More than 30,000 security personnel have been deployed in Jakarta for the inauguration of Indonesian leader Joko Widodo and Vice-President Ma'ruf Amin.
The ceremony has drawn several foreign leaders including Malaysia's Mahathir Mohamad, Cambodia's Hun Sen and Prime Minister Scott Morrison.
"[Joko Widodo] has been an extraordinary friend of Australia and his repeat election speaks volumes about Indonesia," Mr Morrison told reporters in Jakarta.
"And it's not just because he has the best smile of any leader, I think, in the world today ... When you have someone such as President Widodo, who has come from outside the Indonesian establishment, and to have been successful at two successive election, it's an extraordinary achievement," he said.
Indonesian President Joko Widodo and his wife Iriana meet with Prime Minister Scott Morrison and wife Jenny ahead of the inauguration ceremony. Source: AP
"He has a real passion for his people and he is a very significant participant in our regional dialogues."
Mr Widodo - known as Jokowi - is a popular, heavy-metal-music loving former businessman from outside the political and military elite.
The 58-year-old was hailed as Indonesia's answer to former US President Barack Obama when he was first elected in 2014 to lead the world's third-biggest democracy.
On Sunday morning, Mr Widodo tweeted, "Kerja bersama, menuju Indonesia Maju," meaning "working together to move Indonesia forward."
But Mr Widodo's leadership is under mounting criticism after he faced a string of challenges, from nationwide anti-government demonstrations and smog-belching forest fires that sparked diplomatic tensions with Indonesia's neighbours, to deadly unrest in Papua and an economic slowdown.
Recent protests across the archipelago of 260 million were among the biggest student rallies since mass demonstrations toppled the Suharto dictatorship in 1998.
The headwinds threaten to cast a shadow over Mr Widodo's second and final term, a stark reversal of fortune just months after he scored a thumping re-election victory against a former military general.
Fears of another attack
Sunday's inauguration also comes a little over a week after his chief security minister was stabbed in an attack by two members of a local extremist group allied to the Islamic State group, who were arrested at the scene.
Dozens of suspected militants have since been detained in a nationwide dragnet following the assassination attempt on Wiranto, a former general who goes by one name.
The 72-year-old is recovering in hospital.
Authorities have banned mass demonstrations for fear the inauguration might be used as cover for another attack as militancy continues to plague the world's biggest Muslim majority nation.
Mr Widodo's new term also comes against the backdrop of fears that Indonesia's two-decades of democratic reforms are being eroded.
His administration appeared caught off guard when thousands of students hit the streets in protests last month against a raft of divisive reforms, including banning pre-marital sex and weakening the anti-graft agency. Three students died in the unrest.
Trade top of Morrison's agenda
Prime Minister Scott Morrison is in Jakarta for ceremonial reasons, but the trip comes at an opportune time to talk trade with Indonesia.
John Howard started the tradition of Australian leaders attending the important event for the country's close neighbour, and Kevin Rudd and Tony Abbott have also been.
Ahead of the ceremonial events, Mr Morrison and Mr Widodo met to discuss the growing ties between their two nations.
"We have a very significant relationship, we have a comprehensive strategic partnership," Mr Morrison told reporters after the meeting.
Australian Prime Minister Scott Morrison and Indonesian President Joko Widodo at Bogor Presidential Palace near Jakarta, 31 August, 2018. Source: AAP
"[Indonesia] was the first place I visited, and [Widodo] was the first leader I met after becoming Prime Minister."
Trade was likely an area of interest, with a bilateral deal recently signed and now being ratified by both countries.
"The House of Representatives will be considering this matter tomorrow," Mr Morrison said.
That deal has been in the political spotlight over the past week as Labor faced pressure from unions and other groups not to agree to it.
Labor has indicated it will support this - despite opposition from unions - although it is seeking some tweaks which Trade Minister Simon Birmingham expects can be finalised this week.
Labor Leader Anthony Albanese said the agreement is an "enormous opportunity" for Australia.
Scott Morrison and Joko Widodo sit down for high tea at the Grand Garden near Bogor Presidential Palace in August 2018. Source: AAP
"It’s important that we have a good relationship with our neighbour to the north in Indonesia," he told reporters in Sydney on Sunday.
"There are enormous economic advantages we will have, as Indonesia grows into the future. Indonesia has the forth largest economy in the world by 2050, they are building a new capital city – all of that means jobs for Australian infrastructure companies, for Australian steel, Australia engineers, Australia architects, Australian planners, Australia legal offices and service deliverers."
