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Indonesia: Advanced Knowledge and Skills for Sustainable Growth Project

Sovereign (Public) Project | 50395-006 Status: Active

The proposed project will support advanced skills and knowledge for sustainable economic growth in Indonesia by upgrading three public universities in Sumatra and one public university in Bandung, West Java, as the first phase of higher-education reform. The project will support the construction and/or upgrading of new facilities that incorporate green-building and climate-proofing design features. The project will strengthen staff capacity at the universities and support demand-driven quality education and research aligned with local economic priorities. It will integrate new technologies in teaching programs, strengthen technical and vocational teacher education, and help the government develop a medium-term higher-education investment plan.

Project Details

Project Officer
Wiryono, Sutarum Southeast Asia Department Request for information
Country
  • Indonesia
Sector
  • Education
 
Project Name Advanced Knowledge and Skills for Sustainable Growth Project
Project Number 50395-006
Country Indonesia
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3749-INO: Advanced Knowledge and Skills for Sustainable Growth Investment Project
Ordinary capital resources US$ 200.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Education / Tertiary

Gender Equity and Mainstreaming Gender equity
Description The proposed project will support advanced skills and knowledge for sustainable economic growth in Indonesia by upgrading three public universities in Sumatra and one public university in Bandung, West Java, as the first phase of higher-education reform. The project will support the construction and/or upgrading of new facilities that incorporate green-building and climate-proofing design features. The project will strengthen staff capacity at the universities and support demand-driven quality education and research aligned with local economic priorities. It will integrate new technologies in teaching programs, strengthen technical and vocational teacher education, and help the government develop a medium-term higher-education investment plan.
Project Rationale and Linkage to Country/Regional Strategy

Strategic context. The government seeks to accelerate economic growth by promoting technology-intensive industries, infrastructure development, and high-end services, while transforming agriculture and fisheries. Indonesia's manufacturing industry aims to grow and integrate new technologies to increase productivity. New technologies such as big data, robotics, and the internet of things will transform the economy, and can create new industries and better-quality jobs, and thus increase labor productivity. However, these new technologies will alter the skills required of the workforce, leading to lower wage growth for less-skilled laborers, or even loss of employment to automation, thereby exacerbating income inequality. Already, demand for jobs that require non-routine cognitive tasks have grown faster than jobs requiring routine and manual tasks. Without adequate skills development or retraining, workers with weaker skills face hurdles in seizing the opportunities that new technologies provide. As of end-2017, only 11% of the labor force had completed higher education, and in 2017 fewer than 20% of graduates held degrees in technology-relevant fields like engineering with few women among them. Half of the labor force is underqualified for the jobs they are performing. About 10% of the labor force is overqualified, most of whom hold degrees, indicating an increasing risk of mismatch between demand and supply. Indonesia needs more higher-education graduates both men and women with degrees that better match emerging opportunities in the labor market.

Higher education needs to accommodate an increasing volume of students. The gross rate of enrollment in higher education increased from 17% in 2004 to 31% in 2018, with student numbers increasing from 4.0 million to 7.5 million. Advanced skills education is provided by higher-education institutions (HEIs) such as universities and polytechnics. The Ministry of Research, Technology and Higher Education (MORTHE) administers public HEIs and licenses private HEIs.F From 2004 to 2018, the number of students per public HEI grew significantly, resulting in very crowded institutions. During the same period the number of private HEIs grew significantly to accommodate more students. While Indonesia has made significant progress in providing access to higher education, additional effort is needed to meet growing public demand.

Education and research in higher-education institutions do not meet current and future industry needs. Indonesia's labor force is underqualified. Employers indicate that higher- education graduates lack reasoning, problem solving, and teamwork skills. Curricula need to focus more on practical and soft skills like communication, teamwork, and work ethic, and should be updated more regularly. With a few notable exceptions, HEIs do not benefit from links to industry and rely for the most part on traditional lectures. Teachers lack the skills to adopt modern teaching techniques that integrate practical skills training with theoretical content. Few HEI staff have doctoral degrees. Moreover, the sharp increase in enrollment has led public HEIs to recruit more temporary, less-qualified staff and to focus mainly on education and neglecting research. Public HEIs are often overcrowded and have outdated and/or inadequate equipment, lecture halls, and laboratories.

