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lthough the official results are still outstanding, quick counts indicate Joko '€œJokowi'€ Widodo will be Indonesia'€™s next president. Getting elected, however, is likely to prove an easier task than the one that now confronts him. Like India'€™s new Prime Minister Narendra Modi, Jokowi'€™s electoral victory represents a break with the past. He came from outside the traditional political elite and both financial markets and the Indonesian public have high expectations.

Moreover, he inherits an economy struggling with numerous cyclical and structural challenges. Tackling these issues will not be an easy task given Democratic Party of Struggle'€™s (PDI-P) more limited control over parliament, but addressing them is crucial if Indonesia is live up to its economic potential.

During President Susilo Bambang Yudhoyono'€™s second term Indonesian policymaking was on autopilot. Politicians spoke of grand infrastructure plans that would boost incomes and growth, but when push came to shove, tough decisions were often eschewed. Loose global monetary conditions papered over the cracks for a time, but became less forgiving amid the taper tantrum in mid-2013.

Politicians'€™ inaction forced Bank Indonesia (BI) to shoulder the burden of bringing the economy back to a more sustainable footing. Arguably, if reform momentum had not stalled, the scale of rupiah depreciation and BI interest rate hikes (175 basis points thus far) could have been less severe.

Although an important part of government architecture, BI operates with a shorter time horizon, usually 12-24 months. Their primary task is to manage the economic cycle by ensuring scarce capital resources are appropriately priced and allocated.

In essence, BI deals with the current equilibrium and calibrates policy to ensure short-term shocks do not derail longer-term economic prospects. With the current account deficit narrowing gradually on a trend basis and foreign exchange reserves rising, BI would appear to have restored this balance, at least for the moment.

It is important to remember that a current account deficit is not necessarily a bad thing, especially for a lower-middle income economy like Indonesia. Rather, it is helpful if these deficits are financed by stable forms of capital inflows like foreign direct investment (FDI).

Thanks to the commodity super-cycle, Indonesia had little trouble attracting FDI over the last decade. With China'€™s economy now entering a structural slowdown and substantial mineral supply about to come on stream, Indonesia will need to diversify the type of FDI it attracts.

Undoubtedly, Indonesia'€™s vast domestic market and growing middle class remains a tantalizing prospect for investors, be they foreign or domestic. Yet, tapping into this consumer base can be difficult under Indonesia'€™s current investment climate.

The World Bank'€™s latest Ease of Doing Business report ranks Indonesia 120th out of 189 countries, down 4 places from 2013. As this is a relative ranking it does not mean the business environment has deteriorated (it has not), but it does signal Indonesia is falling behind its competitors.

Already FDI inflows show signs of stagnation, albeit at a relatively high level (2.3 percent of GDP). Stumbling inflows to the more labor-intensive manufacturing and services sectors are a particular concern given the employment needs of Indonesia'€™s young population. Consequently, averting a sustained decline in FDI is one among the laundry list of Jokowi'€™s objectives. Clearly, toning down nationalist rhetoric and protectionist measures surrounding the mining sector would ease uncertainty and bring welcome relief to foreign investors.

That said, China'€™s economic history shows foreign ownership restrictions are not always a deterrent. More critical is providing adequate infrastructure, a flexible labor market and streamlined bureaucratic procedures conducive to investment.

Though Jokowi'€™s populist tendencies make meaningful labor market reform unlikely, his track record of administrative reform while mayor of Surakarta and Jakarta Governor shows he understands the need to improve the investment climate.

Translating his normal tactics to the national stage, however, may be difficult as unannounced visits are likely to be more difficult to engineer and less effective.

Instead, Jokowi must delegate supervision of the reform process to his cabinet. In that light, his campaign promise of a competency-based cabinet is positive. Yet, it will require him to build and maintain sufficient political capital to defend key cabinet members from an inevitable attack while showing zero tolerance of corruption.

If successful, such administrative reform would enhance policy credibility and bring more economic activity into the formal sector, making it taxable and potentially raising public sector saving.

Broadening the revenue base will be the greatest challenge for the next administration and essential if Indonesia is to capitalize on its economic potential and tackle Indonesia'€™s gaping infrastructure deficit.

Clearly, following through on his election proposal to raise subsidized fuel prices by Rp 1,000 (US$ 0.086) per year would boost budgetary flexibility and provide greater certainty over the inflation outlook.

Yet, current policy settings and economic trends point to a structural rise in public debt toward 30 percent of GDP. Without a broader revenue base, concerns around fiscal liquidity will rise and risking the prospect of negative action on the sovereign credit rating.

In addition to creating fiscal space for greater investment, raising public sector saving aids the development of Indonesia'€™s fledgling capital markets. Currently, the pool of onshore financial resources is limited, reflecting a history of weak monetary policy credibility and poor governance.

Consequently, despite a seemingly modest loss of fiscal discipline, the government'€™s desire to reduce foreign currency borrowings has crowded out private sector access to onshore capital. Foreign capital, in the form of non-resident participation, has offset but also heightened exposure to shifts in global sentiment and liquidity conditions.

By restoring fiscal discipline and policy credibility residents'€™ wealth kept offshore could be lured home, supporting domestic capital market development and sustaining the structural decline of onshore borrowing costs over the last decade.

Indonesia'€™s economy is no longer broken, but it is by no means fixed. Jokowi faces an arduous task; one that can only be achieved by re-igniting economic reform and retaining the support of foreign investors. With global liquidity set to tighten, time is short and avoiding difficult decisions is less acceptable. Let us hope he lives up to the hype.

The writer is ASEAN economist at BNP Paribas. This is a personal view