Yudhoyono sworn in on tide of optimism

Susilo Bambang Yudhoyono, Indonesia’s president, promised in his second term inauguration speech on Tuesday that his priorities in his final five years in office would be to stimulate the economy, strengthen democracy and uphold justice.

But the former general, who took the oath of office at a meeting of the country’s highest legislative body, the People’s Consultative Assembly, warned that progress could not be taken for granted in a world blighted by economic crisis, climate change and poverty.

Indonesia has largely escaped the ravages of the global financial crisis due to its strong domestic demand, tiny exposure to the subprime mortgage crisis, and relatively small reliance on exports. Its economy is expected to grow about 4.2 per cent this year, the third-best performer among major economies after China and India.

International investors are starting to pay increasing attention to south-east Asia’s largest economy. Its stock market is up 85.5 per cent so far this year.

Mr Yudhoyono, 60, who was re-elected after winning 60 per cent of the vote in a three-way race, projected an overall tone of cautious optimism. He said that while the country’s progress over the last 10 years warranted the title “remarkable Indonesia”, the nation “mustn’t become careless or big-headed”.

“Remember, our heavy work remains unfinished,” he said. “It’s like the voyage of a ship across an ocean that is beset with large waves and storms.”

Mr Yudhoyono, who has a PhD in agricultural economics, said he would boost the economy by maximising Indonesia’s competitive advantages, careful management of its extensive natural resources and increasing the capacity of its workforce.

But he stressed he would seek to ensure growth is inclusive, fair and equal. His new vice president, Boediono, who was also sworn in at the same ceremony, is a widely respected non-party political economist.

Unlike his speeches during the election campaign, the president conspicuously made little mention of Indonesia’s weaknesses that analysts cite as brakes on growth. These include crumbling infrastructure, endemic corruption, extensive red tape and a weak and uncertain legal system.

Mr Yudhoyono is expected to be able to govern more effectively than in his first term because his Democrat Party is now the largest in parliament and his coalition controls 423 of the 560 legislative seats.

He also promised that the world’s largest Muslim-majority country would play a “free and active” international role. Indonesia would have an “all directions foreign policy” with “a million friends and zero enemies”.

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