It is now officially confirmed: Joko Widodo, widely known as Jokowi, has been proclaimed the democratically elected President of the quarter-of-a-billion citizens of Indonesia. The attempt by his rival, Prabowo Subianto, to have the election results annulled on the grounds of alleged massive fraud was rejected by the Constitutional Court on Thursday 21 August.

Though there were some skirmishes from die-hard Prabowo loyalists, it would seem that, even if grudgingly, he is accepting defeat. This is great news for Indonesia, for Asia, for the world and, as Indonesia is the world's third biggest democracy after India and the US, for democracy. The apprehensions that things might go wrong seem to have been quashed. Jokowi will face many challenges as Indonesia, though a recent success story since the collapse of its economy in 1998, has urgent issues to tackle – poor infrastructure, corruption, poverty and environmental degradation. But the significance of this victory cannot be underestimated. Jokowi's election represents a break from the country's cronyist past and the possible birth of a new Indonesia.

Furthermore, not only is Indonesia the world's fourth most populated country and third biggest democracy, it is also the country with the world's largest Muslim population. Indonesia's democratic victory contests the notion that Islam and democracy are incompatible. But also in the context of Indonesia's weight in the Islamic world, it is warmly welcomed that the outgoing President Susilo Bambang Yudhoyono publicly condemned the Islamic State (IS), which is currently ravaging the Middle East. SBY has called the IS an embarrassment to Islam and has committed Indonesia to fighting extremism. It is all the more welcome in that it contrasts with the silence of the leaders of many other Muslim countries and organizations, such as the Organization of Islamic States and the Arab League. Jokowi, a moderate and tolerant person by all accounts, should intensify this trend: his victory could have a benign influence on global Islam.

The encouraging developments in Indonesia are to be celebrated all the more in that the continent of Asia generally is seeing rather dark clouds on geopolitical, social, environmental, and economic fronts. There is no doubt that Asia remains the world's most dynamic continent, but dynamism and turbulence are often inter-related. Asia is a cauldron in a way that no other continent is.

Jean-Pierre Lehmann is Emeritus Professor of International Political Economy at IMD, Founder of the Evian Group and Visiting Professor at the University of Hong Kong and NIIT University in India.

Written by Jean-Pierre Lehmann, Professor at IMD, a top-ranked international business school in Lausanne, Switzerland