00074918.2012.694156
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Indonesian universities in transition: catching up
and opening up
Hal Hill & Thee Kian Wie
To cite this article: Hal Hill & Thee Kian Wie (2012) Indonesian universities in transition:
catching up and opening up, Bulletin of Indonesian Economic Studies, 48:2, 229-251, DOI:
10.1080/00074918.2012.694156
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Bulletin of Indonesian Economic Studies, Vol. 48, No. 2, 2012: 229–51
INDONESIAN UNIVERSITIES IN TRANSITION:
CATCHING UP AND OPENING UP
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Hal Hill*
Australian National University
Thee Kian Wie*
Indonesian Institute of Sciences (LIPI), Jakarta
Indonesia’s higher education system is changing rapidly: in 2010 there were about 5
million students, up from 2,000 in 1945. Effectively the tertiary system has four tiers,
three of which are within the public sector. However, the system is increasingly
private sector driven. The key themes of this paper on universities are rapid growth;
overcoming the historical backlog; and the need for further fundamental reform. The
quality of Indonesia’s tertiary institutions is highly variable. Governance structures
and incentives regimes within the state universities are complex and obscure. The
government both over-regulates and under-regulates. Major reforms are under way
and increasing inancial resources are available.
Keywords: universities, education quality, accreditation
INTRODUCTION
This is a period of unprecedented and multi-dimensional growth and change
in universities throughout the world.1 Individuals aspire to tertiary education
because it can enhance their lifetime earnings and broaden their employment
horizons, and for personal enrichment as well as for social recognition. Governments support the tertiary education sector for several reasons: as a response
to community pressure for greater provision and easier access; as an equalising
instrument, enhancing social and occupational mobility; for the social dividends
above and beyond the personal calculus; and as a means of building a strong civil
society.
Tertiary education is globalising rapidly. Like knowledge itself, universities
have always been global in character, with faculty, students and ideas drawn from
around the world. Traditionally, these lows were concentrated primarily among
the advanced countries, but developing countries have become major players in
* This paper draws on research that was commissioned by the Australian Agency for International Development (AusAID), but the views expressed are entirely those of the authors.
For comments on an earlier draft and much assistance with the research, we wish to thank
Diastika Rahwidiati, Idauli Tamarin, Scott Guggenheim, Siwage Dharma Negara, Mayling
Oey-Gardiner, Peter Gardiner and Colin Brown; we also express our gratitude to the many
people interviewed during ieldwork in Jakarta and Bandung in 2011.
1 For recent analyses of universities in a global (albeit mainly US) perspective, see
Wildavsky (2010).
ISSN 0007-4918 print/ISSN 1472-7234 online/12/020229-23
http://dx.doi.org/10.1080/00074918.2012.694156
© 2012 Indonesia Project ANU
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Hal Hill and Thee Kian Wie
global higher education over the past two decades. As their incomes have risen,
the access of their citizens to higher education in the west has also expanded.
Governments and universities in the rich economies have greatly facilitated the
process, seeing a range of commercial and diplomatic advantages in opening up
their universities.
Funding and incentives are central to these university dynamics. Governments everywhere seek to balance broad-based participation with high-quality
outcomes, alongside constrained iscal positions. Earlier principles of free universal university education have had to be jettisoned. Most of the growth has to
be privately funded. Thus the role for government is being transformed, from
funder, owner and provider to enabler, facilitator, regulator and catalyst. This in
turn requires a major rethink of higher education policy, and a major reform of
ministries of education.
Indonesian universities relect these dynamics and policy issues. The country is
a high-growth latecomer to university education, building on a historical underinvestment in education at all levels in the colonial and early post-independence
periods. There is great pressure on the government to expand higher education
participation and to lift quality, in the context of a modest total expenditure of
about 1.2% of GDP, of which just one-quarter is provided by the government
(World Bank 2010: ix). Although private funding accounts for about three-quarters of the resources and most of the recent growth in enrolments, the government
has only very gradually commenced the transition to a less heavily regulated
environment that promotes the eficient and equitable allocation of resources.
The country’s higher education sector also remains rather isolated from its global
counterparts, although this, too, is beginning to change.
The next section of the paper examines Indonesia’s approach to education and
education outcomes. We then analyse the international context and comparative
experiences. After investigating the changing structure and policy environment of
Indonesian universities, we focus on management and incentives within institutions. Finally, we discuss reform issues and options in light of what is generally
regarded as international best practice.
INDONESIAN EDUCATION: AN OVERVIEW
The educational landscape
Educational outcomes are a product of a country’s history, economy, culture
and broad developmental philosophy. As a prelude to more detailed analysis
we therefore provide a brief overview of how some of these factors have shaped
Indonesian educational outcomes, both in general and at the tertiary level.2
2 Indonesia’s education system comprises pre-school, six years of primary education, and
three years each of lower and upper secondary education. At the tertiary level, there are
diploma, bachelor, master and doctoral programs, with the irst two of these taking from
one to four years. Technical and vocational education and training (TVET) is an alternative
to general education that can be undertaken at the secondary or the diploma level. For each
level of education, a separate Islamic stream is also available.
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Indonesian universities in transition: catching up and opening up
231
Indonesia is, comparatively speaking, an educational latecomer and laggard,
owing to colonial neglect and indifferent economic performance during the irst
two decades of independence. According to the widely used Barro–Lee schooling
attainment data set, 68% of the population aged 15 years and over in 1960 had no
or incomplete primary education, and the average years of schooling for this population was 1.6 (Barro and Lee 2011). The comparable igures for Indonesia’s lowto-middle income ASEAN neighbours were: Malaysia, 49.7% and 2.0 years; the
Philippines, 25.6% and 4.2 years; and Thailand, 36.9% and 4.3 years. Educational
disadvantage of this magnitude takes generations to overcome. This is notwithstanding oficial statements and plans emphasising the importance of education.
In the 1970s the objective was to achieve universal primary education by around
1990, while in the 1980s it was to achieve universal junior secondary education by
around 2005. More recently, in 2005, the People’s Consultative Assembly (MPR)
passed an amendment to the Constitution that requires 20% of the government
budget to be spent on education.
Three features have dominated Indonesia’s educational outcomes and policies since 1970. First, the quantitative expansion has been very rapid at all levels, although, consistent with the conventional wisdom on education priorities,
policy has focused on the primary and lower secondary levels. Second, oficial
education policy has been egalitarian in its rhetoric but in practice – apart from
the rapid expansion of low-quality public education – little attention has been
paid to equity. Third, public expenditure on education has been low by comparable international standards, particularly at the tertiary level, where privately
funded education has been the major driver of expansion. We now briely discuss
each of these propositions.
Indonesia has made impressive gains in enrolments at secondary and tertiary
levels over the past two decades.3 The strongest gains in both primary and secondary education were made earlier, between 1975 and 1985. Primary enrolments
are only now recovering from a decline following the Asian inancial crisis. The
2010 gross primary enrolment rate of 118% is still below the 1985 peak of 125%.4
In 2010, gross enrolment reached 92% at the junior secondary level, and 63% in
senior secondary schools. Despite these gains, Indonesia lags behind most of its
neighbours in the gross enrolment rate (GER) in its secondary schools. Its 2009
rate of 75%, while higher than Malaysia’s (68%), was below that of the Philippines
(85%), Thailand (76%) and China (80%). It also trailed the East Asia and Paciic
regional average of 76% and the OECD average of 101%.
3 Unless otherwise indicated, this section draws on material presented in Di Gropello,
Kruse and Tandon (2011). Other data are from the World Bank’s World DataBank education statistics database, available at ,
or from Index Mundi, available at .
4 The net enrolment rate (NER) is the total enrolment of those in the appropriate age group
for a given level (for example, 6–12-year-olds for primary level) as a percentage of the total
population in that age group. The gross enrolment rate (GER) is the total enrolment at a
given level, regardless of age, as a percentage of the population in the age group appropriate to that level. Hence the GER can be greater than 100% but the NER cannot.
232
Hal Hill and Thee Kian Wie
FIGURE 1 Indonesia’s Tertiary Gross Enrolment Ratio
(%)
30
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20
10
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: World Bank, World DataBank, Education Statistics, .
Indonesia has gradually increased its higher education enrolments over the
past decade (igure 1). In 2001, its tertiary GER was 14.4%; by 2010 it had reached
23.1%. Like its secondary GER, Indonesia’s GER for higher education is lower
than those of most of its neighbours (igure 2). The World Bank’s education statistics (see footnote 3) indicate that Indonesia’s 2009 tertiary GER of 22.4% lagged
behind those of China (24.4%), Malaysia (40.2%) and Thailand (45.8%). It was
below the East Asia and Paciic regional average of 24.7% and far below the average of 72.0% for high-income OECD countries. In Korea, the igure was 103.9%.
Despite progress on enrolment and an increased emphasis on the vocational
training sub-sector, the overall educational attainment of Indonesia’s labour
force remains fairly low. In 2010 just under 50% of Indonesia’s working population (deined as those aged 15 years and above who had worked in the past
week) had completed only primary education or less, down from nearly 60%
in 2000. Some 45% of the working population had completed high school (up
from 38% in 2000). While the proportion with a higher education qualiication in
2010 – 6.3% – is substantially above the 2000 level of 3.6%, it is only one-quarter
to one-third of the most recent (2007) igures provided by the World Bank DataBank for neighbouring countries such as Malaysia (20%) and the Philippines
(28%).
