Bareksa.com - Indonesian president Joko Widodo takes office today and despite a euphoric victory he faces a stiff opposition coalition that could hurt his ability to pass reforms, says Peter Thal Larsen.

(SOUNDBITE) (ENGLISH) REUTERS REPORTER, JON GORDON, SAYING:

"Indonesia's new president, Joko Widodo, taking office today Peter. It seems like he's going to kick off with those fuel subsidies right in his cross-hairs. How's he going to do that?"

(SOUNDBITE) (ENGLISH) ASIA EDITOR, REUTERS BREAKINGVIEWS, PETER THAL LARSEN, SAYING:

"Well actually, I mean this is one of the big tests that investors are looking for. And all the noises are that he is going to tackle those fuel subsidies in a fairly big way in the first couple of weeks of his presidency. He's going to do it basically just by removing the subsidies and actually now is a good time to do it because the oil price is coming down. So actually the pain for -- there will be some pain for people who use fuel in Indonesia and it's bound to be unpopular, but it might not be as great as it would otherwise have been. The question then really is whether Widodo can actually deliver on some of the other reforms that people are expecting and we think that will be harder."

(SOUNDBITE) (ENGLISH) REUTERS REPORTER, JON GORDON, SAYING:

"Well let's talk about that because he's obviously coming in to a rather unfriendly opposition coalition. I think this is first time in Indonesia's democratic history that the president doesn't have a majority going in. So how's that going to affect his ability to legislate?"

(SOUNDBITE) (ENGLISH) ASIA EDITOR, REUTERS BREAKINGVIEWS, PETER THAL LARSEN, SAYING:

"You're right; I mean that's really the big surprise actually about this situation. When Widodo was elected there was a big euphoric reaction. He then faced this challenge to his -- to the election, which he survived. And Indonesia's a fairly young democracy but historically the president has always managed to put together some sort of coalition in the parliament so that he or she was able to get things done in terms of passing legislation; and that's not the case now. Widodo has probably about 200 seats in the 500-and-something-odd seat parliament but he's facing quite a lot of opposition. Quite a strong opposition block who've expressed, at this stage anyway, determination to stop him from getting things done. And so that will really be the big question. Some of the other reforms that are needed, reforms about investing in infrastructure, in terms of sort of opening up to foreign investment perhaps, and changing education, those kind of more fundamental reforms will require parliamentary support and at this stage it's not entirely clear how he's going to be able to get that."

(SOUNDBITE) (ENGLISH) REUTERS REPORTER, JON GORDON, SAYING:

"Sounds like a very tricky situation indeed, many thanks Peter for that." (Reuters: Jon Gordon)