Improve the Quality of Human Capital

KOMPAS/PRIYOMBODO

A student takes part in a practice of competency on motorcycle business engineering expertise at SMK Negeri 7 state vocational high school, Tangerang regency, Banten, which has formed a partnership with PT Astra Honda Motor, on Friday (10/8/2018).

JAKARTA, KOMPAS — The World Bank has reminded Indonesia to improve the quality of its human capital amid the gloomy economic outlook. The government must invest in the long term, especially for education and health.

The annual Global Competitiveness Index released by the Geneva-based World Economic Forum (WEF) on Wednesday places Indonesia in 50^th place out of 141 economies. Last year, Indonesia ranked 45^th out of 140 countries.

In the assessment based on 12 pillars, Singapore ranked 1^st. Vietnam was the country with the greatest leap in the ranking moving from 77^th in 2018 to 67^th in 2019. Of the 12 pillars, Indonesia had the lowest score in innovation capability (37.7), while the best score was recorded in macroeconomic stability (90). Indonesia\'s total score in 2019 was 64.6 or down from 64.9 in 2018.

WEF founder and chief executive Klaus Schwab, in his presentation on the 2019 GCI, said East Asia and the Pacific were the most competitive regions in the world.

The World Bank\'s country lead economist for Indonesia Frederico Gil Sander believes that the health and the skill of the workforce must receive special attention from the government. The quality of human capital is one of the considerations of investors to come to Indonesia. "Government policies to improve the quality of human resources must be accompanied by strengthening the workforce," Sander said in a special interview with Kompas in Jakarta on Wednesday.

KOMPAS/BAHANA PATRIA GUPTA

Job seekers prepare documents to apply for jobs at companies during the Job Market Fair and Entrepreneurship Exhibition at JX International, Surabaya, Wednesday (11/9/2019).

According to Sander, the direction of President Joko Widodo\'s policy to improve the quality of human resources is right. However, there are a number of short-term policy focuses that must be implemented immediately, namely reducing the rate of poverty, increasing basic education, and training of workers.

Sander said the provision of fiscal incentives for vocational education and training was highly anticipated. Indonesia needs more reliable workers in the fields that have become the backbones of the economy, including the manufacturing and tourism industries.

The quality of the workforce must be adjusted immediately to the new era of digital economy. "Indonesia\'s workforce is quite large, so vocational training is a necessity," Sander said.

According to Statistics Indonesia (BPS), the total population of the labor force in Indonesia as of February 2019 reached a total of 129.36 million people. Of that amount, around 40.51 percent had a maximum education level of elementary school or below.

KOMPAS/NORBERTUS ARYA DWIANGGA MARTIAR

Up to 6,000 construction workers take part at the launching of the Electronic Certificates for Construction Workers at Istora Senayan, Jakarta, Tuesday (12/3/2019).

Sander warned that improving the quality of human capital also required investment. The Indonesian economy must be more open to enable the transfer of knowledge and encourage the creation of new jobs.

Indonesian Employers Association chairman Hariyadi B. Sukamdani said incentives for training activities and innovation should be able to improve research and development in the country, a strategic step in improving the country’s competitiveness.

Indonesian E-Commerce Association chairman Ignatius Untung said Indonesia should be able to catch up to other countries in digital technology innovation so that it can be well adopted in the country.

At present, the number or workers who can master digital technology in Indonesia is still limited.

Things to consider

National Development Planning Minister Bambang P.S. Brodjonegoro said the WEF report would be taken into consideration in preparing the National Medium-Term Development Plan (RPJMN).

KOMPAS/HENDRA A SETYAWAN

Fachri Muzaki, a student at Bogor’s SMK 1 Ciomas vocational senior high school, develops an animated film character on Feb. 13, 2019 during the 2019 National Education and Culture Consultation at the Education and Culture Ministry’s Education and Training Center in Depok, West Java.

"The components of skills, infrastructure, and information and communication technology readiness are priority components that will be considered in the 2020-2024 RPJMN," he said.

Vice President Jusuf Kalla acknowledged that the government was aware that all countries continued to improve their competitiveness. Indonesia\'s ranking is still below Thailand (40) and Malaysia (27). "We are aware of it and this is why it needs to be improved, both regulations, investment, and whatever is deemed lacking," said the Vice President.

(KRN/DIM/JUD/INA/CAS/MED)