Donors put pressure on Jakarta

Indonesia is under pressure to disarm the Timorese militias

Indonesia's aid donors have begun a two-day meeting in Tokyo to decide how much to make available to the crisis-torn country in the coming year.

Indonesia says it wants up to $5bn to help plug holes in its budget, but several donor governments have threatened to cut aid unless it deals more effectively with the pro-Jakarta militias operating in East and West Timor.

The militias have been blamed for a series of attacks on East Timorese refugees and UN peacekeepers operating in the former Indonesian territory.

Thousands of East Timorese refugees are unable to return home

On Monday a spokesman for the United Nations refugee agency, the UNHCR, in East Timor told the BBC the Indonesian Government had done nothing serious to implement a Security Council resolution to disarm and disband the militias.

However, diplomats say Indonesia's strategic position and worries about the country's overall stability means that it is unlikely aid will actually be cut off.

As a result correspondents say the government is confident it will secure the funding it wants.

Signs of recovery

Japan in particular has a big interest in propping up the Indonesian economy as the vast majority of its fuel and gas supplies transit through the Indonesian archipelago.

Japan is Indonesia's largest aid donor, pledging some $1.56bn in assistance at last year's meeting.

A World Bank report released on Friday said that although Indonesia's economy was showing some signs of recovery, financial markets remained unconvinced.

"Factors such as political uncertainty, regional unrest and periodic outbursts of violence, combined with policy slippage on the structural reform agenda, could still derail the economic recovery," the report warned.

It went on to say that progress in bringing the pro-Jakarta militias to heel would provide a "positive environment for donor support", although it did not make further action a precondition for more aid.