An urgent agenda for local human development

An urgent agenda for local human development

S.A. Chowdhury, Principal Sector Specialist, Asian Development Bank,
Jakarta

Adam Smith once wrote, "No one needs be bankrupt by investing
in human beings."

All over the present day world it is recognized that the
educational achievement and economic success are closely linked;
the battle to raise a nation's living standards is fought first
and foremost in the classrooms.

The dramatic success of East Asian economies over the past two
and a half decades are partly attributed to the successful
investment made in human capital to create a skilled labor force
that propelled the economy to unprecedented heights.

Poverty was successfully reduced through economic growth and
human indicators rapidly improved. No doubt prudent macroeconomic
policy worked as a catalyst in this venture.

Among the countries in the region Singapore, Taiwan, South
Korea, Hong Kong and Malaysia provided sustained state support to
research and development (R&D) and tertiary education, and
successfully induced private sector participation.

The existence of a highly skilled labor force facilitated the
rebounding of some of the economies after the recent economic
crisis. Indonesia's weakness in creating appropriate level of
manpower is evident in its low R&D base and ineptly resourced
tertiary education system that fails to produce graduates of
international standards.

The country's higher education system is yet to produce world
class scientists, engineers and doctors. Indeed many
multinational companies working in Indonesia are forced to
recruit higher level technical and managerial personnel from
outside the country.

Indonesia's higher education system is relatively new having
initially evolved from Dutch colonial inheritance. But since
independence from Netherlands in 1945 it gradually took on other
West European and North American models.

Indonesia's first university -- University of Gadjah Mada
(Yogyakarta) was established only in 1946, followed by the
University of Indonesia in 1950 in Jakarta, the capital.

Under the founding president Sukarno's administration a large
number of public universities was rapidly established; between
1960 and 1966 19 state universities and eight university level
institutions were established across the country.

The main trend during president Soeharto's "New Order" regime
(1967-1998) was to relocate most of the state universities in new
purpose-built campuses financed by external and domestic sources.
By early 1980s the government's target of geographic equity was
almost achieved; at least one state university was located in
each of the then 27 provinces.

The rapid expansion of higher education was however
accomplished at the cost of quality. Indeed no formal quality
assurance system was in place until 1994. It was only in that
year a higher education accreditation board was established, with
the task to provide external evaluation through accreditation.

Subsequently when government put a brake on creating new state
universities, many private universities and colleges came to be
established, triggered by growing social demand.

These were mainly sponsored by private foundations and non
government organizations. There were widespread concerns among
employers and academics of the unacceptably poor quality of
graduates churned out by many of these newly established private
institutions.

About 1.5 million students are currently enrolled in
Indonesia's tertiary education institutions, of which about two
thirds are in private institutions. About 80 university-level
state institutions and about 25 private universities form the
core of higher education system that comprises over 1800
institutions.

Only about 12 per cent students study science and engineering
mainly due to lack of facilities while the rest study liberal
arts -- many of whom often find it difficult to obtain gainful
employment.

A major weakness of the system is the low staff profile --
over 60 per cent of teaching staff in the system has only a
bachelor degree. Nearly 80 percent of all PhDs is concentrated in
top 10 universities, all located in Java.

Main income of the state universities comes from student fees
and government grants while most private universities achieve
nearly full cost recovery (tuition fees in private universities
range from 5 to 20 times of those in public universities).

The government's ambitious long-term strategy for tertiary
education sets out targets for upgrading tertiary education to
comparable international standards by providing autonomy in
governance -- establishing effective quality assurance regime,
upgrading staff profile, strengthening institutional and sector
management capacity and by investing in information and
communication technology.

The strategy focuses on achieving excellence and expanding
opportunities in science, technology and engineering -- study
programs that will contribute to economic development. This will
be underpinned by major restructuring of the system where all
future funding of higher education will be competitive and
performance-based.

In 2001 the government launched a six-year higher education
sector development and reforms program with a substantial
assistance package from the Manila-based Asian Development Bank.
The program will contribute to modernize the higher education
system by (i) restructuring the management of higher education,
through improved governance, autonomy, and accreditation; (ii)
introducing and reinforcing competitive and performance-based
mechanisms for higher education funding; (iii) improving quality
and relevance of higher education consistent with the needs of
economic and social development; (iv) enhancing geographical and
social equity in higher education; and (v) establishing a
meaningful public-private partnership in higher education.

In upgrading the quality and relevance of higher education
programs, a key focus will be on developing higher education
human resources, academic networking both within and outside the
country and strengthening quality assurance regime.

Indonesia must also address two global trends that have
emerged with unanticipated speed and impact -- the development
and application of information technology and knowledge
management through the Internet.

And, as the opportunities offered by globalization and
information technology are not distributed evenly, the higher
education system must take a lead role in minimizing the "digital
divide". The program will assist in creating the new breed of
knowledge workers who will be mobile and adaptive to new
technology.

Today a review of first year's experience of the six-year
program shows that the development concept and strategy is sound
and on track, and that although much work remains to be done, the
tertiary education is moving ahead steadfastly.

In modernizing its higher education system Indonesia can gain
much from international experience to acquire and manage
knowledge that will benefit society in an increasingly knowledge-
based and globalized economy. International higher education
community will be well justified to assist Indonesia in this
endeavor.

The views expressed by the writer are personal and do not
necessarily reflect those of the institution he works with.