Reflections of Change in Indonesia Promise a Brighter Future
A bright future is reflected in the eyes of the people of Indonesia as positive changes occur. Once known for its lack of educational opportunities and incredible poverty, the statistics are beginning to show a country that can weather the storm and come out on top.
Strengths
- The current GDP per capita in Indonesia is about $3,000, however, in Jakarta, the capital of Indonesia, GDP per capita exceeds $10,000. This tremendous increase shows the positive change that is beginning to take place.
- More importantly, the economy is expanding at an average of 6% every year. That expansion speaks volumes about the power that Indonesia has to make a brighter future a real possibility.
- Indonesia currently contains people that are passionate about evoking change. Students have a strong belief and pride in their country. Schools are filled with young people that are determined to make a difference for them and for their children.
All of this does not mean that Indonesia lacks problems and weaknesses. The country faces many challenges to overcome in order for the nation to make their visions come true. The most important issue to overcome is NOT to be trapped in “The Middle-Income Trap”. The middle-income trap phenomenon occurs when economic development stagnates after attaining a certain income level. Only a few countries in Asia have broken out of this trap including Japan, Singapore, Korea and Taiwan. Can Indonesia break this trap and make its nation’s dreams come true? The country needs innovation to overcome some of the already existing challenges.
Challenges
- Indonesia needs to improve infrastructure. Transportation, energy, and sewage, needs to be improved to catch up with the speed of the fast changing economic environment. According to a local taxi driver, the infamous traffic-jams in Jakarta are getting worse every year. Usually by noon, the traffic starts to slow down, and by three o’clock, it may take more than 30 minutes just to travel a few miles in town. Without improved infrastructure, Indonesia is destined to get caught in the trap.
- Indonesia also needs to change its societal structures. Despite its unique ethnic diversity, the Chinese immigrants are dominating most of the private enterprise whereas Indonesians are dominating most of the public sectors. This peculiar social structure is creating an income inequality where most of the wealth is owned by the Chinese immigrants. Indeed, the CEO that we interviewed during our stay indicated that the positions above the managerial level are usually dominated by Chinese immigrants. Improved societal structures helps to provide wealth for all.
- Indonesia needs to strategically invite foreign capital into various industries. For example, approximately 60% of Japanese companies in Indonesia are manufacturers. Among these manufacturing companies, most of the companies belong to an auto related industry. It is critical to expand the capacity of manufacturing industry to boost the employment of young people and reduce the overall poverty. However, it is as important not to rely on a specific industry as a means to hedge risk.
- Indonesia needs to improve its soft infrastructure: the people. The ministry of education of Indonesia is seeking to improve graduation rates among students so that they can proceed to the next level of education. The plan to establish as many as a few hundred regional diplomas (vocational colleges) will help students acquire more technical skills required for higher paying jobs. Efforts at the regional level are also apparent. The city of Bandung is known as an “education city”. This city has very interesting curriculum such as a week-long training program for high school students at military facilities. The program teaches students the discipline and self-management techniques. The effects are so dramatic that in-school crime has decreased tremendously after putting the program in place for the students. The overall discipline of people in Indonesia still remains low. Many company executive complaints are about people being late for work, stealing company property, and being absent without notice.
- Indonesia needs an innovative education system where they teach not only general and technical education to promote themselves to higher paying jobs, but also a disciplinary and moral education in order to promote maturity levels of the nation as a whole.
Even though there are many challenges that Indonesia faces before breaking out of the middle-income trap, the country has an undeniable strength. The young generations are fueled with hope and energy to strive for a better life. Witnessing the reflection of hope shows that change is possible and that they will make it happen.
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