Mr Joko raised concerns about Australia's unilateral and confrontational asylum seeker policies and specifically warned against the possibility of Australian naval vessels venturing into Indonesian waters without permission as they did on five occasions last year. Indonesia's incoming president Joko Widodo. Credit:Bloomberg "We will give a warning that this is not acceptable," said Mr Joko, in the exclusive Fairfax Media interview. "We have international law, you must respect international law," he said. The former Jakarta governor and small-business man said he would rebuild the security ties which were damaged in a series of bilateral mishaps after Mr Abbott came to power.

For the first time he said he would encourage new avenues of security cooperation wherever benefits can be shown to flow "not only to Australia but also Indonesia", including to combat terrorism. The Prime Minister is set to attend Joko Widodo's inauguration. Credit:Christopher Pearce Also encouraging for Canberra, Mr Joko vowed to return his country of a quarter of a billion people to its traditional leadership role among the disparate states of south-east Asia, including by helping to mediate their increasingly dangerous territorial disputes with China. "Two-thirds of Indonesia is sea, is water, in the South China Sea I think Indonesia can act as an honest broker," said Mr Joko. Illustration: Ron Tandberg

Since the late 1990s, when Suharto fell and the Asian financial crisis hit the Indonesian economy harder than any other, Indonesia has transitioned into a vibrant and at-times rambunctious democracy while steady economic growth has reduced the number of people living in poverty by about 40 per cent, according to the Asian Development Bank. Over the past decade, Australia has had a strong supporter in the outgoing president, Susilo Bambang Yudhoyono, although bilateral relations were damaged by revelations of Australia's naval incursions and its spies tapping the phone of the outgoing president's wife. The Abbott government's hardline boat turn-back policy has been deeply unpopular in Indonesia but also effective, raising hopes of a smooth start to dealings with Mr Joko's administration. Australian policymakers expect to rebuild gradually on the strategic front, where Mr Joko still lacks confidence and experience, while taking an opportunity to press harder in his areas of strength, including business, education and development. Mr Joko also listed a range of measures to improve trade, investment and personal ties, which he said were the foundations of sound bilateral relations.

He encouraged young Indonesians to study at Australian universities, as one of his sons has done, and for Australians to reciprocate under Foreign Minister Julie Bishop's "reverse Colombo Plan". "Business-to-business and people-to-people [links] are crucial," said Mr Joko. "We'll send our students from here to Australia." He also urged Australians to venture beyond Bali and explore one of the largest and most diverse nations on earth. "Jokowi's election is the chance to push the 'reset' button on what Tony Abbott says is the most important relationship we've got," said Professor Tim Lindsey, Director of Melbourne University's Centre for Indonesian Law, Islam and Society, using the name that Mr Joko is universally known by in Indonesia. "And it is really a substantive step forward in Indonesia's transition to being a genuine liberal multi-party democracy where people can be elected on the merits of their policies and track records rather than solely on the basis of elite connections and wealth."

The boldest election commitment from Mr Joko – who is only the second directly-elected president in Indonesian history – was to slash fuel subsidies, which now account for 21 per cent of government spending. That won't be easy, however, as unrest over an earlier price rise is credited for helping bring down the Suharto regime in 1998. Economic growth has been softening over the past two years and investors are wary about corruption, red tape and a wave of economic nationalism that has forced mining companies to process minerals before shipping them offshore. Mr Joko sidestepped questions about resource nationalism but promised to attract Australian investors by listening to their frustrations and addressing more pressing concerns. "When investors come to me they always complain about four points," said Mr Joko. "They ask about the fuel subsidy; second, they ask about bureaucracy reform, business licences, business permits; third, they ask about infrastructure – railway tracks, sea ports, toll roads; and fourth, they ask about power plants, electricity," he said. Loading

"So I am sure when I can solve these problems investors will come. I'm a businessman, so I know how to manage this problem."