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Indonesia's Widodo faces huge reform challenge

After his resounding victory in Indonesia's presidential race, Jakarta governor Joko Widodo now faces the daunting task of taking the world's third-biggest democracy forward as resistance to reform lingers.

JAKARTA: After his resounding victory in Indonesia's presidential race, Jakarta governor Joko Widodo now faces the daunting task of taking the world's third-biggest democracy forward as resistance to reform lingers.

The softly-spoken former furniture exporter was declared Indonesia's next president by election officials on Tuesday (July 22), and although his rival, Prabowo Subianto, is contesting the result in court, Widodo is widely expected to prevail.

He is the country's first president to come from outside the political and military elite, and millions are eager to see him deliver on promised reform. The challenges are enormous: Indonesia's public service is dogged by corruption and tangled in a web of bureaucracy. Around half the population of 250 million people are poor, while persistent weaknesses in the economy threaten growth.

"I'm not going to sugar-coat it, it will be a really difficult job," Indonesian Defence University's Yohanes Sulaiman told AFP. "He will have to cut fuel subsidies and red tape -- a lot of people have financially benefited from red tape for a long time."

Widodo has pledged to eventually scrap energy subsidies that eat 20 per cent of the state budget. Cutting subsidies is politically sensitive, and has met with fierce resistance from the masses and opportunistic opposition parties.

Prabowo's coalition has more seats in parliament than Widodo's, and even though some parties may jump ship in coming weeks, pushing legislation through will be an ongoing challenge.

"The parliament is very hostile -- if Jokowi wants good government, he would have to imprison half the lawmakers. He could easily be blocked by them," Sulaiman said, referring to Widodo by his widely used nickname.

Resistance could also come from within Widodo's own Indonesian Democratic Party of Struggle (PDI-P), known to be split down several lines.

Legions of PDI-P members are loyal to Puan Maharani, daughter of former president and party leader Megawati Sukarnoputri and granddaughter of Indonesia's first president, Sukarno.

Some have painted Megawati as Widodo's puppet master, raising fears among those who remember her 2001-04 presidency as aloof and indecisive as militancy and corruption flourished.

Indonesia's economy has begun to bounce back after a woeful 2013 -- when the rupiah dived, inflation soared and the current account hit a record deficit -- but fundamental weaknesses are still hampering growth, economists say.

"It's a huge challenge because of two things. First we're too dependent on commodity exports, we need to ramp up our non-commodity export base," Kenny Soejatman, portfolio manager at Manulife Asset Management Indonesia, told AFP. "Second, we're facing competition from other emerging countries. We're facing a weakening global economy and wage pressures. We need to improve our human capital and infrastructure to improve competitiveness."

To make good on some of his economic policies, Widodo will have to better engage the labour unions, according to University of Sydney's Michele Ford.

In the campaign period, Prabowo had the support of major unions that have been able to mobilise millions of protesters and last year spearheaded the huge wage hikes that hurt Indonesia's competitiveness in manufacturing.

"If Widodo can bring unions into the fold, he has a much better chance of being able implement the reform agenda," Ford said.

"Take his plan to cut the fuel subsidy. This will be deeply unpopular with workers," she said, adding he would need to work out trade-offs with unions to avoid massive protests.

But what tens of millions of poor Indonesians are hoping for is a sturdier social safety net.  Widodo has promised to upscale his popular Jakarta health and education card programme to the national level. In the capital, residents received cards that guaranteed free medical treatment and schooling.

Widodo was commended for the smooth distribution of the cards, but many complained of bed shortages and long waits in hospitals that were overwhelmed with patients.

Giving all children an education will also require more than cards. Schools around the country are grossly underfunded. Buildings have collapsed and even killed students in recent years, while teachers often refuse to work, complaining of unpaid wages.

His first challenge may be keeping the people's hopes in check -- millions are betting on Widodo's fresh man-of-the-people approach to work wonders.

"Managing those expectations in the early weeks and months will be vital for Widodo if he is to bring the country with him," Ford said.

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