Widodo Sworn in as Indonesia President as Lineup Awaited

Former Jakarta governor Joko Widodo was sworn in as Indonesia’s seventh president, inheriting an economy growing at its slowest pace since 2009 that he has pledged to boost through reforms such as raising fuel prices.

Widodo, 53, abandoned his suit jacket, red tie and presidential limousine to break with tradition and ride in the midday heat down Jakarta’s main thoroughfare in a horse-drawn open carriage, surrounded by a crowd of thousands, to his new home at the palace. He was earlier inaugurated at the parliament, where he faces an opposition that holds the bulk of seats and may try to obstruct his policies for Southeast Asia’s largest economy.

“As the captain trusted by the people, I’m inviting all people of the nation to board the ship and sail ahead to a Great Indonesia,” Jokowi said as he was sworn in. “We will sail confronting all storms and ocean waves with our own power.”

“This is the time to return to Jalesveva Jayamahe,” he said, referring to the Indonesian Navy’s motto: “in the seas we will triumph”.

He’s expected to announce a new ministerial structure as soon as today, including a maritime department to improve sea logistics and trade in the world’s largest archipelago at a time nations in Southeast Asia face pressure from China over its territorial claims in the South China Sea.

Indonesia’s new leader must tackle a political elite split by a contested election outcome that overshadowed the transition from the decade-long rule of previous leader Susilo Bambang Yudhoyono, who called on everyone to support the new president. Investors are hoping Jokowi, like his Indian counterpart Narendra Modi, can take quick action, cutting red tape and subsidies that limit the government’s ability to build more infrastructure.

Rupiah Rise

“Jokowi brings the country to a new stage that leaves ties to the old power structure behind,” said Achmad Sukarsono, an associate fellow at The Habibie Center in Jakarta. “He has much to prove at the top.”

The rupiah rose 0.5 percent against the U.S. dollar by 2.10 p.m. in Jakarta, according to prices from local banks, having lost most of the gains made earlier this year that came on expectations Jokowi would easily win July’s election and deploy the can-do approach he was known for as Jakarta governor at a national level. Indonesian shares gained 0.8 percent.

Jokowi witnessed a short military welcoming ceremony at the palace, with a 21-gun salute, after which he praised the birds singing in the garden and Yudhoyono left the palace with his wife Ani. Jokowi then took part in a live videoconference with schoolchildren around the country.

The inauguration was watched by U.S. Secretary of State John Kerry, who is also meeting in Jakarta with regional leaders including Australian Prime Minister Tony Abbott and Malaysian Prime Minister Najib Razak to discuss challenges such as dealing with Islamic State militants, Ebola and maritime disputes.

High Expectations

“I hope this brings optimism and better Indonesia-Malaysia cooperation,” Najib told reporters after the ceremony.

Jokowi will set up a one-stop shop for investors to speed up business permits within six months, gradually cut fuel subsidies within three years, move tax collection online and prioritize maritime logistics and mass public transportation, he said in an interview with Bloomberg TV.

“Expectations were too high and should be managed,” he said in the interview last month, adding he envisioned a country with a self-reliant economy and national identity.

Jokowi, who likes to go on unscheduled walkabouts to chat with the public, joined a series of public events. He sat in the carriage with Vice President Jusuf Kalla in a parade of marching bands, stilt walkers and dancers. Yudhoyono, a former general, had suggested a military salute at the palace.

‘Very Grassroots’

“I’m so excited because this is the first time a president is being inaugurated in such a way -- it’s very grassroots,” said Elfrida, a 32-year-old from Jakarta who works at an IT company and voted for Jokowi. “We have to be a part of this history,” said Elfrida, who goes by one name.

Jokowi will later make a speech at a central square, ahead of a celebratory concert for the fan of heavy metal bands such as Metallica and Megadeth.

“I never dreamed to be a mayor, nor a governor, much less to be a president,” Jokowi said in an interview. “But the people decided and the people chose me. So I will work my best for my people. I will work day and night.”

Political Game

In the inauguration, he sat next to Yudhoyono and in remarks after the oath-taking referred to failed presidential candidate and opposition leader Prabowo Subianto as his partner and best friend.

As governor of the capital since 2012, he removed underperforming officials, lifted tax revenue and kickstarted a metro project. He wasted no time after winning 53 percent of July’s vote in setting up a transition team, some of whom are expected to form his cabinet, yet he has gone back on pledges to have a team of professionals as he tries to gain support from political parties.

“Jokowi is realizing the hard way that he cannot change the transactional habits overnight,” said Sukarsono. “He must communicate with the political powers, play the political game and compromise without abandoning his political principles.”

Cabinet Compromise

Proposals from within his party include Puan Maharani, the daughter of Megawati Soekarnoputri, the head of his Indonesian Democratic Party of Struggle or PDI-P, according to people familiar with the process who asked not to be named because the talks were private. Also in the running is Tjahjo Kumolo, secretary-general of PDI-P, and Rini Soemarno, the head of Jokowi’s transition team and another ally of Megawati, the people said.

Jokowi is expected to tap the heads of state-owned enterprises who he regards as businesspeople battling to improve the state, such as RJ Lino and Ignasius Jonan, the heads of the state port and railway companies respectively, the people said.

Jokowi will need to offer posts to opposition parties to try to break up the coalition of Prabowo, said Fauzi Ichsan, a finance adviser to his team. Jokowi said he will have up to 60 percent professionals and the rest will be politicians.

“Because of the political realities it’s that way,” Jokowi said in the interview. “It’s not possible to have all professionals.”

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