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Indonesia to Prioritize Development Of Technological And Professional Skills

MANILA, PHILIPPINES (29 November 2000) - The Asian Development Bank today approved a US$180 million loan to Indonesia to strengthen the quality of its higher education to increase the number of skilled professionals and technologists to achieve global competitiveness and sustainable economic growth.

This will be achieved through a policy framework that addresses restructuring the management of higher education through improved governance, autonomy, accountability and accreditation. It will also provide competitive and performance-based funding mechanisms, promote public-private sector partnerships and enhance geographical and social equity.

The project will finance about 75 competitively awarded subprojects at both public and private universities and polytechnics, thereby encouraging universities to improve their quality and relevance. The funds will be utilized to design and implement education improvement plans that include human resources development, equipment procurement, upgrading of existing facilities, curricula development, establishing institutions-industry linkage, and strengthening study centers for women and training unemployed and underemployed graduates.

Subprojects will also increase the capacity of existing public and private higher education institutions by providing some 55,000 new student places in high priority disciplines while some 180,000 students enrolling in engineering, basic sciences, agriculture, law, management and accounting will benefit from improved quality and relevance. About 20,000 poor students will be able to attend institutions of higher education that would not normally be accessible as a result of project induced financial and academic support through a scholarship program. Fifty percent of all scholarships will be targeted to women to increase female participation in science and engineering studies.

The project will upgrade the quality of academic programs utilizing multimedia approach with wider application of information technology including the use of English language.

"These changes will help create a workforce that can absorb new knowledge and technologies through continued improvement of skills, which Indonesia needs to remain globally competitive," says S.A. Chowdhury, senior ADB officer working on the project.

The manufacturing industry was the engine of growth during Indonesia's development between 1978 and 1997. To achieve economic recovery, long-term sustainable growth, and improved quality of life for the poor, the country must boost exports dependent on high levels of skill, technology and capital. A labor force demand study by the Japan International Cooperation Agency projects that Indonesia will require about 600,000 additional engineers, technicians, scientists and other professionals over the next 10 years to adequately meet the anticipated demand for manufactured goods.

ADB will fund 72 percent of the total project cost of US$250 million while the remainder will be funded by the government and participating institutions. The ADB loan is from its ordinary capital resources and will have an amortization period of 25 years, including a grace period of six years. The interest rate will be determined in accordance with ADB's pool-based variable lending rate system for US dollar loans.

The executing agency for the project scheduled for completion in December 2006 is the Directorate General of Higher Education under the Ministry of National Education.

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