INTRO: Indonesian President Megawati Sukarnoputri marks her first year as leader of Southeast Asia's largest nation. Many in Indonesia hoped that Ms. Megawati, the daughter of Indonesia's founding President Sukarno, would lead the nation out of its many woes. But some analysts say her first year in office indicates she is not up to the task. V-O-A's Patricia Nunan brings us more.

TEXT: Troubled by a lackluster economy, scarred by religious and ethnic fighting, and pulled apart by separatist guerrilla wars, Indonesia faces problems that would challenge any president. As President Megawati Sukarnoputri marks her first year in office, analysts say she may not be able to deal with the country's woes - because they say, she is looking backward.

Ms. Megawati came to power last July when the National Assembly voted to remove President Abdurrahman Wahid from power. Ms. Megawati was Mr. Wahid's vice-president. Mr. Wahid's 19 months in office were scandal-ridden and politically tumultuous. Analysts say that made Ms. Megawati's presidency a welcome relief and brought a measure of stability to the economy.

Dewi Fortuna Anwar is a political analyst and served as an adviser to former president, B-J Habibie.

/// ANWAR ACT 1 /// I think her most obvious accomplishment is to bring some political stability and predictability. /// END ACT ///

Ms. Anwar says stability and predictability were lacking during the Wahid administration. But, Ms. Anwar says, while President Megawati may have brought a certain stability to government, it is still not clear if she has the political clout to institute profound structural changes needed to address Indonesia's problems. Jakarta politics has been somewhat defined by long-time alliances and powerbrokers that were created under the decades of rule by former presidents Suharto and Sukarno. Many of these politicians hold seats in the National Assembly - which has the power to remove the president. That is something Ms. Anwar says affects Ms. Megawati's ability to formulate creative policies.

/// ANWAR ACT 2 /// I would not say that Megawati is not pro-reform - she is pro-reform to a certain extent. I'm not saying that she is not anti-corruption, I think she is anti-corruption. /// END ACT ///

But, Ms. Anwar says, the president's sense of vulnerability over her regime, leads to her making compromises with the old guard. It was just four years ago that Indonesia's democracy movement helped oust former dictator Suharto - whose "New Order" government ruled Indonesia for 32 years. With the fall of Mr. Suharto came demands by many Indonesians for reforms. Among the demands: an end to the armed forces' political role, greater rights for provincial governments, and financial reforms such as a crackdown on corruption. So far, many of those efforts appear to have stalled. Indonesia analyst Jeffrey Winters, from Northwestern University in Chicago, says Ms. Megawati has failed to take the reform movement to the next stage.

/// WINTERS ACT /// She embraces the status-quo bureaucracy. She has personally embraced around her a lot of people who are directly - and I mean deeply connected - to the New Order. And it's not as if they forced themselves on her. They are a reflection of her desire to surround herself with people, which in her view, will know how to run the place and so on. And that means that she has essentially returned to what was, rather than what could be. /// END ACT ///

Indonesia's highest legislative body, the People's Consultative Assembly convenes in early August in part to gauge the president's performance. Among the issues to be examined will be the religious unrest in Maluku province, and the continued separatist fighting in the provinces of West Papua and Aceh.

Also, legislators will consider efforts to fight corruption in business and the judiciary and on-going reforms on the military.

/// BEGIN OPT /// Some of Ms. Megawati's critics continue to be wary of her close relationship with the military. She has come under criticism in recent weeks for backing a former general in the race for the post of governor of Indonesia's capital city, Jakarta. Governor Sutiyoso was in charge of the Jakarta military when it raided the offices of Ms. Megawati's political party in 1996 - killing at least five people. Indria Samego is an analyst at the Indonesian Institute of Sciences, a state-funded think tank. Mr. Samego says that by supporting General Sutiyoso, that Ms. Megawati damages her reformist image.

The issue may be on the legislative agenda in August.

/// END OPT ///

But Ms. Megawati has weathered other storms in her first year in office - particularly the issue of terrorism.

She came to power just seven weeks before the September 11th terrorist attacks on the United States changed the face of global politics. Ms. Megawati has so far successfully balanced her support for Washington's war on terror with her need to appease conservative Islamic parties at home which were against the United States' military action in Afghanistan. But analysts say Ms. Megawati must be more pro-active on reforms, if she wants to win re-election in Indonesia's next presidential race in 2004. (Signed)