Whoever wins Indonesia’s presidential election will take the reins of a country very much on investors’ radar, but still facing fundamental economic challenges.

Under President Joko “Jokowi” Widodo, gross domestic product per capita has increased over the past 10 years, and rating agencies have upgraded their assessments of the government’s creditworthiness.

This reflects the work of the Finance Ministry, which has helped wean the populace off costly subsidies to make space for more productive government spending. The effort has also helped to reduce the budget deficit to just 1.6% of GDP, while debt levels in Indonesia as a proportion of GDP remain among Asia’s lowest. Further rating upgrades appear likely given Jakarta’s progress with fiscal reforms, even amid increased infrastructure investment.

Indeed, despite Jokowi’s strategy of leaning on state-owned companies to finance ambitious infrastructure spending, the growth of Indonesia’s government debt has been relatively restrained, rising 10 percentage points as a share of GDP during his term versus a rise of 80 points for China and 40 points for Thailand over the same period.

Jokowi’s infrastructure drive has generated real results, with the opening of 16 airports, 18 ports and over 2,000 toll roads, though not all have proved popular with users. The next president may be constrained in keeping up the pace, due to the large debts state companies have taken on already. But even more bills are to set to come due as construction intensifies for the new capital Jokowi is establishing at Nusantara on the island of Borneo.

Jokowi’s push to get the country into EV supply chains and move Indonesia up the value chain by restricting exports of unprocessed nickel and other key commodities has attracted both direct and portfolio investments from overseas. Soaring energy prices in the wake of the Ukraine war bolstered the value of Indonesia’s exports and helped draw more foreign direct investment into its mining sector.

Yet overall foreign direct investment has stagnated, due to a lack of flows into sectors other than mining and metals. Indeed, job creation for Indonesia’s 189 million working-age adults remains a challenge, with 59% still working only in the informal sector for small businesses like restaurants. Mining investment has been capital intensive, and the sector still accounts for just 1% of overall employment.

Reforms intended to increase labor market flexibility have yet to yield significant results, particularly in terms of the manufacturing sector. Indeed, exports of manufactured goods as a share of GDP have been stuck at around 8% over the past decade.

Meanwhile, Jokowi’s metals policy has increased Indonesia’s dependence on China, both as an export market and as a source of foreign investment. While China accounted for only 1% of foreign direct investment inflows at the start of the president’s first term, it now represents 15%.

Despite the investment focus on nickel, Indonesia’s largest exports in value terms remain coal, palm oil and natural gas. As prices for these items has risen, so have Indonesia’s export earnings and government revenues. Yet at the same time, the share of Indonesia’s exports going to the U.S., Europe and Japan has declined, in contrast to the experience of countries like Vietnam and South Korea.

For Vietnam and a number of other Southeast Asian countries, manufactured goods, particularly electronics, rank as leading export categories in value terms. By contrast, Indonesia’s export structure reflects its natural resource endowment, with the country’s labor endowment not yet fully incorporated.

Indonesia’s high exposure to Chinese investment has meanwhile become a key impediment to its ability to secure preferential market access under the U.S. Inflation Reduction Act. That is, due to the lack of any kind of free trade agreement with Washington, nickel mined in Indonesia does not qualify for U.S. tariff breaks, unlike supplies from Australia, for example. At the same time, with China’s growth slowing, Indonesia’s heightened dependence could be a liability in the years ahead.

As the presidential campaign enters its final days, Defense Minister Prabowo Subianto, who is running for president on a ticket with Jokowi’s son Gibran Rakabuming Raka, has a clear lead in the polls.

Prabowo has promised to continue Jokowi’s infrastructure-led investment approach, and also his focus on positioning Indonesia within EV value chains.

But although his pledges of continuity and teaming up with Gibran have helped Prabowo to win Jokowi’s invaluable tacit backing, it remains an open question whether he will actually maintain the same policy direction if he wins. The answer may depend on how much clout the popular Jokowi retains after he leaves office.

Rival Ganjar Pranowo, nominated by Jokowi’s Indonesian Democratic Party of Struggle, is also running on a platform of continuity.

By contrast, Anies Baswedan, a former Jakarta governor, has been critical of many of Jokowi’s signature policies, arguing that the president’s minerals strategy has led to more pollution and an influx of Chinese workers, that Nusantara is a waste, and that the economy has become too dependent on China. But he is lagging in the polls.

The critical focus for the incoming leader will be to boost formal job growth. But continuity with Jokowi’s policies is unlikely to bring about improved utilization of Indonesia’s labor endowment and could leave GDP growth trundling along at around 5% in coming years — too slow to realize Jakarta’s ambitions of becoming a developed nation by 2045.