Private Universities Association (APTISI) chairman Budi Djatmiko said the presence of foreign universities in general would affect competition among top local universities, both private and state-run, that targeted students from middle to upper income families. This would consequently drive those universities to target lower-income students, further affecting smaller universities, he said.

"They [foreign universities] should only offer study programs that aren't commonly available in Indonesia, so that there won't be head-to-head competition [...] otherwise, there will be [market] shifts and consequently, smaller universities won't have students anymore. That's probably what the government wants; for small universities to close down," he told The Jakarta Post on Monday.

Monash Indonesia will only offer master’s and PhD degrees, as well as executive programs and micro-credentials; focusing on studies in high demand such as data science, digital technology, creative industry, entrepreneurship, health systems and public health, as well as infrastructure and urban planning.

Although Monash’s Indonesian campus would be a wholly Monash-owned entity, as it is made possible by the Indonesia-Australia Comprehensive Economic Partnership Agreement (IE-CEPA), the university has said that it is open to building research and education partnerships with leading local universities.

The plan to allow foreign universities to operate in Indonesia was first announced by the government in 2018 and it is expected to spur competition and improve the country's higher education by requiring the foreign institutions to build partnerships with local universities.

Indonesia, home to more than 3,000 universities -- more than 90 percent of them privately owned --, has been struggling to compete globally when it comes to higher education.

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