As Di Gropello, Kruse and Tandon (2011: 160–8) show, Indonesia’s enrolment
gains have not removed inequalities in access to education. Substantial spatial,
gender and income disparities remain, especially in higher education. Rural–urban
disparities are signiicantly larger than those of gender. Only 15% of those studying for a bachelor, master or doctoral degree in 2007 were rural students – less than
one-third their share of the population. The participation of women has increased
across all education levels. At the primary level, 53% of those enrolled in 2007 were
Indonesian universities in transition: catching up and opening up
233
FIGURE 2 Tertiary Gross Enrolment Ratios in Selected Countries, 2009
(%)
80
70
60
50
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40
30
20
10
0
China
Indonesia
Malaysia
Thailand
East Asia &
Pacific
(developing
only)
High
income:
OECD
Source: World Bank, World Data Bank, Education statistics, .
female, while at the diploma level it was 56%. However, the proportion of women
with bachelor degrees was still much lower than that for men (43% compared to
57%) in 2007, as it was for the percentage of the population aged 25 years and
older with secondary education (24% compared to 31%). Current enrolments at the
secondary level suggest that these disparities will disappear within a generation.
There are very large differences between the rich and the poor in access to all
levels of education, particularly the tertiary level. More than 70% of those enrolled
in universities in 2007 were in the richest quintile of the population. Students from
the poorest three income quintiles made up only 10% of university graduates, and
the poorest quintile accounted for less than 1% of those enrolled in university (Di
Gropello, Kruse and Tandon 2011: 164). Poverty and low educational attainment
are therefore strongly correlated.
Public spending on education in Indonesia has risen substantially in recent
years, boosted by the 2005 constitutional amendment on education spending.
Consistent with the historical emphasis on primary and secondary education,
public funding for tertiary education remains very modest, even by developing
Asian standards. The Indonesian government currently spends the equivalent of
about 0.3% of GDP on tertiary education (igure 3). This is about one-third of
the corresponding percentage for India and Thailand, one-quarter of the OECD
average, and one-seventh of the percentage for Malaysia (not shown). Thus, most
of the funding for tertiary education in Indonesia comes from private sources, that
is, tuition fees. Private funding is about three times the level of public funding,
one of the highest ratios in developing Asia. In aggregate, however, Indonesia
spends less on tertiary education than most of its neighbours.
234
Hal Hill and Thee Kian Wie
FIGURE 3 Public and Private Spending on Tertiary Education as a Share of GDP
(%)
Korea 0.6
3.4
OECD average 1.3
0.4
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Japan 0.7
1.0
Thailand 0.9
India 1.0
Indonesia 0.3
0
Public
0.4
Private
0.2
0.9
1
2
3
4
5
Source: World Bank (2010: 11, igure 2.3, citing UNESCO, World Education Indicators 2007). Figures
relect estimates for 2004–05. Indonesian igure is from 2009 budget.
Educational quality
Comparative international assessments such as the US-based Trends in International Mathematics and Science Study (TIMSS) and the OECD’s Programme for
International Student Assessment (PISA) show that Indonesia’s performance lags
behind that of its neighbours other than the Philippines. The absence of any signiicant improvement over successive rounds of both series is cause for concern
(Suryadarma and Sumarto 2011). The test scores indicate that quality needs to be
strengthened. However, if the analysis takes account of differences in per capita
GDP, the Indonesian record is comparatively good, as illustrated with reference
to the PISA scores. Indonesia’s PISA scores are generally at least comparable with,
and often higher than, those from countries with a similar per capita GDP.
Comparative quality at the tertiary level is dificult to measure. The two major
international rankings are the World University Rankings published by the Times
Higher Education Supplement (THES) and the Academic Rankings of World Universities published by Shanghai Jiao Tong University (SJTU).5 For what they are
worth, the 2008 World University Rankings included only three Indonesian universities among the top 400 in the world: the University of Indonesia (UI) was
ranked 287th, Bandung Institute of Technology (ITB) was 315th, and Universitas
Gadjah Mada (UGM) 316th. The rankings do luctuate from year to year, however. In some other recent years, no Indonesian universities appear in the top
400. According to the SJTU survey, no Indonesian university is placed within
5 Both rankings use objective and subjective criteria. The THES rankings, which commenced in 2004, focus most heavily on international reputation. The SJTU rankings, which
started in 2003, use objective indicators exclusively, related to the academic and research
performance of faculty and alumni.
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Indonesian universities in transition: catching up and opening up
235
the top 100 institutions in Asia. Various comparative assessments conirm these
general conclusions. Suryadarma, Pomeroy and Tanuwidjaja (2011) conclude, on
the basis of an examination of the Social Sciences Citation Index database for the
period 1956–2011, that only about 12% of social science research publications on
Indonesia were authored by researchers based in-country. This was the lowest
share among the seven major developing countries included in their comparison, and about half of the corresponding igures for China (21%) and India (25%).
Sumarto (2011) conirms these indings: a search of the ‘Econlit’ database showed
that, among the articles published in English on the Indonesian economy in all
refereed journals over the period 1980–2000, the 10 most published authors were
all foreigners.
The origins of tertiary education
Although the country’s oldest university, UI, technically dates its origins to 1849,6
in practice Indonesia’s university system is almost entirely a creation of the second half of the 20th century (Buchori and Malik 2004; Welch 2011). In this respect,
Indonesia’s colonial experience lags behind those of India and the Philippines, for
example. Three of the country’s other leading universities – Airlangga University
(Unair) in Surabaya, the Bogor Agricultural Institute (IPB) and ITB – also date
their origins to the establishment of single faculties or schools in the 1920s, during
the Dutch colonial era. The irst post-independence university was UGM, located
in Yogyakarta. State universities were then progressively established in the major
provinces in the 1950s and 1960s, albeit with grossly inadequate funding.
During the colonial period, the faculty consisted almost exclusively of professors from the Netherlands, teaching that country’s curriculum. The standards
were high, in general comparable with those of the leading home institutions. The
language of instruction was Dutch, but these institutions were open to the Dutch
(including Eurasians) and to qualiied ethnic Chinese and indigenous Indonesian
students – mainly from the privileged priyayi class – who had graduated from the
Dutch language senior high schools.7 The Dutch academic community, which had
left Indonesia during the Japanese occupation, returned in the late 1940s. However, Dutch academics progressively left in the course of the 1950s, as bilateral
relations deteriorated in response to the festering dispute about the status of West
Irian (now comprising the provinces of West Papua and Papua). By the late 1950s,
with the switch to Indonesian as the language of instruction, the Dutch academic
community had totally disappeared
6 UI’s 1849 origins are based on the establishment in Jakarta in that year of the Dokter
Jawa School (School tot Opleiding van Inlandse Artsen or Stovia, School for the Training
of Indigenous Physicians), which eventually became the university’s faculty of medicine
in the late 1940s.
7 During the period 1920–40, fewer than 1,500 Indonesian students had qualiied to enter
a tertiary institution; only 230 had graduated from Indonesian tertiary institutions; and just
344 had graduated from universities in the Netherlands (Booth 1989: 118).
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236
Hal Hill and Thee Kian Wie
UNIVERSITIES: THE GLOBAL CONTEXT
Issues and trends
Higher education has historically been an international activity, with the great
centres of learning attracting scholars and students from around the world. The
number of people participating in the global delivery and receipt of higher education has risen rapidly over the past two decades. According to OECD estimates
(OECD 2008a, 2008b), there were about 120 million university students in 2007,
of whom about 3 million were undertaking education abroad. The US was the
largest host country, with about 20% of the total, followed by the UK, Germany,
France and Australia. Students from Asia accounted for the largest proportion
of foreign students, led by China (457,000), India (162,000) and Korea (107,000).
Indonesia, with 33,500 students, ranked low at number 20.8
There is much discussion about the prerequisites for the creation of high-class
universities. Leadership, vision and resources are central. The consensus is that
at least three factors are essential (Salmi 2009). First, there must be a high concentration of talent, based on a capacity to attract the best faculty and students. By
deinition, this will be on a global scale, with at least 30% international faculty
and 20% international students regarded as useful rules of thumb in rich countries. Moreover, top universities typically have a high proportion of high-quality
graduate students enmeshed in faculty research activities. Second, the universities need to be well resourced. US expenditure (public plus private) on higher
education in 2008 was about 2.7% of GDP, more than twice the proportion spent
by the EU21 (1.3%) (OECD 2011a: 231.9 The top US universities (which are overwhelmingly private) are well resourced, with endowments per student about 40
times the level in publicly funded US universities. A third factor is high-quality
university governance, which typically features autonomy from government and
political pressures, incentives for high performance, and a competitive spirit.
Most of the top universities have evolved over decades or even centuries, and
establishing top-class universities de novo is very expensive, with estimates ranging up to a billion dollars (Economist, 27/3/2010).
Several attributes supportive of high university quality that are implicit in the
above analysis deserve emphasis. The irst is mobility within and between countries, including the ability to attract the best faculty and students domestically and
internationally. This in turn requires at the very least that regulatory barriers such
as visa regulations are minimal.10 A second attribute relates to governance and
independence from governments. Aghion et al. (2010: 10), for example, test the
hypothesis that ‘a combination of autonomy and competition makes universities
8 The OECD estimates appear to under-state the stock of Indonesian students abroad. Although accurate igures are not available, the number is thought to be about 60,000.
9 The EU21 average is ‘the unweighted mean of the data values of the 21 OECD countries
that are members of the European Union for which data are available or can be estimated.
These 21 countries are Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland,
Portugal, Slovenia, the Slovak Republic, Spain, Sweden and the United Kingdom’ (OECD
2011a: 26).
10 To quote Salmi (2009: 21), ‘tertiary education institutions in countries where there is
little internal mobility of students and faculty are at risk of academic inbreeding’.
