EDUCATION FINANCE AND DECENTRALIZATION : Indonesian Experiences
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1 EDUCATION FINANCE AND DECENTRALIZATION : Indonesian Experiences Dr. rer. soc. R. Agus Sartono, MBA Deputy Minister of Education and Religion The Coordinating Ministry of People Welfare Republic of Indonesia Presented at Regional Policy Seminar : Education Finance and Decentralization Bangkok, Thailand, 3 5 November
2 OUTLINE A PROGRESS OF INDONESIA COMPETITIVENESS AND THE ROLE OF EDUCATION B INDONESIAN EDUCATION PERFORMANCE C EDUCATION DECENTRALIZATION IN INDONESIA D FUNDING ARRANGEMENT FOR DECENTRALIZED EDUCATION E FUTURE OUTLOOKS OF DECENTRALIZED EDUCATION IN INDONESIA 2
3 A PROGRESS OF INDONESIA COMPETITIVENESS AND THE ROLE OF EDUCATION 3
4 4
5 Country rank score rank Switzerland Sweden Singapore United States Japan Malaysia China Brunei Darussalam Thailand Indonesia India Brazil Vietnam Source: The Global Competitiveness Report , World Economic Forum. 5
6 12 Competitiveness Indicators Sumber: Global Competitiveness Index , WEF 6
7 Source: The Global Competitiveness Report and , World Economic Forum. 7
8 Indonesia Competitiveness Progress Period 2009/ /2011 (Global Competitiveness Report , World Economic Forum) Education sector have increased dramatically during period 2009/ /2011. The good progress in Education give significant contribution to the increasement of indonesia competitiveness 8
9 Indonesia Score and Ranking Progress for GCI Indicators (12 Pillars) Years / Indicator (12 Pillars) score rank score rank Basic Requirement st pillar: Institutions nd pillar: Infrastructure rd pillar: Macroeconomic environment th pillar: Health and primary education Efficiency Enhancers th pillar: Higher education and training th pillar: Goods market efficiency th pillar: Labor market efficiency th pillar: Financial market development th pillar: Technological readiness th pillar: Market size Innovation and sophistication factors th pillar: Business sophistication th pillar: Innovation Source: The Global Competitiveness Report and , World Economic Forum. 9
10 Indonesia Ranking Progress for GCI Education Indicators Years / Indicator 4th pillar: Health and Primary Education Rank Rank Business impact of malaria Malaria incidence Business impact of tuberculosis Tuberculosis incidence Business impact of HIV/AIDS HIV prevalence Infant mortality Life expectancy Quality of primary education Primary education enrollment rate Source: The Global Competitiveness Report and , World Economic Forum 10
11 Indonesia Ranking Progress for GCI Education Indicators Years / Indicator Rank Rank th pillar: Higher Education and Training Secondary education enrollment rate Tertiary education enrollment rate Quality of the education system Quality of math and science education Quality of management schools Internet access in schools Local availability of research and training services Extent of staff training Source: The Global Competitiveness Report and , World Economic Forum. 11
12 Indonesia Ranking Progress for GCI Education Indicators Years / Indicator Rank Rank th pillar: Innovation Capacity of innovation Quality of scientific research institutions Company spending on R&D University industry collaboration in R&D Gov t procurement of advanced tech products Availability of scientists and engineers Utility patents per million population Source: The Global Competitiveness Report and , World Economic Forum. 12
13 B INDONESIA EDUCATION PERFORMANCE 13
14 BASIC FIGURES OF EDUCATION IN INDONESIA (2008/2009) LEVEL STUDENT SCHOOL TEACHER Primary Education 29,498, ,755 1,687,371 Junior Secondary 10,961,492 39, ,936 Senior Secondary Education 7,353,408 22, ,477 Higher Education 1,224, ,127 Source: Indonesia/Educational Statistics in Brief, 2008/
15 Performance Indicators of Primary Schools (2009) NO Performance Indicators Figures 1 Gross Enrollment Rate 117% 2 Net Enrollment Rate 95.2% 3 Student/Teacher Ratio 17 (13 s/d 33) 4 Drop outs 1.7% 5 Transition rate to Junior Secondary 90% 6 Percentage of Schools with Library 19% 7 Percentage of Schools with Computer Facilities 10% 8 Percentage of Teacher with B.S. Degree 24.6% 15
16 Performance Indicators of Junior Secondary No Performance Indicators Schools (2009) Figures 1 Gross Enrollment Rate 98.3 % 2 Net Enrollment Rate 73.3 % 3 Student/Teacher Ratio 17 (13 s/d 33) 4 Drop outs 1.99 % 5 Transition rate to Senior Secondary 87.9 % 6 Percentage of Schools with Library 79.5 % 7 Percentage of Schools with Computer Facilities 38.5 % 8 Percentage of Teacher with B.S. Degree 73.4% 16
