The World Bank says choking smog and filthy water are threatening lives and the economy in Indonesia. For years the environment was a low priority for the Jakarta government.
The new World Bank report says Indonesia faces heavy financial and health costs from its massive environmental problems.
The threats range from diesel exhaust and unchecked forest fires fouling the air to untreated waste poisoning the water.
The report's lead author, Tom Walton, says the lack of sewage systems in Indonesia's teeming cities is particularly worrisome. He says the situation is bad, even by developing-world standards.
"Certainly less than two percent of the population of Jakarta is served by sewers compared to Mumbai at 75 percent," Mr. Walton said.
Mr. Walton said that under the former government of President Suharto, sewage systems were a low priority, creating a backlog of need that continues today.
He says the dangerously polluted water leads to ailments such as diarrhea, the number one killer of Indonesian infants.
The World Bank is calling for the government to tackle the country's rampant air pollution. The report says Indonesia has delayed phasing out diesel fuel and has done little to curb smoke from forest fires and from burning garbage.
Mr. Walton says the Indonesian environment ministry recognizes the problem, and has even offered to work with the World Bank in preparing next year's report.
But he adds that the rest of the government seems unwilling to face up to the mounting crisis.
"I would say the minister of environment is as frustrated as I am, but the rest of the government is not pulling together behind environment as a high priority," Mr. Walton said.
The pollution problem takes a heavy financial toll. The World Bank estimates that air pollution alone costs Indonesia $400 million each year, mostly because of increased health costs.