Indonesian President Megawati Sukarnoputri has defended her first year in power, arguing that stability in the disparate archipelago has improved.

We... feel a change toward the improvement of many areas... It's clear we are not stagnating

Indonesian President Megawati Sukarnoputri

President Megawati presented a progress report to the country's highest constitutional body, the People's Consultative Assembly (MPR).

She also asked people to be patient as the country implemented hard financial reforms agreed with the International Monetary Fund.

But she stressed that the threat of national disintegration that has "shadowed" Indonesia for several years had passed.

She added that the government would be taking stronger action against separatist rebels in the north Sumatran state of Aceh.

No pain, no gain

President Megawati, responding to critics of the IMF's role in economic policy, said that Indonesia must work with the IMF if it is to win investor confidence.

In her first public statement on the controversial issue, Megawati said the IMF's stringent demands would be beneficial over time.

"We have to be realistic in that there is no instant and quick solution for the complex problems we are facing now."

One of those problems involves the separatist guerrillas of the Free Aceh Movement (GAM), which Megawati accused of a range of "terror acts".

Tackling Aceh

The cabinet is schedule to discuss new policies on Aceh on Monday, including whether a military emergency should be imposed in the troubled province.

The government is considering a four-step approach which would begin with restoring security and culminate in talks, on condition that GAM accepts Jakarta's limited autonomy for Aceh.

The law gives the province a greater share of its oil and gas revenue and allows the implementation of Islamic law but does not allow independence.

The MPR's 10-day meeting is also set to debate important political changes, including a constitutional amendment to allow direct presidential elections for the first time in the country's history.

People's Consultative Assembly (MPR)

500 MPs 200 appointees Meets every five years Votes for president and vice president Approves national policy

The proposed changes have been hotly debated for months.

Amien Rais, Assembly Chairman, said: "I am quite sure this session will finally pass all the amendments to the constitution. I think all issues have been agreed upon by almost all factions."

An amendment was passed last year to allow the people to elect a president, but a clause stated that if the winning candidate did not get more than 50% of the vote, the final choice rested with the MPR.

Now, the MPR is debating scrapping that clause.

If the changes are approved, the MPR is also likely to be reorganised, with a stipulation that all members are elected.

That means the block of 38 seats reserved for the military and police would be abolished, ending the armed forces' role in Indonesian politics.