17 Performance Indicators of Senior Secondary Schools (2009) No Performance Indicators Figures 1 Gross Enrollment Rate 69.6 % 2 Student/Teacher Ratio (General Senior Secondary) 3 Student/Teacher Ratio (Vocational Senior Secondary) 18 (12 s/d 29) 16 (12 s/d 28) 4 Drop outs 1.73 % 5 Percentage of General Secondary Schools with Library 6 Percentage of Vocational Secondary Schools with Library 74.5 % 61.7 % 17
18 Performance Indicators of Senior Secondary Schools (2009) No Performance Indicators Figures 7 Percentage of General Senior Secondary Schools with Computer Facilities 8 Percentage of Vocational Senior Secondary Schools with Multi media Facilities 9 Percentage of General Secondary School Teacher with B.S. Degree 10 Percentage of Vocational Secondart School teacher with B.S. Degree 47.8% 63.0 % 85.8 % 91.2 % 18
19 NET ENROLLMENT RATE AT PRIMARY SCHOOL (2009) 19
20 GROSS ENROLLMENT RATE AT JUNIOR SECONDARY SCHOOL (2009) National GER =98,1 20
21 GROSS ENROLLMENT RATE AT SENIOR SECONDARY SCHOOL (2009) National GER =69,6 21
22 HDI Indicators for 2005 between SE Countries (Human Development Report 2008/2009) Rank Country Life Expectancy Literacy (Age + 15 years old) Enrolment Rate GDP per capita 23 Singapura 80,2 94,4 87, Brunei Darussalam 77,0 92,7 77, Malaysia 74,1 88,7 71, Thailand 68,7 92,6 78, Pilipina 71,6 92,6 79, Indonesia 70,5 90,4 68, Vietnam 74,3 90,3 62, Cambodia 60,6 73,6 58, Myanmar 61,2 89,9 56,3 904 Sumber: UNDP, Human Development Report 2008/
23 GROSS ENROLLMENT RATE AND NET ENROLLMENT RATE NER Primary School GER Secondary School GER University SUMBER: WORLD ECONOMIC FORUM 23
24 STUDENT TEACHER RATIO IN INDONESIA PRIMARY SCHOOLS Cambodia India Philippines Korea, Rep Mongolia Lao PDR Vietnam China Thailand Indonesia Japan Malaysia UK 17.1 US JUNIOR SECONDARY SCHOOL Philippines India Lao PDR Vietnam Thailand Cambodia Mongolia UK China Korea, Rep Malaysia US Indonesia Japan Source: Edstats database 24
25 C EDUCATION DECENTRALIZATION IN INDONESIA 25
26 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT Policy 1. Determining Policies and National standards, 2. Disseminating the Education National Standard 3. Monitoring the International School Standard 1. Disseminating the Education National Standards 2. Coordinating the management and implementation of primary and secondary education 3. Implementing and monitoring the International School Standard 1. Ensuring the implementation of Education National Standards 2. Managing and Implementing the Early Child Education, Primary Education and Secondary Education 3. Managing and Impelementing the Primary School International Standadrs 26
27 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT Financi ng 1. Providing necessary education budget as mandated by the national constitution 2. Determining the guideline of education finance 3. Providing the financial support to ensure the implementation of quality assurance 1. Providing the financial support and grant to districts 2. Providing the additional education budget to support implementation of secondary schools international standards 1. Providing and managing the education budget to ensure the achievement of national goals and targets 2. Providing the additional budget to ensure the free basic education BOS Daerah 27
28 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT Curriculu m 1. Determining the basic framework and curriculum structure 2. Determining the curriculum content standard and graduates competency standard 3. Coordinating/ controlling the implementation of curriculum 1. Coordinating/ controlling the curriculum development for senior secondary schools 2. Disseminating and implementing the curriculum content and graduates competency standard 3. Coordinating the curriculum implementation at senior secondary schools 1. Coordinating/ controlling the curriculum development for primary schools 2. Disseminating and implementing the curriculum content standard and standard competency of graduates primary schools 28
