Indonesia is growing. Strong economic growth and a swelling middle class have even seen some analysts predict that Indonesia will become a global economic powerhouse behind China, India and the United States. As it moves along that path, Indonesia will continue to re-shape its strategic outlook and overcome numerous challenges as it seeks further influence in its region and beyond. This paper will examine some of those challenges in the context of foreign policy, specifically, the leadership role that Indonesia needs to fulfil through ASEAN, its position as a Muslim beacon of democracy and the need to reduce its dependence on China by broadening its economic relationships with other countries. Additionally, the appeal of populist policies and phantom threats that are distracting officials from addressing such foreign policy challenges will also be looked at.