The Demographic Boomerang: How Indonesia Can Turn the Tide?

Indonesia is at a pivotal moment, benefiting from a demographic bonus— a period characterized by a substantial working-age population. Currently, 69.25% of Indonesia’s population falls within the productive age range of 15 to 64 years, significantly outnumbering dependents. This demographic bonus presents a rare and valuable opportunity to drive economic growth, foster innovation, and elevate living standards. By strategically leveraging this advantage, Indonesia can unlock its full potential and secure long-term prosperity.

However, this demographic dividend comes with a caveat. If not properly managed, the so-called demographic bonus could turn into a “demographic boomerang,” striking back with serious repercussions. Unemployment rates could skyrocket as the job market struggles to absorb the growing labor force. This could lead to widespread underemployment, social unrest, and increased poverty. Additionally, without substantial investments in education and skills development, Indonesia risks creating a generation of workers ill-prepared to compete in the increasingly complex global economy.

Indonesia’s education system faces major obstacles in maximizing the demographic bonus. The 2022 Programme for International Student Assessment (PISA) results underscore these issues, with Indonesia scoring 366 in mathematics, 359 in reading, and 383 in science—well below global averages and lagging behind many ASEAN peers. These low scores highlight critical deficiencies in critical thinking and problem-solving skills. Additionally, only 10.15% of Indonesians have completed higher education, while 30.22% have a senior high school diploma, limiting their ability to compete in high-skill jobs locally and globally.

The impact of these educational shortcomings is reflected in Indonesia’s 2023 Global Talent Competitiveness Index (GTCI) ranking of 80th out of 134 countries, trailing other ASEAN nations. Compoundly, regional disparities exacerbate this issue, with urban centers like Jakarta and Surabaya having better educational resources compared to rural and remote areas, which face underfunded schools, a lack of qualified teachers, and poor infrastructure. These imbalances hinder the development of a skilled and competitive workforce.

Despite these hurdles, Indonesia’s demographic bonus presents a unique chance to drive economic growth, innovation, and social progress. To harness this potential, the country must focus on improving education and vocational training. A crucial step is enhancing teacher quality and distribution. Many teachers face job insecurity, low wages, and delays in certification, impacting their motivation and performance. It is essential to accelerate the conversion of honorer teachers to PPPK status and expedite certification processes to ensure fair compensation, without compromising teaching quality and standards.

Addressing the uneven distribution of qualified teachers is another critical issue. While urban areas are well-staffed, remote regions need more support. The government should offer incentives for teachers to work in rural and areas, as well as establish a transparent teacher recruitment and placement system, aiming to reduce educational disparities.

Revamping vocational and technical education is also vital. Vocational schools often struggle to match their curricula with labor market demands, leading to high unemployment rates among graduates. Collaborating closely with industry stakeholders to design relevant curricula and expanding apprenticeship and internship opportunities will improve student employability. Additionally, modernizing vocational school facilities, especially for under-resourced private institutions, is essential. Providing students with access to up-to-date equipment and learning environments will better prepare them for the workforce.

Strengthening educational management at the regional level is also critical. By enhancing the capacity of local education authorities through targeted training and development, Indonesia can establish a more equitable and effective education system, offering better support for schools across the nation.

In conclusion, Indonesia stands on the brink of a transformative period, with the demographic bonus offering an unparalleled opportunity to boost economic growth and elevate the nation’s global standing. However, this potential can only be realized if the country addresses the critical challenges within its education system. By investing in teacher quality, modernizing vocational training, and ensuring equitable access to educational resources, Indonesia can build a skilled and competitive workforce that will drive its future success. The time to act is now—let us not waste this golden opportunity.

This article is shorter and partial version of IBC’s “15 Rekomendasi Paket Kebijakan untuk Mendukung Agenda Pembangunan Presiden dan Wakil Presiden Indonesia 2024 – 2029”