From clearing out slums and reviving the long-stalled monorail and subway public transport projects, he has shown he is committed to improving infrastructure. Analysts are confident that he will deliver on his promises to build 2,000 km of new roads and 10 seaports.
He is expected to do this by cutting the oil subsidy and channelling the savings to infrastructure spending as well as by increased private investment. Indonesia is expected to spend around IDR285trn ($25bn) on oil subsidies in 2014, comprising more than 15% of its budget. Last year, subsidies cost around IDR240trn, outpacing planned infrastructure spending of IDR200trn.
There is much to do after years of neglect and Widodo has shown that he is willing to go down the private investment route with the monorail project being financed by the private sector, while the subway project is a public-private partnership backed by Japan.
The other key issue that investors particularly in the shipping and commodities industries will be anxiously looking for guidance on is Indonesia’s ban on ore exports.
According to Australia & New Zealand Banking Group this will probably remain in place and speculation that the curb may be relaxed if Widodo becomes the country’s next president is misplaced.
Although he is perceived as being more market-friendly, and there has been speculation that Widodo will lift or loosen the ban, this seems unlikely ANZ's analysts said.
They cited reasons such as the substantial upside to revenue, and the fact that the policy seems to be achieving its intended aim of encouraging investment in processing facilities in the six months that it's been in effect.
Furthermore, Widodo's running mate Jusuf Kalla has specifically said during the campaign that he would keep the ore export ban. His government would seek to boost exports of processed minerals rather than raw ores, according to a party policy document.
However, getting things done in Indonesia is never that simple. Coalition governments are common and the desired end result not as straightforward to achieve. Parliamentary elections in April saw Widodo’s Indonesian Democratic Party of Struggle (PDI-P) winning 19% of the vote, short of the 25% threshold and meaning that a coalition needed to be formed.
Some analysts have warned against placing too much hope in Widodo as the ideal of a charismatic, pro-Western, free-market liberalizer with the nationwide support base necessary to implement reforms decisively. As the lacklustre second term of his predecessor Susilo Bambang Yudhoyono showed, with his party not in a dominant position in parliament, legislative deadlock could block progress.
When it comes to the formulation of policy and practical outcomes, the necessity of coalition building to get bills through the Indonesian parliament means Indonesia’s political process is all about compromise, consensus, and especially behind the scenes horse trading.
This however provides little comfort to investors planning on future investments for business in Indonesia. Recent statements show the trend in port development has been to support the container trade of modern commerce. This is in line with Indonesia's aim of moving up the value chain and will be compatible with higher processing of ores and other raw materials.
Whether this will lead to the quick demise of some of the minor bulk trades that have thrived off Indonesia's commodities exports for so long is unclear. That there is a trend towards modernisation and all that means for the logistics business is clear. How fast it happens and how many bumps there will be along the way remains to be seen in the theatre that is Indonesian politics.
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