Risks, opportunities in Indonesian higher education amid free trade Serian Wijatno and Ariawan Gunadi  ;   Serian Wijatno is vice chairman of the Agung Podomoro Education Foundation; Ariawan Gunadi is a business law expert

JAKARTA POST, 13 September 2014

                                                                                                                       

                                                      

As a member of ASEAN, Indonesia will soon be shouldering the region’s most comprehensive economic policy. The dream was to form an ASEAN Economic Community (AEC) based on an agreement made between member states at the 13th ASEAN High Summit Conference in Singapore in November 2007. With a definite deadline of 2015, the initiative came with the AEC Blueprint as a baseline to implement a free flow of goods, services, investment, labor and capital among member states in the region. With such a utopian dream, the AEC tried to put it into reality by liberating meaningful trade instead of the usual free-trade commodities from other economic initiatives. Some of the procedures involved applying suitable trade facilities such as export procedures, through the enactment and implementation of an ASEAN Single Window (ASW), evaluating the Common Effective Preferential Tariff (CEPT) Scheme, Rules of Origin (ROO) and conducting standards and conformance. However, further clarification has to be sought by respective member states. In particular, the education sector is categorized into a free-flow trade of services that demands the removal of restrictive barriers and the relaxation of foreign education products’ entry into the national market. This act was expected since demand for educational activities from pre-school to the post-graduate level has always increased exponentially, just as health and housing does over the years. But the issue remains that Indonesia is struggling to tackle education issues due to a lack of funds and manpower. Article 31 of the 1945 Constitution only covers the government’s obligation for basic education and the state budget allocation would never be sufficient to accommodate all levels of education. Therefore, society has to shoulder the responsibility of developing nations in higher education. Data from Indonesia’s Directorate General of Higher Education in 2014 showed that there were 92 state universities and around 3,000 private higher-education institutions, from polytechnics to universities. In comparison, the number of higher education students in 2012 reached up to 4.27 million people with a growth rate of 1.7 percent every year. Overall statistics showed a pale comparison between capacity versus demand. Indeed we always fall short of the final answer regarding higher education and methods to find the right answer will differ at each level. Simply speaking, how does one solve these problems? Jack Welch once stated that the priority of higher education lies in its independence. We believe that success also lies in effective management. As I put it in a bold style in my newly launched book Managing an Effective, Efficient Higher Education, the creativity of foundation organs are the bloodline of higher-education sustainability. Most of the time, people who manage boards of advisors, executives or supervisors are a combination of professionals, CEOs, academicians and public representatives. Leaders need to define their market segments, develop potential faculties to be opened and attract top talent. By combining skills and local wisdom, a firm foundation will be able to direct universities to solid leadership and excellent education-system management. The second part involves the creation of independence for universities. Education goes beyond textbooks, classrooms and diplomas. It involves life experience, exposure to workplaces, real-time business activities and laboratories. S Koeberle, former World Bank country director for Indonesia, noted that universities that established appropriate skills and research could help Indonesia to achieve productiveness, creativity and growth in a competitively global environment. While state universities may enjoy decades or even centuries of reputation in this matter, private universities need to promote a cutting-edge, specialized service, as well as international cooperation with world-class universities or professional certifications to attract potential students. It is little wonder that young generations are finding information technology more convenient and educational entities that refuse to evolve may end up being left behind by the market or produce unmarketable graduates. In regard to internationalization, Dr. J. Knight from the University of Toronto pointed out that the impact of free trade on higher education can create a boom in academic relations between graduates and institutions. Indonesian professionals may be startled to see savvy graduates from Singapore who can speak in a multilingual manner and draft advanced business proposals, or graduates from Thailand with international networks and certifications in their field. From a holistic perspective, Indonesian higher education should consider not only its own standards but also international standards, for instance the Association to Advance Collegiate Schools of Business International (AACSB) accreditation. Do not forget the importance of Indonesian culture. We want to remind all education agents that free trade poses another challenge to institutions, as their non-profit element clashes with international pressures of trade. An influx of foreign capital or offers from foreign institutions may compromise the integrity or way of thinking regarding the dogma of higher education. The only solution would be an enhancement of coordination between foundations and universities. With each separate authority in management and pure academic activity, universities would have a better chance of achieving their purpose of national education. Overall, Indonesia’s national higher education still has a long way to go, but management excellence remains a possibility to manage the risks of free trade and create beneficial opportunities. ●