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.