06 Maret 2021

Improving the Quality of Indonesian Human Resources as a Pre-requisite to Expedite the Job Creation Law: A Regional and Global Perspective

As the Job Creation Law plays a strategic role in developing the Indonesian economy, it may assist Indonesia to become a formidable regional and global competitor. Hence, it is important to synergize the law with other legislations, including the Law on the National Educational System.

Professor Cecep Darmawan


The Job Creation law (or generally knowns as UU Cipta Kerja) and all its components have been legitimized since October 2020. However, the enforcement of this law has not been successful thus far. Some have attributed this to the need for other implementing laws, such as Government Regulations and Presidential Decrees, to be part of the implementation process. The inclusion of such laws also enables the public to continue to track and ensure that the laws are enforced in compliance with the public interest.

Moreover, it remains unclear whether the law can potentially improve the Indonesian economic position, both regionally and internationally. One indication of how this could be achieved is outlined in a section in the Republic of Indonesia Law Number 11 of 2020 on job creation. The section entails how the Job Creation Law should absorb as much of the Indonesian workforce as possible in the midst of highly competitive global economic demands This, thus, demonstrates how the law is vital in preparing the national economy to compete regionally and globally.

Economic, Technological and Human Resource Considerations for the Job Creation Law

There are several considerations for the Indonesian government pertaining to the Job Creation law. Indonesia should first focus on enhancing its productivity as the largest economy among ASEAN countries. More specifically, Indonesia should avoid becoming a consumer state as it eases access of imported goods into the country.  By doing so, Indonesia can avoid becoming a victim of the global economy as it facilitates both domestic and foreign investments through the law. It is also noteworthy that the law is implemented in the digital economy of industrial revolution 4.0 which encourages a larger reliance on technology through online sales and transactions.

This law is also expected to facilitate technology-based transfer into Indonesia and improve the informational skills of its citizens. To sustain long-term impact, the quality of Indonesian human resources should be significantly improved and the utilization of its natural resources optimized. Such optimization is crucial to support Indonesia’s exporting process. Additionally, this should entail a significant reduction of raw material exports that can be achieved by transforming the paradigm behind Indonesian exports. Through economic policies, Indonesia could instead focus on increasing their exported products which have been processed both partially and fully in Indonesia. By doing so, it will not only further increase the job creation in Indonesia, but also inspire new local innovations that can compete with global competitors.

Improving Human Resources through Education

To facilitate a successful transfer of information, skills, and technology, improving the quality of Indonesian human resources is mandatory. The lack of such improvements will limit the goals of the law and endanger its existence. Generally, Indonesia’s human resources are impeded by several factors, including (1) low qualifications of manpower which predominantly possess high school qualifications or lower; (2) low productivity rates; and (3) a lowly skilled labour. Addressing these human resource challenges enable a proper matching with the expectation of the Job Creation Law.

As a developing country, Indonesian human resources require substantial improvements. This is evident as Indonesia is ranked 111th out of 189 countries or sixth among ASEAN countries in the Human Development Index Ranking. This is unfortunate when human development is key to increasing economic growth and vice versa. The “two-way relationships between Economic Growth (EG) and Human Development (HD)” also demonstrates that human development is not only a product of economic growth but also an important indicator and input for economic growth. Therefore, human development should be prioritized further to drive higher economic growth.

This, thus, supports the need to synergize the law with other regulations including the Law on the National Educational System. Currently, educational regulations have been incorporated into the Job Creation Law to facilitate the improvement of Indonesian human resources. While the law aims to ease investments and creating jobs, the incorporated educational reforms would improve the quality of Indonesian human resources intended to fill these newly created jobs. This symbiotic relationship exemplifies the importance of a strong economic system sustained by an equally good education system; within the ambit of national development.  

The current Law on the National Educational System has yet to successfully developed a comprehensive education system throughout Indonesia. This is due to numerous compartmentalized developments of other educational regulations covering: 1) Law No. 14/2005 on teachers and lecturers; 2) Law No. 12/2012 on higher education; and 3) Law No. 18/2019 on Islamic boarding schools (pesantren).

These developments have caused the Law on the National Education System to seem fragmented and reduced to several specific regulations, thus impeding the formation of an integrated education system. Akin to the Job Creation Bill, by merging these separate education laws, it is hoped that there would no longer be any regulations pertaining to education beyond the Law on the National Education System.     

Towards a Good Education System in Indonesia

A good education system is one that develops Indonesians to possess values such as diligence, independence, resilient, entrepreneurial while possessing a prestigious mindset. Simultaneously, an education system that also instils citizenship values is essential to develop a preference for locally-made products over foreign products. Such education system would not only improve Indonesia’s human resources but also innovate Indonesians to better compete in this global economy. 

Numerous of these values are being nurtured into students under the current education system. However, some of these values have not yet been implemented due to a lack of grounded educational philosophy. This is further confounded by the current education system which cannot fully accommodate various developments such as industrial revolution 4.0 and society 5.0. Instead, it seems solely focused on formal education.

To address these issues, it is proposed for the Indonesian national education system to return to the philosophy espoused by Ki Hajar Dewantara, Indonesia’s founding father of education. Through such a philosophy, the system is capable of strengthening and synergizing the three hubs of education; formal, non-formal and informal. This would also entail the standardization of national education across Indonesia covering aspects such as competencies, curriculum, processes, and educators. Moreover, with the advent of industrial revolution 4.0, society 5.0 and the COVID-19 pandemic, the digitalization of education must also be considered.

Such massive effort of standardization is still a distant goal as it is fraught with numerous challenges:

  1. Indonesia does not have a grounded national education philosophy;
  2. The lack of an educational roadmap or blueprint for the next 50 or 100 years to serve as a main reference for administering the National Education System;
  3. The presence of inconsistent education policies such as the zoning policy;
  4. The contested autonomy of education between the central and local governments;
  5. The lack of proportional and efficient allocation of Indonesia’s education budget;
  6. The compulsory education programme of nine years is not completely administered as evident from the number of school dropouts;
  7. The low national mean years of schooling (Rata-rata Lama Sekolah, RLS) that has yet to complete high school and the low estimated participation rate (Angka Partisipasi Kasar, APK) of those moving on to tertiary education upon completing pre-tertiary education;
  8. The lack of standardization of educators as aforementioned;
  9. The disparity of education between regions due to factors such as restricted access; and
  10. There is yet to be a link and match between education and industry.

Key to overcoming these challenges is the formulation of an educational roadmap or blueprint as aforementioned. A long-term educational roadmap lays the foundation for the development of comprehensive, complementary policies that are relevant to the needs of time.     

To further inspire educational reforms, the government should escape from the paradigmatic trap of focusing solely on Indonesia’s economic growth rate. Instead, the government needs to recalibrate qualitatively and comprehensively in initiating a balanced development of other sectors. Economic growth without such a balanced development perpetuates social imbalance.

Professor Cecep Darmawan is a Political Science Professor at the Indonesia University of Education (UPI). He also currently heads the Civic Education for Master and Doctoral programmes at UPI. The views expressed are those of the author and do not necessarily reflect those of STRAT.O.SPHERE CONSULTING PTE LTD.

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