29 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 Infrastructure CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT 1. Monitoring and evaluating the implementation and the fulfillment of Education National Standard for school infrastructures 2. Coordinating/ controlling aid for school infrastructures 3. Determining the books standard especially the contents 1. Monitoring the implementation and the fulfillment of Education National Standard for secondary schools infrastructures 2. Coordinating/ controlling aid/grant for schools infrastructures 3. Determining the books standard of senior secondary schools 1. Monitoring and evaluating the implementation and the fulfillment of Education National Standard for school infrastructures for early child, primary, and secondary education 2. Control of aid for school infrastructure 3. Determining standard for books of early child, and primary schools 29
30 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT Teacher and other Educatio n Staffs 1. Teachers power planning and other education staffs at national level 2. Distribution of teacher between provinces 3. Managing the schools teachers pension funds 1. Coordinating the planning of teachers and staffs at provincial level and teacher of International Standard Schools 2. Distributing teachers between districts within province 3. Monitoring the certification of teachers and supporting the capacity building 1. Managing the schools principals, supervisor and teachers of early child education, primary schools as well as secondary schools 2. Distributing teachers between districts 3. Monitoring the teachers performance and conducting the professional developments 30
31 DISTRIBUTION OF RESPONSIBILITY BETWEEN CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. PROVINCE GOVT. DISTRICT GOVT Quality Control 1. Determining the guidelines and passing grade of national exams. 2. Conducting the national exam for junior and senior secondary schools 3. Developing the guideline of education evaluation and implementation of the Education National Standards 4. Determining the guideline of schools accreditation that will be used by independence accreditation body 1. Providing support and evaluating the national exam with the central government 2. Ensuring the implementation of the education evaluation and the Education National Standard at provincial level 3. Providing necessary support for accreditation of primary and secondary schools 1. Conducting the national exam under supervisor of central and provincial government 2. Coordinating, monitoring and evaluating the national exam 3. Implementing the Education National Standard at district level 4. Supporting the accreditation of nonformal and informal education 31
32 32
33 FINANCING RESPONSIBILITIES ALIGNMENT BETWEEN CENTRAL, PROVINCIAL, AND DISTRICT GOVERNMENTS ASPECT OF RESPONSIBILIT Y CENTRAL GOV FINANCING BY PROVINCIAL GOV DISTRICT GOV POLICY FINANCING CURRICULUM INFRASTRUCTUR E TEACHER & OTHER EDUCATION PERSONNEL QUALITY CONTROL 33
34 BENEFITS OF DECENTRALIZATION Improving the school management more accountable with the implementation of School Based Management Increasing the community participation through the establishment of Education Board (at Province and District levels) and School Committees (at School level) Increasing the involvement of industry and business community in education through the Corporate Social Responsibility (CSR) program 34
35 MAJOR ISSUES IN EDUCATION DECENTRALIZATION Lack of alignment between responsibilities and provision of finance served by Central Government, Provincial Government, and District Governments Insufficient capacity of education leadership and staffs in Province and District Education Offices, especially in the area of the Education National Standard Uncertain career development of education staffs in Province and District Education Offices due to the high mobility/transfer of personnel among local government offices. Those who close to the Bupati/Wali Kota most likely will be promoted. 35
36 D FUNDING ARRANGEMENT FOR DECENTRALISED EDUCATION 36
37 PLANNING AND BUDGETING REFORM Unified Budget Integrating the Routine Budget and Development Budget Each Echelon I (Deputy Minister) only has one program and Echelon II (Asst Deputy or Director) maximum has two activities Medium Term Expenditure Framework (MTEF) All Ministries have to estimate the 5 years budget based on the strategic plan. The Ministry of Finance estimate the resource envelope necessary to support the national program Performance Based Budgeting (PBB) All Ministries have to implement the performance based budgeting define clear outcome and out put Accountability for each level of management Gender Responsive Budgeting Clear budget allocation based on gender in the broad sense 37
