'by its people' might be a better translation.
Does this sentence mean that the people observe the progress, or that other people observe a country's progress by watching the people?
For the former, "by its people" is the correct translation. For the second "from its people" is OK, but "in its people" is better.
Wouldn’t “by its people” be “oleh masyarakat”?
Maybe this is meant: "The progress of the country is seen (or is clear) by (looking at) its people"?
Why the translation isn't down here?