Shawn Donnan, Jakarta – At the end of this month Indonesia will become the last of the economies plunged into chaos by the 1997-98 Asian financial crisis to graduate from the IMF and is looking to plug a budget gap of more than $10 billion.

In an effort to alleviate concerns that it may abandon a reform agenda already criticised by some for its plodding implementation, Jakarta earlier this year unveiled a "white paper" setting itself an ambitious schedule for reforms.

While the IMF and the World Bank have heaped praise on the plan, donors gathered for the annual meeting of the Consultative Group on Indonesia yesterday said its "effective implementation" remained the "key challenge".

"All eyes are now on next year," said Jemal-ud-din Kassum, the World Bank's vice-president for east Asia and the Pacific.

"If the government delivers on the commitments it has made, then growth in Indonesia is set to take off," he said. "But significant slippage, especially on improving the investment climate, governance and fighting corruption, would put gains in market confidence at risk."

That confidence is particularly relevant in the months ahead. To help fill the financing gap after its graduation from the IMF and its resulting inability to turn to the Paris Club group of creditors to restructure foreign debt, Jakarta is looking to issue an international sovereign bond as early as January.

Finance minister Boediono said on Thursday details of that offering would be unveiled "soon". He has said he expected an issue of about $400 million while investors have told Jakarta the market would absorb up to $1 billion.

Efforts to improve Indonesia's poor investment climate come as domestic and foreign investment, badly needed to help spur growth, still troubles donors.

"Conditions are in place for a sustained recovery. Still, growth has been moderate, unemployment has been high and poverty remains higher than we would like," said the IMF's Daniel Citrin in an FT interview this week.

Thursday's donor pledges came as Mexican cement maker Cemex turned to international arbitration to try to resolve a dispute over its efforts to buy a majority stake in Indonesia's largest cement maker.