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Indonesian universities in transition: catching up and opening up
237
more productive’. They conclude that increases in a university’s expenditure generate greater output – as measured by patents or publications – if the university has greater autonomy and faces more competition. They therefore propose
‘increased reliance on competitive grants, enhanced competition for faculty and
students (promoted by reforms that increase mobility)’, and competition against
yardsticks based on various assessment exercises (Aghion et al. 2010: 7). A third
key attribute is the presence of arms-length, independent processes for review
of all aspects of university operations, including appointments, promotions, academic output and resource allocation. Indeed, the president of a leading US university observed that ‘the bedrock of university quality in the United States is
peer review’ (quoted in Salmi 2009: 59).
Country experiences
Developing country tertiary education experiences vary enormously, and it is
beyond the scope of this paper to survey them. However, a few key lessons from
selected Asian countries are salutary.
In the case of China, there has been a major commitment to tertiary education
since the 1990s (Li et al. 2011). Undergraduate and graduate student enrolments
have been growing at 30% per annum. China now produces three times as many
PhD graduates in science and engineering as the US, although on a per capita
stock basis the US still leads. Much of the increased government spending has
been channelled into the 10 elite universities, which select the top students nationwide through national entrance exams. Alongside this quantitative expansion is
the push for quality, with emphasis on objective indicators such as international
publications, citations and cooperation. There is a strong focus on science and
engineering, with these ields constituting 41.3% of enrolments, compared with
an economics and management share of 23.3%. As a result, China’s share of published output in the sciences is rising quickly, from 14.5% of Asian science and
engineering articles in 1998 to 22.4% in 2003 (Li et al. 2011: 523–4).
The Indian record is surprisingly similar to that of Indonesia, in spite of the
former’s head start at the time of independence, and notwithstanding the fact
that it has a marked edge with its handful of elite institutions and access to an
extensive international diaspora of leading academics.11 India’s tertiary GER
is slightly below Indonesia’s, its education dropout rates appear to be higher,
and its performance in international university rankings is only a little higher.
As in Indonesia, governments have adopted an ambivalent stance towards liberalisation of the tertiary sector and the role of the private sector. On the one
hand, real per student funding has been declining, forcing the public universities
to seek alternative funding sources. But caps remain on tuition fee levels, and
there are barriers to entry into the industry. As expected, the private institutions
have grown most rapidly in disciplines where start-up costs are low, returns to
graduates are high, and the supply response from the public sector is sluggish.
The country’s regulatory system is complex. Onerous rules cover the minimum
11 For example, two Indian institutions – the Indian Institute of Technology Delhi and the
Indian Institute of Technology Bombay (IITB) – were placed in the top 150–200 in the THES
2008 ranking. This paragraph on India draws on OECD (2011b: ch. 5, ‘Building on progress
in education’).
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238
Hal Hill and Thee Kian Wie
qualiications required of staff, in addition to arrangements governing promotions, workloads and curricula. The establishment of a new university requires
an act of parliament.
Malaysia has consistently attached a high priority to education, with very rapid
growth in enrolments at all levels, generous inancial support and the extensive
provision of overseas study opportunities. Education has been central to the objective of redressing the country’s large ethnic imbalances, with ethnic-based afirmative action quotas for enrolments (and implicitly for faculty recruitment) in public
universities introduced as part of the government’s New Economic Policy following ethnic hostilities in May 1969. There is considerable debate about the effectiveness of Malaysia’s overall education policies, with concern that the system has
become heavily bureaucratic and is performing poorly on equity and pedagogic
grounds (Lee and Nagaraj 2012). From the mid-1980s there was a rethink of education policy, prompted by iscal stringencies and global changes. The 1996 Private
Higher Educational Institutions Act was a watershed. Private universities were
permitted for the irst time, and their numbers have risen rapidly, contributing
most of the country’s very rapid growth in tertiary enrolments (Tham 2011). The
private universities are also being encouraged to upgrade, with liberalised visa
entry provisions for foreign students and faculty. In 2000–05, the government set
a target for foreign student numbers to increase from 20,000 to 25,000, but by 2005
the actual number was already twice the target, and 82% of these foreign students
were enrolled in higher education. Thus Malaysia has successfully developed a
middle-level niche as a regional hub for higher education, based on its relatively
low cost and reasonably competent quality assurance. However, major challenges
remain (Lim 2011). No Malaysian university performs well in the various international ranking exercises. Concern persists that the afirmative action programs
have weakened the public universities. Malay graduate unemployment is high,
and there is pressure on an already bloated civil service to hire these graduates.
Singapore aspires to establish world-class universities and to become the leading international centre for high-quality university education in Southeast Asia
and beyond (Lee and Gopinathan 2008). Its university sector is not large, comprising just three public universities; the oldest, the National University of Singapore,
is already highly ranked internationally. Major reforms have been introduced
since 2000. Universities now have greater autonomy (with a 2005 reform having
transformed them from statutory boards under the Ministry of Education to university companies); one-line budgets; and aggressive endowment funding initiatives through 3:1 matching grants from the government. The incentives systems
have also been reformed, with rewards for high performance, opportunities for
staff upgrading, favourable staff–student ratios, and frequent, rigorous audits
for quality. Singapore universities have aggressively developed international
exchanges and cooperation, with notable successes in niche areas such as prestigious international business schools. However, the country has been less successful
in attracting full-ledged international campuses.
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Indonesian universities in transition: catching up and opening up
239
INDONESIAN HIGHER EDUCATION:
DEVELOPMENTS, POLICIES, PRIORITIES
Planning
The Indonesian government’s educational objectives are set out in its MediumTerm Development Plan (Rencana Pembangunan Jangka Menengah, RPJM) for
2010–14 (GOI 2010) and its Master Plan for the Acceleration and Expansion of
Indonesian Economic Development (Master Plan untuk Percepatan dan Perluasan Pembangunan Ekonomi Indonesia, MP3EI). Key assessments and priorities
include the following.
First, the two documents note the signiicant educational advances made. The
government has signed on to the Millennium Development Goal that all children
will have completed primary education by 2015. By 2008, mean years of schooling had reached 7.5, and the illiteracy rate for those aged 15 years and above was
just 6%. The GER for higher education has been rising steadily, from 14.6% of the
age group 19–24 years in 2004 to 23.1% in 2010, but at this rate it is not certain
whether the 2014 target of 30% is attainable. The percentage of the workforce
with a diploma or degree rose from 5.3% to 6.2% between 2004 and 2008. The
indicators for educational quality, relevance, teacher education, governance and
accountability are all rising. The MP3EI also emphasises the importance of the
knowledge economy as an engine of economic development, and that university research institutes should be developed as national innovation centres. The
number of PhD graduates in science and technology is to be quickly expanded, to
about 7,000–10,000 by 2014, although this may be dificult to achieve, as evidently
most graduate students prefer the social sciences and humanities.
Second, the RPJM notes several current challenges. Over 1 million children
have not completed primary education. There is great pressure for entry into
upper secondary schools and universities, relecting the delayed effects of
the 1980s decision to aim for a universal nine years of compulsory schooling.
In higher education, Indonesia’s GER remains lower than those of its ASEAN
neighbours, and access to higher education is uneven by gender, socio-economic
status and region.
Third, the government is aiming for greater autonomy in the university sector,
commencing with four leading institutions, UI, ITB, UGM and IPB, to be extended
to three more, Universitas Pendidikan Indonesia (Indonesian University of Education, UPI), Universitas Sumatera Utara (University of North Sumatra, USU) and
Unair (which is often bracketed with the four above as one of the nation’s ive
leading universities). However, the application of the not-for-proit principle in
the private provision of education needs to be clariied, especially in light of a
recent Constitutional Court ruling, discussed below.
Fourth, the RPJM states that funding and administrative procedures are in need
of reform: ‘the current mechanism for the allocation and channelling of education
funds is very complex and needs to be simpliied in order to achieve greater eficiency and accountability’.
240
Hal Hill and Thee Kian Wie
TABLE 1 Indonesian Higher Education Institutions, by Type, 2009/2010
MONE a
Type
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Public
University
Institute
Advanced school
(sekolah tinggi)
Academy
Polytechnic
Total
MORA a
Private
Total
Public
Private
Total
48
6
412
47
460
53
6
14
87
26
93
40
2
1,314
1,316
32
409
441
0
27
83
1,015
140
2,928
1,015
167
3,011
0
0
52
0
0
522
0
0
574
a MONE = Ministry of National Education; MORA = Ministry of Religious Affairs.
Source: Ministry of Higher Education, Higher Education Statistics, 2009/2010.
Structure and characteristics of Indonesia’s higher education sector12
In 2010, approximately 5 million students were enrolled in Indonesia’s higher
education institutions, up from the estimated 2,000 at the time of independence in 1945. Effectively there is a four-tier system, with three of the tiers located
mainly in the public sector.13 But the system is private sector dominated (table
1). Three-quarters of the total expenditure is in the private sector, most of the
recent growth has been in these private institutions, and the state universities are
de facto increasingly ‘privatised’ in terms of their funding.
The four main groups of higher education institutions are:
• 5–7 ‘elite’ public universities;
• 47–49 public universities of mixed but generally low quality;
• a vast private sector of hugely variable quality, comprising approximately 400
private universities and around 3,000 polytechnics, academies and ‘sekolah
tinggi’;14 and
12 The most detailed study on the subject is World Bank (2010), which is the source for
some of the statistics quoted in this section.
13 The universities and institutes could of course be classiied according to alternative criteria. For example, if quality were the main arbiter, the top group would include the elite state
universities together with a small group, probably similar in number, of private institutions.
