Joko Widodo was inaugurated as Indonesia’s new president on Monday, facing the challenges of rebooting a slowing economy and working with a potentially hostile opposition that has already landed some early blows against his administration.
Mr Widodo, the first Indonesian president not to come from the ranks of the country’s established political, business and military elite, took the oath of office in a ceremony at parliament in the capital, Jakarta, attended by regional leaders and US Secretary of State John Kerry.
“To the fishermen, the workers, the farmers, the merchants, the meatball soup sellers, the hawkers, the drivers, the academics, the laborers, the soldiers, the police, the entrepreneurs and the professionals, I say let us all work hard, together, shoulder to shoulder, because this is a historic moment,” Mr Widodo, popularly known as “Jokowi,” said in his inauguration address.
He ended his speech with a shout of “Merdeka!” or “Freedom,” the independence-era rallying cry associated with the country’s founding president, Sukarno.
A former furniture salesman, the 53-year-old Mr Widodo rose from humble beginnings to become Jakarta’s governor before winning July’s presidential election with 53 percent of the vote. Polls showed most of his support came from lower-income, non-urban Indonesians attracted by his simple demeanor and record of honest, hard work.
Indonesia is the biggest economy in Southeast Asia, and about 90 percent of its 250 million people are Muslims, more than any other nation. After years of dictatorship, the country was convulsed by political, ethnic and religious unrest in the late 1990s and early 2000s. Since then, it has consolidated its democratic transition. While most of the country remains poor, it is home to a rapidly expanding middle class.
Outgoing President Susilo Bambang Yudhoyono’s two terms in office saw democratic consolidation and a focused fight against Islamist militancy. But economic growth on the back of a commodities boom has slowed, and a recovery is being hampered by weak infrastructure, rampant corruption and red tape.
Economic growth is currently around 5 percent, barely allowing enough jobs to be created. Mr Widodo is targeting 7 percent growth in the coming years. To get close to that, he will need bold reforms to attract foreign investment and favorable external conditions. A looming problem is expected hikes next year in what are record-low US interest rates, which could suck funds from the country, pressurizing the rupiah and spooking the markets.
Economists say Mr Widodo must soon make a decision on how much to cut subsidies on fuel that unless trimmed will cost the government a budget-busting $30 billion-plus this year. The move will likely stoke protests from political opponents and could trigger street demonstrations.