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February 2019.
Against this backdrop, President Joko “Jokowi” Widodo is pursuing a grand vision to develop Indonesia’s human capital, with the government stepping up efforts to bridge the skills gap and bring more unemployed people into the workforce by improving vocational schools and training.
As part of his campaign, the President will disburse Rp 10.3 trillion (US$725,217) for preemployment training to equip jobseekers with skills necessary for work.
The funds are expected to be disbursed through cards for 1 million jobseekers, with 1 million more to be allocated for those looking for work in the digital sector.
On top of these efforts, Manpower Minister Hanif Dhakiri announced in April that he would increase the vocational education budget next year, but had yet to disclose an exact number. The current budget totals Rp 16.8 trillion.
The government previously also signaled it would trim some Rp 1 trillion from the Education and Culture Ministry’s budget to balance the increased budget for the Manpower Ministry and Public Works and Housing Ministry in 2020.
A study published in July by Alpha Beta and the Australia-Indonesia economic development partnership Prospera highlighted that the problem was more deep- rooted. The study argued that Indonesia’s relatively low per capita spending on education compared to neighboring countries had hampered development. “Industry stakeholders continue to report mismatches between the breadth and quality of skills they need and the skills taught in vocational and other educational institutions,” a section of the study states.
Even though the country devotes a similar portion of the budget to education as Vietnam and Malaysia, the country has fared worse in its educational outcomes in core subjects like math, a collaborative study with the World Bank and the Organization for Economic Cooperation and Development (OECD) found in 2015. “There is a sense among stakeholders that the government has focused on controlling the skills supply rather than preparing a skills system that can respond quickly to demand,” Alpha Beta researchers wrote in the report. “This creates structural inflexibility, which generates graduates who are not suited for the positions available.”
The Indonesian Employers Association’s (Apindo) employment training and human capital development committee member Miftahudin concurred with these findings, adding that many employers were reluctant to hire applicants due to their lack of soft skills.
Emi La Palau, a 22-year-old recent graduate from a university in Bandung, West Java, felt the pain. She had to spare Rp 3 million for a three-month broadcast training course as she aspires to work in radio or television, even though she had majored in communications.
“The university only teaches the theory. There needs to be an initiative to sharpen soft skills,” said Emi. Unemployment in West Java is the highest of all provinces in the archipelago at a rate of 7.7 percent, which compares to the national rate of 5.01 percent, BPS data show.
Even as government-funded vocational training programs are expanded, many people do not benefit. Worse, an Institute for Development of Economics and Finance (Indef) report found that 1.18 million people trained at skill training centers were jobless in February last year.
This is despite the fact that, according to the Research, Technology and Higher