Australian International Education Conference
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1 Indonesia Overview 2 Population: 245 million with 58% living on Java, the world s most populated island The country has 33 provinces Indonesia is the world s 3rd largest democracy Vocational Education and Training as a component of the Asean Economic Community-Opportunities Challenges and Success Factors in Indonesia Michael Fay Director, AFG Venture Group Member, Australia Indonesia Business Council Australian International Education Conference Melbourne Convention Centre 3 rd October 2012 World s largest Muslim population - 87% of the population are Muslim Indonesia has a larger Christian population than the total population of Australia GDP growth 2012: 6.7% Literacy rate: 92% 20% of Indonesian budget now spent on education Australian Aid budget for Indonesia A$558m AUSTRALIA INDONESIA BUSINESS AFG Venture COUNCIL Group PUBLIC 1
2 w 3 PPOL 4 POLICY CONTEXT INDONESIA S ECONOMIC PLANNING Indonesia has developed a Strategic Economic Development Master Plan (MP 3EI) covering the period Economic Corridors with nominated economic activities Sumatra Plantations, Production and Processing, Energy Kalimantan-Mining, Production and Processing, Energy Java-Manufacturing and Services Bali and Nusa Tengarra (NTT)-Tourism and Food Production Sulawesi-Plantation, Agriculture, Fisheries, Processing Papua-Mining, Natural Resources 2
3 8W8ithin these zones there are 8 designated programs and 22 main economic a *8 5 ASEAN Agenda ASEAN Economic Community (AEC) to be established by Designated programs and 22 activities: Economic integration plus comprehensive connectivity of key infrastructure and services. 1. Tourism and Hospitality 2. Energy-oil and gas, geothermal, hydro 3. Mining-coal, nickel, copper, bauxite, gold 4. Industrial- steel, manufacturing and textiles, defence equipment 5. Marine-fishery, shipping 6. Agriculture-food and beverages, animal husbandry, palm oil, rubber, cocoa, timber 7. Telecommunications 8. Development of strategic areas-sunda Straits (between Java and Sumatra) Enhanced people-to-people and government-to-government relations to support AEC and regional cohesion Recognition/harmonisation of standards and qualifications-indonesian Qualifications Framework Presidential decree No8/ Indonesia the Chair of APEC and host of the APEC Summit English is the official ASEAN regional language of government, business and education Polytechnics are expected to play a key role in supporting human resources and skills development for the MP3EI 3
4 Indonesian Qualification Framework 7 ASEAN Economic Community (AEC) 8 a single market and production base a highly competitive economic region equitable economic development a region fully integrated into the global economy comprising five core elements: free flow of goods; services; investment; skilled labour; freer flow of capital Source: Directorate General of Higher Education, Ministry of Education and Culture, Republic of Indonesia Source: ASEAN Economic Community Blueprint 4
5 Indonesia Australia Closer Economic Partnership Agreement IA-CEPA 9 Indonesia Australia Closer Economic Partnership-IA-CEPA 10 IA-CEPA aims to facilitate: (negotiation stage 2011 and 2012) greater economic integration between Australia, ASEAN (Association of Southeast Asian Nations) and APEC (Asia-Pacific Economic Cooperation) regions the World Trade Organisation s objectives for the liberalisation of multilateral trade IA-CEPA supported by AIBC/IABC, the Indonesian and Australian governments and Joint Chambers of Commerce Supports exploring opportunities for extending education cooperation across a range of modes, including joint courses, student and staff exchange, joint research and even joint campuses Recognises the key role of the TVET sector Indonesia as a potential source of skilled labour Potentially an increased opportunity for online degrees and diplomas Recognition by the Indonesian government of online degrees is an issue as is the level of English in Indonesia for regional integration English language levels required for entry to tertiary education increasing ACCI/AIBC Indonesia Australia Business Partnership Group meetings 2012 Key alumni from Australia in Indonesian government, business and education sectors English now a selective criteria instrument for migration and professional recognition under the SkillSelect System e.g. nurses, accountants, engineers You will struggle to get permanent residency as an independent skilled migrant without an IELTS 7 - Bob Birrell quoted in Australian HES 26/09/12 5
6 Contact Details Indonesian Education and Skills Training 11 Technical Vocational Education and Training (TVET) 12 20% of budget set aside for education and skills training however basic education consumes much of this The sleeping giant of education in Indonesia (similar to India) Significant private and Islamic school, polytechnic and university sector Only 8,500 vocational schools catering for close to 4 million students Australia major contributor under the aid budget to Indonesian government schools sector plus some to Islamic sector Enrolments up 11% in TVET in 2011 over 2010 Australia and Indonesia now reassessing their VET relationship Increasing TVET regional cooperation Singapore, Malaysia, Australia, New Zealand USA has announced significant funding for Indonesian education US$ 165 million over 5 years (the Obama factor) US Public diplomacy strategy focused on education (@america Pacific Place Mall in Jakarta the world s first high-tech cultural centre) Increasing interest and funding by UK, Singapore, Germany, Japan, USA, Asian Development Bank Indonesia s demographic dividend is a young population, with 50 per cent( 120 million) aged under 29 and 2 million a year entering the workforce Job creation is the nations number 1 priority Source: GBG Indonesia 2011 and McKinsey and Co
7 c Come the hour come the man: Joko Widodomayor elect of Jakarta and a champion of VET 13 Challenges in the Education and Training sector Finding the right fit local partner Obtaining timely approvals 14 Lack of coordination between national, district and provincial governments Inconsistent or ambiguous regulation e.g. Expat English Language Teacher Regulations Investment rules that limit foreign equity and provision of services by non-indonesian companies TVET fees historically very low in Indonesia so the price point is challenging Corruption and patronage Terrorism and safety issues 7
8 Challenges in Education and Training sector 15 Contact Details Contact AFG Venture Group 16 Foreign direct investment is limited to 49% in higher education and non-formal education Establishment of a partnership with a local institution necessary Michael Fay Director, Head of Education Services English language level of students The digital divide but rapid internet take-up and Indonesia now fastest growing Facebook market Phone: Mobile: michael.fay@afgventuregroup.com Regional recognition of qualifications and quality assurance Application of the Indonesian Qualifications Framework Australia Level 2, 52 Phillip St Sydney, NSW, 2000 Australia Indonesia L28 Menara Karya, Jl Rasuna Said, Blok X-5 Kav. 1-2, Jakarta Indonesia AUSTRALIA INDONESIA BUSINESS COUNCIL 8
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