Focus on Human Quality

Kompas/Heru Sri Kumoro

A. Prasetyantoko

The slowdown in global economic growth and the global financial turmoil, as well as changes in the supply chain, trade and investment, will increasingly affect all countries in the world. Meanwhile, technological advancements have disrupted the old ways of work in a growing number of sectors. That is the looming economic challenge we must face.

The question is, how do we deal with it? In his annual state of the nation address on Friday (16/8/2019) during the House of Representatives (DPR) plenary session in Jakarta, President Joko “Jokowi” Widodo unveiled that the development focus for the next five years would be human resources.

In the 2020 draft state budget and financial report, the President highlighted certain budgetary items. The 2020 budget is themed "accelerating competitiveness through innovation and strengthening human resource quality". The government’s commitment to improving human resource quality is also evident in the 74th Independence Day theme: " Excellence in Human Resources, Advanced Indonesia".

Why is the government so focused on human resource quality? One of the most important tasks of our generation is to prepare future generations to face uncertainty. Indonesia will have a very important occasion in the years to come, its centennial in 2045. The 2045 “gold generation” must be prepared from this point forth.

KOMPAS/DWI BAYU RADIUS

Workers affix decals to ceramic bowls on 13 May 2019 at the Indo Porcelain tableware factory in Tangerang, Banten. The company produces about 1.7 million pieces of dishware per month, 65 percent of which is exported to the United States, Europe and Asia.

Human capital

At last year’s annual meetings in Bali, the World Bank released its 2018 Human Capital Index (HCI) that ranked Indonesia 87th out of 157 countries. Vietnam ranked 48th, Malaysia 55th, Thailand 65th and the Philippines 84th. Singapore ranked first. This indicates the difficulty of our task.

The HCI was created with an aim to raise awareness and the need for intervention in accelerating human development. The index shows where investments should be allocated. The HCI scores saw an increase in 2012-2018 from 0.50 to 0.53. A significant increase in the HCI is expected in the next five years with well-planned investment programs.

We scored 0.53 on the 2018 report. The figure means that 53 percent of all children born today will become productive people with adequate levels of education and health. This is lower than 63 percent in Vietnam, 62 percent in Malaysia, 60 percent in Thailand and 55 percent in the Philippines. Singapore has the most productive human resources at 88 percent. We are far behind our neighbors.

To support the development focus of human resources, the 2020 draft state budget has set five priorities. First, strengthening human resource quality to create healthy, smart, skilled and prosperous human resources. Second, accelerating the development of infrastructure to support economic transformation. Third, strengthening social protection. Fourth, expanding fiscal decentralization to encourage regional independence. Fifth, anticipating global uncertainty.

On the budgetary side, three key items need synergizing: education, health and social protection.

KOMPAS/WAWAN H PRABOWO

Female workers produce shoes on 30 April 2019 at a factory in Cikupa, Tangerang, Banten.

The 2020 draft state budget allocates an estimated Rp 505.8 trillion to education, up 29.6 percent compared to Rp 390.3 trillion in 2015. The estimated health budget is Rp 132.2 trillion, nearly double the health budget realized in 2015.

According to the law, the education budget should be at least 20 percent of the total budget, while the health budget should be at least 5 percent.

In order to improve the people’s quality of life, the government will also increase coverage in a variety of social security programs. The National Health Insurance will cover 96.8 million people, the Family Hope Program 10 million families, and the Non-Cash Food Assistance is to provide food cards to 15.6 million families.

The government has also launched a pre-employment card for those seeking work or changing jobs to improve the skills of the younger generation. They can obtain training in specific skills through this program, such as coding, data analysis, graphic design, accounting, foreign languages and barista skills. The training workshops are to offer skills that are needed now and in the future.

The next question is, how will the job program be managed and institutionalized? The Manpower Ministry is responsible for managing it, particularly through vocational training centers, but it needs to be transformed to match industry needs and the latest developments.

KOMPAS/BAHANA PATRIA GUPTA

An officer of the Surabaya tax office in East Java assists a taxpayer complete his electronic tax return (e-filing) on 29 March 2019, two days before the deadline on 31 March. The 2019 state budget has a tax revenue target of Rp 1.786 quadrillion.

First, it is necessary to involve the private sector and universities in preparing skilled workers. Second, technology must be adopted to bridge training providers and labor needs. Third, the training programs should be managed professionally so their benefits can be measured in real terms.

The private sector will play a bigger role with the enactment of Government Regulation No. 45/2019 which provides a “super tax deduction” for companies that offer professional development programs. The policy will encourage an ecosystem that comprises government, businesses and educational institutions (including universities) for preparing a skilled and productive golden generation.

In short, three aspects need to be taken into consideration in generating superior people for the future. First are the budgetary aspects, particularly the education, health and social protection budget. Second is institutionalization, for example through improving those institutions relevant to policy directions and working procedures.

KOMPAS/RADITYA HELABUMI

President Joko Widodo, dressed in traditional Sasak attire from West Nusa Tenggara, delivers his state of the nation address on Friday (16/8/2019), during the plenary session of the House of Representatives (DPR) at the Nusantara 1 room of the Senayan legislative complex in Jakarta.

Third, the training programs should be managed professionally. The target is to increase labor productivity, not just implementing the programs or providing adequate budgets. The training must involve professionals. The government should organize training activities in a mutually supportive ecosystem.

A. PRASETYANTONO, Lecturer, Atma Jaya Catholic University Jakarta