updated 10/19/2004 11:58:57 PM ET 2004-10-20T03:58:57

Retired Gen. Susilo Bambang Yudhoyono was sworn in as Indonesia’s sixth president on Wednesday after winning the country’s first-ever direct elections for head of state last month.

Yudhoyono, 55, begins his five-year term amid high expectations he can fix the many problems that saddle the world’s most populous Muslim nation, among them rising Islamic militancy, massive poverty and widespread corruption.

“In the name of God, I swear that as the president of the Republic of Indonesia I will uphold the law and the constitution ... and serve the nation,” the U.S.-educated former general told the country’s parliament.

An Islamic leader held a copy of Islam’s holy book, the Quran, over Yudhoyono’s head as he made the oath.

Yudhoyono took over from Megawati Sukarnoputri, the eldest daughter of Indonesia’s founding father Sukarno. Megawati was punished by voters in the Sept. 20 poll for her aloof governing style and ineffective leadership.

The prime ministers of Australia, Malaysia, East Timor and Singapore were scheduled to attend the ceremony in a regional show of support for the retired general.

Police had warned that terrorists may be planning attacks to coincide with the country’s political transition. More than 2,000 police patrolled the parliament building, and roads leading to it. Several armored vehicles were parked in the sprawling complex’s grounds.

The elections were the first in which Indonesians voted for their leader directly. The polls passed off peacefully, and were considered a milestone in the country’s sometimes turbulent transition to democracy after the fall of longtime dictator Suharto in 1998.

Later Wednesday, Yudhoyono is scheduled to name his Cabinet.

Financial markets are eagerly awaiting the lineup to gauge his commitment to rooting out corruption and fixing the country’s economic woes — two key campaign pledges.

Despite his popular mandate, Yudhoyono will face problems pushing through reforms against deeply entrenched vested interests in the business, government and legal elite. Moreover, his tiny Democratic Party only holds 10 percent of the seats in parliament.

Fighting terrorism will be high on his list of priorities.

The sprawling country has been hit by three major attacks by Muslim terrorists over the last two years, including the 2002 Bali bombings that killed 202 people, most of them foreign tourists.

Yudhoyono presented few distinct policies during the campaign, but voters hungry for change were impressed by his grasp of the issues facing the country and his steadfast, honest image.

He attended officer training college in the United States and is popular in Washington because he is seen as a better partner in the war on terror than Megawati was.

Some critics have expressed concern over his army background. The military, which propped up Suharto’s 32-year regime and still retains much influence on civilian life, is viewed with suspicion by many Indonesians.

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