News & Briefings‎ > ‎

Oxford Business Group: Indonesia: Education Reform

posted Nov 19, 2012, 8:05 PM by Unknown user
Foreign institutions are to be targeted to help fill major gaps in Indonesia’s skill base as a result of a weak and undersupplied education system. A recent bill opens tertiary education to overseas interests but the challenge will lie in balancing the goals of social equality with the mandate to promote high-quality education at a low cost.

Under the bill, state universities can designate themselves as “legal entities”, which would give them more autonomy and the right to seek alternative funding. Opponents of the law have charged that this will allow state schools to raise their fees arbitrarily, although the government counters that fees would be carefully regulated. The bill also mandates that 20% of seats in all faculties be allocated to low-income students, who are often priced-out or tested-out of state universities.

This shortfall of public supply has led to the proliferation of private institutions, including both universities and vocationally focused polytechnics and academies, which grant a professional diploma. Around 68% of Indonesia’s 4m higher education students attend these institutions, despite costs that can be more than double those of public schools: $16,000 for a four-year private degree, compared with up to $7000 for an equivalent public degree.

Limited resources in the state university system and low standards for private institutions result in workers lacking skills. The varying aptitude levels of graduates and their suitability for the job market produces both a shortage and a mismatch of skills. A World Bank survey found that up to 25% of the fresh work force needed to be retrained on the job.