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After resource boom, Jokowi turns to humans of RI
“Improved human resources for an advanced Indonesia” were the words that caught the attention of the audience when displayed on a big banner spread across a stage on which Finance Minister Sri Mulyani Indrawati was seen dancing with her staff to celebrate Indonesia’s 74th year of independence
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“Improved human resources for an advanced Indonesia” were the words that caught the attention of the audience when displayed on a big banner spread across a stage on which Finance Minister Sri Mulyani Indrawati was seen dancing with her staff to celebrate Indonesia’s 74th year of independence.
After decades of reliance on natural products, from spices, palm oil and raw ore to oil, President Joko “Jokowi” Widodo has reiterated his commitment to break Indonesia away from the “natural resources curse” and focus on human development.
To that end, the government has allocated hundreds of trillions of rupiah from the proposed 2020 state budget that carries the theme “state budget for competitiveness acceleration through innovation and empowerment of human resources quality”, the President said in his state of the union address on Friday.
The human capital budget will be disbursed through various channels including the Education and Culture Ministry, Manpower Ministry, Health Ministry and regional fund transfers. Programs include subsidies for students, endowment funds for education, research and culture funds, training for the unemployed as well as universal healthcare insurance and stunting reduction acceleration programs.
“Armed with innovation, quality human resources and technological proficiency, we can break away from the natural resources curse,” said Jokowi in front of policymakers and lawmakers at the House of Representatives on Friday, dressed in royal Sasak attire.
The shift to human capital has seen the budget allocation for education increase by 5.72 percent year-on-year to Rp 505.8 trillion (US$35.52 billion) in 2020, health by 13 percent to Rp 132.2 trillion and social protection by 4.3 percent to Rp 385.3 trillion, Finance Ministry data show.
Endowment funds for culture, higher education and research have been earmarked at Rp 29 trillion.
“Broadening access for social inclusion, increasing access and quality of healthcare services, boosting equality of education services, strengthening economic resilience, advancing culture and character building for a nation with accomplishment,” Coordinating Human Development and Culture Minister Puan Maharani told a press briefing.
The programs include scholarships for more than 800,000 university students, an expanded version of the Indonesia Smart Card (KIP) program previously reserved for elementary to high and vocational school students, preemployment cards for training and skills upgrades for the unemployed, operational support for schools across the archipelago and health programs to accelerate reduction and prevention of stunted growth among children.
At the same time, Research, Technology and Higher Education Minister Mohamad Nasir announced a plan to recruit foreign academics to lift local universities into the list of the world’s top 200 universities.
I Dewa Gede Karma Wisana, associate director of the University of Indonesia’s Demographic Institute at the Faculty of Economy and Business, lauded the government’s expanded initiatives in human development.
“The important thing, however, is for the government to stay consistent with its human development policies [...] developing human resources is not an overnight project,” Dewa told The Jakarta Post on Monday. “We have to make sure that we will not lose opportunities from the [labor force] once our demographic bonus ends in 2036.”
The main consideration in sustaining Indonesia’s human development policies, he said, was to prevent fiscal exposure from external turbulence and to improve data collection, so that the government could use human development-related spending more effectively and accurately.
Separately, Center of Reform on Economics (CORE) Indonesia executive director Mohammad Faisal concurred with Dewa, saying that impacts from human development policies would provide more lasting effects on growth than direct economic policies.
“It’s no news that many countries that did not have natural resources have overtaken countries that did because the former invested so much in human development,” Faisal told the Post. “We have huge work to do in boosting education, because even today, the majority of our labor force still did not graduate from high school.”
A Statistics Indonesia’s (BPS) labor survey in February showed that only 29.17 percent of Indonesia’s 136.18 million labor force had a high school or vocational school diploma. Of the total labor force, only 12.57 percent graduated from college.
Human development programs would boost Indonesia’s competitiveness through labor skills improvements, which in turn would encourage more exports of services and value-added goods, said Faisal.
“However, the government cannot just throw money around and hope for results. They also have to identify and provide the necessary skills and training so that our workforce will be absorbed by existing industries,” he added.
