Corruption and weak law enforcement are the price which Indonesians are paying for reforms, former Indonesian president B.J. Habibie was quoted as saying.

"Corruption, collusion and nepotism continue to grow; law enforcement becomes more difficult to develop and this is creating high economic costs," Habibie was quoted by Kompas newspaper as saying. All of this is the price of reforms, he said.

Habibie, who replaced Suharto as president after the former dictator resigned in May 1998, was speaking at a gathering of Muslim intellectuals in Jakarta on Sunday.

"These days, we can see that KKN is committed openly, not only in Jakarta, but in almost all regions across Indonesia without an ounce of guilt," the Jakarta Post quoted him as saying. KKN is the Indonesian acronym for corruption, collusion and nepotism.

The country's current plight was a temporary phenomenon now that it was in a transitional phase to democracy and the government installed through elections next year must take the lead in coping with these challenges, said Habibie, 67, who now lives in Germany.

During his 17 months in office, Habibie introduced several reforms such as allowing more political parties, releasing political prisoners and freeing up the media.

He pulled out of the presidential race in October 1999 after legislators rejected his progress report, partly due to dissatisfaction over East Timor's breakaway from Indonesia. Habibie had authorised a UN-sponsored referendum on the issue.

Abdurrahman Wahid became president but was impeached in July 2001 for incompetence and alleged corruption. His deputy Megawati Sukarnoputri took over.