Challenges await new Indonesian leader

Many would have felt upbeat had the Indonesian presidential election produced a result beyond dispute as an overflowing national agenda awaits, while coalition Cabinet formation can be a disruptive test of consensus politics. The polarising race has seen both candidates, Mr Joko Widodo and Mr Prabowo Subianto, claiming victory based on unofficial results. A legal challenge is even likely if the Elections Commission's official result, coming out in two weeks, is close.

Once the dust has settled, Indonesians must be able to set aside differences and focus on the promise of a better future. This is a delicate phase that will test the nation's political maturity. The Indonesian people have reason to be proud of the democratisation their country has undergone without incident after the end of the Suharto era. They have reacted responsibly so far to the closely fought contest, taking their cue from the two candidates, who are aware that excessive displays of emotion from supporters would taint their administration, whoever is proclaimed the winner.

Setting the right tone matters as the new president will not have an easy time getting his legislative programme through Parliament without coalition building. Mr Joko's party, the Indonesian Democratic Party - Struggle, did not live up to the dominance predicted in the April parliamentary elections. This goes to the heart of operative governance in Indonesia as provincial decentralisation requires the centre to exert firm control.

If it eventuates that the old establishment Golkar party switches its support to Mr Joko's camp in Parliament, should he be declared the winner, the new government's hand will be strengthened immeasurably in making tough choices, such as on fuel subsidies.

Cutting subsidies to reduce fiscal drag is an article of faith in International Monetary Fund prescriptions for struggling economies that seek its financing support. Indonesia is well past that stage, and big things are being forecast for a resource-rich economy which aims to grow at about 7 per cent annually in coming years.

A commitment by the new president to wean the people off price distortions - and to be prepared to face down street protests and inflation - will be a defining moment in economic reform.

Diverting billions from state coffers to infrastructure building and promoting health and education will be next, to be supplemented by foreign money when restrictions and outright prohibitions in certain sectors are eased. Foreigners and Indonesia's own financiers are bracing themselves for a signal from the next president that all systems are go.