Indonesia’s new reformist leader

Joko Widodo has been declared the winner of the presidential election by Indonesia’s election commission. The former salesman, who went on to become a successful governor of the capital Jakarta, won 53% of the vote, becoming the fifth president since the country embraced democracy in 1998.

His opponent, Prabowo Subianto, plans to mount a challenge, but isn’t expected to get far, as independent observers were satisfied the vote was fair. Widodo will take over in October.

What the commentators said

Widodo has a tricky task: moving growth up a notch even as demand for Indonesia’s commodities has slipped and the tide of Western money that flowed into emerging markets in recent years is set to recede. Indonesia spends too much – around a fifth of the budget – on subsidising fuel; corruption is endemic.

Taking a stand on subsidies will be key, said William Pesek on Bloombergview.com. If Widodo can push through a timetable for their removal, he would not only free up money for spending on infrastructure, but also unlock foreign investment in it, as it will be clear that Indonesia is no longer wasting money but is “open for business”. “Subsidy roll-backs are [also] a litmus test for attacking graft.”

These programmes are “the ultimate cookie jar for wayward politicians”, who divert at least $21bn a year from fuel subsidies alone. But he could struggle, warned Ben Bland in the FT. His coalition has only 37% of the seats in parliament, and his own party was “lukewarm” about his run for president.

His lack of experience on the national stage could also hamper his attempt to give Indonesia’s $900bn economy the kick it needs.

Merryn

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