Indonesian President Prabowo Subianto’s first year in office has made clear that his technology agenda is about digital sovereignty and state capacity, beyond shiny infrastructure. While his digital policy sits quietly behind populist social programs of free nutritious meals for students and healthcare vouchers for the poor, it’s no less impactful. The jury is still out on how effective his digital policy is in supporting Indonesia’s ambitious 8 percent economic growth target, but it marks a distinct shift from his predecessor’s focus on infrastructure development.

Where previous president Joko Widodo’s time prioritised physical expansion, Prabowo is systematising the digital stack by integrating data, cybersecurity and AI governance. Beyond building national data centres to add capacity and consolidate digital systems, Prabowo's administration will also pursue a multifunctional satellite system to integrate the Palapa Ring—a project that aims to provide nationwide 4G internet access—and the Satria-1 satellite, connecting all fibreoptic networks across the country.

The administration is pursuing a National Single Socioeconomic Data framework, which would merge social and economic registries to reduce duplication in providing government services. This sits on a broader Digital Public Infrastructure program, branded Digital Nusantara, aimed at enabling secure data exchange across ministries. The program, supported by the United Nations Development Programme, will first unify social protection systems before expanding to digital civil registration, health services and payment systems.

On AI, the approach is pragmatic, moving beyond soft ethics guidance towards practical implementation. Presidential Regulation 83/2025, issued in August, provides a directive for AI use in public services. It aims to improve bureaucratic efficiency by 400 trillion Indonesian rupiah (around $40 billion AUD) to ease the fiscal deficit. Yet, Prabowo is aware of AI risks. He has warned of misinformation, pointing to deepfake videos of him speaking Mandarin and Arabic as examples.

The social aspects of cybersecurity underpin much of Prabowo’s digital policy. The government has established a digital-space supervision unit within the Ministry of Communication and Digital Affairs and a cyber team to combat disinformation surrounding government programs. Officials argue that such monitoring is essential to protect citizens from online risks, including human trafficking, child exploitation and online gambling, even as civil-society groups warn the increased surveillance may breach human rights. But reality on the ground factors more into Jakarta’s caution, with hundreds of Indonesians trafficked to Cambodia, Myanmar and the Philippines and forced to work in scam centres.

Internationally, Indonesia is becoming a proactive digital actor. Prabowo has positioned AI as a tool for development by linking digitalisation efforts to its partnership with the United States through the International Technology Security and Innovation Fund. He also included data transfer components when negotiating a reduction in US tariffs from 32 to 19 percent. Insider accounts also suggest that Indonesia is working on a cybersecurity partnership with Britain following Prabowo’s November 2024 meeting with Prime Minister Keir Starmer.

Domestically, the government is drafting a roadmap for AI, semiconductors, and the broader tech ecosystem to meet global standards while empowering local innovation efforts, such as the Quick Response Code Indonesian Standard (QRIS) that supports the digitalisation of small and medium enterprises.

For Australia, Indonesia’s evolving digital landscape offers both opportunities and challenges. With digital economy contributing 19 percent of Indonesia’s GDP, Canberra should see Jakarta as a tech collaborator. The alignment is natural, as Australia’s Southeast Asia Economic Strategy to 2040 identifies the digital economy as a key growth driver, while Indonesia seeks reliable partners to enhance cybersecurity, AI governance and digital-skills development.

There is potential for collaboration in joint capability-building and innovation. Australia’s government economic development program Prospera is a promising starting point for deepening ties, as is private sector collaboration offered by Trellis Data to build large language models in Yogyakarta.

Both countries could exchange learning on AI-for-productivity pilots and training in critical infrastructure protection and incident response. Additionally, policy and technical fellowships that Australia has been providing for Indonesia since the 2010s can be geared towards joint products, papers and briefings to build cyber-resilience and digital-infrastructure interoperability.

To accelerate this, Jakarta should streamline its policies for permits so the two countries can co-innovate. For example, the Australia-Asia PowerLink project, also known as SunCable, would benefit from such streamlining. The project aims to facilitate transport of 1.75 gigawatts of electricity through Indonesia’s territorial waters. But since its 2021 signing, it has faced delays in processing of permits due to a lack of visible benefit for Indonesia. However, the September establishment of the SunCable Tech Research Park in the Riau Islands marked a step towards collaborative work on renewable energy and digital technologies. Expanding such joint innovation platforms could yield mutual gains.

Under Prabowo, development and digitalisation are intertwined. For Australia, engaging with Indonesia is less about exporting governance models and more about co-creating cyber norms and capacities for the next phase of digital transformation. If successful, Australia–Indonesia digital collaboration could be the new cornerstones of practical middle-power diplomacy.