Higher-education institutions outside Java need to improve to support local society and the economy. Of Indonesia's 122 public HEIs, 40% are in Java, and so are nine of Indonesia's top-10 public universities. HEIs outside Java cater to poorer parts of the country. They are rated lower in quality, have limited financial resources, fewer qualified staff, and hardly conduct any research. With adequate investment in facilities and human resources, the HEIs outside Java can play an important role in the local economy. They can provide the advanced skills needed for inclusive economic growth, collaborate with local industry to introduce new technologies, and enable a more diverse array of students to attend high-quality universities.

Higher education needs to provide better teachers to meet growing demand for technical education. Senior secondary vocational education (SMK) students are not as employable as they should be, and thus the quality and relevance of SMK education needs to improve. Teachers at SMK schools and HEIs lack the practical skills and industry experience needed for the technical subjects they teach. They rely mainly on traditional lectures, instead of using more interactive, inquiry-based teaching methods. Employment rules for teachers focus on academic qualifications, which hampers recruitment of teachers with practical experience. Only 20% of SMK vocational subject teachers have the required qualifications, implying that 90,000 of such teachers require skills improvement. Teaching universities and institutions lack adequate programs, facilities, and industry linkages, and are ill-prepared to integrate new technologies to prepare teachers for the changing needs of technical education. Indonesia urgently requires better SMK teachers, as the number of SMKs and students has increased significantly since 2012. In response, the MORTHE and the Ministry of Education and Culture (MOEC) have introduced programs to strengthen teacher education. This includes changing employment rules to allow people with industry backgrounds to become teachers. Given the urgent need for more and better technical-and-vocational-education-and-training (TVET) teachers, the MORTHE and MOEC are preparing a strategy to educate TVET teachers, which includes integrating pre- and in-service training and increasing industry involvement.

Efforts to improve quality and relevance need to become more effective. The higher education quality assurance mechanism and the Indonesian qualification framework (IQF) are the two main instruments to improve the quality and relevance of higher education. HEIs also operate their own internal quality assurance systems. An independent panel is in charge of assessing and accrediting HEIs at the program level and at the institution level. From 2019, the national accreditation body for higher education will introduce an improved instrument to assess HEIs at the institution level. The new instrument will focus on performance and processes. Under the IQF, which came into effect in 2012, national qualification standards for occupations are developed with inputs from industry to ensure that the education and training institutions provide skills development which meets industry needs. The IQF is meant to be the unifying framework for skills development. While progress has been made, the system needs to be strengthened so that IQF certificates issued under the national assessment and accreditation system become nationally and possibly internationally accepted.

The government's strategy. Higher education is a priority for the government. The National Medium-Term Development Plan, 2015 2019, the MORTHE's strategy for 2015 2019, and the presidential decree on strengthening vocational education set out the directions to improve the quality and relevance of higher education. The government will focus on improving access to and the quality of science, engineering, agriculture, and health education and research; establishing stronger collaboration with industry; and strengthening teacher quality. The MORTHE's investment program aims to strengthen the capacity of HEIs to meet increased demand for higher education. HEIs outside Java are included in the investment to ensure equitable growth. The MORTHE expects each university to become a center of excellence in a specific academic discipline to meet current and future (local) economic needs. The government is preparing its National Medium-Term Development Plan, 2020 2024, with a strong focus on the role of higher education to support technological change, innovation, and entrepreneurship. As part of the 2020 2024 plan, the MORTHE will prepare a medium-term investment plan for higher education. This investment plan will aim to accelerate innovation in new technology and stimulate entrepreneurship at top universities, and will also target the development of advanced skills at regional universities so local economies can also benefit from the technological transformation.

Financing requirements for upgrading higher-education institutions. Since 2010, the government has allocated 20% of the national budget to education, with the MORTHE receiving about 10% of the education budget. This includes revenue that public universities gain from tuition and other resources. However, this budget is insufficient to upgrade facilities to offer quality education to an increased number of students, especially for public HEIs outside Java, which have fewer revenue-generating options. Hence, development partners are financing the HEI upgrades. As part of the initiative, the MORTHE has requested support from the Asian Development Bank (ADB) to upgrade four public universities: the University of Malikussaleh (UNIMAL), the University of Jambi (UNJA), and the University of Riau (UNRI) all in Sumatra; and the Indonesia University of Education (UPI) in Bandung, West Java.

