Human Capital Development Still Faces Problems

Jakarta- Human capital development in Indonesia still faces a number of challenges, from budget disbursement, education curriculum, less competitive graduates, incompatibility between education and industry, to teaching quality at education institutions. 

The problems arose in an Expert Roundtable Discussion on “Addressing Challenges of Education Sector in Producing Top Human Resources” held by the National Committee of the Annual Meetings of IMF-World Bank Group 2018 in Jakarta on Wednesday, 12 September 2018.

The session is part of the Voyage to Indonesia, a series of many events leading to the Annual Meetings 2018 in Bali this October. The Wednesday’s event was opened by the Daily Chairman of the National Committee of the Annual Meetings 2018 Susuwijono and attended by dozens of experts on human capital development. 

In that occasion, the Daily Chairman of the National Committee Susiwijono said human capital or quality of human resources would become one of the agendas at the Annual Meetings 2018 to be held in Nusa Dua, Bali. Along with digital economy, this issue will serve as additional agenda in the Meetings that will be attended by not less than 18,000 participants from 189 countries. 

“This is in line with the commitment of the President who will focus on human capital development in years to come,” he said. 

Budget allocation task

Many problems remain unsolved. One of them is optimizing education budget that stands at 20%. Head of the Fiscal Policy Agency of the Finance Ministry Suahasil Nazara said the large percentage in the national budget hadn’t produced significant results in the past 10 years. 

“440 trillion (in IDR) is a big budget. This budget hasn’t result in significant human capital development in education sector in the past 10 years,” he said.

He said the problem was on the budget optimization to significantly add Indonesia’s human capital quality. A valuation from the Program for International Student (PISA) reveals that the ranking of the country’s human resources is at the 62nd from 69 countries.

As such, Suahasil said, how to allocate the 20% budget became the government’s task until now. The Finance Ministry offers Sovereign Wealth Fund or SWF in Education in forms of Education Fund Management Institution. 

“This is an effort to optimize the education budget so as it won’t run out in the same year. This is also an attempt to realize equality among generations,” he said. 

On the other side, according to the Atma Jaya University Rector Prasetyantoko, the amount of education budget was in fact not line with the increased quality of the human resources, he said by quoting a research by the World Bank. 

“Because there isn’t any conditionality. Higher education doesn’t go parallel with industry. KPI measures don’t exist, higher education disparity is also very high. These are the problems that are once said by the World Bank. So, mismatch eventually occurs,” he said. 

As a result, he stressed on the necessity of the budget allocation management as big education budget wasn’t the only factor guaranteeing human capital development would run as expected. 

Improving relevance with industry

In response with the conditions, Director of the Learning and Students Affairs of the General Directorate of the Higher Education, Technology and Research Ministry 

Paristiyanti Nurwardani said her office had been building relevance education sector with industry, one of which was by applying blended learning system.

“This is the effort to add relevance. That’s why we repair curriculum by applying dual system, 3:2:1 learning model as well as multi entry module system,” she said. 

In the 3:2:1 learning model, Paris said students were directed to take classes for three semesters. The next two semesters are internship programs to introduce them to industry while the last one semester is competency strengthening and final assignment completion.

“That’s why we hope state-owned enterprises (BUMN) can provide bigger rooms for creating relevance between education sector and industry,” Paris said. 

She said that the Higher Education, Technology and Research Ministry never provided courses references to be taught to students. “We only determine learning goals. This is expected to make campuses formulate simpler courses. What is more important is achieving the learning goals,” she said. 

Head of the Fiscal Policy Agency of the Finance Ministry Suahasil Nazara shared his similar views. He said that the key for developing education sector did not lie on the government’s hands. 

“That should be developed by the business sector. The government only creates conducive environment for the development efforts,” he said. 

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