38 POLITICAL WILL AND FINANCIAL SUPPORT Constitution* Every citizen is entitle to education Every citizen should enroll in basic education and the government should provide sufficient funds (art 31:2) Law 20/2003 on National Education System The national government, local government, and community share the education funding responsibility (art 46:1) Education funds** was allocated at a minimum of 20% of national government budget 20% of local government budget (art 49:1) * IV th amendment of the 1945 Constitution ** Excluding salary of educators & service expenditure 38
39 CENTRAL GOVERNMENT BUDGET FOR EDUCATION 39
40 GOVERNMENT EDUCATION FINANCING IN DECENTRALIZATION ERA The percentage of education budget provided by the Provincial Government tends to decline due to limited authority The percentage of education budget provided by the District Governments remain stagnant and even declining most of the district already allocated above 20%, just using the transfer from central government The School teacher s salary and allowance consume approximately 60% of the national budget Budget for improving the access and quality of education mostly coming from the central government 40
41 Education Budget MONE 25,8T 40,4T 43,3T 45,8T 62.4T 54,9T
42 Composition of Budget Allocation District s receive the 83 % of routine budget, the majority of it (96 %) was used for teachers salary Province Central Other routine expenditures District Teacher Salary Districts alocate only 12% from their Education Budget for Infrastructures 42
43 Persentage of Education Budget againts Total Budget at District Level ,6 36,2 33,3 33, ,4 28,3 29,1 29,1 29, * 2009** 43
44 BREAKTHROUGHS IN FUNDS DELIVERY TO SCHOOLS, STUDENTS, AND TEACHERS a. School Operational Assistance (Bantuan Operasional Sekolah BOS). b. Operational Assistance for Quality Management (Biaya Operasional Manajemen Mutu BOMM) c. Scholarship for Students from Poor Families d. Teacher/Lecturer Profession Grant e. Books for all student f. Scholarship for higher degree 44
45 SOME FOREIGN ASSISTANCES IN EDUCATION DECENTRALIZATION a. Basic Education Projects in West Java, Eastern Islands, and Sumatera (World Bank Loans) b. Decentralized Basic Education Project (Asian Development Bank Loan) c. Australia Indonesia Basic Education Project AIBEP(Australian Government,) d. Capacity Building for Decentralized Social Service Delivery (ADB) e. Decentralized Basic Education Project (USAID) f. Education Sector Support Program (EC and AusAID) g. Community Participation in Strategic Education Planning for School Improvement (JICA) 45
46 E FUTURE OUTLOOKS OF DECENTRALIZED EDUCATION IN INDONESIA 46
47 NEW POLICY INITIATIVES FOR Establishment of the Education Committee Chaired by Vice President of the Republic of Indonesia 2. Transfers of responsibility of BOS delivery from the Central Government to the District Governments 3. Completion of school rehabilitation (Primary and Junior Secondary Schools) 4. Acceleration of teacher certification 5. Transfer the payment of teachers incentive to the District Governments, including the monitoring of teachers performance. 47
48 PRIORITY OF EDUCATION BUDGET ADMINISTERED BY MONE Increasing the access and quality of early child education 2. Accelerating the completion of nine years universal basic education 3. Improving the quality of vocational education 4. Accelerating and improving the degree program academic qualification of teachers, teacher certification, and development of special education for teacher 5. Accelerating the doctorate degree program for faculty members 48
49 The Challenges 1. The alignment of planning, between central government, provincial and district to attain the national goals 2. Coordinating and monitoring mechanism among several supervision bodies/institution 3. Maintaining the education budget s disbursement economics engine and multiplier effect for sustainable development 4. Ensuring the high quality and the effectiveness of education budget spending decentralization the authority of planning and budgeting. 49
50 50
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