14 Di Gropello, Kruse and Tandon (2011: 190) provide the following explanation of the
types of tertiary institutions. ‘Academies are legally deined as higher-education institutions that provide instruction in only one ield; most offer diplomas and certiicates for technician-level courses in applied science, engineering, or art at both public and private institutions. Advanced schools [sekolah tinggi] provide academic and professional university-level
education in one particular discipline. Polytechnic schools are attached to universities and
provide subdegree junior technician training. Institutes are those HEIs [higher education
institutions] that offer several ields of study by qualiied faculty and are ranked as universities with full degree-granting status. Universities are larger than institutes and offer training
and higher education in various disciplines.’ These are unoficial deinitions, and best seen
as only a guide; for example, two ‘Institutes’, IPB and ITB, are larger than most universities.
Indonesian universities in transition: catching up and opening up
241
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• a very large number of universities and other institutions administered by the
Ministry of Religious Affairs – mainly Islamic but also including schools for
students of Christian and other religious communities – and other government
departments (such as health, foreign affairs, defence and inance), also of
highly variable quality.
The agency oficially charged with the development of higher education in
Indonesia, the Directorate General for Higher Education (Direktorat Jenderal Pendidikan Tinggi, Dirjen Dikti), has limited capacity to implement the government’s
higher education policy. It effectively supervises the 54 state (public) universities,
but in practice it has limited inluence over private sector institutions, and even
less over the fourth tier of institutions that operate under the purview of other
government agencies. These limitations are compounded by its limited inancial
resources, equivalent to about 0.3% of GDP. It therefore has very few opportunities to offer inancial incentives to encourage tier three and four institutes to conform to its policy goals. Moreover, it broadly lacks the analytical capacity to drive
the public and intellectual debate on higher education strategies.
Although state institutions constitute just 4% of Indonesia’s higher education
institutions, they account for 32% of enrolments, and they set the standard for
academic quality and performance (Buchori and Malik 2004). They are the only
ones to have any international ranking or proile. The well-established national
universities rank highest in student application preferences, owing to prestige,
higher quality and lower cost. Most Indonesian academics with foreign PhDs are
products of the elite state universities, and state and foreign scholarships at the
PhD level go disproportionately to these universities, which also have the highest proportion of graduate students. Within the state system, a small but variable
number are regarded as higher-quality universities. Historically it was the ive
noted above (UI, ITB, IPB, UGM and Unair). Other classiications add the state
universities in Semarang (Universitas Diponegoro, Undip), Bandung (UPI and
Universitas Padjadjaran, Unpad), Medan (USU), Surabaya (Universitas Teknologi
10 Nopember) and Malang (Universitas Brawijaya, Unbraw). Several of these
universities have concentrations of PhD holders, indicating that they have the
potential to be research-active. The four top-ranking universities in Indonesia in
the THES University World Ranking tables (that is, UI, ITB, UGM and IPB) have
over 2,500 faculty members with PhDs. However, in aggregate only 5% of faculty
lecturers in Indonesian higher education institutions (HEIs) have PhD degrees.15
Until the early 2000s, the state universities were run along civil service lines.
Resources were provided by the central government, permanent staff were
required to be civil servants, and major decisions about resource allocation, fees
and stafing were determined at the centre. Only in the past decade have there
been gradual moves towards increased autonomy and greater lexibility, focused
mainly on the elite group. This was in part a recognition of the reality that the
central government does not have the resources to fund these universities fully.
Direct grants from Dikti now typically account for between a third and a half of
state university revenues, with the leading state universities at the lower end of
15 Those with at least a masters degree constitute 30% of state HEI and 11% of private HEI
faculty.
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242
Hal Hill and Thee Kian Wie
this range owing to their much greater inancial strength. These universities have
the capacity to earn more revenue through commercial activities and supplementary student fees.
Private universities are a relatively recent phenomenon in Indonesia, although
some of the larger ones were established in the early 1960s, including Tarumanagara University and Trisakti University, both located in Jakarta. More began
to emerge in the 1970s, some evolving out of ‘sekolah tinggi’, others established
de novo. Typically they are creatures of either a major business conglomerate or
a religious organisation, as in the case of the various campuses of the Muhammadiyah University. They began to grow very rapidly in the 1980s, in response to
rising incomes, limited state iscal capacity, growing commercial demand and the
economic deregulation that was occurring at this time. Until the 1990s, the government paid little attention to them, other than to ensure that they were not incubators of anti-government protest movements. Their status was regularised by a
1999 presidential decree on higher education, PP60/1999. A further boost to their
development was the recent requirement that teachers and professional civil servants have at least a bachelor degree. Private HEIs receive very little public money,
typically less than 5% of their revenue. There is also very little private educational
philanthropy, apart from small-scale scholarships and minor endowments.
The private sector displays greater quality variability than the public sector, with several large, relatively well-endowed private universities at one end
of the spectrum and small ‘sekolah tinggi’ with very rudimentary facilities at the
other. The well-established private universities are closely integrated with and
responsive to the labour market, and their graduates have little dificulty securing
employment upon graduation. The ethnic Chinese community is disproportionately represented in the better private universities, owing to a semi-formal policy
of afirmative action in favour of pribumi (indigenous Indonesian) students at the
state universities. The quality of the Islamic universities is also highly variable,
with a few strong institutions, such as Universitas Islam Negeri Syarif Hidayatullah in Jakarta, operating alongside many of low quality.
There is some specialisation between public and private universities. Private
universities usually specialise in low-cost courses in high demand, such as information technology, inance, accountancy and management. State universities are
usually expected to offer a full range of course offerings, including courses in
less lucrative ields such as agriculture, public health and mathematics. There is
also an expectation that the state universities will undertake research.16 Regional
state universities have a local development mission. The HEIs that are under the
supervision of other government departments are beyond the scope of this study,
except to note that they are by nature specialised institutions. Some, such as the
Akademi Statistik (the training institution run by the Central Board of Statistics,
BPS) are highly regarded.
16 In the words of the World Bank (2010: 19), private institutions are ‘totally devoid of a
research program and do not offer courses in ields thought to be essential for development
in areas such as agriculture, forestry and public health’.
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Indonesian universities in transition: catching up and opening up
243
Finance
Financial arrangements for Indonesian HEIs are complex. Of Dikti’s 2009 budget
of Rp 18.5 trillion, about 85% went to tertiary institutions: 69% to 75 non-autonomous state HEIs, 11% to the seven autonomous state universities and 6% to private institutions (World Bank 2010: ix). According to estimates prepared by the
World Bank (2010), in 2009 the average annual cost of course delivery per student
in HEIs was about $1,500. This igure is comparable with that in middle-income
economies, but quite high relative to Indonesia’s per capita GDP. There is substantial variation in per student costs between state and private institutions, with
the average for 2009 being Rp 22 million in the former and Rp 12 million in the
latter (World Bank 2010: ix). There are evidently no uniform funding formulae for
standardised courses, nor do Dikti allocations reward eficient course delivery.
Recurrent Dikti allocations are generally incremental and based on those of the
previous year. Capital budgets are determined on a ‘needs’ basis and are negotiated case by case. It is oficial Dikti policy to further the general goal of greater
autonomy, with a system of block grants, performance-based grants and competitive grants, combined with portable scholarships. Law 9/2009 on Legal Education Entities (Badan Hukum Pendidikan, BHP) was designed to facilitate these
objectives, and eventually to extend these principles to senior secondary school
funding. However, progress in its implementation has been slow, in part because
the Constitutional Court has declared the Law invalid, as we discuss below.
In terms of resource eficiency, the average length of tertiary study for a bachelor’s degree (known as ‘S1’) has been declining, from 6 to 4.5 years in public
universities in the past decade. The graduation time in private institutions has
always been shorter and it too has declined in recent years, from 5.7 to 4 years.
Given the faster graduation times and lower cost structure of private institutions,
the World Bank (2010: 26) estimates that the average cost of a private degree is
about half that of a comparable degree from a public university.
Regulation
The overall regulatory framework is therefore changing, albeit slowly. Dikti is
caught between the earlier approach to higher education, which for the state universities was highly prescriptive, and the transition to a system that conforms more
closely to international best practice, with greater autonomy and performancebased funding. Dikti’s accreditation process is institutionally well established,
through the National Accreditation Board for Higher Education (Badan Akreditasi
Nasional Pendidikan Tinggi, BANPT), but in practice its small, non-specialised
staff are unable to do much more than routine checks.17 The Ministry of Education and Culture (until October 2011 the Ministry of National Education) is also
in the process of inalising a presidential decree for an Indonesian Qualiication
Framework. However, the foundations of a credible regulatory framework are not
yet present. Serious peer review mechanisms have yet to be developed, and there
is not yet the bureaucratic capacity to deliver arms-length assessments.
17 In fact, the director general of Dikti, Djoko Santoso, has stated that about one-quarter
of the country’s higher education institutions are not actually accredited (Jakarta Post,
11/7/2011).
