Jakarta – Ethnic Chinese in Indonesia marked the start of the Lunar New Year amid new-found freedom to celebrate their most important festival but an activist said discrimination still exists.

Thousands of ethnic Chinese flocked to temples in the capital on Monday night to welcome the new year and pray even though several parts of Jakarta, including the Chinatown area, have been inundated following heavy rain since last month.

The government has declared the start of the Chinese new year an optional holiday and many private institutions and businesses, including the Jakarta Stock Exchange, were closed. But an ethnic Chinese expert said the move was not enough.

Wahyu Effendi of the Movement Against Discrimination in Indonesia said several government regulations discriminating against Chinese-Indonesians had yet to be replaced. "It is true that we are now free to celebrate [the Lunar New Year] but that's not something fundamental," said Effendi, who like most ethnic Chinese here uses an Indonesian-sounding name.

"For us the most important thing is equal rights as Indonesian citizens," he told AFP, adding the present freedoms are only "ceremonial and political." "We are not asking to be treated specially, we just want to be treated equally," he said.

Chinese-Indonesians must still have a certificate issued by the justice ministry declaring them Indonesian citizens in addition to the ID cards which every Indonesian must carry, he said. The certificate is required when ethnic Chinese apply for documents such as a passport, register marriages or enter school, although a 1958 law on which it is based does not state such a requirement exclusively for them. Their entry to state-run universities is also limited in a move aimed at allowing more native Indonesians to enjoy higher education.

In 2000 the government of then-president Abdurrahman Wahid allowed ethnic Chinese to openly celebrate the Lunar New Year for the first time in many years.

Chinese-Indonesians make up an estimated three percent of mainly Muslim Indonesia's 210 million people but control much of the economy. Their perceived wealth has often made them targets of social unrest.

A failed coup in 1965 was officially blamed on the powerful communist party even though some analysts believe it played no role. Suharto, who took power from founding president Sukarno in the aftermath of the coup, froze relations with China for many years and banned the communist party. Tens of thousands of alleged communists were massacred in a purge which claimed hundreds of thousands of lives in 1965-66.

Suharto, despite his closeness to wealthy ethnic Chinese business figures, banned ethnic Chinese from careers in the military and public service. Public displays of Chinese culture and even written characters were prohibited.

During the violent upheaval at the height of the economic crisis in 1998 hundreds of ethnic Chinese businesses were looted and Chinese were the victims of rape and murder, prompting tens of thousands of them to flee overseas. Dozens of burnt-out buildings can still be seen in the Glodok district. The unrest led to the downfall of Suharto in May 1998.