ADB Approves $500M to Advance Indonesia’s Human Capital and Social Reforms

This third subprogram builds on earlier reform phases approved in 2021 and 2023, moving from regulatory groundwork and pilot interventions to full integration within national systems.

The Asian Development Bank (ADB) has approved a $500 million policy-based loan to support Indonesia’s wide-ranging human capital development reforms. The funding, issued under the third subprogram of the Boosting Productivity through Human Capital Development Program, will help institutionalize national reforms in education, skills development, health, and social protection—key pillars of Indonesia’s long-term economic transformation.

Consolidating and Embedding Reforms for Long-Term Impact

This third subprogram builds on earlier reform phases approved in 2021 and 2023, moving from regulatory groundwork and pilot interventions to full integration within national systems.

• Subprogram 1 established initial policy frameworks and explored targeted pilot initiatives.

• Subprogram 2 expanded nationwide implementation of education, health, and labor programs.

• Subprogram 3 now aims to embed these reforms into Indonesia's long-term governance, ensuring continuity, scalability, and sustainability.

By institutionalizing reforms, Indonesia aims to raise labor productivity, strengthen workforce readiness, and ensure equitable access to essential services—cornerstones for achieving sustained economic growth.

“Indonesia's path to sustainable growth depends on investments in its people,” said Bobur Alimov, ADB Country Director for Indonesia. He emphasized that strengthening education systems, expanding healthcare access, and solidifying social protection frameworks will help Indonesia build a more productive, equitable, and inclusive economy.

Advancing Health Reforms with a Focus on Women and Preventive Care

A major component of the program focuses on enhancing health insurance coverage to promote preventive healthcare, especially for women and girls. Key reforms include:

• Expanded coverage for breast and cervical cancer screenings

• Preventive programs addressing anemia among adolescent girls

• Increased autonomy for women to select their primary healthcare facility, ensuring they access care where they feel secure and respected

These measures aim to reduce long-term health risks, empower women and girls, and strengthen Indonesia’s overall healthcare system.

Expanding Skills Development for a Modern, Green, and Digital Economy

Indonesia’s widely successful pre-employment card program (Kartu Prakerja)—which has trained over 18 million people—has been further upgraded to include training in:

• Green skills, supporting Indonesia’s climate and sustainability transition

• Artificial intelligence (AI) and digital competencies

A new digital career guidance platform has been launched to connect graduates with employment opportunities, improve job-matching, and reduce skills mismatches across the country.

To align education with labor market demands, the program has also:

• Established technical and vocational education and training (TVET) coordination teams in 63% of provinces

• Supported the creation of 15 new Sustainable Development Goals (SDG) centers in partnership with universities

• Mandated all public universities to adopt policies preventing and addressing gender-based violence, strengthening campus safety and inclusivity

Strengthening Social Protection Through Data and Fiscal Governance

The reforms reinforce Indonesia’s social protection systems through improved governance and accurate targeting. Key measures include:

• Expanding performance-based fiscal transfers to ensure local governments align spending with national priorities

• Utilizing the National Single Social and Economic Data System (DTSEN) for more precise identification of households eligible for social assistance

These enhancements improve the transparency and effectiveness of public spending while ensuring vulnerable populations receive the support they need.

Advancing Indonesia’s Long-Term Vision for Inclusive Development

The program is aligned with the Government of Indonesia’s broader development goals, including its long-term national strategies under Vision 2045, which aim to transform the country into a high-income, innovation-driven economy supported by a skilled, healthy, and empowered population.

Through this $500 million investment, ADB reaffirms its commitment to Indonesia’s human capital agenda—strengthening systems that will help ensure every Indonesian has the opportunity to learn, work, and thrive in a rapidly changing global economy.