A system test: Funding and regulation are set to be overhauled with a range of ambitious reforms

In the past 15 years, spending on Indonesia’s education system has dramatically increased, along with enrolment rates. Indeed, basic education is now mandatory and in theory accessible to all, in line with one of the country’s Millennium Development Goals. Moreover, recently there have been great improvements in the quality of basic and, to some extent, secondary education. With improvements in basic education mostly completed, the next challenge is to increase access to, and the quality of, secondary and higher education, especially for public institutions.

PRIORITIES: The central government’s main priorities in education are to advance the implementation of a compulsory nine-year education programme, to ensure all Indonesian children have access to a basic level of education and to continue increasing basic education quality. To achieve these targets, efforts are currently aimed at reducing the nation’s illiteracy rate, especially that of people over 15 years old; raising the educational participation rate and the average time spent in school; increasing the tertiary participation rate among today’s elementary school students; and decreasing disparities in education quality nationwide.

STRUCTURE & HISTORY: Public educational institutions fall under the authority of the Ministry of National Education (MoNE), while the Ministry of Religious Affairs (MoRA) has oversight of religious schools, or madrasas (see Religious Affairs chapter). In 1989, after the end of the Suharto era, Indonesia reformed its national education system. The reform’s main tenets included the right of all citizens to education regardless of gender, religion, ethnicity, race, social status or level of ability; the implementation of nine years of basic compulsory education and the decentralisation of the curriculum, including local content provision and adjustment of national content to local circumstances. The reform also saw establishment of the National Education Advisory Board. In 2003, the system’s legal framework was delimited via the National Education System Act. In 2006, the minister of national education spelled out the national curriculum and graduate competency standards in a decree, as well as establishing the Office of National Education Standards.

ROLE OF COMMUNITIES: Under the national curriculum, primary and secondary education must include languages, mathematics, natural and social science, art and culture, religious education, physical and vocational education, and citizenship. While policy-making and setting of standards fall under the central government’s purview, education services are decentralised.

Local and provincial governments are responsible for service delivery, school maintenance, planning and quality oversight. The schools are self-managed, enjoying considerable discretion over funds allocated from the central government. According to Anwar Al Said, head of the education unit at UNESCO in Jakarta, local communities play a key role in determining a variety of education priorities. “School committees are very active,” he told OBG. “Parents and members of the community work closely with the principal and engage in deciding on 20% of education content, including topics such as agriculture, disaster risk reduction, HIV awareness, English language and technology empowerment. It is a very liberal system, and is an approach that gives the community more say over how their children are being educated.”

The Indonesian education system consists of two years of preschool education, six years of primary, three years of lower secondary education, three years of upper secondary and various degrees of higher education, which can be formal or vocational. Since 2003, children aged 7-15 years have been required by the government to attend primary and lower-secondary school. At the end of their secondary education, students’ performance is assessed for eligibility to enrol at institutions of higher education via a national exam called the Ujian Akhir Nasional. Students may also sit exams at the end of their primary education.

NATIONAL PLUS: “National Plus” is an unofficial term describing schools offering education beyond minimum requirements specified by the national curriculum. These schools experienced a boom during the 2000s, with the number of schools and the enrolment in them rising every year. This was largely due to national foundations and business leaders looking to fill a perceived gap in the educational system in the 1990s. As a rule, National Plus schools conduct some subjects in English and therefore have a number of native English speakers on staff. To ensure implementation of the national curriculum, and to meet state employment regulations, Indonesian teachers are kept on staff as well. National Plus schools, which are accredited by the Association of National Plus Schools (ANPS), may also offer a variety of internationally recognised curricula, such as the International Baccalaureate or Cambridge International Examinations.

International schools differ from National Plus schools mainly in the make-up of their student body, which tends to be composed of expatriates. However, there is significant overlap between the two, with many Indonesians attending international schools and a number of foreign nationals attending National Plus schools. Despite the gains made by National Plus schools in recent years, international schools are still widely perceived to be favoured by the country’s elite, as well as by the growing expatriate population.

“One of the main concerns of expatriates when they settle in a new country is the availability of high-quality educational institutions. Jakarta has a number of these types of facilities, providing parents with more than one option,” Timothy Carr, head of school of the Jakarta International School, told OBG. Students graduating from these international schools often choose to attend university overseas, gravitating towards places such as the US, Europe and Singapore.

FUNDING: Funding for public education comes from the central government in many forms. In an indication of its importance, 20% of total government expenditure is ring-fenced for education. These funds are disbursed to local districts for spending, mostly at their discretion. In addition, MoNE’s flagship school grant programme, the School Operations Fund (Bantuan Operasional Sekolah, BOS), forms an important part of efforts to deliver high-quality education to students at all income levels. Since 2005, BOS – which allocates Rp19trn ($2.3bn) per year – has been disbursing quarterly block grants for operational expenses to schools based on the number of students in each school.

TEACHER REFORM: All teachers are required by the MoNE to have an undergraduate education or a four-year diploma to be certified to teach in all schools, public and private, and at all levels. However, in reality, a minority of teachers have these basic qualifications. The 2005 Teacher Law was designed to address this, with a focus on solving systemic problems such as sub-par qualifications and absenteeism among teachers. The law changed teachers’ employment conditions, certification requirements and compensation. Based on the outcome of national certification exams implemented in 2007, teachers are now allotted benefits depending on their qualifications, functional area and place of work. In addition, certification is based on an assessment of the teacher’s competencies.