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Hal Hill and Thee Kian Wie
Although increasing numbers of Indonesian citizens study abroad, the Indonesian university system is rather isolated internationally. This relects the country’s latecomer status, its still low per capita income and the relatively poor
English-language proiciency of most Indonesian students. But Indonesian government policies reinforce this isolation. Visa regulations frustrate the movement
of faculty and students. Indonesia attracted 5,366 international students in 2007,
predominantly from Malaysia (52.6%) and East Timor (31%), and almost half in
medicine. Malaysia, by comparison, had about 48,000 international students in
that year. Indonesia is also missing out on the rapidly growing trend for students
to take a semester or a year for study abroad. For example, about 223,000 US
students were studying abroad in 2006. Most of these go to Europe, but China
attracted 11,10
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Indonesian universities in transition: catching up
and opening up
Hal Hill & Thee Kian Wie
To cite this article: Hal Hill & Thee Kian Wie (2012) Indonesian universities in transition:
catching up and opening up, Bulletin of Indonesian Economic Studies, 48:2, 229-251, DOI:
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Bulletin of Indonesian Economic Studies, Vol. 48, No. 2, 2012: 229–51
INDONESIAN UNIVERSITIES IN TRANSITION:
CATCHING UP AND OPENING UP
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Hal Hill*
Australian National University
Thee Kian Wie*
Indonesian Institute of Sciences (LIPI), Jakarta
Indonesia’s higher education system is changing rapidly: in 2010 there were about 5
million students, up from 2,000 in 1945. Effectively the tertiary system has four tiers,
three of which are within the public sector. However, the system is increasingly
private sector driven. The key themes of this paper on universities are rapid growth;
overcoming the historical backlog; and the need for further fundamental reform. The
quality of Indonesia’s tertiary institutions is highly variable. Governance structures
and incentives regimes within the state universities are complex and obscure. The
government both over-regulates and under-regulates. Major reforms are under way
and increasing inancial resources are available.
Keywords: universities, education quality, accreditation
INTRODUCTION
This is a period of unprecedented and multi-dimensional growth and change
in universities throughout the world.1 Individuals aspire to tertiary education
because it can enhance their lifetime earnings and broaden their employment
horizons, and for personal enrichment as well as for social recognition. Governments support the tertiary education sector for several reasons: as a response
to community pressure for greater provision and easier access; as an equalising
instrument, enhancing social and occupational mobility; for the social dividends
above and beyond the personal calculus; and as a means of building a strong civil
society.
Tertiary education is globalising rapidly. Like knowledge itself, universities
have always been global in character, with faculty, students and ideas drawn from
around the world. Traditionally, these lows were concentrated primarily among
the advanced countries, but developing countries have become major players in
* This paper draws on research that was commissioned by the Australian Agency for International Development (AusAID), but the views expressed are entirely those of the authors.
For comments on an earlier draft and much assistance with the research, we wish to thank
Diastika Rahwidiati, Idauli Tamarin, Scott Guggenheim, Siwage Dharma Negara, Mayling
Oey-Gardiner, Peter Gardiner and Colin Brown; we also express our gratitude to the many
people interviewed during ieldwork in Jakarta and Bandung in 2011.
1 For recent analyses of universities in a global (albeit mainly US) perspective, see
Wildavsky (2010).
ISSN 0007-4918 print/ISSN 1472-7234 online/12/020229-23
http://dx.doi.org/10.1080/00074918.2012.694156
© 2012 Indonesia Project ANU
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Hal Hill and Thee Kian Wie
global higher education over the past two decades. As their incomes have risen,
the access of their citizens to higher education in the west has also expanded.
Governments and universities in the rich economies have greatly facilitated the
process, seeing a range of commercial and diplomatic advantages in opening up
their universities.
Funding and incentives are central to these university dynamics. Governments everywhere seek to balance broad-based participation with high-quality
outcomes, alongside constrained iscal positions. Earlier principles of free universal university education have had to be jettisoned. Most of the growth has to
be privately funded. Thus the role for government is being transformed, from
funder, owner and provider to enabler, facilitator, regulator and catalyst. This in
turn requires a major rethink of higher education policy, and a major reform of
ministries of education.
Indonesian universities relect these dynamics and policy issues. The country is
a high-growth latecomer to university education, building on a historical underinvestment in education at all levels in the colonial and early post-independence
periods. There is great pressure on the government to expand higher education
participation and to lift quality, in the context of a modest total expenditure of
about 1.2% of GDP, of which just one-quarter is provided by the government
(World Bank 2010: ix). Although private funding accounts for about three-quarters of the resources and most of the recent growth in enrolments, the government
has only very gradually commenced the transition to a less heavily regulated
environment that promotes the eficient and equitable allocation of resources.
The country’s higher education sector also remains rather isolated from its global
counterparts, although this, too, is beginning to change.
The next section of the paper examines Indonesia’s approach to education and
education outcomes. We then analyse the international context and comparative
experiences. After investigating the changing structure and policy environment of
Indonesian universities, we focus on management and incentives within institutions. Finally, we discuss reform issues and options in light of what is generally
regarded as international best practice.
INDONESIAN EDUCATION: AN OVERVIEW
The educational landscape
Educational outcomes are a product of a country’s history, economy, culture
and broad developmental philosophy. As a prelude to more detailed analysis
we therefore provide a brief overview of how some of these factors have shaped
Indonesian educational outcomes, both in general and at the tertiary level.2
2 Indonesia’s education system comprises pre-school, six years of primary education, and
three years each of lower and upper secondary education. At the tertiary level, there are
diploma, bachelor, master and doctoral programs, with the irst two of these taking from
one to four years. Technical and vocational education and training (TVET) is an alternative
to general education that can be undertaken at the secondary or the diploma level. For each
level of education, a separate Islamic stream is also available.
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Indonesian universities in transition: catching up and opening up
231
Indonesia is, comparatively speaking, an educational latecomer and laggard,
owing to colonial neglect and indifferent economic performance during the irst
two decades of independence. According to the widely used Barro–Lee schooling
attainment data set, 68% of the population aged 15 years and over in 1960 had no
or incomplete primary education, and the average years of schooling for this population was 1.6 (Barro and Lee 2011). The comparable igures for Indonesia’s lowto-middle income ASEAN neighbours were: Malaysia, 49.7% and 2.0 years; the
Philippines, 25.6% and 4.2 years; and Thailand, 36.9% and 4.3 years. Educational
disadvantage of this magnitude takes generations to overcome. This is notwithstanding oficial statements and plans emphasising the importance of education.
In the 1970s the objective was to achieve universal primary education by around
1990, while in the 1980s it was to achieve universal junior secondary education by
around 2005. More recently, in 2005, the People’s Consultative Assembly (MPR)
passed an amendment to the Constitution that requires 20% of the government
budget to be spent on education.
Three features have dominated Indonesia’s educational outcomes and policies since 1970. First, the quantitative expansion has been very rapid at all levels, although, consistent with the conventional wisdom on education priorities,
policy has focused on the primary and lower secondary levels. Second, oficial
education policy has been egalitarian in its rhetoric but in practice – apart from
the rapid expansion of low-quality public education – little attention has been
paid to equity. Third, public expenditure on education has been low by comparable international standards, particularly at the tertiary level, where privately
funded education has been the major driver of expansion. We now briely discuss
each of these propositions.
Indonesia has made impressive gains in enrolments at secondary and tertiary
levels over the past two decades.3 The strongest gains in both primary and secondary education were made earlier, between 1975 and 1985. Primary enrolments
are only now recovering from a decline following the Asian inancial crisis. The
2010 gross primary enrolment rate of 118% is still below the 1985 peak of 125%.4
In 2010, gross enrolment reached 92% at the junior secondary level, and 63% in
senior secondary schools. Despite these gains, Indonesia lags behind most of its
neighbours in the gross enrolment rate (GER) in its secondary schools. Its 2009
rate of 75%, while higher than Malaysia’s (68%), was below that of the Philippines
(85%), Thailand (76%) and China (80%). It also trailed the East Asia and Paciic
regional average of 76% and the OECD average of 101%.
3 Unless otherwise indicated, this section draws on material presented in Di Gropello,
Kruse and Tandon (2011). Other data are from the World Bank’s World DataBank education statistics database, available at ,
or from Index Mundi, available at .
4 The net enrolment rate (NER) is the total enrolment of those in the appropriate age group
for a given level (for example, 6–12-year-olds for primary level) as a percentage of the total
population in that age group. The gross enrolment rate (GER) is the total enrolment at a
given level, regardless of age, as a percentage of the population in the age group appropriate to that level. Hence the GER can be greater than 100% but the NER cannot.
232
Hal Hill and Thee Kian Wie
FIGURE 1 Indonesia’s Tertiary Gross Enrolment Ratio
(%)
30
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20
10
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: World Bank, World DataBank, Education Statistics, .
Indonesia has gradually increased its higher education enrolments over the
past decade (igure 1). In 2001, its tertiary GER was 14.4%; by 2010 it had reached
23.1%. Like its secondary GER, Indonesia’s GER for higher education is lower
than those of most of its neighbours (igure 2). The World Bank’s education statistics (see footnote 3) indicate that Indonesia’s 2009 tertiary GER of 22.4% lagged
behind those of China (24.4%), Malaysia (40.2%) and Thailand (45.8%). It was
below the East Asia and Paciic regional average of 24.7% and far below the average of 72.0% for high-income OECD countries. In Korea, the igure was 103.9%.
Despite progress on enrolment and an increased emphasis on the vocational
training sub-sector, the overall educational attainment of Indonesia’s labour
force remains fairly low. In 2010 just under 50% of Indonesia’s working population (deined as those aged 15 years and above who had worked in the past
week) had completed only primary education or less, down from nearly 60%
in 2000. Some 45% of the working population had completed high school (up
from 38% in 2000). While the proportion with a higher education qualiication in
2010 – 6.3% – is substantially above the 2000 level of 3.6%, it is only one-quarter
to one-third of the most recent (2007) igures provided by the World Bank DataBank for neighbouring countries such as Malaysia (20%) and the Philippines
(28%).