The Sumatran universities are mid-tier universities providing higher education to support economic development in their regions. Financing is needed to provide lecture halls, laboratories, and other facilities to meet increased demand for higher education, improve quality and relevance of education and research, and ensure an inclusive, conducive, and gender-friendly teaching and learning environment. UNIMAL caters mainly to students from East Aceh, a post-conflict and post-tsunami area in which agriculture is the main economic activity. It will focus on sustainable agriculture to support local farmers and small agribusiness. UNJA, the only public university in poor but natural-resources-rich Jambi Province, will focus on sustainable management of natural resources to support the province's transformation from an extractive to a sustainable economy. UNRI, located in Riau Province, which has seen strong economic growth, aims to strengthen its capacity in aquatic and marine science to accommodate agribusiness companies, related service industries, and farmers.

UPI, a teaching university, will become a center of excellence for educating TVET teachers. The center will prepare TVET teachers to teach emerging technologies to meet current and future industry needs. The center will collaborate with other universities that specialize in TVET-teacher education; with other HEIs in Bandung; and with SMKs, the MORTHE, and the MOEC. UPI will establish a special unit to strengthen industry relationships within the center of excellence.

Lessons learned. The project design incorporated lessons learned from the ADB-supported Polytechnic Education Development Project and the Education Sector Analytical and Capacity Development Partnership. First, programs designed by industry and individual HEIs generally produce better results. Second, to reform an institution, a piece meal approach focusing at a few programs does not sustain. The design should address all stakeholders and units within an organization, and ensure interconnectivity between these units so reforms reinforce each other and sustain. Third, education institutions should design their skills development programs based on the skills needs of the local industry, as each location and each industry is unique.

Impact Income and productivity of the working age population increased
Project Outcome
Description of Outcome Access, relevance, and quality of targeted universities strengthened.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Market-responsive programs delivered

Training of TVET teachers improved

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Aceh, Jambi, Riau, West Java
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

All recruitment of consulting services will be undertaken in accordance with ADB''s Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017), as amended from time to time.

The project is as part of advance action currently recruiting the following consulting services: (i) engagement of project management and construction supervision consultants to support the project management unit (PMU) and the 4 universities acting as the project implementation unit, (ii) engagement of two individual consultants (Procurement Specialist and Civil Engineer) under PMU. This is necessary to ensure consultants are available to support the early stages of project.

There will be a total of 13 consultancy packages to be financed by ADB loan and by the government of Indonesia. The procurement plan of the project showing all procurement packages will be made available upon approval of the project.

Procurement

All procurement of goods and works will be undertaken in accordance with ADB''s Procurement Policy (2017) and Procurement Regulations for ADB Borrowers (2017), as amended from time to time.

The project is undertaking procurement of civil works on the construction of three buildings for UPI as part of advance action. This is to ensure that civil works can start at early stage of the project.

There will be a total of 37 packages of civil works and good/equipment/furniture, to be financed by ADB loan and by the government of Indonesia. The procurement plan of the project showing all procurement packages will be made available upon approval of the project.

Responsible ADB Officer Wiryono, Sutarum
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Human and Social Development Division, SERD
Executing Agencies
Ministry of Research, Technology and Higher Education
[email protected]
Building D, Jalan Jenderal Sudirman,
Pintu Satu, Senayan Jakarta 10270
Timetable
Concept Clearance 23 Oct 2017
Fact Finding 14 May 2018 to 25 May 2018
MRM 06 Aug 2018
Approval 29 Nov 2018
Last Review Mission -
Last PDS Update 29 Mar 2019

Loan 3749-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Nov 2018 17 Dec 2018 08 Apr 2019 30 Jun 2024 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 266.52 Cumulative Contract Awards
ADB 200.00 29 Nov 2018 0.03 0.00 0%
Counterpart 66.52 Cumulative Disbursements
Cofinancing 0.00 29 Nov 2018 0.00 0.00 0%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Civil Engineer as Bridging Consultant Individual - Consulting Closed 02 Apr 2019 04 Apr 2019
PMSC (Project Management and Supervision Consultant) Firm - Consulting Closed 12 Mar 2019 10 Apr 2019
Project Management and Supervision Consultant Firm - Consulting Closed 07 Mar 2019 06 Apr 2019
PMSC - Project Management and Supervision Consultant Firm - Consulting Closed 13 Feb 2019 14 Mar 2019
Procurement Specialist as Bridging Consultant Individual - Consulting Closed 16 Jan 2019 25 Jan 2019

Contracts Awarded

No contracts awarded for this project were found