Just as Indonesia’s president-elect Joko Widodo prepares to take office, a huge constitutional row has erupted raising new questions about the future of the country’s democratic progress.

On September 26, the Indonesian parliament voted to end direct elections for local mayors and regional governors. The Democratic Party, headed by outgoing President Susilo Bambang Yudhoyono, unexpectedly walked out of the vote at the 11th hour.

With this unexpected defection of the largest current parliamentary faction, Joko’s supporters were heavily outvoted by a coalition of right-wing and conservative religious parties headed by the Golkar party.

The vote repeals a 2004 reform that allowed popular local leaders to emerge in key cities by appealing directly to the electorate without first having to trade with the party elites for favours and backhanders.

It is a slap in the face for Joko especially, as his own rise to power began with his becoming mayor of the city of Solo in 2005. Having won re-election in Solo, he went on to govern the capital Jakarta, and in both cities he earned a reputation for clean government relatively untainted by korupsi – the rampant political bribery of a nation notorious for crony capitalism.

Joko, or Jokowi as he is popularly known, was the candidate of a coalition headed by the liberal Indonesian Democratic Party — Struggle (PDI-P), which won the July 9 presidential election by around 8 million votes.

His opponent was former general Prabowo Subianto, who led the opposing Koalisi Merah Putih (KMP) or Red and White Coalition, the name taken from the colours of the Indonesian flag.

Golkar, the KMP coalition’s largest component, is a party dominated by the political and military elite dating back to the “new order” years of the Suharto dictatorship.

Prabowo was a member of Golkar until 2008 when he established a breakaway movement Gerindra. Prabowo’s former wife was one of Suharto’s daughters.

A former commander of the elite special forces Kopassus unit, Prabowo was closely linked to the abduction and murder of pro-democracy activists in the 1990s as well as atrocities against East Timorese and Papuan liberation activists.

He was implicated in the army’s covert role in the dying days of the Suharto dictatorship where military units engaged in arson, murder and the ethnic cleansing of the Indonesian-Chinese community.

This strategy of chaos ultimately failed and Prabowo left the military apparently under a cloud, however he soon found his feet in business with many of Suharto’s associates.

Today Prabowo’s Nusantara Group is a powerful industrial conglomerate. As a measure of just how unprincipled and fickle Indonesian political alliances are, Prabowo was chosen as the running mate of Megawati Sukarnoputri, matriarch of the PDP-I, in the 2009 presidential elections against Yudhoyono.

This year’s presidential election was a particularly bad-tempered affair. Prabowo initially rejected the result, although a subsequent court battle to annul the polls was thrown out. It now appears that these anti-democratic forces have already regrouped and are seeking to undermine Joko even before he enters the presidential palace on October 20.

To add to his woes, the incoming House of Representatives sees Subianto’s KMP with 353 of the 560 House seats, against 207 seats held by parties backing president-elect Joko.

So a further fear is that the KMP can easily amend the 2008 presidential election law and the constitution to allow the people’s consultative assembly, or MPR, of which the house forms the major part, to eventually impeach Joko and appoint a new president.

Joko’s position is further weakened by the fact that the KMP is in control of 31 of 33 provincial legislatures, with the PDI-P holding power in only the Hindu-majority island of Bali, a traditional stronghold, and West Kalimantan on the island of Borneo. This gives his opponents powerful levers to obstruct his administration.

Joko’s programme is far from radical yet his supporters have been branded as communists — a murderous accusation in the Indonesian historical context where Suharto climbed to power through the slaughter of hundreds of thousands of leftwingers in 1965-66.

In fact, Joko has gone out of his way to placate the far right. His vice-presidential running mate Jusuf Kalla served as vice-president during Yudhoyono’s first administration and is one of Indonesia’s richest businessmen. His Kalla Group is a conglomerate with business interests in construction, textiles, commodity trading, finance and energy.

Another long-time but disaffected member of the Golkar Party, Kalla was featured in a recent highly acclaimed documentary on the 1965 massacres The Act of Killing.

In the film, Kalla praised the anti-communist death squads: “This nation needs free men. We need gangsters to get things done.”

Corruption remains one of Indonesia’s greatest economic barriers yet the entire political system rests on it. One of Yudhoyono’s former cabinet ministers has recently been jailed for bribery associated with the building of a sports stadium.

Perhaps most embarrassingly, his former minister of religious affairs and a member of an allied conservative Islamist party currently faces charges of pocketing cash during the annual hajj — the pilgrimage to Mecca — a hugely lucrative sector in the world’s most populous Muslim country.

Joko has outlined plans to allow online tax collection, for example, a proposal that in most countries would be seen as modernising and rational. However, it potentially denies a small fortune to layers of greedy officials who skim state revenues.

His next challenge is to deliver improved living standards to the masses of rural and urban poor who back the PDP-I. This will be difficult with a budget set by his political opponents.

His key target is to cut fuel subsidies that cost an estimated $20bn annually. This accounts for up to 20 per cent of the state budget and is widely recognised as a sop to the country’s elite.

Joko wants to raise prices by around 15p per litre, which would free up half of the sum currently allocated to subsidies. However, the result may be to trigger price rises and inflation — fuel prices have been a trigger issue for mass protests in years gone by.

Indonesia’s new leader faces a struggle on two fronts.

In the national parliament, Golkar and the Democratic Party are clearly willing to collude to derail his reform programmes and the corrupt regional elites will now once again be able to reassert their power against the president and the millions who voted for him.

Meaningful social and political change in this sprawling country of 250 million people still appears to be some way off.