Indonesia behind the learning curve
By Bill Guerin, Asia Times (Hong Kong)
August 31, 2006
JAKARTA - Indonesia is arguably Asia's least
well-educated country, and the government is largely
to blame. With 30% of its 242 million population
school-aged, the world's largest Muslim country ranks
lowest among its Asian neighbors in terms of public
education expenditure.
A minuscule 0.03% of the Indonesian workforce has
earned a university degree, according to government
statistics. Only 39% of 12-to-15-year-olds ever make
it to secondary school. Addressing a major world
conference this month on training and development in
Kuala Lumpur, Telkom Indonesia chairman Tanri Abeng
lamented that more than 80% of Indonesians have only a
primary-school education.
With a record 40 million people unemployed, the
education system's failure means that Indonesia's pool
of unskilled and increasingly unemployable labor is
growing exponentially. That's bad economic and social
news for a country that nearly a decade after the
1997-98 Asian financial crisis is still straining to
recover from the economic adversity and displacement.
Indonesia has in recent years witnessed a worrying
process of de-industrialization, with massive foreign
divestment in many of the export-oriented industries
that drove the country's spectacular economic growth
throughout the 1980s and into the 1990s. In 2003,
foreign investors pulled US$597 million out of the
country, according to a recent report by the United
Nations Conference on Trade and Development (UNCTAD).
Nowadays, the availability of low-cost labor has only
a limited bearing on a country's ability to attract
foreign capital, particularly in knowledge-based
Western industries. The UNCTAD report notes that
future foreign-investment flows to top developing
countries in Asia will increasingly go toward
so-called human-capital-intensive industries. The
likely high-growth industries of the future, such as
information technology and biotechnology, require an
increasingly skilled labor force.
Moreover, Southeast Asia's fragmented markets are a
tougher sell nowadays with foreign investors in light
of China's and India's growth potential, where
untapped unified markets present huge
economies-of-scale benefits for multinational
manufacturers. In human-capital terms, Indonesia is
now viewed less favorably as a foreign-investment
destination than Thailand, Singapore and arguably even
Vietnam.
Part of that perception, no doubt, can also be chalked
up to Indonesia's aging infrastructure, its
unpredictable legal system and the lingering threat of
terrorist attacks against Western targets. At the same
time, Indonesia's decrepit education system and its
woefully unskilled labor force are emerging as the
largest deterrent to desperately needed new foreign
investments.
Poverty of learning
In 2003, Indonesia's education spending stood at about
1.5% of gross domestic product (GDP), compared with
5.3% in South Korea and 2.8% in comparatively
underdeveloped Vietnam, according to World Bank data.
Thailand, which spends 3.7% of GDP on education,
announced this week plans to increase that to 4.5%-5%
beginning next year to improve Thai students'
analytical abilities.
This year China will spend 13% of its total national
budget on education, India 12%, the Philippines 17%,
Malaysia 20%, Hong Kong 23% and Thailand 27%.
Indonesia's education budget this year, in comparison,
represents less than 10% of the government's budget,
while the draft budget for 2007 proposes a tiny
upgrade to 10.2% of total national spending.
Those meager allocations are in effect bankrupting
Indonesia's public education system. For instance, in
2005 the cost of education was Rp71 trillion (US$7
billion), well above the Rp21.38 trillion allocated by
the state budget, according to official statistics. A
constitutional amendment in 2002 decreed that the
government must spend 20% of the annual budget on
education - but politicians have been slow to follow
up.
Officials say they plan to increase education spending
to 14.7% in 2007, as part of a phased plan to achieve
the constitutionally mandated 20% by 2009. But as with
previous governments, spending on roads, bridges and
power stations has once again taken precedence over
education under President Susilo Bambang Yudhoyono's
administration.
Indonesia's education failures are grounded deep in
history. National founder president Sukarno favored a
system of mass political education, aimed at unifying
the population rather than empowering them with
employable skills. Under president Suharto, a
compulsory nine-year education program was
implemented, but the education system still completely
failed to meet the needs of a modern workforce.
Now government funding is concentrated at the
primary-school level, where enrollment rates have
jumped from 62% in the early 1970s to about 95% today.
Yet the lack of a modern curriculum and capable
teachers is holding back Indonesia's most ambitious
students and in turn the country's future economic
prospects.
Across the board, rote learning is emphasized over the
development of critical thinking skills. Sector
specialists say less than half the country's
primary-school teachers and two-thirds of
secondary-school teachers possess even the minimum
qualifications required to teach effectively.
Instructor absenteeism on any given day is reportedly
about 20%.
