• The World View

    A blog from the Center for International Higher Education

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Is Indonesia Ready for International Branch Campuses?

Allowing 10 international branch campuses in the first year of operation seems like a risky move -- a stark contrast with more careful moves by Malaysia and Vietnam.

May 29, 2018
 
 

​Indonesian higher education rarely receives international attention. However, lately international media, such as The Australian and the Singapore-based The Straits Times, are abuzz with news that Indonesia will end its current protectionist higher education policy. In February 2018, President Widodo lamented the lack of innovation among Indonesian universities to the Indonesian Rector’s Forum and announced he would stimulate competition by introducing international branch campuses.

Indonesia is the world’s fourth most populous country— 37% of the population is below 20 years of age. Despite the fact that Indonesia’s economy continues to grow at a rate of roughly 5% per year and is now one of the 16 countries producing a 1 trillion-dollar GDP, the quality of its human resources and educational institutions are deplorable. A 2013 study done by the Boston Consulting Group (BCG) reported that many Indonesian companies will be left behind if they cannot address the challenge of cultivating talent. BCG predicts that by 2020, hiring for mid-level managers will fall short, leaving 56% of the positions unfilled and only half of the entry-level positions filled. At the level of senior management, there will be a lack of talent with global exposure or the necessary leadership skills to sustain business and manage burgeoning economic growth.

Global rankings of Indonesian universities seem to confirm challenges with the quality of human resources in the country. Of the more than 4,500 institutions of higher education, only three are in the top 500 QS global rankings for 2018— University of Indonesia (ranked 277th), Institute of Technology, Bandung (331st) and Gadjah Mada University (401-410th). Still, these Indonesian universities are well below the position of top Southeast Asian Universities such as Nanyang Technological University (11th) and University of Malaya (114th). Presumably, the quality of graduates produced by even the best Indonesian universities is far below that of its neighbors. Without intervention, the prediction of BCG will become a reality in the near future.

On learning of the President’s plan, the reaction from Indonesian higher education sector has been almost exclusively negative. Both private and state universities oppose the opening of the sector to foreign providers. They voice concern over neocolonialism and the commodification of higher education if international branch campuses are allowed into the country. Some urge the government to only allow research-intensive international universities to operate in the country and then, only in remote border areas.

Indonesian universities have long benefitted from the government’s protectionist policy. The state universities receive substantial financial subsidies. The Constitution mandates 20% of the state budget be spent on education, but as the World Bank confirms, the quality of education remains low and financial incentives have failed to increase the quality of teaching or research.

Unfortunately, the government seems to have no clear policy on international branch campuses in terms of an investment scheme or academic regulations. Different government agencies continue to issue unclear and even contradictory statements. The Minister of Research, Technology and Higher Education proposed that international branch campuses should be opened in partnership with local Indonesian universities, so that ownership is split 49-51 weighted to the Indonesian partner. However, earlier in April 2018, the head of the Investment Board announced that the higher education sector would be 100 percent open to foreign investment.

The academic regulations that the government is considering still include a lot of restrictions. The government will be able to dictate subjects offered by the international branch campuses. The current emphasis seems to emphasize science, technology, engineering and mathematics (STEM). Popular majors such as business may be off the table. These international branch campuses are also required to dedicate 15% of the curriculum to Indonesian-specific courses such as religious studies and national ideology that may result in a longer study period for the students. Unclear investment and academic policy may easily deter reputable foreign providers from entering the Indonesian market.

Even more baffling, officials in the Ministry of Research, Technology and Higher Education mentioned numerous foreign universities ready to open branch campuses in Indonesia within this year. The names of these universities vary considerably, depending on which official is talking to the media. They include: Cambridge, MIT, Imperial College, Monash, University of Melbourne, Central Queensland University, and National Taiwan University. Indonesian media report that up to ten international branch campuses will be ready to operate by the middle of this year. It is highly doubtful that leading universities like Cambridge will consider opening a branch campus, let alone in Indonesia. Moreover, allowing ten international branch campuses in the first year of operation seems like a risky move—a stark contrast from more careful moves by Malaysia and Vietnam where only one international branch campus was opened initially.

While the Indonesian government seems to welcome international branch campuses, this opening is a premature. Without clear policy and leadership, international branch campuses may not lead to the expected improvement. One might suspect that the recent announcements made by the government were intended more to force local universities to ramp up their quality, rather than actually inviting foreign investment in the higher education sector. Foreign providers are wise to exercise prudence and due diligence when considering an entry into Indonesia.

Agustian Sutrisno holds a PhD in higher education management from Queensland University of Technology. He lectures at Atma Jaya Catholic University of Indonesia and was a Fulbright Visiting Scholar at the Center for International Higher Education, Boston College.

 

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