JAKARTA, INDONESIA (3 December 2018) — The Asian Development Bank (ADB) has approved a $200 million loan to upgrade four higher education institutions in Indonesia and improve the technical and vocational training programs that will help youth obtain the job skills needed in the evolving global economy.

The Advanced Knowledge and Skills for Sustainable Growth Project will improve the quality of education and research in three universities in Sumatra—Jambi, Riau, and Malikussaleh in Aceh—and the Indonesia University of Education in Bandung, West Java, by strengthening their collaboration with industry, as well as international and domestic universities. The project will also finance the construction of new lecture halls, laboratories, and other infrastructure equipped with climate-proofing design features.

The universities in Sumatra will establish research centers for sustainable agriculture and natural resources, as well as marine and aquatic science, to support local economic development. The Indonesia University of Education will focus on improving the quality of technical and vocational education and teacher training in areas such as information systems and technology; artificial intelligence and robotics; industrial instrumentation engineering; and renewable energy engineering.

“Indonesia has one of the world’s youngest populations, which is expected to boost the country’s labor productivity in the next few years. It is important that this young working population has the skills that the labor market demands,” said ADB Senior Social Sector Specialist Mr. Rudi van Dael. “ADB’s assistance will increase student access to higher education and support the advancement of skills and knowledge among Indonesia’s youth.”

While enrollment in higher education in Indonesia has increased to 7.5 million in 2018 from 4 million in 2004, Indonesia faces a shortage of skilled workers as its economy shifts to more technology-intensive and services industries, which require higher levels of technical proficiencies in areas such as data mining and robotics.

“The demand for students majoring in engineering and technology is high. With 20% of the students enrolled in these fields, there is room for growth,” said ADB Senior Project Officer Mr. Sutarum Wiryono. “Students can benefit if their skills meet the demands of the job market and if teachers have the qualifications to teach.”

The total cost of the project, which is expected to be finished by the end of 2023, is $266.5 million, with the Government of Indonesia contributing $66.5 million.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.

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