Most of the country's 3 million teachers and
university lecturers moonlight to supplement their
income. That's because pay scales, set by the
government, start at a low Rp1.5 million ($165) a
month for schoolteachers and Rp3 million ($330) for
college lecturers. According to a recent Ministry of
Education survey, about 80% of schoolteachers take on
outside jobs to bolster their incomes - to the
detriment of their commitment to public-school
students.
This inattentiveness was recently exemplified in the
failing results of a basic placement examination taken
by thousands of graduating high-school students who
had already been accepted for university places. Of
the privileged few who do make it to university,
graduates are criticized by employers for their lack
of analytical skills and inability to solve problems -
hardly surprising given the political emphasis of the
national curriculum.
Worryingly, it appears the situation is set to
deteriorate. In Indonesia, families are free to send
their children to state, private or Islamic schools,
yet the spiraling costs of education and related
expenses have recently caused a growing number of
dropouts.
Last year the government tried to cushion the effect
of fuel-price increases on education enrollment
through the so-called Bantuan Operasional Sekolah
(BOS) program, which was designed to help cover the
cost of tuition, registration, books and exams for
needy children aged between six and 15 years. Yet
according to Indonesian Corruption Watch (ICW),
schools still charged most parents for these items,
and in any case, the increased costs of transport for
schoolchildren after the abolition of fuel-price
subsidies has largely negated any of the BOS benefits
for parents.
Indonesia is widely ranked as one of the most corrupt
countries in Asia, and state schools are badly plagued
by embezzlement and bribery.
The Indonesian Coalition for Education claims that
corruption permeates the national education system,
where budgets earmarked for educational purposes are
seldom fully used for school purposes and instead end
up in the pockets of institutions' administrators, it
contends.
For instance, it notes that textbooks and uniforms are
marked up for sale to pupils, and teachers often give
low marks in examinations to make students sit for
repeats, which, of course, the students have to pay
for. Contractor fees for school-building repairs and
improvements are chronically inflated.
Islam fills the gap
Significantly, the state's education failure has
opened the way for cheaper Islamic-oriented education.
Recent estimates suggest that as many as 20% of
Indonesia's school-aged children are enrolled in
Islamic schools. And enrollment rates are increasing
by about 7% every year, though education experts say
the quality of instruction and emphasis on religious
studies mean most Islamic-school graduates will lack
the skills needed to participate in a competitive job
market.
The government funds 10% of the secular Islamic day
schools, or madrasahs, and an even larger portion of
the traditional Islamic boarding schools, known
locally as pesantrens. Pesantrens played a key role in
national education before and during the early years
of independence in the 1950s, but six decades later
the standards, curricula and instruction methods are
widely considered even lower than at state schools.
Attended by an estimated 2 million pupils, most
pesantrens are in rural areas and under the direction
of Muslim scholars. The standard pesantren syllabus
includes teaching blocks for an understanding of the
Koran, the Arabic language and Islamic law, as well as
Muslim traditions and history.
Indonesia's 38,500 madrasahs enroll 21% of all
students at the junior-secondary level, according to
statistics compiled by the Asian Development Bank
(ADB). In general, madrasahs serve the rural poor and
are most active in isolated areas that offer few other
educational opportunities.
These are often in areas of the country affected by
chronic unemployment and poverty, a desperate mix that
radical Islamic groups have been known to exploit for
recruits to their sometimes violent causes. Madrasahs
provide schooling for an estimated 5.7 million
students nationwide, or 13% of all school-age students
and more than half of madrasah students are children
of farmers and laborers.
Foreign donors, for their part, are trying to help
fill Indonesia's learning gap. The ADB has worked with
madrasahs since the mid-1990s, aimed mainly at
integrating their curriculum with the secular national
education system. So, too, has the United States
Agency for International Development (USAID) through a
$157 million program aimed at modernizing Islamic
schools through teacher training and updating
curriculum to include lessons relevant to the
workplace. Those efforts, however, have so far met
with only limited success.
Notably, USAID in 1997 had prepared to close down its
Indonesia-based operations on expectations that the
then rapidly growing country no longer needed foreign
aid. Now, Indonesia desperately needs to attract new
foreign investments to rejuvenate growth and employ
its vast, underemployed population. But without
substantial domestic investment in human capital,
those foreign investments likely won't arrive, and
Southeast Asia's largest economy's prospects just grow
dimmer and dimmer.
Bill Guerin, a Jakarta correspondent for Asia Times
Online since 2000, has worked in Indonesia for 20
years, mostly in journalism and editorial positions.
He has been published by the BBC on East Timor and
specializes in business/economic and political
analysis related to Indonesia. He can be reached at
softsell@prima.net.id.
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