Susilo Bambang Yudhoyono: Act Two for Indonesia's President

Time/CNN, By Hannah Beech / Jakarta, Nov. 16, 2009

The one in charge - Indonesian President Yudhoyono says he intends to accelerate reform and promote transparency. Photograph for TIME by Kemal Jufri / Imaji

When traffic in Jakarta snarls to a stop — as it so often does in the Indonesian capital — swarms of peddlers besiege occupants of air-conditioned cars, offering up everything from roasted peanut to balloons. Lately, though, the street vendors have added another item to their eclectic wares: posters of the country's recently re-elected President Susilo Bambang Yudhoyono. The hawking of new merchandise in some of the world's worst gridlock is a fitting metaphor for a country that hopes to add a second I to the so-called BRIC emerging economies of Brazil, Russia, India and China. Just as SBY's second five-year term will draw to a close in 2014 — by which time he has vowed at least 7% economic growth, up from the 4.5% estimated for this year — urban planners fear that traffic in Jakarta will grind to a halt unless its transportation system is overhauled.

If anyone can keep Indonesia moving, it's the 60-year-old former army general who last month was sworn in for what, by law, is his final term. SBY, as he is commonly known in Indonesia, already made history in 2004 as the country's first directly elected President. In a nation where 14% of the country's 240 million citizens still live under the poverty line, SBY, who has a careful, consensus-driven leadership style, delivered one of the G-20's most impressive economic growth rates this year. His anticorruption drive, which landed even his own son's father-in-law in jail, drew plaudits in a country where graft often feels as omnipresent as urban smog. Little more than a decade after Indonesia emerged from dictatorship, SBY's peaceful re-election is proof that the world's most populous Muslim-majority nation can thrive as a stable democracy.

(Read "The 2009 TIME 100: Susilo Bambang Yudhoyono.")

The question now is what SBY will do with the overwhelming mandate he received from the Indonesian people in July. In his first foreign-media interview since his re-election, the President sounded the note of change: "Bureaucratic reform is one of my top priorities and so is combating corruption. If we achieve this, we can create a conducive climate for our economy to grow and our people to prosper." Dumping a marriage-of-convenience Vice President from his first term, SBY selected respected former central banker Boediono as his No. 2 this time around; despite political pressure, he has kept on Finance Minister Sri Mulyani Indrawati, whose commitment to cleaning up Indonesia's regulatory morass has delighted foreign investors even as it has irked some of the President's closest advisers, who didn't appreciate their own business interests coming under scrutiny. (In a further cleanup bid, SBY is instituting a pay raise for his Cabinet members "so they are not tempted by corruption.")

(See pictures of a deadly dam burst near Jakarta.)

But not all of the President's new Cabinet pleases reformists. During his first term, SBY's Democratic Party held just 7% of seats in parliament, and he had to stud his Cabinet with political appointees to ensure legislative support. Today, the Democrats control more than a quarter of parliamentary seats. Yet instead of increasing the number of technocrats in his second-term team, SBY doled out just as many party favors this time around, with more than half of Cabinet members political appointees. "There were high expectations that with the President's significant victory he had the mandate to choose better qualified and younger candidates for his Cabinet than last time and not be so dependent on political parties," says Hendardi, chairman of the Setara Institute, an NGO dealing with pluralism issues. "The reality is different and reflects his interest in protecting himself."

Of course, four-star generals don't get to the top without knowing how to look after themselves — and their charges. One of SBY's biggest priorities during his first term was overseeing a massive campaign to root out the Islamic militants who had conducted a series of deadly terror attacks since 2002. For four years, calm reigned in Indonesia. Yet just nine days after the President's re-election, fatal bombings at Jakarta hotels shattered any illusion that extremism had been eradicated. Raids on terror hideouts resulted in the killing of Noordin Top, the Malaysian militant who is believed to have orchestrated the bombings. But questions remain about how Southeast Asia's most wanted terrorist managed to crisscross Indonesia with ease for years — and whether the authorities did enough to try to nab him.

(Read "Facing the Enemy.")

The President will also have to redouble efforts to build, build, build. In 2005 and '06, SBY presided over glitzy infrastructure summits in which more than 100 projects were trumpeted. Yet little movement has occurred on any of these initiatives, which included badly needed transportation fixes. "I have to admit we faced many weaknesses at the time when we convened the infrastructure summits, including the readiness of the provinces," says SBY. "But this time around we are much better prepared." A concerted construction campaign will be needed if Indonesia is to reach SBY's ambitious 7%-plus growth targets. Southeast Asia's largest economy escaped the worst of the global financial crisis in part because its economy was girded by domestic demand, not an export-oriented strategy. Miles of new roads and sea links to better connect this far-flung archipelago will fire that internal growth engine. Otherwise, Indonesia's economy could slow to a crawl — and few commuters in Jakarta will be willing to spend their rupiah on posters of their smiling second-term President.

— with reporting by Jason Tedjasukmana / Jakarta

Read "What Indonesia's President Needs to Do."