As Di Gropello, Kruse and Tandon (2011: 160–8) show, Indonesia’s enrolment
gains have not removed inequalities in access to education. Substantial spatial,
gender and income disparities remain, especially in higher education. Rural–urban
disparities are signiicantly larger than those of gender. Only 15% of those studying for a bachelor, master or doctoral degree in 2007 were rural students – less than
one-third their share of the population. The participation of women has increased
across all education levels. At the primary level, 53% of those enrolled in 2007 were
Indonesian universities in transition: catching up and opening up
233
FIGURE 2 Tertiary Gross Enrolment Ratios in Selected Countries, 2009
(%)
80
70
60
50
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40
30
20
10
0
China
Indonesia
Malaysia
Thailand
East Asia &
Pacific
(developing
only)
High
income:
OECD
Source: World Bank, World Data Bank, Education statistics, .
female, while at the diploma level it was 56%. However, the proportion of women
with bachelor degrees was still much lower than that for men (43% compared to
57%) in 2007, as it was for the percentage of the population aged 25 years and
older with secondary education (24% compared to 31%). Current enrolments at the
secondary level suggest that these disparities will disappear within a generation.
There are very large differences between the rich and the poor in access to all
levels of education, particularly the tertiary level. More than 70% of those enrolled
in universities in 2007 were in the richest quintile of the population. Students from
the poorest three income quintiles made up only 10% of university graduates, and
the poorest quintile accounted for less than 1% of those enrolled in university (Di
Gropello, Kruse and Tandon 2011: 164). Poverty and low educational attainment
are therefore strongly correlated.
Public spending on education in Indonesia has risen substantially in recent
years, boosted by the 2005 constitutional amendment on education spending.
Consistent with the historical emphasis on primary and secondary education,
public funding for tertiary education remains very modest, even by developing
Asian standards. The Indonesian government currently spends the equivalent of
about 0.3% of GDP on tertiary education (igure 3). This is about one-third of
the corresponding percentage for India and Thailand, one-quarter of the OECD
average, and one-seventh of the percentage for Malaysia (not shown). Thus, most
of the funding for tertiary education in Indonesia comes from private sources, that
is, tuition fees. Private funding is about three times the level of public funding,
one of the highest ratios in developing Asia. In aggregate, however, Indonesia
spends less on tertiary education than most of its neighbours.
234
Hal Hill and Thee Kian Wie
FIGURE 3 Public and Private Spending on Tertiary Education as a Share of GDP
(%)
Korea 0.6
3.4
OECD average 1.3
0.4
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Japan 0.7
1.0
Thailand 0.9
India 1.0
Indonesia 0.3
0
Public
0.4
Private
0.2
0.9
1
2
3
4
5
Source: World Bank (2010: 11, igure 2.3, citing UNESCO, World Education Indicators 2007). Figures
relect estimates for 2004–05. Indonesian igure is from 2009 budget.
Educational quality
Comparative international assessments such as the US-based Trends in International Mathematics and Science Study (TIMSS) and the OECD’s Programme for
International Student Assessment (PISA) show that Indonesia’s performance lags
behind that of its neighbours other than the Philippines. The absence of any signiicant improvement over successive rounds of both series is cause for concern
(Suryadarma and Sumarto 2011). The test scores indicate that quality needs to be
strengthened. However, if the analysis takes account of differences in per capita
GDP, the Indonesian record is comparatively good, as illustrated with reference
to the PISA scores. Indonesia’s PISA scores are generally at least comparable with,
and often higher than, those from countries with a similar per capita GDP.
Comparative quality at the tertiary level is dificult to measure. The two major
international rankings are the World University Rankings published by the Times
Higher Education Supplement (THES) and the Academic Rankings of World Universities published by Shanghai Jiao Tong University (SJTU).5 For what they are
worth, the 2008 World University Rankings included only three Indonesian universities among the top 400 in the world: the University of Indonesia (UI) was
ranked 287th, Bandung Institute of Technology (ITB) was 315th, and Universitas
Gadjah Mada (UGM) 316th. The rankings do luctuate from year to year, however. In some other recent years, no Indonesian universities appear in the top
400. According to the SJTU survey, no Indonesian university is placed within
5 Both rankings use objective and subjective criteria. The THES rankings, which commenced in 2004, focus most heavily on international reputation. The SJTU rankings, which
started in 2003, use objective indicators exclusively, related to the academic and research
performance of faculty and alumni.
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Indonesian universities in transition: catching up and opening up
235
the top 100 institutions in Asia. Various comparative assessments conirm these
general conclusions. Suryadarma, Pomeroy and Tanuwidjaja (2011) conclude, on
the basis of an examination of the Social Sciences Citation Index database for the
period 1956–2011, that only about 12% of social science research publications on
Indonesia were authored by researchers based in-country. This was the lowest
share among the seven major developing countries included in their comparison, and about half of the corresponding igures for China (21%) and India (25%).
Sumarto (2011) conirms these indings: a search of the ‘Econlit’ database showed
that, among the articles published in English on the Indonesian economy in all
refereed journals over the period 1980–2000, the 10 most published authors were
all foreigners.
The origins of tertiary education
Although the country’s oldest university, UI, technically dates its origins to 1849,6
in practice Indonesia’s university system is almost entirely a creation of the second half of the 20th century (Buchori and Malik 2004; Welch 2011). In this respect,
Indonesia’s colonial experience lags behind those of India and the Philippines, for
example. Three of the country’s other leading universities – Airlangga University
(Unair) in Surabaya, the Bogor Agricultural Institute (IPB) and ITB – also date
their origins to the establishment of single faculties or schools in the 1920s, during
the Dutch colonial era. The irst post-independence university was UGM, located
in Yogyakarta. State universities were then progressively established in the major
provinces in the 1950s and 1960s, albeit with grossly inadequate funding.
During the colonial period, the faculty consisted almost exclusively of professors from the Netherlands, teaching that country’s curriculum. The standards
were high, in general comparable with those of the leading home institutions. The
language of instruction was Dutch, but these institutions were open to the Dutch
(including Eurasians) and to qualiied ethnic Chinese and indigenous Indonesian
students – mainly from the privileged priyayi class – who had graduated from the
Dutch language senior high schools.7 The Dutch academic community, which had
left Indonesia during the Japanese occupation, returned in the late 1940s. However, Dutch academics progressively left in the course of the 1950s, as bilateral
relations deteriorated in response to the festering dispute about the status of West
Irian (now comprising the provinces of West Papua and Papua). By the late 1950s,
with the switch to Indonesian as the language of instruction, the Dutch academic
community had totally disappeared
6 UI’s 1849 origins are based on the establishment in Jakarta in that year of the Dokter
Jawa School (School tot Opleiding van Inlandse Artsen or Stovia, School for the Training
of Indigenous Physicians), which eventually became the university’s faculty of medicine
in the late 1940s.
7 During the period 1920–40, fewer than 1,500 Indonesian students had qualiied to enter
a tertiary institution; only 230 had graduated from Indonesian tertiary institutions; and just
344 had graduated from universities in the Netherlands (Booth 1989: 118).
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Hal Hill and Thee Kian Wie
UNIVERSITIES: THE GLOBAL CONTEXT
Issues and trends
Higher education has historically been an international activity, with the great
centres of learning attracting scholars and students from around the world. The
number of people participating in the global delivery and receipt of higher education has risen rapidly over the past two decades. According to OECD estimates
(OECD 2008a, 2008b), there were about 120 million university students in 2007,
of whom about 3 million were undertaking education abroad. The US was the
largest host country, with about 20% of the total, followed by the UK, Germany,
France and Australia. Students from Asia accounted for the largest proportion
of foreign students, led by China (457,000), India (162,000) and Korea (107,000).
Indonesia, with 33,500 students, ranked low at number 20.8
There is much discussion about the prerequisites for the creation of high-class
universities. Leadership, vision and resources are central. The consensus is that
at least three factors are essential (Salmi 2009). First, there must be a high concentration of talent, based on a capacity to attract the best faculty and students. By
deinition, this will be on a global scale, with at least 30% international faculty
and 20% international students regarded as useful rules of thumb in rich countries. Moreover, top universities typically have a high proportion of high-quality
graduate students enmeshed in faculty research activities. Second, the universities need to be well resourced. US expenditure (public plus private) on higher
education in 2008 was about 2.7% of GDP, more than twice the proportion spent
by the EU21 (1.3%) (OECD 2011a: 231.9 The top US universities (which are overwhelmingly private) are well resourced, with endowments per student about 40
times the level in publicly funded US universities. A third factor is high-quality
university governance, which typically features autonomy from government and
political pressures, incentives for high performance, and a competitive spirit.
Most of the top universities have evolved over decades or even centuries, and
establishing top-class universities de novo is very expensive, with estimates ranging up to a billion dollars (Economist, 27/3/2010).
Several attributes supportive of high university quality that are implicit in the
above analysis deserve emphasis. The irst is mobility within and between countries, including the ability to attract the best faculty and students domestically and
internationally. This in turn requires at the very least that regulatory barriers such
as visa regulations are minimal.10 A second attribute relates to governance and
independence from governments. Aghion et al. (2010: 10), for example, test the
hypothesis that ‘a combination of autonomy and competition makes universities
8 The OECD estimates appear to under-state the stock of Indonesian students abroad. Although accurate igures are not available, the number is thought to be about 60,000.
9 The EU21 average is ‘the unweighted mean of the data values of the 21 OECD countries
that are members of the European Union for which data are available or can be estimated.
These 21 countries are Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland,
Portugal, Slovenia, the Slovak Republic, Spain, Sweden and the United Kingdom’ (OECD
2011a: 26).
10 To quote Salmi (2009: 21), ‘tertiary education institutions in countries where there is
little internal mobility of students and faculty are at risk of academic inbreeding’.
