Prospera's eight years of contributions towards outcomes for Indonesia
Prospera built on two decades of Australian support for economic governance, contributing to reforms, innovations and policy shifts that helped shape Indonesia's development during a period of global change.
The past eight years have been transformative across multiple dimensions. Global economic norms have been reshaped by a once-in-a-century pandemic, accelerating digitalisation and breakthroughs in artificial intelligence, geopolitical realignments affecting trade, and the growing reality of climate change. In Indonesia, this period also marked a major leadership transition, with President Prabowo Subianto succeeding President Joko Widodo.
Against this backdrop, Prospera built on two decades of Australian support for economic governance in Indonesia. For the first time, policy advisory support and government-to-government partnerships were brought together under a single program to support strong, sustainable and inclusive economic growth.
Despite the Covid-19 shock, Indonesia maintained steady growth, with GDP expanding by around 4% per year on average between 2018 and 2025.
Investment rose sharply — driven by critical minerals and emerging industries — while trade openness was preserved. While employment recovered post-pandemic, productivity growth slowed and informality increased, highlighting job-quality challenges, even as skills development and women's workforce participation improved.
Reforms to investment policy and business licensing were advanced through the Job Creation Law and a new risk-based licensing framework. Prospera supported the economic case for opening investment and strengthening the national Online Single Submission (OSS) system, which had issued 14.6 million registrations — mostly to micro and small enterprises — by December 2025, with reforms estimated to lift GDP by USD 300 billion over 15 years.
Trade policy also evolved. Import regulation was streamlined and tariffs held steady despite rising global protectionism. Prospera supported development of a more flexible import framework in 2025 and helped inform evidence-based decisions that avoided tariff escalation.
Indonesia's industry policy became increasingly forward-looking. Prospera supported regulatory and policy reforms to unlock growth in sectors such as data centres, semiconductors and green textiles, as well as in regional hubs. Investment in Batam data centres reached USD 3 billion, while productivity gains in Gorontalo's corn-processing sector could generate 28,000 jobs and IDR 3.65 trillion in regional output.
International and regional economic engagement also deepened. Indonesia chaired the G20 in 2022 and ASEAN in 2023, commenced OECD accession, and advanced trade agreements. Prospera supported collective problem-solving on global challenges and a rules-based approach to trade, including the design of a new pandemic fund launched during Indonesia's G20 presidency.
Transport safety improved markedly across maritime and aviation sectors. A move from the global shipping "black list" to the "white list" under the Tokyo Memorandum of Understanding in 2021 was underpinned by Australia–Indonesia cooperation, with further gains achieved through a 2024 agreement ensuring uninterrupted air navigation services.
Skills development scaled rapidly through the Prakerja program, launched during a period of economic disruption. By 2023, 17.5 million people had participated across 514 districts. Prospera supported rapid program design, improved skills matching and quality assurance, with evaluations showing positive effects on skills and income.
Women's economic participation was elevated within economic policy, including the assignment of national targets to the Ministry of Labour and recognition of the care economy in new legislation. Prospera supported evidence-based advocacy and policy access, helping advance reforms that could lift GDP by USD 376 billion if participation reaches Indonesia's 2045 target.
Digital transformation accelerated as online economic activity expanded. Prospera supported development of the national digital economy strategy, informed personal data protection reform, and helped advance e-government regulation and institutional leadership.
Strong macroeconomic management helped Indonesia avoid a financial crisis during the Covid-19 shock, with growth returning by 2022.
Prospera's work on macroeconomic surveillance, forecasting and debt management supported Indonesia's crisis response capability. As global turbulence persisted, Prospera reinforced crisis management frameworks and economic planning while also supporting early foundations for the green energy transition.
During the 2021 Delta wave, data-driven mobility monitoring helped avert an estimated AUD 6 billion loss in GDP, while forecasting and debt-management capacity also improved.
Economic growth strategies increasingly reflected sustainability and inclusion. Prospera supported development of two medium-term plans, integrating priorities such as middle-class job creation, women's participation and the green transition, and helped translate these strategies into fiscal frameworks.
The Finance Sector Omnibus Law reinforced financial stability by strengthening surveillance, crisis response and market development. Prospera supported drafting, coordination among reform champions, and capability building for the Financial System Stability Committee, while Australia supported accession to the Financial Action Task Force.
An enabling framework for the green energy transition took shape. Prospera supported regulatory reform, eased electric vehicle investment restrictions to help unlock AUD 1.9 billion, and advanced climate–growth dialogue and institutional reform critical to long-term competitiveness.
Government effectiveness and digital capability improved between 2018 and 2024, supported by Prospera's assistance in strengthening tax administration, digital government systems and economic statistics.
The Indonesian Government digitalised tax administration and improved tax policy. Prospera's support enabled adoption of a new tax IT system to integrate services and increase revenue. Tax transparency and some policy reforms advanced, enabling Indonesia to secure a USD 500 million loan for further IT system operationalisation and policy reform.
Revenue mobilisation expanded through introduction of VAT on digital platforms, which collected IDR 33.9 trillion between 2020 and 2025, including from global firms. Support for digital taxpayer services helped generate estimated government savings of AUD 633 million from 2020-2023.
Spending quality improved steadily in social protection, subsidies and education. Prospera supported reforms that reduced inefficiencies, improved equity and strengthened links between budgets and performance.
Fiscal support for people with disabilities was strengthened through new regulations reducing the cost of basic services and supporting economic participation, developed with Prospera's assistance.
A major health-system reform program was launched, supported by Prospera through policy design, institutional change and the Omnibus Health Law. A new health-financing masterplan helped catalyse USD 4 billion in multilateral financing.
Inclusion across public institutions was strengthened through flexible-work regulation, leadership training reaching 1.25 million participants, and pathways to implement the legislated disability-employment target.
Oversight and data systems were enhanced, including international peer review of audit capability, improved ombudsman investigations and accessibility, and stronger economic statistics through development of a statistical business register and preparation for the 2026 economic census.
Prospera's contributions generated returns many times greater than the original investment, supporting reforms that shaped economy-wide outcomes rather than isolated projects.
From investment openness and crisis response to health-system transformation and revenue mobilisation, Prospera helped Indonesia move faster and with greater confidence during an era filled with uncertainty.
Across these reforms, leadership rested firmly with Indonesia. Prospera's role was to catalyse change, strengthen policy quality and accelerate implementation — working alongside reformers to reduce risk, improve design and support delivery in a complex political economy.
The results demonstrate the force-multiplier effect of a trusted, long-term partnership grounded in policy capability, institutional relationships and shared problem-solving.
Prospera's journey will continue. Realising Indonesia's Vision 2045 will depend on lifting productivity, expanding opportunity and embracing sustainability as a driver of growth.
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