JAKARTA (AFP) - Susilo Bambang Yudhoyono was sworn in as Indonesia's sixth president, pledging to revive a precarious economy by personally leading a war on endemic graft while tackling terrorism.
Shortly after taking the oath which cemented his victory in the country's first ever democratic presidential polls, Yudhoyono outlined his goals in a maiden speech warning of tough times for the world's largest Muslim nation.
"We have to remember that we will have to weather a difficult period and face heavy challenges. All these complex and difficult problems of our nation cannot possibly be overcome in 100 days, with a flick of the wrist," he said.
Earlier, Yudhoyono and his deputy Yusuf Kalla, were sworn in under the watch of Islamic officials at a heavily-guarded ceremony in the Indonesian capital attended by regional leaders including Australian Prime Minister John Howard.
More than 2,000 police and military personnel were deployed to prevent a strike by the Al-Qaeda-linked Jemaah Islamiyah group behind the October 2002 Bali bombings and an attack last month on Australia's Jakarta embassy.
The unprecedented appearance by heads of state was seen as a reflection of the expectations the international community have placed on Yudhoyono to deliver on promises of curbing Islamic extremists.
"The threat of terrorism and transnational crime is still haunting us," he said in his debut speech, which focused heavily on the corruption which has hampered the country's economic progress against fierce regional rivalry.
"The government will actively launch programmes to fight corruption. Those I will lead myself," he said.
"Our economic growth is far below seven percent and is not yet enough to provide jobs. More than 10 million or our brothers are still jobless, some 16 percent of our people are still living below the poverty line."
Indonesia was on Wednesday placed by graft watchdog Transparency International as the world's joint-fifth worst country for corruption, showing the situation had worsened since a year earlier.
Yudhoyono is expected to unveil his cabinet later Wednesday after weeks of pensive discussions which he said would ensure he formed a professional body capable of making good on his pre-election promises.
But fears he has given in to backers who oppose pro-International Monetary Fund appointments left markets sharply down ahead of the announcement, after weeks of record stock prices in anticipation of better economic times ahead.
Potential cabinet member Drajad Wibowo told journalists before the swearing in that Yudhoyono was expected to unveil a cabinet which would balance opinions to appease those who believe IMF policies are to blame for Indonesia's malaise.
Yudhoyono replaces Megawati Sukarnoputri, whom he beat in a landslide victory in September 20 polls that were seen as a milestone in the country's emergence as a democracy only six years after the downfall of dictator Suharto.
Though Megawati was credited with overseeing Indonesia's successful election year and restoring economic stability, her popularity waned as she developed an image as a distant leader who lacked the drive to revive the financial sector.
She was notably absent from the ceremony, reportedly tending to her garden, a gesture seen as a final snub by the former leader who has failed to concede her defeat or congratulate the new president.
Among Indonesia's large population of low-paid and unemployed there were hopes that the appointment of Yudhoyono, often known by his initials SBY, would provide the reforms that they once looked to Megawati for.
"My hope is that Mr. SBY can carry out his duties as well as possible. That is the hope of all of us, the little people," said 33-year-old food vendor Warsito.
But observers say he will face an uphill battle to take on an entrenched political elite in a parliament in which his supporters are in minority.