After he was sworn in Sunday for his second and final five-year term, Jokowi pledged to transform the Southeast Asian nation's economy and take actions against poverty and corruption. 

Jokowi opted for an austere ceremony at the heavily guarded parliament in Jakarta in contrast to the festive parade and horse-drawn carriage at his first inauguration. The president was sworn in with his new vice president, Ma'ruf Amin, one of the most important religious figures in the country.

Read more: Southeast Asia in the crosshairs of 'Islamic State'

After taking his oath before the Quran, the Muslim holy book, in front of lawmakers and foreign dignitaries, Jokowi set out ambitious targets to help Indonesia join the ranks of the world's developed nations by its centennial in 2045.

He said in his inauguration speech that he expects poverty — which afflicts close to 10% of Indonesia's nearly 270 million people — to be just about wiped out and the country's annual GDP to reach $7 trillion (€6.27 trillion) by then. "For those who are not serious, I'll be merciless. I would definitely fire people," Widodo warned.

To achieve his development goals, Jokowi said he would focus on human resource development, simplifying regulations and bureaucracy, as well as reconfiguring the economy from being reliant on natural resource production to a maker of high value-added goods.

'Innovative' cabinet?

Jokowi, 58, presents himself as a man of the people, often emphasizing his humble roots. He is the first president from outside the country's super rich and often corrupt political, business and military elite.

Over the last five years, Jokowi has been praised for his efforts to improve inadequate infrastructure and reduce poverty in Southeast Asia's largest economy.

On Monday, the president said he wanted "innovative" ministers in his cabinet for a second term. Nadiem Makarim, the co-founder of tech startup Gojek, a $10 billion unicorn, said he would join the cabinet, while a former chairman of Inter Milan soccer club was also tipped for a post.

Even opposition leader Prabowo Subianto said he had been asked by Jokowi to join the cabinet to help in the area of defense. The former general, who was defeated by Jokowi in April's presidential election after a bitter campaign, said he had accepted the invitation.

The makeup of the cabinet is important as it determines the president's ability to push through his reform agenda. Jokowi is expected to announce the cabinet lineup on Wednesday.

Growing radicalism

Indonesia, the world's largest Muslim-majority country with nearly 270 million people, has increasingly confronted security issues and terror threats over the past several years.

Days before the inauguration, on October 10, an Islamic militant couple carried out a knife attack against Jokowi's security minister Wiranto, who goes by one name. He suffered severe injuries and is currently being treated at a military hospital in Jakarta. The minister is said to be in a stable condition.

Wiranto's attacker was 31-year-old Syahril Alamsyah, a member of the terrorist organization Jamaah Ansharut Daulah (JAD), which is one of the many terrorist groups in the region that have pledged loyalty to "Islamic State" (IS). Since new anti-terrorism laws were introduced this year, hundreds have been detained.

Stanislaus Riyanta, a terrorism expert from the University of Indonesia, told DW that terror groups like JAD are now breaking into small cells — at the family and individual levels — to avoid being detected by authorities.

"This strategy should not be underestimated; in the form of small cells, they are even more deadly because the target becomes more selective and the cells' mobility is very high," said Stanislaus.

Religious radicalization has also been on the rise. Religious tolerance is supposed to be one of the five fundamental principles ("Pancasila") guiding the Indonesian state, but experts say this principle has been undermined in recent years.

Furthermore, observers point out that younger Indonesians are increasingly advocating for a conservative interpretation of Islam, which is leading to increasing Islamization of society.

Even Jokowi's running mate, 76-year-old Amin, was chairman of Majelis Ulama Indonesia, the country's council of Islamic leaders, and supreme leader of Nahdlatul Ulama, the world's largest Muslim organization. Amin has been criticized for being a vocal supporter and drafter of fatwas against religious minorities and the LGBT community.

Law enforcement issues

To spread radical thought, terror groups have targeted not only civilians, but also security institutions, Halili, a research director at the Jakarta-based NGO Setara Institute, told DW. "This is a very real danger," he said.

Indonesia's Defense Minister Ryamizard Ryacudu warned in July that about 3% of military personnel were exposed to radicalism. Experts have repeatedly called on the government to improve oversight mechanisms both within the civilian bureaucracy and security institutions.

During his first term in office, Jokowi drew a lot of criticism over his administration's law enforcement and human rights practices.

Muhammad Isnur, the head of advocacy at the Indonesian Legal Aid Foundation (YLBHI), criticized that the law was used to criminalize those fighting for their constitutional rights. The activist also stressed that Jokowi failed to fulfill his promise to resolve past human rights violations, noting that none of the perpetrators was brought to justice.

Puri Kencana Putri of Amnesty International Indonesia also denounced the free hand enjoyed by law enforcement authorities in the country, saying that excessive use of force by police occurs "also in normal situations."

Jokowi faces a multitude of stark economic and security challenges in his second term with no easy solutions, observers underlined, noting that how he tackles them will determine his legacy.