Editorial: Seize the Demographic Dividend, Invest in HR
September 15, 2011
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Indonesia’s demographic dividend has been widely touted as one of the driving forces that will propel the country to the next level. With nearly 60 percent of its population under the age of 30, it has one of the youngest demographic profiles in the world.
But if the country is to fully realize the potential payoff of this demographic dividend, it has to pursue a number of policies today. The government must implement a plan to improve and empower our human resources, mainly through education.
Based on data from the Coordinating Ministry for the Economy, the nation will have its lowest “dependency ratio” by 2025. By that year, it is predicted that for every 100 working people, there will be 32 unemployed people depending on them. That would be a massive improvement over Indonesia’s dependency ratio in the 1970s, when there were 100 working people feeding 72 unemployed people.
According to those projections, the demographic dividend will pay off partly by virtue of the fact that in 14 years’ time, 70 percent of Indonesia’s population will be between 15 and 64 years old, their most productive years.
In contrast, countries such as China and Japan will have aging populations and the governments of those countries will have to devote more resources to looking after the elderly. India alone has a demographic picture similar to Indonesia’s.
This represents a unique opportunity for Indonesia, and it would be a huge waste if the country failed to capitalize on it.
The key challenge is to upgrade the quality of our human resources. We have a large labor pool but a small talent pool, and there is an urgent need to expand the number of skilled and capable workers. We can only achieve this if the government and private sector continue to invest in education.
The current state of the nation’s public schools is dismal. Scores of local schools are in poor repair and lack qualified teachers. Students have no access to the Internet and other modern teaching tools. Their curricula are outdated and the system is based on rote learning.
Those conditions need to be dramatically improved if the schools are to produce students equipped to take on 21st-century jobs. Our demographic dividend will only be realized if we overhaul our education system today.
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