves of his own this week in the capital's Parliament, where 700 elected and appointed members of the People's Consultative Assembly, or MPR, are holding their annual two-week meeting.

The President of the world's fourth most populous nation told the stony-faced audience how the "dangerous symptoms and flow of national disintegration are getting stronger".

"The prime problem we face during the period of transitional reign is ... national disintegrating symptoms resulting from primordial social conflicts, the birth of separatist movements in some regions and also growing actions of anarchy and criminal activities among members of the society, followed up by violent demonstrations," he said.

"All of these give rise to and increase the feeling of insecurity. Enthusiasm to invest has dropped, unemployment increased, social prosperity dropped drastically, especially in the riot-laden regions ..."

Few world leaders have delivered such a grim assessment of their own country. But instead of "facing the national problem for the sake of our beloved people", as Wahid asked, the country's politicians replied with a torrent of criticism, some of it personal, and in some cases with plots to bring him down.

Wahid, regarded as a master tactician, moved quickly to take the sting out of the criticisms by promising to devolve the daily government administration to the popular Vice-President, Megawati Sukarnoputri. But this only sparked more political intrigue, backroom plotting and uncertainty.

Can the 54-year-old daughter of Indonesia's founding president, Sukarno, run the country any better than Wahid? She has so far shown little administrative skills. She harbours deep distrust of the President and has until now performed largely ceremonial tasks for the Government.

Wahid is pushing ahead with a plan to appoint the retired general Susilo Bambang Yudhoyono as co-ordinating minister in a new, cut-back Cabinet. Wahid's idea is that Yudhoyono would report daily to Megawati, who would then confer frequently with the President, whose authority remains undiluted. But nobody seems to know exactly how Megawati views the proposed arrangement.

Yudhoyono has been named as a suspect in the July 27, 1996, violent takeover of the then Jakarta headquarters of Megawati's Indonesian Democratic Party of Struggle. More than 20 of Megawati's supporters are believed to have been killed in the attack. Yudhoyono was the Jakarta military command's chief of staff at the time. "The choice of Yudhoyono is not exactly a subtle one by the President," says a Western analyst. "How long do you think any relationship with Megawati would last?"

Many politicians are questioning how the arrangement would work. They are also questioning whether Wahid would refrain from meddling with Megawati's decisions.

Wahid this week described his relationship with Megawati as being like brother and sister. But Megawati has been quoted as telling one of her advisers that "my brother stabbed me in the back" – a reference to her losing bid for the presidency last year after winning 34 per cent of the vote at national elections.

Wahid seemed to think that not much at all had changed this week, while most commentators took his statements to mean he was becoming a figurehead leader, taking an interest only in foreign affairs while he wandered the world. As usual, Indonesians have been left guessing while the country's myriad problems worsen.

Wahid's Government has effectively collapsed pending a Cabinet reshuffle to be announced after the MPR ends its session on Friday. The chief economics minister, Kwik Kian Gie, resigned on Thursday, a serious blow to efforts to grapple with fundamental economic problems.

The economy continues to struggle. While a consumer-led recovery is likely to see Indonesia meet the International Monetary Fund (IMF) and World Bank predictions of 4 per cent growth this year, the recovery remains extremely patchy.

Exports are up strongly, boosted by good oil prices, and areas with strong agricultural economies have suffered little through the country's two-year crisis. The problems are worst in Java itself – crammed with 60 per cent of the population and little of the country's vast natural resources – where unemployment is endemic.

Indonesia's finances are in a shocking state. The country's total external debt, which includes government and private-sector, is $US144 billion ($250 billion). Indonesia now ranks as the most deeply indebted major country in the world. It will not be able to recover for decades.

The Indonesian Bank Restructuring Agency (IBRA), tasked with selling off $US80 billion of assets pledged by bankrupt business in repayment of debts, is embarking on a high-profile international promotion drive to interest investors. But who is going to invest in a country facing dire problems outlined by its own president?

So far the agency has been able to meet targets set by the IMF, but any slowdown in asset sales and debt restructuring will see interest payments on the debt it has absorbed undo the value it has delivered so far.

Political tensions have been on the rise across the country for weeks. Hanging over the heads of the population was the threat of a new confrontation between Wahid's supporters and his opponents should an attempt be made to force him out of office.

Grave fears exist that any mass demonstrations would be used as a cover for disgruntled elements of the military or wealthy businesspeople loyal to former president Soeharto to provoke widespread instability. Soeharto has been charged with corruption and is likely to be put on trial within weeks.

There are other, even more potentially explosive issues emerging that may threaten the country's future. A group of Islamic-based parties has proposed the inclusion in the Constitution of what is known as the Jakarta Charter. Originally discussed in the early years of the republic as an integral part of the Constitution, the charter states that Muslim citizens of Indonesia should be subject to Islamic law.

While the charter did not in any way suggest that non-Muslims should be subject to the rigorous system of law – in which thieves' arms are chopped off and adulterers are stoned to death – Christians and other non-Muslims regarded it as a threat to their safety as minorities.

The founders of Indonesia eventually rejected inclusion of the charter. Christians regarded the move as a de facto bid to declare Indonesia a Muslim state. "If this is passed, Indonesia will split apart," warns a Christian politician, who asked that his name be withheld. "We cannot accept this."

Realising the issue is highly dangerous for the country, the Government has been working hard behind the scenes to block it. Wahid's National Awakening Party, Megawati's party and Golkar, the former ruling party, have agreed to reject the charter in a deal that has left Amien Rais, the Speaker of the MPR and one of Wahid's fiercest critics, out in the cold.

Ironically, it was Rais who last October patched together a "central axis" coalition between the Muslim parties that took Wahid to victory over Megawati.

While the elite continues to squabble over the division of the political spoils, most ordinary Indonesians are seriously concerned about the fate of their nation. Many are particularly worried at the way religion is emerging as a factor to divide rather than unite the nation.

"Religion is supposed to be something that concerns an individual and his or her relationship with God," says one Jakarta taxi driver. "Now it is being used as a vehicle for hatred."

The Maluku islands are increasingly being turned into a hardline Muslim enclave, with Christian communities being attacked by Muslim "warriors" from across the country, often supported by elements of the military. Tensions are escalating in areas with sizable Christian communities.

Keeping the Jakarta Charter out of the Constitution might have given some room for relaxation, but ultimately the ability or willingness of the Government to deal with problems such as those in the Maluku islands may decide the future of Wahid's Government.

It remains unclear what type of democracy is emerging in the country after three decades of corrupt authoritarian rule. The MPR is debating direct presidential elections when Wahid's term expires in 2004. Debate is also raging about the establishment of impeachment procedures and the role of the military in domestic affairs. The decisions made will be crucial to the new Indonesia.

Wahid remains in charge for now but who can predict for how long? Politicians are showing no sign of cutting him any slack despite Indonesia's problems having been inherited from Soeharto's 32- year regime. The country remains about where it was when Wahid took over last October – a mess.

In his speech to the MPR this week the President pledged the Government's resolve and determination to solve the country's crises, to safeguard national integrity and implement reforms "no matter how dreadful the problems and challenges we are confronting".