ABSENTEEISM: Despite progress in recent years due in part to benefits distributed under the Teacher Law, absenteeism remains a problem in many schools. The World Bank estimates that one in five teachers does not show up to teach on any given day. Some in the system point to the way in which compensation is structured as a root cause of absenteeism, with low salaries (the average teacher’s salary is about $2000 per year, according to the “National Socio-Economic Survey”, or Susenas), little room for career progression and scant additional compensation for teachers who do pursue additional qualifications. The result, some argue, is that better educated teachers may maintain only a formal attachment to the school system while at the same time pursuing other opportunities in more lucrative areas.

Despite recent improvements, in the face of such obstacles it is perhaps not surprising that various international ratings have placed the education quality in Indonesia in the lower fifth of those nations tested. For example, the literacy rate is 87%, according to a survey done by UNESCO in 2007, below neighbouring Philippines (93.4%) and Thailand (94.1%). In addition, the Programme for International Student Assessment placed Indonesia 50th out of the 57 countries ranked on their scientific and mathematical literacy. Likewise, the International Reading Literacy Study rated Indonesia 42nd out of the 45 countries that were surveyed.

PUBLIC VS. PRIVATE: Because educational standards are set by the central government, there do not appear to be many significant differences in the quality of schools, teacher qualifications and pupil-teacher ratios between public and private institutions – despite a predominance of private institutions at higher levels of education. Private madrasas, which follow the general curriculum of regular schools in addition to providing enhanced religious teaching, account for 12% to 15% of primary and lower-secondary enrolment.

SECONDARY & HIGHER EDUCATION: While private universities proliferated during the Suharto years, their quality was questionable, with private and public universities sharing resources, standards and ideals. The result was a relatively homogenous education system that did not make research a priority. The country has two types of senior high school: Sekolah Menengah Atas denotes a university-preparatory school and Sekolah Menengah Kejuruan a vocational school. According to the World Bank, the net enrolment rate at the upper-secondary level has doubled, and the share of employees with an upper-secondary or higher education has increased from 35% to 50% since 1995. In 2010, the gross enrolment rate at the tertiary level was 16.35%, according to Susenas statistics.

However, student performance has yet to improve in line with the increase in government expenditure. Enrolment is particularly low in secondary education, with public secondary school seeing 57% enrolment rates and private secondary schools receiving 37%, according to Susenas. Not surprisingly, private schools play an important role at the secondary level of education: while only 7% of primary schools are private, 56% are private at the lower-secondary level and 67% are private at the upper-secondary level.

SKILLS TRAINING: A potential mismatch between the courses taught at the tertiary level and the skills required by the job market is another concern. A prime example of this is that many universities are unable to offer science programmes because they cannot afford to set up laboratories, or pay for special equipment. Unsurprisingly, scientific illiteracy can have many negative knock-on effects. Economic growth mechanisms such as technological innovation and transfer can be hampered by an unskilled workforce, which in turn makes increasing productivity difficult. Even further down the line, Indonesia could be vulnerable to the loss of labour-intensive jobs – as wages rise and these jobs are lost to countries with less costly labour – with its workforce unable to make the needed move up to more highly skilled jobs.

El-Mostafa Benlamlih, resident coordinator for UN Indonesia, told OBG that although there is a high enrolment rate in the country, the dropout rate and the quality of education are issues that need to be addressed if the economy is to prosper. “Indonesia needs to look at the quality of education if it is to compete with other countries in attracting investment,” he said.

Indeed, a World Bank survey conducted in 2010 found that the skills of upper-secondary graduates do not meet employers’ expectations, with a quarter of recent hires ranked as being of a “poor or very poor quality”, 7% considered “very good” and the remainder seen as “fair”. The poor-quality hires came from both academic and vocational institutions, but there were a higher number of “very good” hires from vocational, rather than academic schools, seeming to signal that there are perhaps problems with quality in both streams of the country’s education system.

The government can do more to help, according to Benlamlih, by supporting capacity and coordination, increasing expenditure, showing local governments how to use the allocations more efficiently and striving to ensure that there is improved teacher quality. “All the governments, both provincial and national, have to work together. The budget has to be used in a smarter way. Monitoring is needed, as well as involvement of the community,” Benlamlih told OBG.

OUTLOOK: Many sector professionals advocate a greater emphasis on policy design and enhancing the quality of teaching, teacher evaluation, training and certification. Furthermore, allocating additional government spending towards income-support programmes to include attendance in secondary education might contribute to student retention and a higher awareness of the benefits of continued education.

Although the 2005 Teacher Law created incentives for teachers to seek further training, the law might also be enhanced by regular assessments of teachers’ pedagogical skills and by heightened managerial oversight, especially with regard to absenteeism.

The ring-fenced 20% budget allocation is a good base to start from when implementing such changes for what is very much a geographically dispersed and demographically diverse population. If local oversight of funds and human resources can be strengthened, and if private institutions are allowed to function with some degree of autonomy, the education sector looks to have a good chance of meeting its goals. The whole country will be watching to see how the system scores in the important tests coming up in the next few years.