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Indonesia’s new president must tackle corruption, poverty.

Last month’s inauguration of President Joko “Jokowi” Widodo marked Indonesia’s first peaceful transition of power from one popularly elected leader to another. More remarkable for the young democracy was the background of the man who won.

Jokowi, 53, is a former furniture salesman who grew up in a riverside slum in central Java, Indonesia’s largest and most populous island. He’s the country’s first leader who was neither a part of one of its political dynasties nor a military officer. A charismatic former governor of Jakarta with a reputation for honesty in a country beset by corruption, Jokowi ran an extraordinarily well-organized and well-financed campaign—narrowly defeating a former general Prabowo Subianto. For many, Jokowi’s victory illustrates the achievements of Indonesia’s democratic transition since the fall of the Suharto military dictatorship in 1998.

“He’s seen as clean, as hard-working,” says Vibhanshu Shekhar, an Indonesia scholar at American University in Washington, D.C. “He’s relatively young and visionary.”

That said, Jokowi faces major challenges in improving economic growth in a country where more than 40 percent of the population lives on less than $2 a day, and where economic growth has slowed in the past two years after averaging nearly 6 percent per year since 2007. The culprit: falling prices for Indonesian export commodities caused by China’s slowing economy.

One priority will be tackling wasteful spending. Indonesia’s government spends more than $20 billion annually on fuel subsidies—about 20 percent of the state budget. That money could be better spent on health and infrastructure. With a metropolitan area of 28 million people and rush hour traffic of 9.9 million cars, Jakarta was ranked second-lowest in the region for ease of doing business and its infrastructure was recently rated as Southeast Asia’s worst by the International Monetary Fund.

Map produced by Anna Kowalska. Map source: National Geographic

Produced by Anna Kowalska. Source: National Geographic

“The incoming government would like to build infrastructure, building new seaports and fixing the traffic jams in Jakarta,” says Andreas Harsono, an Indonesia researcher for Human Rights Watch. “But cutting the oil subsidies will be very unpopular.

That’s particularly so given that many urban Indonesians spend as many as four hours a day commuting in their cars. Still, Jokowi’s advisers have hinted at raising fuel prices as much as $.50 per liter as early as this month, according to the Jakarta Post.

“Commodity-driven, turbo-charged growth for the last decade allowed the government in many ways to overlook some of the key structural problems economically…the wasteful spending on fuel subsidies, the lack of spending and investment in healthcare, education and infrastructure,” says Ben Bland, a reporter for the Financial Times based in Jakarta. “There was a commodity boom and these key issues were ignored.”

Tackling corruption is also a priority. Indonesia ranks 114th out of 175 countries on Transparency International’s Corruption Perceptions Index, behind Mexico, Ethiopia and Tanzania. Harsono recounts a story from a popular Indonesian essayist who noticed that every morning officers at a police station would hang out lines of wet paper rupiahs to dry.

“It turns out that all this money came from truck drivers who have to bribe the police,” says Harsono. “But before they bribe the police they spit on the money so of course the money is dirty and has to be rinsed.”

A third challenge will be improving relations with Indonesia’s religious minorities. Under Susilo Bambang Yudhoyono, who became Indonesia’s first directly-elected president in 2004, the government shifted its policy from ensuring religious freedom to promoting “religious harmony.

Produced by Anna Kowalska. Source: Bloomberg

Produced by Anna Kowalska. Source: Bloomberg

Despite the policy’s name, Harsono says the institutionalization of this idea led to the expansion of blasphemy laws, including harsh restrictions on the building of churches and Shi’ite mosques and turning a blind eye to attacks on minority religious groups.

“The question is if Jokowi will spend political capital to undo what Yudhoyono had done,” Harsono says. “Will he review discriminatory regulations? Will he spend money and political capital to fire thousands of [government religious] officials? We’ll have to wait and see.”

To carry out any of these initiatives, Jokowi will need parliament’s approval. Unfortunately for the new president, the legislative body is controlled by a coalition led by Prabowo Subianto—the man he defeated in July’s bitter presidential election.

In the weeks before Jokowi’s inauguration, the legislature rushed to push bills that will not only restrict Jokowi’s capability to rule but limit his brand of popular politics. One of the most egregious new laws ended direct elections for village heads, mayors and governors. That’s a blow for a candidate whose own rise was fuelled by his popularity with Indonesia’s people rather than its political power-brokers.

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