Farmers in Central Java spent last Thursday praying because they feared the date 9/9/1999 spelled the end of the world. They betrayed a kind of fatalism that infects much of Indonesia today. The fourth largest country in the world is in deep trouble, and no one seems to know how to fix it.

While a horrified world watches at least 100,000 refugees flee their homes in East Timor, at least half that number again have already been refugees for months in other parts of the archipelago. Perhaps 80,000 have fled their homes in Aceh since renewed fighting broke out between Free Aceh guerrillas and Indonesian security forces in May. While many fear the army, the Free Aceh movement acknowledges it too has forced people to flee in order to pressure the government.

Further east, 20-40,000 Madurese were displaced from their homes in West Kalimantan after being attacked by both Malays and Dayak tribesmen, in 1997 and early 1999. Although the Madurese were clearly the victims, tribal leaders for months refused to allow them to resettle. West Kalimantan is the first place in Indonesia where the government has cooperated with ethnic cleansing, in this case by not allowing the Madurese to return to their homes.

Fighting between Christians and Muslims on the once fabulous Spice Island of Ambon broke out on 19 January and has so far produced about 53,000 largely Muslim refugees. Most fled to another island further west, whence their ancestors came. More will follow, as the conflict smolders on.

All these refugees tell harrowing tales of murder and mayhem. Hundreds have been killed in each of these regions.

Yet the misery of so many does not impact on Jakarta in equal measure. The two waves of bloodletting in West Kalimantan, respectively leaving about 500 and 200 dead, stirred hardly a ripple. Jakarta was preoccupied with the last Suharto-era election. Officials afterwards declared proudly that the Kalimantan violence had had 'no effect' on the result.

Indonesia's recent history is spattered with blood, yet none of the conflicts have been resolved. No one is prosecuted, no new rules are agreed, nothing changes. One reason for this apparent callousness is that Jakarta's power elite is notoriously turned in on itself. Today their preoccupation is to gain or retain power, and the regions are irrelevant to that struggle.

Another reason for the national drift is that many Indonesians feel demoralised by failure. The 'reformasi' of 1998 remains unfinished. No prosecution against Suharto is pending or even likely - for corruption or human rights abuse. Indonesia's economy remains the most sluggish and unreformed in Southeast Asia. On East Timor, the predominant feeling is not outrage at what Indonesia's armed forces are doing there, but a sense that Indonesia is being unfairly victimised by the world.

Into this demoralised confusion steps armed forces commander General Wiranto. Tuesday morning's declaration of martial law in East Timor was his doing, against the declared wishes of parliament and even much of cabinet. It was his most open move yet against the president, who may have been inclined to invite in UN peacekeepers instead. On Thursday morning every paper led with rumours of a coup Wiranto was supposed to have launched against Habibie.

Some foreign commentary already sees here a second New Order, carried along on the nationalistic anger at the UN ballot result in East Timor.

Retired soldiers, who in Indonesia often say what active soldiers think, have joined voices against Habibie. On Monday the Retired Military and Police Officers Communication Forum declared that the East Timor ballot had been 'a failure of the Habibie government'. This forum brings together prominent old soldiers, several of whom now support Megawati for president. They seem keen to restore the army's eroded influence.

The more historically aware among these soldiers and their civilian friends may see parallels with Indonesia in 1957. As now, there was then widespread democracy just after a national election, and unrest in the regions. Declaring martial law in one region after another boosted the military role in politics. It also gave (Megawati's father) President Sukarno the profile he had been yearning for, at the expense of the political parties. By 1966 the military were firmly in control, and had also eliminated Sukarno. They had saved the nation from disintegration, they told themselves.

Wiranto would like to declare martial law in other troubled provinces as well - Aceh in particular. He wants to increase the military presence in Maluku (of which Ambon is the capital) and in Irian Jaya. By week's end he was close to winning himself a new law on state security. Replacing the old subversion law, it gives wide-ranging powers to the executive. Human rights lawyers and student protesters condemned it as draconian.

However, neither Wiranto nor foreign commentators should be drawn too easily by the 1957 parallel. The situation today has two important differences.

Indonesia's regression towards full military control between 1957 and 1966 was helped by the Cold War. Military regimes are more difficult to sell in the world today. If Indonesia wants to keep aid flowing, it should not have its army in the streets shooting protesting citizens.

Moreover, demoralised as they may be, Indonesians have now seen what happens when soldiers run the show. When the truth dawns, the appalling events in East Timor will surely reinforce the conclusion. People today find it harder to believe that the military can 'hold the country together'. To win this game, Wiranto needs to play his cards with greater sophistication than he has shown so far.

Revelations over the past two years have shown that, with the military, what you see is not what you get. Newspaper readers in Jakarta have not yet been told clearly that the East Timor militias are directed by elite soldiers of their army. Yet the thought that soldiers might masquerade as criminals comes quite naturally to the average newspaper reader. Last November an official fact finding commission found that Suharto's son-in-law Lt-Gen Prabowo may have helped instigate the riots that devastated Jakarta the previous May. Stories circulated about grown men with tough crew cuts in school uniforms hurling petrol bombs.

In Aceh, unknown 'provocateurs' regularly burn schools. In the countryside of East Java, allegedly military assassins struck down dozens of Muslim teachers in October last year. The suspicion that anyone in authority may not be what they appear to be now runs deep. It helps explain why trust in the security forces is at an all-time low.

Rather than a second New Order, with Wiranto in the guise of Suharto as national saviour, Indonesia may well be headed for a dangerous drift.

[An edited version of this article appears in The Age (Melbourne), 11 September 1999]

Gerry van Klinken, editor, 'Inside Indonesia' magazine.