Opportunities for Australia to Help Close Indonesia’s Skills Gap

3 July 2019 Jarryd de Haan, Research Analyst, Indian Ocean Research Programme


Indonesian President Joko “Jokowi” Widodo met with his Australian counterpart, Scott Morrison, on the sidelines of the G20 Summit in Osaka on 29 June. According to a media release from the Indonesian Ministry of Foreign Affairs, Jokowi made a statement during that meeting which said that: ‘Within the next five years, Indonesia will drive its priority focus on human resources improvement, including the development of vocational education and higher education sectors’. He added that Indonesia wishes for greater co-operation with Australia to help it reach those goals. Those comments came one day after a Roundtable event in Perth titled ‘Technical and Vocational Education and Training (TVET) in Mining and Tourism sectors: Opportunities and Challenges’. The Roundtable was convened by the Indonesian Embassy in Canberra, in collaboration with the Consulate-General in Perth.


As discussed in a previous Strategic Analysis Paper, Indonesia needs to maintain a GDP growth rate of approximately five to six per cent to achieve the goal of becoming the world’s fourth largest economy by 2050. In a bid to achieve this, Indonesia is seeking significant investment in a number of key priority sectors, including: infrastructure; manufacturing; maritime; agriculture; tourism and digital. As investment is poured into those sectors, significant growth in the supply of skilled workers will be needed to fulfil their growing demands. Unfortunately, Indonesia currently suffers from a skills shortage.

To remedy that skills shortage, the education sector needs to offer opportunities for Indonesian workers to develop the skills they need. Currently, however, the number of students enrolled in courses related to priority sectors, does not match the number needed to effectively sustain those sectors. Additionally, as noted by some attendees at the Roundtable event, there is, in some cases, a significant gap between the certifications offered and what is required by industry employers seeking skilled workers.

The Indonesian Government, therefore, needs to balance procuring investment in key sectors with investment in its education sector. The pending ratification of the Indonesia-Australia Comprehensive Economic Partnership Agreement will help facilitate investment. Australia can then play a major role in developing Indonesia’s education sector. The potential for Australia’s involvement has already been recognised by some Indonesian officials, as noted by Tom Lembong, the head of Indonesia’s Investment Coordinating Board. He considers that the solution to Indonesia’s skills problem is Chinese capital combined with Australian training.

Much of that potential lies in developing TVET for the Indonesian mining sector. Australia is already a significant investor in the sector, which accounts for 64.3% of Canberra’s total investment in the country over the past five years. Australia’s experience in heading a nationally regulated and consistent TVET programme, with regular input from the relevant industries, is also invaluable to Indonesia.

As noted by the secretary general of the Ministry of Research, Technology, and Higher Education, Professor Ainun Na’im, Indonesia’s vocational training is traditionally based on an academic level, with a record of poor co-operation with industries seeking to employ future graduates. Adopting practices from Australia’s approach to TVET, could address many of the skills shortages that Indonesia faces across a variety of sectors.

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