Issues. The following are some of the important issues and challenges facing Indonesia which is now undergoing a difficult stage of transition. They are：
■ Economic Recovery. Putting the economy back on track after the contagion attack is Indonesia's first priority. Since Suharto stepped down President Habibie has been working hard to restore the peoples confidence in their economy and at the same time to get the foreigners to re invest in Indonesia. The signs are mixed, more on the negative side. When millions (estimated at 20 million) have lost their jobs and many who should be in school have left schools as they cannot afford the fees, this feeling of discontent and anger could be understood. Besides the economy has shrunk by 14%. Although the rupiah has strengthened against the US dollar, the worst is still not over; there are some positive signs in the stock market. But beyond that, difficult to access. Some split views on whether the IMF prescriptions work or not.
■ Political stability is a big question mark. With the students conducting demonstration in Jakarta and now the problem of racial, religious and political violence in Acheh, Makassar, Ambon and elsewhere, political order can be a problem. But it is not likely to be regime threatening. If Indonesia collapses -it will invariably lead to instability in the immediate neighborhood - Singapore, Malaysia, Philippines, Brunei. Asean itself will be in disarray without support from Indonesia.
■ Poverty eradication. Removing inequities between the haves and the haves- not will be on the agenda. The question is how to allocate the resources unless a thorough restructuring of the society like what happened in Malaysia can take place.
■ Islamisation will be more than a moral force. However, it is in the field of politics that Islam will actually be tested as a force of tolerance. But Islam in Indonesia is not likely to take the Taliban route in Afghanistan or become a secessionist force in Mindanao, South Philippines.
