for official use only - world bank filerepelita ii, 1974-79; repelita iii, 1979-84) sarjana -...
TRANSCRIPT
Document of
The World Bank FILE COPYFOR OFFICIAL USE ONLY
Report No. 2125c-IND
INDONESIA
STAFF APPRAISAL REPORT
POLYTECHNIC PROJECT
December 7, 1978
Projects DepartmentEast Asia and Pacific Regional Office
This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS /a
US$1 = Rp 415Rp 1 = US$0.0024
Rp 1 million = US$2,410Rp 1 billion = US$2,410,000
GLOSSARY
ADB - Asian Development Bank
ADC - Accountancy Development CenterBappenas - National Planning AgencyBP3K - Office of Educational and Cultural Research and
Development, DECDEC - Department of Education and CultureDGHE - Directorate General for Higher Education within the DECINPRES - Local public works programITB - Institute of Technology at BandungITS - Institute of Technology at SurabayaLAN S National Institute of AdministrationPAT - Diploma level engineering program (Pendidikan Ahli Tecnik)PAAP - Diploma level business administration program (Pendidikan Ahli
Administrasi Perusahaan) including financialadministration training
PLK - Vocational training centerRepelita - National Five-Year Development Plan (Repelita I, 1969-74;
Repelita II, 1974-79; Repelita III, 1979-84)Sarjana - Five-year degree programSarjana muda - Three-year degree programSTAN - State School for Government Accountants (Sekolah Tinggi
Akuntansi Negara) within the Ministry of FinanceSTM - Senior technical secondary schoolTEDC - Technician Education Development CenterUMDP - Unit for Management of Diploma Programs within the DGHE
FISCAL YEAR
April 1 - March 31
SCHOOL YEAR
January 1 - December 31 l/b
/a After the conclusion of negotiations between the Government of Indonesiaand the Association, the Rupiah was devalued (to US$1 = Rp 625). Thefigures of this report are based on the exchange rate prevailing atthe time of negotiations (US$1 = Rp 415).
/b July 1-June 30 as of July 1979
FOR OFFICIAL USE ONLY
INDONESIA
POLYTECHNIC PROJECT
TABLE OF CONTENTS
P_g_ No-
BASIC DATA
1. DEVELOPMENT STRATEGY AND MANPOWER IMPLICATIONS . . . . . . . . . 1
Development Pattern and Strategy . . . . . . . . . . . . . . . 1Demand for Higher Level Technical Manpower. . . . . . . . . . . 3
2. HIGHER TECHNICAL EDUCATION . . . . . . . . . . . . . . . . . . . 6
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Dimensions and Prospects of Higher Education . . . . . . . . . 7Issues in Higher Education. . . . . . . . . . . . . . . . . . . 13Engineering and Accountancy Education . . . . . . . . . . . . . 15Education Sector Strategy . . . . . . . . . . . . . . . . . . . 19
3. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Technician Training . . . . . . . . . . . . . . . . . . . . . . 23Accountancy Training ... . . . . . . . . . . . . . . . . . . 32Planning and Management Support ... . . . . . . . . . . . . . 38
4. PROJECT COSTS, FINANCING, ItPLEMENTATION AND DISBURSEMENTS . . . 40
Project Cost .... . . . . . . . . . . . . . . . . . . . . . 40Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Implementation . . . . . . . . . . . . . . . . . . . . . . . . 43Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . 46
5. BENEFITS AND RISKS . . . . . . . . . . . . . . . . . . . . . . . 47
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Risks .... . . . . . . . . . . . . . . . . . . . . . . . . . 48
6. AGREEMENTS REACHED . . . . . . . . . . . . . . . . . . . . . . . 48
This report is based on the findings of a mission to Indonesia during January/February, 1978 composed of Messrs. A.H. ter Weele (educational planner andmission leader), A. Stam (architect), K. Everard (technical educator, Unesco)and Mrs. E. Levy Schreiber (economist). A follow-up mission, during April1978, was carried out by Mr. P. Holzer (accountancy specialist, consultant).
This document has a restricted distribution and may be used by recipients only in the performanceof their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization.
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Page No.
