JAKARTA - Three years and three presidents since the fall of President Suharto, the latest palace turnover is an important reminder that Indonesia's quest for democracy remains a work in progress.

Indonesia has replaced two autocratic chief executives with a gang of five party bosses, who control a largely unaccountable super-Parliament, the People's Consultative Assembly. Indonesians do not vote for individuals but for parties, which dance to the tune of their bosses.

The bosses recently traded in President Abdurrahman Wahid, who talked too much and never listened, for Megawati Sukarnoputri, daughter of the country's first president, who never talks and who, the gang of five expects, will listen. The makeup of her cabinet is encouraging, but it is not at all clear how stable the nation will become.

One institution that does provide stability is the military, the TNI. It is the most powerful organization in the nation, with a territorial structure reaching all the way to the remotest village. With the army as its backbone, it has been the glue that keeps this sprawling archipelago of 215 million people with diverse cultures from falling apart.

Under President Suharto, the military suppressed dissent and often acted as an instrument of repression, but it also has done some things well: resettling refugees, supplying disaster relief after floods and landslides, and putting down extremist actions. The armed forces could do even more if given training and responsibility for jobs that take advantage of their logistics and organizational skills, such as fighting forest fires and replanting trees. Army strategic reserves and special forces, well trained and disciplined, could be used as UN peacekeepers or peace enforcers.

What limits the TNI from becoming more accountable to its civilian bosses and more effective as a servant of the nation is that only 25 percent of its funds come from the defense budget. The rest is made up from the military's own business enterprises, both legal and crooked.

A former defense minister, Juwono Sudarsono, tells me that an estimated 65 percent of the revenues from these businesses is siphoned off. That leaves the average soldier with little choice but to go into "business" for himself: illegal logging or mining, smuggling, gambling, drugs, prostitution, extortion.

Unfortunately, the U.S. Congress has banned military aid and training to Indonesia until its armed forces introduce reforms and punish the officers responsible for the killings and mayhem that devastated East Timor after its vote for independence from Indonesia in 1999.

The result of Washington's shortsighted and one-dimensional thinking is that it now has little leverage to promote positive changes in the military. Yet providing assistance to redefine the role of the TNI is key to America's goal of helping to build democracy here.

Even José Ramos-Horta, East Timor's foreign minister and Nobel Peace Prize holder, supports Jakarta's request for resumption of U.S. supplies to the Indonesian military.

The Bush administration would like to renew ties and is asking Congress to approve limited contacts. That would allow Washington to help the TNI professionalize its legal businesses with regular audits, broad oversight and transparent reporting.

Then it should help Jakarta convert the military companies to state-owned enterprises. And finally, the central government should privatize these businesses and use the tax revenues to finance the military entirely through the defense budget.

America should work with Indonesia to create an elite coast guard. A maritime nation with 13,000-plus islands, Indonesia loses some $6 billion a year to illegal fishing, not to mention losses from piracy. A well-trained and equipped coast guard with high-speed patrol boats, air support and over-the-horizon radars could pay for itself with what it saves, and then some.

America could provide assistance in building a professional civil service within the Ministry of Defense. Few officials have training in planning, budgeting and administration. These are all steps leading to civilian control of the military.

Indonesia has greater geostrategic value than any other country in Southeast Asia. The world's biggest Muslim nation has been the moderate face of Islam. It can be a valuable counterweight to China, especially in the South China Sea. Nearly half of the world's commercial shipping goes through one of its key straits, as does the bulk of oil that Japan and South Korea import.

Egypt and Turkey are also large, strategically located, secular Muslim countries with miserable records of human rights abuses. Egypt, a police state backed by the army, gets $2 billion a year from America in military and economic assistance. Turkey, whose generals make or break the duly elected governments, gets America's military support as a valued partner in NATO. Indonesia gets American lectures.

The United States must balance its policy on human rights with its interest in having stable allies in strategic areas of the world. Here America can have it both ways. By helping Indonesia's military, it can help this nation to become the world's third largest democracy.

Stanley A. Weiss is founder and chairman of Business Executives for National Security. The views he expresses are his own.