On July 9, Indonesians went to the polls to vote for the nation’s second directly-elected President.  Neither candidate has conceded, and official results will not be announced until July 22. However, independent polling and election monitoring organizations point to the loss of Prabowo Subianto, a Suharto-era general, to relative newcomer Joko Widodo, a reformist mayor who started his career running a furniture business.

Foreign investors seem pleased with the presumed result.  In the months preceding the election, the value of the Indonesian rupiah closely tracked Widodo’s poll numbers: climbing in February and March; falling as Subianto’s campaign closed the gap in late Spring; and climbing again in late June as Widodo appeared to stabilize his lead.  Despite the potential for unrest generated by dueling claims to victory, the Jakarta Composite Index climbed to a seven-month high by the time it closed on election day.

Such sentiments are not surprising.  Widodo is a rarity in Indonesia; a business-oriented politician with no discernable ties to the country’s corporate powerbrokers, and thus, despite his populist rhetoric, no personal financial interest in economic protectionism.  In contrast, both Subianto and his unlikely ally, former presidential candidate Abdurizzal Bakrie, are patriarchs of families that preside over vast business empires that are heavily concentrated in resources and commodities and therefore stand to benefit directly from resource nationalism.

Yet Widodo hardly campaigned as a champion of economic openness.  That was likely a wise choice, given the electoral mood.  But it also means that investors have little concrete guidance on how a Widodo government will view key investment policies adopted by his predecessor.  A Widodo administration’s approach to the following critical investment issues may serve as an important measure of how open Indonesia’s economy will be for business:

1. Restrictions on the export of natural resources.  In the months before the election, the incumbent government imposed far-reaching restrictions on the export of mineral ores.  The restrictions implemented a preexisting statute, and Widodo’s running mate announced in early June that Widodo would not reverse the government’s policy.  However, it remains to be seen whether he may move to relax or temper the new restrictions in any way.

2. Termination of bilateral investment treaties.  With little warning, the Indonesian government informed the Netherlands early this year that it would terminate the bilateral investment treaty (BIT) between the two countries effective July 2015.  Subsequent reports confirmed that this action was a step toward the ultimate goal of terminating, or allowing to expire, all 67 of Indonesia’s BITs.  It is not yet clear whether Indonesia intends to disavow BITs in all cases, or if it will be seeking to create a new template for its investment agreements going forward that would more explicitly address the government’s authority to promulgate legitimate health, environmental and other regulations.  It is also not yet clear whether the government’s policy will extend to multilateral investment protection treaties.  Both choices will ultimately rest in Widodo’s hands.

3. Changes to the negative investment list.  Indonesia’s new Negative List – the list of sectors in which foreign investment is excluded – saw the country take two steps forward and one step back.  Restrictions on foreign investment were eased in key sectors including pharmaceuticals and land transportation.  Simultaneously, foreign shareholding caps were tightened for a range of businesses, including those operating in certain sectors related to oil and gas drilling and services.  Again, there is much Widodo can do even without reversing the policies adopted by his predecessor.  For example, having spoken on the campaign trail of the importance of building out Indonesia’s infrastructure, Widodo could move to permit foreign investment in airports and toll roads.

Widodo’s stands on these issues should not be considered in isolation.  If he is announced as the election winner, he will be faced with a strong legacy of nationalist and protectionist policies that have presented significant challenges to foreign investors.   Indeed, upon assuming office, his most important task will be to tackle the endemic corruption faced by Indonesian citizens, foreigners and businesses in navigating the country’s bureaucracy.  Nevertheless, for foreign investors, how a Widodo administration tackles the issues above will serve as an important barometer for Widodo’s approach to trade and investment more generally.