Joko Widodo sworn in Monday as Indonesia's new president

JAKARTA, Indonesia -- Joko Widodo completed a journey from riverside shack to presidential palace on Monday, cheered through the streets following his inauguration by tens of thousands of ordinary Indonesians in a reminder to the opposition-controlled parliament of the strong grassroots support that swept him to power.

Outgoing Indonesian President Susilo Bambang Yudhoyono, right, walks with President-elect Joko Widodo upon arrival before a tour of the presidential palace Sunday in Jakarta, Indonesia. Widodo, popularly known as Jokowi, wasa inaugurated as the country’s new president Monday. (Adek Berry ~ Associated Press, pool)

The 53-year-old must make tough decisions, and soon, to stand a chance of boosting economic growth in Indonesia, a sprawling nation of 250 million people. Supporters have already expressed concerns any reforms he tries to enact could be blocked by a hostile opposition led by the Suharto-era general he defeated in July's election.

But those thoughts were put aside momentarily Monday when Widodo and his deputy traveled from the parliament building to the presidential palace in an organized public party, the first in the country's history following an inauguration. After a few miles, he left his car and took a horse and cart, flashing victory signs and shaking countless hands.

"To the fishermen, the workers, the farmers, the merchants, the meatball soup sellers, the hawkers, the drivers, the academics, the laborers, the soldiers, the police, the entrepreneurs and the professionals, I say let us all work hard, together, shoulder to shoulder, because this is a historic moment," Widodo said in his inauguration speech, witnessed by regional leaders and U.S. Secretary of State John Kerry.

Widodo, better known by his nickname of Jokowi, was elected with 53 percent of the vote, with most of his support coming from poor, nonurban Indonesians attracted by his simple demeanor and record of hard work as Jakarta governor.

The son of a furniture maker, he grew up in a rented bamboo shack on the banks of the river Kalianyar in Solo, a town on Java Island.

He is the first Indonesian leader not to come from the country's super rich, and often corrupt, political, business and military elite.

"I was moved by Jokowi's inauguration speech this morning, it was so beautiful," said Rukasih Wanti, standing under a blue umbrella with her two children waiting for the president. "He deserves to get the people's respect and a celebration the likes of which has never happened in the past."

Police estimated that 50,000 people attended the street party, which brought traffic to a standstill. Around twice that many attended an evening concert where Widodo made a speech and cut the top of a traditional cone of rice before returning to the palace for meetings with visiting leaders.

Indonesia is the biggest economy in Southeast Asia, and about 90 percent of its people are Muslims. After years of dictatorship, the country was convulsed by political, ethnic and religious unrest in the late 1990s and early 2000s. Since then, it has consolidated its democratic transition. While most of the country remains poor and inequality is rising, it is home to a rapidly expanding middle class.

Outgoing President Susilo Bambang Yudhoyono's two terms in office saw democratic consolidation and a focused fight against Islamist militancy. But economic growth on the back of a commodities boom has slowed, and a recovery is being hampered by weak infrastructure, rampant corruption and red tape.

Widodo is targeting 7 percent growth in the coming years. To get close to that, he will need bold reforms to attract foreign investment, as well as favorable external conditions. A looming problem is expected hikes next year in what are record-low U.S. interest rates, which could suck funds from the country, pressurizing the rupiah and spooking the markets.

Economists say Widodo must soon decide how much to cut subsidies on fuel that unless trimmed will cost the government a budget-busting $30 billion-plus this year. The move will likely stoke protests from political opponents and could trigger street demonstrations.

He also can expect resistance from opposition parties still smarting from the election defeat of their candidate, Prabowo Subianto. The coalition against Widodo already has captured most of the important positions in parliament and last month voted to end direct regional elections, a key plank of the country's democratic transition since Suharto was ousted in 1998.

Subianto attended Monday's inauguration ceremony and met with Widodo last week to offer qualified support for his administration.

Much uncertainty remains over how effective Widodo will be in negotiating with the opposition, and how much of a disruptive role it will play. Subianto's initial refusal to accept the election results and the comments of some of his supporters led to speculation among analysts that he would seek to topple Widodo midterm.

In his inauguration speech, Widodo pledged to maintain the country's "free and active" foreign policy, a stance that has seen it slowly taking up more of a leadership role in Southeast Asia. Working to stop the flow of foreign fighters to Iraq and Syria, managing relations with China and keeping often testy ties with Australia on an even keel will be key tasks.

"I'm very encouraged by everything that President Jokowi has said up until now. He's obviously a charismatic and inspirational figure," said Australian Prime Minister Tony Abbott, who flew to Jakarta for the ceremony. "I think there's a wave of confidence and renewal sweeping Indonesia right now."