Indonesia is grappling with a serious shortage of skills with as much as half of its workforce under qualified for their jobs, according to one of the country’s leading economists.

Asian Development Bank (ADB) economist Emma Allen said that despite improvements to educational achievement in recent years, too many older workers in particular have not completed secondary school.

And even younger Indonesians may not learn the right skills to match the country’s job market, said Allen, although she accepted that the government has taken steps to improve the adaptability and responsiveness of its education system. This has, notably, come through a recent Presidential Instruction on Revitalisation of Vocational Education issued in September 2016 by president Joko Widodo, which provides “a clear direction on how to move forward, with emphasis given to ministries and the private sector working together”, she said.

The job, however, will not be easy and requires a comprehensive programme of education and training reform, stressed Allen. Primarily, the government needs to make spending on public education more efficient – meaning it should not only upgrade school infrastructure (such as installing science and computer laboratories and training equipment), but also raise the quality of instruction in schools by training teachers and improve the curriculum.

Above all, “reforms should facilitate greater engagement between education providers and the private sector to ensure that graduates meet the demands of a middle-income country’s labour market”, the ADB expert said.

“Industry associations need to play a stronger role by developing good collaboration models that can evolve into industry wide skills-development programmes, with cost-sharing initiatives to support more and better skills training,” Allen said, while calling for greater focus on technical and vocational education and training.

Key ingredients for success include more “autonomy for providers of education and training to enable them to respond to local industry needs quickly, equipping the institutions with adequate financial and technical resources, and strengthening the industry qualification framework and the accreditation system,” she noted.

Even if such reforms are put in place, Indonesia-based recruitment specialist JAC International head Windiastri Arinda said companies still needed to play a role in developing staff skills. She urged companies to understand there are “no perfect employees or candidates” so learning and development for each employee is essential. She added that saying half of Indonesia’s workforce is under-qualified may not be “one hundred percent correct because we believe that humans are unique and each of them has their own strengths, both hard-skills and soft-skills”.

The World Bank already recognises Indonesia as a lower middle-income country – its gross national income per head in 2015 was US$3,440 – but moving to high-income status requires “investing in innovation, human capital, and infrastructure” Allen said, quoting from an ADB report: Asia Development Outlook 2017– Transcending the Middle-Income Challenge.

Recent policy initiatives taken under president Joko Widodo’s government, such as increasing public investment in infrastructure and improving the business environment, are encouraging, yet these measures need to be “complemented by a strengthening of reform in education and training, so that Indonesia can close the skills gap and address mismatches,” said Allen.

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