New President Yudhoyono Faces Difficult Tasks

On Wednesday Susilo Bambang Yudhoyono was inaugurated as Indonesia's first ever directly elected president. In the world's largest Muslim country, he was delivered a massive mandate. Marianne Kearney reports

Over 600 mostly newly elected members of Indonesia's highest political body watched Wednesday as Yudhoyono swore before god, and the people of Indonesia, that he would carry out his presidential duties to the best of his abilities.

"In the name of Allah the most merciful, as elected president I swear to carry out my constitutional duties. In front of Allah I swear I will fulfil my role as president of Indonesia in the most just and best way possible, I swear this to the nation and people of Indonesia."

The event was witnessed by several heads of state including Australian Prime Minister John Howard, Malaysia's new Prime Minister Abdullah Badawi, Singapore's new Prime Minister Lee Hsien Loong and Mari Alkatiri, the Prime Minister of East Timor.

The one significant no show was the outgoing president Megawati – who still appears to be feel betrayed by Yudhoyono's decision to run against her.

In a moving speech at the palace several hours later Yudhoyono, thanked Indonesians for their support, he thanked Ms Megawati and promised to improve the economy, fight corruption and work together to overcome Indonesia's enormous problems.

"This is a time for unity a time for change and for hard work," Yudhoyono said. "But we can't deal with these problems facing our nation and our people without the participation and support of the Indonesian people. I promise to continue the reformasi agenda."

High unemployment rates and the threat of terrorism

With 40 percent of the population unemployed, foreign investment declining, and much of the country living below the poverty line and an ongoing threat of terrorism, Yudhoyono warned that solving such problems wouldn't happen quickly.

Indonesians hope he will shake up Indonesia's lagging economy and clean up the rampant corruption, which makes Indonesia Asia's most corrupt country.

But with Yudhoyono's democrat party controlling less than 10 percent of seats in parliament, the president will need to move cautiously as first says economic analyst Fauzi Ichsan.

"In next 100 days he may want to consolidate his political base first, trying to win allies in parliament, especially from big political parties, PDI and Golkar," said Ichsan. "Once he is sure his reforms will not be blocked in parliament then he could start introducing serious reforms, maybe at the beginning of next year."

Evaluating the performance of the cabinet

But Yudhoyono has made a good start by promising to fill his cabinet with clean professionals, rather ministers from than from the ranks of political parties.

He has spent most of the last week interviewing his potential cabinet members and demanded they swear to be honest. He has even vowed to review each minister's performance annually.

Markets have rallied and both foreign and domestic businesses say they are hopeful Yudhoyono will be able to attract sorely needed foreign investment. But this too is no easy task says Ichsan.

"When we talk about foreign investment we need to look at four struggling blocks to improving investment climate; these are legal certainty or corruption, implementation of regional autonomy, labour issues, and the fourth one would be infrastructure," says Ichsan. "And to tackle these issues Yudhoyono needs, most of all, political allies."

Several key posts closely watched by both foreign and domestic observers will be his economic ministers, and his attorney general.

The choice of capable clean candidates in these posts will send a strong message about whether he will really be able to make a radical change from the previous government and begin to attack Indonesia's rampant corruption and underperforming economy.

Marianne Kearney