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Indonesian universities in transition: catching up and opening up
237
more productive’. They conclude that increases in a university’s expenditure generate greater output – as measured by patents or publications – if the university has greater autonomy and faces more competition. They therefore propose
‘increased reliance on competitive grants, enhanced competition for faculty and
students (promoted by reforms that increase mobility)’, and competition against
yardsticks based on various assessment exercises (Aghion et al. 2010: 7). A third
key attribute is the presence of arms-length, independent processes for review
of all aspects of university operations, including appointments, promotions, academic output and resource allocation. Indeed, the president of a leading US university observed that ‘the bedrock of university quality in the United States is
peer review’ (quoted in Salmi 2009: 59).
Country experiences
Developing country tertiary education experiences vary enormously, and it is
beyond the scope of this paper to survey them. However, a few key lessons from
selected Asian countries are salutary.
In the case of China, there has been a major commitment to tertiary education
since the 1990s (Li et al. 2011). Undergraduate and graduate student enrolments
have been growing at 30% per annum. China now produces three times as many
PhD graduates in science and engineering as the US, although on a per capita
stock basis the US still leads. Much of the increased government spending has
been channelled into the 10 elite universities, which select the top students nationwide through national entrance exams. Alongside this quantitative expansion is
the push for quality, with emphasis on objective indicators such as international
publications, citations and cooperation. There is a strong focus on science and
engineering, with these ields constituting 41.3% of enrolments, compared with
an economics and management share of 23.3%. As a result, China’s share of published output in the sciences is rising quickly, from 14.5% of Asian science and
engineering articles in 1998 to 22.4% in 2003 (Li et al. 2011: 523–4).
The Indian record is surprisingly similar to that of Indonesia, in spite of the
former’s head start at the time of independence, and notwithstanding the fact
that it has a marked edge with its handful of elite institutions and access to an
extensive international diaspora of leading academics.11 India’s tertiary GER
is slightly below Indonesia’s, its education dropout rates appear to be higher,
and its performance in international university rankings is only a little higher.
As in Indonesia, governments have adopted an ambivalent stance towards liberalisation of the tertiary sector and the role of the private sector. On the one
hand, real per student funding has been declining, forcing the public universities
to seek alternative funding sources. But caps remain on tuition fee levels, and
there are barriers to entry into the industry. As expected, the private institutions
have grown most rapidly in disciplines where start-up costs are low, returns to
graduates are high, and the supply response from the public sector is sluggish.
The country’s regulatory system is complex. Onerous rules cover the minimum
11 For example, two Indian institutions – the Indian Institute of Technology Delhi and the
Indian Institute of Technology Bombay (IITB) – were placed in the top 150–200 in the THES
2008 ranking. This paragraph on India draws on OECD (2011b: ch. 5, ‘Building on progress
in education’).
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Hal Hill and Thee Kian Wie
qualiications required of staff, in addition to arrangements governing promotions, workloads and curricula. The establishment of a new university requires
an act of parliament.
Malaysia has consistently attached a high priority to education, with very rapid
growth in enrolments at all levels, generous inancial support and the extensive
provision of overseas study opportunities. Education has been central to the objective of redressing the country’s large ethnic imbalances, with ethnic-based afirmative action quotas for enrolments (and implicitly for faculty recruitment) in public
universities introduced as part of the government’s New Economic Policy following ethnic hostilities in May 1969. There is considerable debate about the effectiveness of Malaysia’s overall education policies, with concern that the system has
become heavily bureaucratic and is performing poorly on equity and pedagogic
grounds (Lee and Nagaraj 2012). From the mid-1980s there was a rethink of education policy, prompted by iscal stringencies and global changes. The 1996 Private
Higher Educational Institutions Act was a watershed. Private universities were
permitted for the irst time, and their numbers have risen rapidly, contributing
most of the country’s very rapid growth in tertiary enrolments (Tham 2011). The
private universities are also being encouraged to upgrade, with liberalised visa
entry provisions for foreign students and faculty. In 2000–05, the government set
a target for foreign student numbers to increase from 20,000 to 25,000, but by 2005
the actual number was already twice the target, and 82% of these foreign students
were enrolled in higher education. Thus Malaysia has successfully developed a
middle-level niche as a regional hub for higher education, based on its relatively
low cost and reasonably competent quality assurance. However, major challenges
remain (Lim 2011). No Malaysian university performs well in the various international ranking exercises. Concern persists that the afirmative action programs
have weakened the public universities. Malay graduate unemployment is high,
and there is pressure on an already bloated civil service to hire these graduates.
Singapore aspires to establish world-class universities and to become the leading international centre for high-quality university education in Southeast Asia
and beyond (Lee and Gopinathan 2008). Its university sector is not large, comprising just three public universities; the oldest, the National University of Singapore,
is already highly ranked internationally. Major reforms have been introduced
since 2000. Universities now have greater autonomy (with a 2005 reform having
transformed them from statutory boards under the Ministry of Education to university companies); one-line budgets; and aggressive endowment funding initiatives through 3:1 matching grants from the government. The incentives systems
have also been reformed, with rewards for high performance, opportunities for
staff upgrading, favourable staff–student ratios, and frequent, rigorous audits
for quality. Singapore universities have aggressively developed international
exchanges and cooperation, with notable successes in niche areas such as prestigious international business schools. However, the country has been less successful
in attracting full-ledged international campuses.
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Indonesian universities in transition: catching up and opening up
239
INDONESIAN HIGHER EDUCATION:
DEVELOPMENTS, POLICIES, PRIORITIES
Planning
The Indonesian government’s educational objectives are set out in its MediumTerm Development Plan (Rencana Pembangunan Jangka Menengah, RPJM) for
2010–14 (GOI 2010) and its Master Plan for the Acceleration and Expansion of
Indonesian Economic Development (Master Plan untuk Percepatan dan Perluasan Pembangunan Ekonomi Indonesia, MP3EI). Key assessments and priorities
include the following.
First, the two documents note the signiicant educational advances made. The
government has signed on to the Millennium Development Goal that all children
will have completed primary education by 2015. By 2008, mean years of schooling had reached 7.5, and the illiteracy rate for those aged 15 years and above was
just 6%. The GER for higher education has been rising steadily, from 14.6% of the
age group 19–24 years in 2004 to 23.1% in 2010, but at this rate it is not certain
whether the 2014 target of 30% is attainable. The percentage of the workforce
with a diploma or degree rose from 5.3% to 6.2% between 2004 and 2008. The
indicators for educational quality, relevance, teacher education, governance and
accountability are all rising. The MP3EI also emphasises the importance of the
knowledge economy as an engine of economic development, and that university research institutes should be developed as national innovation centres. The
number of PhD graduates in science and technology is to be quickly expanded, to
about 7,000–10,000 by 2014, although this may be dificult to achieve, as evidently
most graduate students prefer the social sciences and humanities.
Second, the RPJM notes several current challenges. Over 1 million children
have not completed primary education. There is great pressure for entry into
upper secondary schools and universities, relecting the delayed effects of
the 1980s decision to aim for a universal nine years of compulsory schooling.
In higher education, Indonesia’s GER remains lower than those of its ASEAN
neighbours, and access to higher education is uneven by gender, socio-economic
status and region.
Third, the government is aiming for greater autonomy in the university sector,
commencing with four leading institutions, UI, ITB, UGM and IPB, to be extended
to three more, Universitas Pendidikan Indonesia (Indonesian University of Education, UPI), Universitas Sumatera Utara (University of North Sumatra, USU) and
Unair (which is often bracketed with the four above as one of the nation’s ive
leading universities). However, the application of the not-for-proit principle in
the private provision of education needs to be clariied, especially in light of a
recent Constitutional Court ruling, discussed below.
Fourth, the RPJM states that funding and administrative procedures are in need
of reform: ‘the current mechanism for the allocation and channelling of education
funds is very complex and needs to be simpliied in order to achieve greater eficiency and accountability’.
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Hal Hill and Thee Kian Wie
TABLE 1 Indonesian Higher Education Institutions, by Type, 2009/2010
MONE a
Type
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Public
University
Institute
Advanced school
(sekolah tinggi)
Academy
Polytechnic
Total
MORA a
Private
Total
Public
Private
Total
48
6
412
47
460
53
6
14
87
26
93
40
2
1,314
1,316
32
409
441
0
27
83
1,015
140
2,928
1,015
167
3,011
0
0
52
0
0
522
0
0
574
a MONE = Ministry of National Education; MORA = Ministry of Religious Affairs.
Source: Ministry of Higher Education, Higher Education Statistics, 2009/2010.
Structure and characteristics of Indonesia’s higher education sector12
In 2010, approximately 5 million students were enrolled in Indonesia’s higher
education institutions, up from the estimated 2,000 at the time of independence in 1945. Effectively there is a four-tier system, with three of the tiers located
mainly in the public sector.13 But the system is private sector dominated (table
1). Three-quarters of the total expenditure is in the private sector, most of the
recent growth has been in these private institutions, and the state universities are
de facto increasingly ‘privatised’ in terms of their funding.
The four main groups of higher education institutions are:
• 5–7 ‘elite’ public universities;
• 47–49 public universities of mixed but generally low quality;
• a vast private sector of hugely variable quality, comprising approximately 400
private universities and around 3,000 polytechnics, academies and ‘sekolah
tinggi’;14 and
12 The most detailed study on the subject is World Bank (2010), which is the source for
some of the statistics quoted in this section.
13 The universities and institutes could of course be classiied according to alternative criteria. For example, if quality were the main arbiter, the top group would include the elite state
universities together with a small group, probably similar in number, of private institutions.
