TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Monash first: Australian universities are coming to RI
In the not so distant future, you will no longer need to apply for a visa and fly south to study at some top Australian universities
Change Size
In the not so distant future, you will no longer need to apply for a visa and fly south to study at some top Australian universities. With the ratification of a landmark trade deal with Canberra, the Indonesian government has decided to bring them here instead.
Indonesia is already open to foreign colleges. But the trade pact, ratified by the House of Representatives earlier this month, allows the government to further relax its rules regarding the establishment of local branches of Australian universities.
The first Australian university to announce its Indonesian branch is Monash University, a Melbourne-based public university, which will only offer master's and PhD degrees, as well as executive programs and micro-credentials. The university is scheduled to begin short executive programs later this year and plans the first intake of master's students in late 2021.
A Monash University spokesperson told The Jakarta Post via email last week that the campus would be a "wholly Monash-owned entity, rather than a joint venture", although it was open to building research and education partnerships with local leading universities. The institution is looking at various options for its campus location within the capital.
The move is made possible by the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which allows Australian investors to have bigger ownership shares in various sectors, including that of education, as the government expects to upskill the country’s workforce.
Investment Coordinating Board (BKPM) investment deregulation director Yuliot told the Post on Friday that Australian universities would be able to enjoy several exceptions, such as Monash's plan to own 100 percent of the shares with locations not limited to those set in prevailing regulations.
"One of the focuses of Indonesia's agreement with Australia in the CEPA framework is on education. Monash's plan to open a campus here without a local partner is within the CEPA framework. Universities from other countries will have to follow prevailing regulations," he said.
Monash's announcement came two years after the government first revealed in 2018 its plan to allow the operation of foreign universities, not just Australian, in the country, earning mixed reaction from the public.
The government expected to spur competitiveness among private universities and to provide students with a cheaper and easier option than studying abroad.
This is because the number of Indonesia's outbound students has continued to grow over the years, with Australia being the most popular destination. Some 11,000 Indonesians went to study in the southern neighbor in 2018, according to a 2019 UNESCO report. The rest went to Malaysia (about 10,400 students), the United States (about 8,700 students), the United Kingdom (about 3,600 students) and other countries.
The government, however, gave different figures.
According to the Research, Technology and Higher Education Ministry, the number of Indonesian students in Australia exceeded 16,000 in 2018, followed by China (14,600), Malaysia (10,000) and the US (8,600).
Rough estimation of capital outflow from these students reached as high as Rp 8.96 trillion (about US$654 million) annually, according to the Office of the Coordinating Economic Minister.
The liberalization of tertiary education in the country is based on a 2012 law on higher education that allows foreign operations, requiring foreign universities to obtain a government permit, be nonprofit, work together with local universities under the government's permit and prioritize local lecturers and educational staff.
The government claimed then that several universities such as Melbourne University and the University of Queensland had expressed interest in establishing branches in Indonesia but none of the plans materialized, even after a 2018 ministerial regulation on foreign universities was ratified that same year.
Yuliot of the BKPM said requirements in prevailing regulations that foreign universities had to be nonprofit and also partner with local universities might cast doubt on foreign institutions investing in the country.
On Indonesia's 2016 negative investment list (DNI), tertiary education service is listed as open to investment under certain conditions, with the conditions being reverted to regulations mentioned earlier.
Yuliot said, however, that both regulations did not specifically regulate share ownership. He added that the Office of the Coordinating Economic Minister was deliberating a regulation on share ownership of foreign universities and the plan was to set the foreign ownership at as high as 67 percent.
"Countries like Malaysia, Vietnam, Thailand and the Philippines have pushed for [foreign] investment in higher education. We're far behind Malaysia, which has for long opened its doors [to foreign universities]. Quite a big number of Southeast Asian students go to Malaysia to get a better education," he said.
Contacted separately, the Office of the Coordinating Economic Minister’s secretary, Susiwijono Moegiarso, said the office was finishing a draft of the investment priority list as a replacement to the 2016 DNI, adding however that further details on the tertiary education business were not complete yet.
It is possible, however, for foreign universities to be fully owned by foreign investors if they are to be established, as allowed by the 2018 regulation, within special economic zones (SEZs) — making them subject to another law on SEZ.
The 2009 law on SEZs states that regulations concerning sectors open for investment under certain conditions shall no longer apply — meaning that foreign shares in these zones can reach as high as 100 percent. There are currently 13 of such zones across the country, with only two in Java.
"Attempts to attract foreign investment in the education sector are constrained by the requirement to work together with Indonesian universities. [...] There's room to attract higher education investment that can give freedom to investors; that is by using the 2008 law on SEZs [...]," SEZ national council secretary Enoh Suharto Pranoto told the Post.
This is also why the government has been pushing to create an education SEZ in Banten, the neighboring province of Jakarta. Banten, in particular the city of South Tangerang, is home to American tech giant Apple's Developer Academy, which is run in collaboration with Indonesian private university Binus University. Talks of the plan, however, had stalled at the Banten administration, Enoh said.
Education observer Indra Charismiadji said he appreciated the positive development toward more relaxed education regulations in the country as it could prompt local universities to improve and offer more choices locally to students aspiring to study abroad.
