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Education | Indonesia's Higher Education Sector: Aiming to Become a Top Destination in Southeast Asia

The Indonesian government has been focused on revamping its higher education sector in recent years to keep pace with global competition from its neighbours such as Malaysia and Thailand. The strategy serves two purposes; first, to provide a better level of education for its own youthful population and second, to lure more international students to study in the country.

Indonesia's Higher Education Sector: Aiming to Become a Top Destination in Southeast Asia
The government’s support is vital to help Indonesian universities compete at the international level

In the last few years, many universities in Asia, including Indonesia, have placed a renewed emphasis on improving their facilities and programs. This has come as a reaction to the inclusion of international students as a key criterion in university rankings and accreditation.

The number of international students attending Indonesian universities has increased significantly in recent years. Going forward, this trend is expected to continue following the Indonesian government's decision to allow foreign universities to open branches in the country.

Going global

Since the first issuance of Law No. 12 on Higher Education in 2012, the internationalization of the local higher education sector has been made one of the key priorities (See Indonesia’s Higher Education Act 2012). Indonesia currently has 4,498 universities offering 25,548 majors, yet the country's higher education institutions still rank poorly on a global level (See Higher Education: Indonesian Academia Must Open Up).

Only three national universities in Indonesia made it into the list of the world's top 500 universities, namely University of Indonesia (UI) (277), Bandung Institute of Technology (ITB) (331), and Gadjah Mada University (UGM) (402). In Asia, only UI was added to the list of the top 200 universities (See Indonesia’s Creative Industry: Set to Become the Next Economic Powerhouse). 

Table 1. Top 5 Universities with the Most International Students in Indonesia


Source: Dikti

Meanwhile, at a national level, as of the end of 2017, only 65 universities held A Grade accreditation status (See Second Class: Indonesia’s Higher Education Sector In Need of Reform). To gauge the performance of the country's higher education institutions, the Indonesian government ranked local universities based on four major assessment criteria. First, human resource quality; second, institutional quality; third, student activity quality and fourth, scientific research and publication quality (See Making Research & Development Part of Indonesia’s Vision for Growth). 

In 2017, the Indonesian government added three new assessment sub-components. These are the number of majors with international accreditations/certifications, the number of students, and community services.

Under the so-called World Class University (WCU) concept, the number of international students and partnerships with overseas universities have become key aspects when assessing the performance of universities. For example, in order to be eligible to be called a WCU, at least 10% of a university’s students must come from abroad with this component contributing to 2.5% - 5% of the overall ranking score.

An additional benefit is that foreign students can help local students and lecturers gain exposure to an international environment without having to go abroad. Moreover, from an economic perspective, local universities and communities can reap the financial benefits from the presence of international students from their tuition fees and living costs. Furthermore, foreign students can help promote Indonesian universities and tourism when they return to their home countries which will eventually attract more international students and tourists to come to the country.

This is why many campuses in Indonesia are eagerly seeking partnerships with international universities through faculty and student exchange programs, grants and scholarships, dual degree programs, joint research, training, and publications (See Opportunities for Research Collaboration in Indonesia). 

Additionally, more universities are now offering scholarships and programs taught in English to attract foreign students, contributing to an overall rise in international student numbers. (See Opportunities for Research Collaboration in Indonesia).

Top 10 Countries of Origin for International Students in Indonesia


Source: Dikti

In 2016, for instance, as many as 6,967 study permits for foreign students were issued by the Directorate of Institutional Management of Universities. Study permits are an important prerequisite for obtaining immigration documents such as a student visa and Limited Stay Permit or ITAS, issued by the Directorate General of Immigration of the Ministry of Law and Human Rights.

Challenges and opportunities

Compared to other Asian countries, Indonesia has lagged behind in making its universities appealing as international education destinations. China, for instance, is now ranked third in the world, after the US and UK, in terms of the number of foreign students studying in the country with 489,000 (2017). The country has set a target to surpass the UK by 2020 and become the most popular higher education destination in the world, ahead of the US, by 2049.

Malaysia, another ASEAN member, is significantly further ahead than Indonesia in developing its higher education sector. In 2014, there were 108,000 foreign students in the country which is expected to double to 250,000 by 2025. Other neighbouring countries such as the Philippines and Vietnam have also adapted their education systems and established partnerships with global universities in order to attract more international students.

That being said, Indonesia still has plenty of scopes to catch up with its neighbours in luring international students. It offers highly competitive tuition fees and living costs, a strategic location, and is a leading economic power within the ASEAN block with plenty of opportunities within industries such as renewable energy resources.

The government’s support is vital to help Indonesian universities compete at the international level. Over the past year, the government has launched various programs and incentives to improve the quality and competitiveness of local universities. These include introducing lecture focused scholarships to improve the quality of faculty members, providing infrastructure funding and offering online courses, among others. The government, through the Ministry of Education and Culture, has been routinely offering a non-degree scholarship program known as Darmasiswa to foreign students to study the Indonesian language, art, and culture at local universities.

Since 1974, the program has provided scholarships to 7,852 foreign students from 117 countries. In 2018, the program awarded scholarships to 697 foreign students from 94 countries to study at 70 national universities.

Top 5 Subjects with the Most International Students in Indonesia


Source: Dikti

Furthermore, to streamline the application process, the Directorate of Higher Education at the Ministry of Education and Culture has partnered with the Directorate General of Immigration of the Ministry of Law and Human Rights to implement an online-based study permit and student visa application for foreign students. The system, which receives 150 - 500 applications per week, has successfully reduced the waiting time to an average of 6 days.

Bright prospects ahead

The prospect of Indonesia becoming a premier higher education destination in Southeast Asia is still very much possible, but a lot of progress is required to improve the quality of education and to market the country as an attractive education destination in an increasingly competitive global education market. As more and more universities offer English taught programs with international recognition, more international students should take up the opportunity to study in Indonesia. Moreover, the Indonesian government's policy to allow foreign universities to open branches in Indonesia or collaborate with local universities will hope to further boost the number of international students in the country. However, the commercial interest of the policy is still a sticking point (See After the 2012 Higher Education Act; Where are the Foreign Universities?).

The Ministry of Research, Technology, and Higher Education announced in September 2018 that two Australian universities have obtained approval to open their branches in Indonesia. The opportunity to study at global universities with much lower tuition fees and living costs will be an attractive offer to Southeast Asian students (See Indonesia’s Tertiary Education Sector: Aiming Higher).

We admit that Indonesia’s higher education sector still has room to improve and that we have not yet reached our best performance thus far. Nonetheless, the government has issued regulations and assisted in developing our sector

Another breakthrough policy allowing 400 state and private universities to offer online courses will also be beneficial in attracting overseas students to Indonesia (See Indonesia and the Internet; Online & On the Move). The policy will mean that 50% of the course can be carried out online, this can eliminate geographical and financial barriers faced by many prospective local as well as international students. 

Global Business Guide Indonesia - 2019

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Indonesia Education Snapshot

Number of Tertiary Education Institutions: 4,445 (2016)
Type: 91.5% Private, 8.5% Public
Students in Higher Education: 4,941,574 (2016)
Net Enrolment Rate in Tertiary Education: 22% (2014)
Relevant Law: Higher Education Law No. 12 of 2012 provides universities with the autonomy to set their own tuition fees and authorising the set up of foreign universities in partnership with Indonesian institutions.