Although 12 months have passed since the first signs emerged of a run on the rupiah currency and although the international community has pledged to pour in tens of billions of dollars in loans, bright spots are still few and far between, they said.

The rupiah's collapse from 2,400 against the dollar to levels around 13,000 now has sent the price of basic necessities soaring and the economy is forecast to contract 15 per cent in 1998/99 compared to a previous growth rate of around seven percent.

The government has said that by the end of this year, half of the country's 200 million people will be unable to afford food and basic needs. It has been a tragic turnaround in a nation where the annual per capita income broke through the $1,000 level early last year.

John Davitte, emerging markets analyst atthe IDEA economic consultancy in Singapore, said he saw a "scintilla of light" at the end of the tunnel, but that it was a very long tunnel.

He said one of the main risks was political, as the country holds general elections after jettisoning the restrictive political laws of the 32-year-long regime of president Suharto, who stepped down in May amid widespread protests and rioting. "There will be a lot of foreign investors holding off until they see what the new regime is going to be like," he said.

"The clear risk is the emergence of a populist political force. I don't think the market is factoring that in yet, but it could well happen."

Suharto's successor, president BJ Habibie, has promised to hold elections in the middle of next year and a presidential election by the end of 1999.

On the economic front, Davitte said, Indonesia would need to speedily implement reforms mandated by the International Monetary Fund and continue tight monetary and fiscal policies.

The World Bank, in a report lastweek, also listed political turmoil as one of several massive shocks to the economy over the past year.

It also pointed to anticipated private capital outflows of $13 billion in 1998/99 from inflows of a similar amount in 1996/97 and a fall in the price of crude oil, Indonesia's key export, to around $13 per barrel, the lowest in real terms in three decades.

Disasters springing from last year's El Nino weather phenomenon -- the country's worst drought in half a century and fires over vast parts of the nation's rich forests -- had compounded the pain, it said. Last week, the IMF resumed disbursements from a $41.2 bail-out scheme it had drawn up last year, which had been suspended during the May turmoil.

The package was boosted by an extra $6 billion to meet the country's budget deficit and plug a balance of payments hole. And the government announced that it had received agreements in principle to reschedule part of its $54 billion in sovereign debt, easing pressure on the balance ofpayments.

Multilateral and bilateral donors are scheduled to meet in Paris later this month to discuss aid commitments for this year, amid initial indications that they will far exceed last year's $5.3 billion.