14 Di Gropello, Kruse and Tandon (2011: 190) provide the following explanation of the
types of tertiary institutions. ‘Academies are legally deined as higher-education institutions that provide instruction in only one ield; most offer diplomas and certiicates for technician-level courses in applied science, engineering, or art at both public and private institutions. Advanced schools [sekolah tinggi] provide academic and professional university-level
education in one particular discipline. Polytechnic schools are attached to universities and
provide subdegree junior technician training. Institutes are those HEIs [higher education
institutions] that offer several ields of study by qualiied faculty and are ranked as universities with full degree-granting status. Universities are larger than institutes and offer training
and higher education in various disciplines.’ These are unoficial deinitions, and best seen
as only a guide; for example, two ‘Institutes’, IPB and ITB, are larger than most universities.
Indonesian universities in transition: catching up and opening up
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• a very large number of universities and other institutions administered by the
Ministry of Religious Affairs – mainly Islamic but also including schools for
students of Christian and other religious communities – and other government
departments (such as health, foreign affairs, defence and inance), also of
highly variable quality.
The agency oficially charged with the development of higher education in
Indonesia, the Directorate General for Higher Education (Direktorat Jenderal Pendidikan Tinggi, Dirjen Dikti), has limited capacity to implement the government’s
higher education policy. It effectively supervises the 54 state (public) universities,
but in practice it has limited inluence over private sector institutions, and even
less over the fourth tier of institutions that operate under the purview of other
government agencies. These limitations are compounded by its limited inancial
resources, equivalent to about 0.3% of GDP. It therefore has very few opportunities to offer inancial incentives to encourage tier three and four institutes to conform to its policy goals. Moreover, it broadly lacks the analytical capacity to drive
the public and intellectual debate on higher education strategies.
Although state institutions constitute just 4% of Indonesia’s higher education
institutions, they account for 32% of enrolments, and they set the standard for
academic quality and performance (Buchori and Malik 2004). They are the only
ones to have any international ranking or proile. The well-established national
universities rank highest in student application preferences, owing to prestige,
higher quality and lower cost. Most Indonesian academics with foreign PhDs are
products of the elite state universities, and state and foreign scholarships at the
PhD level go disproportionately to these universities, which also have the highest proportion of graduate students. Within the state system, a small but variable
number are regarded as higher-quality universities. Historically it was the ive
noted above (UI, ITB, IPB, UGM and Unair). Other classiications add the state
universities in Semarang (Universitas Diponegoro, Undip), Bandung (UPI and
Universitas Padjadjaran, Unpad), Medan (USU), Surabaya (Universitas Teknologi
10 Nopember) and Malang (Universitas Brawijaya, Unbraw). Several of these
universities have concentrations of PhD holders, indicating that they have the
potential to be research-active. The four top-ranking universities in Indonesia in
the THES University World Ranking tables (that is, UI, ITB, UGM and IPB) have
over 2,500 faculty members with PhDs. However, in aggregate only 5% of faculty
lecturers in Indonesian higher education institutions (HEIs) have PhD degrees.15
Until the early 2000s, the state universities were run along civil service lines.
Resources were provided by the central government, permanent staff were
required to be civil servants, and major decisions about resource allocation, fees
and stafing were determined at the centre. Only in the past decade have there
been gradual moves towards increased autonomy and greater lexibility, focused
mainly on the elite group. This was in part a recognition of the reality that the
central government does not have the resources to fund these universities fully.
Direct grants from Dikti now typically account for between a third and a half of
state university revenues, with the leading state universities at the lower end of
15 Those with at least a masters degree constitute 30% of state HEI and 11% of private HEI
faculty.
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Hal Hill and Thee Kian Wie
this range owing to their much greater inancial strength. These universities have
the capacity to earn more revenue through commercial activities and supplementary student fees.
Private universities are a relatively recent phenomenon in Indonesia, although
some of the larger ones were established in the early 1960s, including Tarumanagara University and Trisakti University, both located in Jakarta. More began
to emerge in the 1970s, some evolving out of ‘sekolah tinggi’, others established
de novo. Typically they are creatures of either a major business conglomerate or
a religious organisation, as in the case of the various campuses of the Muhammadiyah University. They began to grow very rapidly in the 1980s, in response to
rising incomes, limited state iscal capacity, growing commercial demand and the
economic deregulation that was occurring at this time. Until the 1990s, the government paid little attention to them, other than to ensure that they were not incubators of anti-government protest movements. Their status was regularised by a
1999 presidential decree on higher education, PP60/1999. A further boost to their
development was the recent requirement that teachers and professional civil servants have at least a bachelor degree. Private HEIs receive very little public money,
typically less than 5% of their revenue. There is also very little private educational
philanthropy, apart from small-scale scholarships and minor endowments.
The private sector displays greater quality variability than the public sector, with several large, relatively well-endowed private universities at one end
of the spectrum and small ‘sekolah tinggi’ with very rudimentary facilities at the
other. The well-established private universities are closely integrated with and
responsive to the labour market, and their graduates have little dificulty securing
employment upon graduation. The ethnic Chinese community is disproportionately represented in the better private universities, owing to a semi-formal policy
of afirmative action in favour of pribumi (indigenous Indonesian) students at the
state universities. The quality of the Islamic universities is also highly variable,
with a few strong institutions, such as Universitas Islam Negeri Syarif Hidayatullah in Jakarta, operating alongside many of low quality.
There is some specialisation between public and private universities. Private
universities usually specialise in low-cost courses in high demand, such as information technology, inance, accountancy and management. State universities are
usually expected to offer a full range of course offerings, including courses in
less lucrative ields such as agriculture, public health and mathematics. There is
also an expectation that the state universities will undertake research.16 Regional
state universities have a local development mission. The HEIs that are under the
supervision of other government departments are beyond the scope of this study,
except to note that they are by nature specialised institutions. Some, such as the
Akademi Statistik (the training institution run by the Central Board of Statistics,
BPS) are highly regarded.
16 In the words of the World Bank (2010: 19), private institutions are ‘totally devoid of a
research program and do not offer courses in ields thought to be essential for development
in areas such as agriculture, forestry and public health’.
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Indonesian universities in transition: catching up and opening up
243
Finance
Financial arrangements for Indonesian HEIs are complex. Of Dikti’s 2009 budget
of Rp 18.5 trillion, about 85% went to tertiary institutions: 69% to 75 non-autonomous state HEIs, 11% to the seven autonomous state universities and 6% to private institutions (World Bank 2010: ix). According to estimates prepared by the
World Bank (2010), in 2009 the average annual cost of course delivery per student
in HEIs was about $1,500. This igure is comparable with that in middle-income
economies, but quite high relative to Indonesia’s per capita GDP. There is substantial variation in per student costs between state and private institutions, with
the average for 2009 being Rp 22 million in the former and Rp 12 million in the
latter (World Bank 2010: ix). There are evidently no uniform funding formulae for
standardised courses, nor do Dikti allocations reward eficient course delivery.
Recurrent Dikti allocations are generally incremental and based on those of the
previous year. Capital budgets are determined on a ‘needs’ basis and are negotiated case by case. It is oficial Dikti policy to further the general goal of greater
autonomy, with a system of block grants, performance-based grants and competitive grants, combined with portable scholarships. Law 9/2009 on Legal Education Entities (Badan Hukum Pendidikan, BHP) was designed to facilitate these
objectives, and eventually to extend these principles to senior secondary school
funding. However, progress in its implementation has been slow, in part because
the Constitutional Court has declared the Law invalid, as we discuss below.
In terms of resource eficiency, the average length of tertiary study for a bachelor’s degree (known as ‘S1’) has been declining, from 6 to 4.5 years in public
universities in the past decade. The graduation time in private institutions has
always been shorter and it too has declined in recent years, from 5.7 to 4 years.
Given the faster graduation times and lower cost structure of private institutions,
the World Bank (2010: 26) estimates that the average cost of a private degree is
about half that of a comparable degree from a public university.
Regulation
The overall regulatory framework is therefore changing, albeit slowly. Dikti is
caught between the earlier approach to higher education, which for the state universities was highly prescriptive, and the transition to a system that conforms more
closely to international best practice, with greater autonomy and performancebased funding. Dikti’s accreditation process is institutionally well established,
through the National Accreditation Board for Higher Education (Badan Akreditasi
Nasional Pendidikan Tinggi, BANPT), but in practice its small, non-specialised
staff are unable to do much more than routine checks.17 The Ministry of Education and Culture (until October 2011 the Ministry of National Education) is also
in the process of inalising a presidential decree for an Indonesian Qualiication
Framework. However, the foundations of a credible regulatory framework are not
yet present. Serious peer review mechanisms have yet to be developed, and there
is not yet the bureaucratic capacity to deliver arms-length assessments.
17 In fact, the director general of Dikti, Djoko Santoso, has stated that about one-quarter
of the country’s higher education institutions are not actually accredited (Jakarta Post,
11/7/2011).
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Hal Hill and Thee Kian Wie
Although increasing numbers of Indonesian citizens study abroad, the Indonesian university system is rather isolated internationally. This relects the country’s latecomer status, its still low per capita income and the relatively poor
English-language proiciency of most Indonesian students. But Indonesian government policies reinforce this isolation. Visa regulations frustrate the movement
of faculty and students. Indonesia attracted 5,366 international students in 2007,
predominantly from Malaysia (52.6%) and East Timor (31%), and almost half in
medicine. Malaysia, by comparison, had about 48,000 international students in
that year. Indonesia is also missing out on the rapidly growing trend for students
to take a semester or a year for study abroad. For example, about 223,000 US
students were studying abroad in 2006. Most of these go to Europe, but China
attracted 11,10