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You heard it here first. Two years ago, I predicted in this column (Hope amidst the madness Sept 29, 2012) that Joko Widodo, the then newly-elected governor of Jakarta, was poised to become the next president of Indonesia.

On Oct 20, that prediction came true as Widodo — better known as Jokowi — became the leader of the world’s most populous Muslim majority country, fourth largest democracy and an impressive Asian economic power house.

In 2012, I remember coming back from a long study tour in Indonesia where practically everyone I met had waxed lyrical about the governor of Jakarta. I was intrigued — and then I was convinced. Jokowi is special.

Jokowi and Indonesia matter. They matter to Indonesia’s 250 million citizens, to the wider south-east Asian region — and also to an increasingly chaotic and depressingly violent Muslim world.

Much has been written about Indonesia’s new head of state: by all accounts, he is low-key, soft-spoken, dedicated, hard-working and, in a country once ruled by the army and an unsavoury elite, he is “a man truly of the people”.

He is therefore an unusual and outstanding political phenomenon. His origins are modest. He was drawn to politics late in life. In a country where family and background counts, he breaks the rules by having no army or political family connections.

Comparisons have been made to US President Barack Obama. Both men emerged “out of nowhere” to lead their nations, caught the popular imagination by breaking with the past, reached out to young people and brought a message of change and hope to a tired nation.

Look carefully, and the two men even share a striking physical resemblance.

As Jokowi takes power, there are concerns that he may also run afoul of an old guard which is reluctant to cede power and privilege to a less skilful and less experienced political newcomer.

But there is a difference. Obama heads an economy which is just beginning to sputter to life after years of stagnation. America is desperate to look inwards even as it is pulled screaming and kicking into new military adventures. Public support for Obama is eroding fast.

Jokowi, in contrast, has become the leader of one of Asia’s most exciting countries and dynamic economies. Indonesia still faces an array of political, economic and societal challenges — and none of these will disappear under the new president’s watch.

Significantly, what happens in Indonesia will not just stay in Indonesia — it will have strong repercussions across the country itself, the 10-member Association of South-east Asian Nations (Asean) and a curious Muslim world.

Jokowi’s election is hopefully a fatal blow to the old-style politicians like Prabowo Subianto — a former general once married to the daughter of Indonesian dictator Suharto — who was also a candidate for president and refused at first to acknowledge defeat.

In a region not noted for its espousal of democratic values and human rights, Indonesia stands out for having successfully ensured the transfer of power from one elected president to another.

For many years, Indonesia has engaged in a massive soft power exercise of trying to export democracy to neighbouring nations, including Myanmar. Jakarta has taken the lead in trying to inject some real “people power” into Asean.

Finally, Jokowi offers welcome relief in a Muslim world dominated by dictators, monarchs and unsavoury politicians.

Still, it won’t be easy. Jokowi may have claimed the presidency, but he does not have a majority in parliament which last month controversially blocked the direct election of governors, mayors and district chiefs, a move which could prevent the rise of figures outside the political establishment, like Jokowi. The law is expected to be repealed — but it signals the tough political battle ahead for the new president.

It’s been a good few years for the Indonesian economy — but growth is slowing down as the commodity boom wanes and exports decline. The government is under pressure to cut its generous fuel subsidies, a move which could spark civil unrest.

Indonesia has not suffered a major terrorist strike since 2009 when a pair of luxury Jakarta hotels were targeted by suicide bombers but its brand of moderate and tolerant Islam is under threat from extremist forces. The country is trying hard to fight the spread of Wahabi Islam. Fighting corruption remains a challenge across the country.

Most significantly, the new president faces the challenge of distancing himself from Megawati Sukarnoputri, a one-time president of the Indonesia and the daughter of the country’s first post-independence president, Sukarno.

As chairwoman of the Indonesian Democratic Party of Struggle (PDI-P), which put up Jokowi as presidential candidate, Megawati still wields enormous influence and has used it to determine the members of the new president’s cabinet.

Indonesian newspapers warn that the new government is the result of compromises between Jokowi and Megawati and that contrary to expectations that the new president would appoint a team of technocrats, at least 21 ministers in the 34-member cabinet are either representatives of political parties or have links to political figures.

Most damagingly, is the inclusion of Puan Maharani, Megawati’s daughter as a coordinating minister for human resources development and culture.“We can only imagine that the shoe is too big for her,” warned the Jakarta Post.

“We are disappointed because we had high expectations,” the newspaper warned. However, there is praise for the appointment of eight female ministers, including the country’s first-ever woman foreign minister, Retno Marsudi.

As I said in an earlier column, the world needs an inspirational, forward-looking Indonesia which stands proudly for pluralism, human rights, civil society and reform in a world where these values are in short supply.

Friends of Indonesia are hoping they can continue to engage with a country which can fulfil its role as a modern and promising 21st century power. And they are watching Jokowi.