Inside Pakistan’s palatial Presidential House – before a crowd that included the country’s all-powerful army chief, top businessmen, cricket stars and a first lady in a white silk abaya robe – Imran Khan, former cricket captain, was sworn in yesterday as Pakistan’s prime minister.

The ceremony was a simple affair by Pakistan’s opulent standards, with just tea served instead of a set nine-dish menu – a first show of austerity by a leader who has promised to create millions of jobs and turn the prime minister’s sprawling official residence into an education facility instead of living in it. It was also the apogee of the political career of the sportsman-turned-politician who has spent the past 22 years prowling the margins of Pakistani politics and railing against the country’s corrupt, dynastic politicians.

Khan led Pakistan to victory in the 1992 Cricket World Cup, and built a world-class cancer hospital – but he has never held public office. Among his top challenges will be resolving a currency crisis that will require an International Monetary Fund bailout, and consolidating hard-won gains against a 15-year Islamist insurgency. Khan also comes to power at a time when ties with on-off ally the United States and neighbours India and Afghanistan are particularly frayed.

“Imran Khan understands that there are grave difficulties: economic, governance and foreign policy challenges,” said Shafqat Mahmood, education minister. “But he is confident. He is prepared. He has the sincerity.”

More than 200 million Pakistanis, suffering unemployment, power shortages and terrorist attacks, will be keeping their fingers crossed.

Wali Shah was sitting on a busy street corner in Islamabad’s upmarket F-7 neighbourhood. He had travelled there a month ago from Punjab province to look for work, without success. “But now that Imran Khan is PM, I am hopeful something good will happen,” Shah said. “Things are going to change for Pakistan.”

Many working and middle-class Pakistanis see Khan as an incorruptible outsider who will impose discipline and honesty on the government. Khan, a firebrand nationalist, rose to power promising radical change, saying he would redistribute wealth, hold the country’s political elite accountable for corruption, make more people pay taxes, and improve the lives of the poor by building world-class schools and hospitals.

Three weeks have passed since Khan’s Pakistan Tehreek-e-Insaf (PTI) party won 151 of the 342 seats in the lower house of parliament, not enough for a simple majority. Khan’s first challenge has been cobbling together a precarious coalition. The senate is controlled by the opposition.

“If the PTI is serious about ushering in deep-rooted change, it will need to pass key legislation, or otherwise build consensus around large-scale reform efforts. Finding a way to build bridges will be key,” said Khurram Husain, an editor at Dawn, Pakistan’s leading English newspaper. “The incoming government will have to work with other parliamentary parties, which will be a challenge in the current climate of polarisation.”

Voting took place on 25 July. Photograph: Farooq Naeem/AFP/Getty Images

Critics accuse Khan and his team of inexperience. A council of 15 ministers will be sworn in on Monday. Asad Umar, the former chief executive of Engro, Pakistan’s biggest conglomerate, has been chosen as finance minister and Shah Mehmood Qureshi will be the minister for foreign affairs. In a surprise move, Khan will retain around 18 portfolios for himself.

“Saying Khan’s team is inexperienced is an understatement,” said Ahsan Iqbal, a minister in the last government of prime minister Nawaz Sharif, the now-jailed leader of the Pakistan Muslim League Nawaz (PMLN). “It’s one thing to be enrolled in an introductory college course; these people are starting kindergarten. They don’t know the first thing about running a government.”

Many are concerned that Khan, who has taken an increasingly conservative stance on issues of religion and human rights, will not push for aggressive action against Islamist militants. He also has little experience in foreign policy, which analysts fear could be exploited by an army that considers Pakistan’s international policy its exclusive domain.

Khan won’t be able to achieve much unless he is able to develop a working relationship with, or be subservient to, Pakistan’s all-powerful military, famous for carrying out coups or ruling from behind the scenes.

“In Pakistan if you have two brothers and one is army chief and the other is prime minister, even they will eventually end up fighting. The system is just configured in this way,” said PMLN’s Iqbal. “Unless we correct this internal imbalance, Pakistan will keep crawling on, not failing, not succeeding. It will not take off.”

The Pakistani military is widely accused of skewing the election in favour of Khan but denies the charge.

“I don’t see any immediately conflict between Khan and the army,” said veteran journalist Nusrat Javed. “He will work with the [army’s] script. He is not the man who will fix the civil-military imbalance.”