The shape of the world a generation from now will be influenced far more by how we communicate the values of our society to others than by military or diplomatic superiority. William Fulbright, 1964

Thursday, March 15, 2018


No skills, no surging economy

President Joko ‘Jokowi’ Widodo is getting frustrated.  With just over a year before seeking a second five-year term, his plans to make Indonesia a fresh young international industrial giant grunting alongside the old hands are losing traction: The workforce doesn’t have the skills to drive this economic engine because it’s blocked by illiteracy.  Duncan Graham reports:

There’s no need to spend hours flicking through data-dense surveys analysing Indonesia’s education system to know it’s still fumbling for first gear.

Just one fact says it all:  The world’s fourth largest nation has no Nobel prizes to its credit.  The first three by population are China with eight awards, India with ten while the US has 371.

The closest Indonesia came was last century when human rights activists proposed novelist Pramoedya Ananta Toer for the honor.  But there was no applause from Indonesia where his books were banned. In the 1960s and 70s he’d been banished to a distant prison island for his alleged pro-communist writings.

Adjacent Australia, with one-tenth of Indonesia’s population has 12 Nobels, mainly in physics and medicine, with two for literature. The message is clear - striving for intellectual excellence has not been Indonesia’s top priority.

The irony is that the Indonesian Constitution demands 20 per cent of the national budget be spent on education. Yet the nation allocates less than US $1,200 per primary student - around 14 per cent of spending by Organisation for Economic Co-operation and Development (OECD) countries.

Nine years of schooling are mandatory and supposed to be free.  However schools thrust their hands into parents’ pockets with a wide range of charges from buying equipment to building new classrooms to funding teachers’ retirements.

Indonesia has 170,000 primary schools, 40,000 middle level but only 26,000 highs. 

In villages and poor areas kids are frequently pulled from class because the family can’t afford the fees and the child’s labor is needed.  A ‘Smart Card’ providing free tuition to the poor was introduced by Jokowi, but filling desks does little if the room is overcrowded and the teacher incompetent.

None of this is new to the nation’s politicians and planners who have long tinkered at the edges.  Before he was elected Governor of Jakarta last year Dr Anies Baswedan was Education Minister, and before that an academic who pioneered the Indonesia Mengajar (Indonesia teaches) program sending young graduates to work in remote schools.  

There are many other worthy schemes usually engineered by philanthropists rather than politicians, but they are buckets and spades to flatten the Mount Bromo of past apathy.

Two years ago an OECD survey found ‘the typical Indonesian adult living in Jakarta, who has completed tertiary education, has lower literacy proficiency than the typical Greek or Dane who’d completed only lower secondary school.

Additionally, the Jakartan with tertiary education had lower literacy proficiency than adults in every other OECD country who only completed upper secondary schooling.

There are 35 members of the OECD, mainly from Europe but also including the US, Turkey, Japan, Australia and New Zealand

Dr Lant Pritchett of the US non-profit Center for Global Development commented that the statistics don’t mean the disadvantaged are getting a bad education and the advantaged in Jakarta a good education;

‘It means the disadvantaged are getting a terrible education (essentially none at all) and the advantaged a bad (or mediocre at best) education.

This is impacting on development as the nation strives to play economic catch-up with the rest of the world.  Finance Minister Sri Mulyani Indrawati estimated the economy grew 5.05 percent last year; the goal was 5.2 percent. Though these figures would delight many Western nations, most growth is through local demand, not exports; the population increases by more than 9,300 every day.

Without dramatic changes education experts reckon it will take Indonesia decades to close the skills gap with advanced economies.  Although literacy levels have risen (the average is now 95.38 per cent) the nation ranks 60 in the world according to a list assembled by the Central Connecticut State University.  

Its president and list author John Miller said that ‘as knowledge increasingly becomes a product as well as a tool, the economic welfare of any nation will be ultimately and inextricably tied to the literacy of its citizens.'€

Literacy leaders are the Nordic countries where teacher quality and spending are high, truancy policed, reading encouraged and citizens value education.

These statistics reveal the problems confronting the Indonesian government trying to become the world’s seventh largest economy within 12 years. President Jokowi says that requires 58 million skilled workers by 2030.

He wants the law changed so foreign universities can open in Indonesia as they are in Malaysia; this move has been pushed by Australian academics but resisted by their Indonesian colleagues who fear their deficiencies will be exposed.

At a Palace meeting last November the President complained that the topics being taught hadn’t altered much for the past three decades while the rest of the world is into automation, information technology and artificial intelligence.

There are more than 3,000 private and 130 public universities in Indonesia, but few internationally recognised for quality.  Some are linked to companies, like tobacco giant Sampoerna and property developer Ciputra.  Others are faith-based and not controlled by the Education Department.

Jokowi’s ambition is grand.  It is also unachievable without massive reforms powered by great political will.  His statements follow the tradition set by the Soeharto ‘New Order’ government last century which was forever announcing splendid schemes later remembered only by rotting billboards set in empty fields.

Maybe this time it will be different as reality bites and voters demand change.  But  this engine is going to take time to crank.

First published in Strategic Review, 12 March 2018:  See

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