The Harvard Kennedy School Indonesia Program was inaugurated in January 2010. The first activity of the new program was to carry out a strategic assessment of Indonesia’s prospects for economic growth and democratic governance. Inspired by a similar exercise carried out in Vietnam in 2008 by the HKS Vietnam Program, the objective of the strategic assessment was to stimulate critical discussion of the country’s development challenges. The research was not intended as a comprehensive review of the country’s political economy, nor did the team attempt to formulate an alternative reform strategy. Instead, the assessment was viewed as an opportunity to reflect on the gains achieved during the first decade of democratic government and to identify remaining obstacles to social, economic and political progress. This paper reports the findings of the assessment.