Dancing with another giant
About three months ago, Indonesia and India held a summit in New Delhi where President Susilo Bambang Yudhoyono also witnessed the signing of US$15 billion in new investment commitments by Indian companies in the development of natural resources and basic infrastructure in Indonesia.
During Prime Minister Wen Jiabao’s visit to Jakarta over the weekend, Chinese companies also signed almost a dozen agreements committing over $15 billion in new loans and investments in Indonesia’s infrastructure and natural resource development.
It was encouraging to note that despite the noisy protests by Indonesian manufacturers and farmers over the last few weeks against the flood of Chinese goods in the domestic market since January 2010, the launching of the ASEAN-China Free Trade Agreement (ACFTA) did not divert the attention of Indonesia’s government and business leaders from the long-term, broader benefits of expanded bilateral economic cooperation.
Bilateral trade has expanded in leaps and bounds over the past five years to almost $40 billion last year, although Indonesia has faced a widening deficit. But, we think this is only temporary as the country has yet to improve its economic efficiency and competitiveness through massive infrastructure development and bureaucratic reforms.
As a member of the prestigious Group of 20 major economies (G20) together with China and India, it would look immature and capricious for Indonesia to ask for a renegotiation of regional trade pacts like ACFTA because of our widening trade deficit.
The agreement was not a bilateral deal between Indonesia and China, but also involved nine other ASEAN members. Moreover, the primary cause of the imbalance is our gross economic inefficiency and uncompetitiveness.
If imports from China caused severe disruptions in the domestic market, Indonesia could still resort to safeguard measures allowed by the Geneva-based World Trade Organization like anti-dumping and countervailing actions.
More important is for both countries to increase the depth and breadth of their economic linkages through investment, which is the best vehicle for the transfer of expertise, technology and the development of global market networks.
Indonesia has enjoyed many benefits from the booming Chinese economy. The persistently high prices of our major commodities like palm oil, rubber, cocoa, coal and other minerals while the demand from rich countries has fallen should be attributed to the robust demand in China.
During Prime Minister Wen Jiabao’s visit to Jakarta over the weekend, Chinese companies also signed almost a dozen agreements committing over $15 billion in new loans and investments in Indonesia’s infrastructure and natural resource development.
It was encouraging to note that despite the noisy protests by Indonesian manufacturers and farmers over the last few weeks against the flood of Chinese goods in the domestic market since January 2010, the launching of the ASEAN-China Free Trade Agreement (ACFTA) did not divert the attention of Indonesia’s government and business leaders from the long-term, broader benefits of expanded bilateral economic cooperation.
Bilateral trade has expanded in leaps and bounds over the past five years to almost $40 billion last year, although Indonesia has faced a widening deficit. But, we think this is only temporary as the country has yet to improve its economic efficiency and competitiveness through massive infrastructure development and bureaucratic reforms.
As a member of the prestigious Group of 20 major economies (G20) together with China and India, it would look immature and capricious for Indonesia to ask for a renegotiation of regional trade pacts like ACFTA because of our widening trade deficit.
The agreement was not a bilateral deal between Indonesia and China, but also involved nine other ASEAN members. Moreover, the primary cause of the imbalance is our gross economic inefficiency and uncompetitiveness.
If imports from China caused severe disruptions in the domestic market, Indonesia could still resort to safeguard measures allowed by the Geneva-based World Trade Organization like anti-dumping and countervailing actions.
More important is for both countries to increase the depth and breadth of their economic linkages through investment, which is the best vehicle for the transfer of expertise, technology and the development of global market networks.
Indonesia has enjoyed many benefits from the booming Chinese economy. The persistently high prices of our major commodities like palm oil, rubber, cocoa, coal and other minerals while the demand from rich countries has fallen should be attributed to the robust demand in China.
Hence, China’s lending and investment commitments to infrastructure development are rather strategic because it is poor and inadequate infrastructure that has long been the main cause of Indonesia’s economic inefficiency and uncompetitiveness.
But, the devil is in the technical details. The implementation of Chinese loan and investment commitments will still depend on the ground preparations and regulatory framework already in place in Indonesia itself.
This requires a lot of homework on the part of the government, especially with regard to inter-ministerial coordination.
But, the devil is in the technical details. The implementation of Chinese loan and investment commitments will still depend on the ground preparations and regulatory framework already in place in Indonesia itself.
This requires a lot of homework on the part of the government, especially with regard to inter-ministerial coordination.
Recruiting the best minds
This year’s commemoration of National Education Day, which falls today, will essentially be a repeat of such events in the past, unless there are key strategic policies promoted to upgrade the country’s education system, particularly its end products – the students.
It is important to note that the government has taken significant measures to ensure that Indonesians of low-income-bracket families have relatively equal opportunities to attend state universities. One of these measures is a national education ministerial decree that requires state universities to accept more high-school graduates taking the open nationwide university entrance test system (SNMPTN), and fewer high-school graduates taking the limited university admission system (Mandiri or invitation).
That excludes the initiatives taken by both the government and the private sectors to provide scholarships to poor but eligible students to continue their studies at all levels of education, including university.
However, such measures are not enough, especially when we do a cost-benefit analysis of the existing system.
The current system does help provide students with equal opportunities to get proper education, but it is still unable to develop their academic potential, let alone compete with counterparts from more advanced countries in this globalized era.
The government’s decision, with the approval of the House of Representatives, to have the budget for the education sector increased to Rp 250 trillion this year, or 20.2 percent of the 2011 state budget - a significant hike from Rp 225 trillion the previous year — will remain meaningless unless the money is put to the best possible use to help increase the quality of our students.
There are a lot of measures that we need to take to reach the target of producing quality Indonesian students. But the most important thing to do perhaps is to start recruiting the country’s best minds, for example screening the top 20 to 30 best graduates from top universities nationwide to be groomed as teachers. Having highly intelligent teachers should produce high-quality students.
hat will bring consequences of increasing the budget of the education sector in the future. But the increased expenditure is not comparable to the potential products — quality Indonesian students who are on par with those of advanced countries.
It is important to note that the government has taken significant measures to ensure that Indonesians of low-income-bracket families have relatively equal opportunities to attend state universities. One of these measures is a national education ministerial decree that requires state universities to accept more high-school graduates taking the open nationwide university entrance test system (SNMPTN), and fewer high-school graduates taking the limited university admission system (Mandiri or invitation).
That excludes the initiatives taken by both the government and the private sectors to provide scholarships to poor but eligible students to continue their studies at all levels of education, including university.
However, such measures are not enough, especially when we do a cost-benefit analysis of the existing system.
The current system does help provide students with equal opportunities to get proper education, but it is still unable to develop their academic potential, let alone compete with counterparts from more advanced countries in this globalized era.
The government’s decision, with the approval of the House of Representatives, to have the budget for the education sector increased to Rp 250 trillion this year, or 20.2 percent of the 2011 state budget - a significant hike from Rp 225 trillion the previous year — will remain meaningless unless the money is put to the best possible use to help increase the quality of our students.
There are a lot of measures that we need to take to reach the target of producing quality Indonesian students. But the most important thing to do perhaps is to start recruiting the country’s best minds, for example screening the top 20 to 30 best graduates from top universities nationwide to be groomed as teachers. Having highly intelligent teachers should produce high-quality students.
hat will bring consequences of increasing the budget of the education sector in the future. But the increased expenditure is not comparable to the potential products — quality Indonesian students who are on par with those of advanced countries.
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