Job skills for young Indonesians a key concern ahead of election

By Gayatri Suroyo and Tabita Diela

JAKARTA (Reuters) - Rival campaigners in Indonesia's elections next month are sparring over ways to fix the education system in Southeast Asia's biggest economy, which is widely blamed for failing to equip students with the skills to find jobs.

As a flood of young people enters the workforce, President Joko Widodo, who seeks re-election on April 17, has pledged to develop human capital in his second term, after focusing on roads, railways and airports since taking office in 2014.

In a vice presidential debate this week, partly focused on education, opposition candidate Sandiaga Uno attacked Widodo's record and his signature program to improve one of the world's biggest vocational high school systems.

“How ironic it is that this country's economy is the world's 15th or 16th biggest, but faces difficulties providing jobs for its youth,” Uno said, adding that Indonesia's vocational school graduates are the largest chunk of its 7 million unemployed.

Uno, who is running alongside retired general Prabowo Subianto, promised to cut youth unemployment by 2 million if elected.

Widodo and his running mate, cleric Ma'ruf Amin, have a double-digit lead in most opinion polls, but education could prove a weakness.

Indonesia should be enjoying a demographic sweet spot with its youthful population, but 90 percent of its labor force of 131 million have no college degree and more than half works in informal sectors.

The World Bank said more than 55 percent of citizens who complete education are functionally illiterate, far more than 14 percent in neighboring Vietnam, which has been more successful in wooing manufacturers moving out of China.

The OECD ranks Indonesia's education system 62nd among the 72 nations in its Program for International Student Assessment (PISA) that rates 15-year-olds' maths, science and reading skills. Neighboring Vietnam placed 8th.

Pledging to emulate Germany's skills training system, Widodo's government wants to spend $1.22 billion in 2019 on improvements to 14,000 vocational schools which have 320,000 students, or more than double the past three years' spending.

Vocational schools have failed to keep pace and offer the skills employers want, said Hariyadi Sukamdani, chairman of Indonesia's employers' association.

“Once we hire people, they always have to be retrained.”

A joint assessment by the government and the World Bank revealed shortages of skills in managerial positions, from chemical manufacturing to biochemistry and food technology.

At one of Jakarta's best vocational schools, deputy head Handayani said it was tough to keep pace with technology.

While a course on office management that replaced secretarial training taught use of a fax and even a typewriter, there were no courses on artificial intelligence or automation, she added.

During Sunday's debate, the 76-year-old Amin defended the government's program to produce a skilled workforce.

He touted a plan for skills training and cash handouts to the unemployed, but some economists have warned that could stretch the budget.

Uno, a businessman and former deputy governor of Jakarta, said he would push training for entrepreneurs and boost teachers' salaries if elected.

Experts point to the looming demographic challenges.

“Like it or not, this population is growing older and before it turns old, people have to be made more productive,” Finance Minister Sri Mulyani Indrawati said this month.