List of Tables in Text
1.1 Number and Size of Large- and Medium-Scale Industriesin Indonesia, 1976 . . . . . . . . . . . . . . . . . . . . . 2
1.2 Estimated Nonagricultural Employment by Major SkillCategory, 1971, 1975 and 1990 . . . . . . . . . . . . . . . . 3
1.3 Projected Annual Nonagricultural Manpower Requirementsby Major Skill Category, 1990 ... . . . . . . . . . . ... 4
1.4 Requirements for Engineers, Engineering Technicians andAccountants, 1990 . . . . . . . . . . . . . . . . . . . . . . 5
1.5 Requirements for Annual Output of Engineers andAccountants (Formal Education Sector), 1990 . . . . . . . . . 6
2.1 Higher Education - Number of Institutions and StudentsEnrolled, 1976 . . . . . . . . . . . . . . . . . . . . . . . 10
2.2 Postsecondary Enrollments by Field of Specialization, 1976 . . . 10
2.3 Postsecondary Enrollments in Engineering and Economics, 1976 . . 112.4 Expenditure on Education, Selected Asian Countries . . . . . . 132.5 Estimated Investment Required During Repelita III . . . . . . . 202.6 Aggregate Bank Group Lending for Education in Indonesia . . . . 223.1 Proposed Project Institutions . . . . . . . . . . . . . . . . . 23
3.2 TEDC and Polytechnic Staffing Requirements . . . . . . . . . . . 273.3 TEDC and Polytechnic Schedule of Fellowships . . . . . . . . . . 28
3.4 Schedule of Training Polytechnic Staff . . . . . . . . . . . . . 293.5 Polytechnic Enrollment by Field of Study and
Specialization . . . . . . . . . . . . . . . . . . . . . . . . 303.6 University Accountancy Development Centers - Potential
Participants and Scheduled Annual Training . . . . . . . . . . 353.7 STAN Accountancy Development Center - Potential Participants
and Scheduled Annual Training ... . . . . . ..... . . . 35
3.8 Accountancy Development Centers Staff Fellowship Training . . .. 363.9 Planning and Management Support . . .. . . . . . . . . . . . . 38
4.1 Summary of Project Costs by Project Item . . .. . . . . . . . . 404.2 Summary of Project Costs by Category of Expenditure . . .. . . 414.3 Annual Price Increases . . .. . . . . . . . . . . . . . . . . 424.4 Preliminary Schedule of Disbursements . . .. . . . . . . . . . 47
List of Charts in Text
3.1 Organization of Unit for Management of Diploma Programsand Technician Education Development Center . . .. . . . . . 25
3.2 Accountancy Development Center Organization . . .. . . . . . . 344.1 Organizational Structure for Project Management . . . . . . . . 43
ANNEXES
1. Comparative Education Indicators2. Estimated Base Cost3. Implementation Schedule4. Selected Documents and Data Available in the Project File
MAP
1. Location of Project Institutions
INDONESIA
BASIC DATA /1
Enrollment (1977) (Government schools)
Amounts: Primary (Grades 1-6) 17.3 millionSecondary (Grades 7-12) 3.4 millionTertiary (Grades 13-17) 0.3 million
Ratios:/2 Primary 78%Secondary 18%Tertiary (1976) 2%
Finance (1976)
GNP/Capita (1977) US$300 p.a.
Public Education Expenditure as percentage of GNP 3%Percentage of Expenditure devoted to Education 11%
Expenditure for Universities (Public and Private)
Recurrent US$44 millionCapital US$ 7 millionTotal US$51 millionTotal as a percentage of all education
expenditures 5%
Unit Costs for Public Universities:
Recurrent (per student) US$160Capital (per place)
Sciences US$4,300Other subjects US$1,400
/1 Comparative data are shown in Annex 1.
/2 Gross enrollment ratios, including over-age students, based onenrollment in Government schools.
INDONESIA
POLYTECHNIC PROJECT
1. DEVELOPMENT STRATEGY AND M4ANPOWER IMPLICATIONS
Development Pattern and Strategy
1.01 Under Indonesia's First Development Plan (Repelita I, 1969/70-1973/74)substantial rehabilitation of infrastructure was achieved and economicgrowth averaged 7.5% per annum. Development objectives for the Repelita IIperiod (1974/75-1978/79) focused on a continuing high rate of economicgrowth and a more equitable distribution of services and incomes. Progresstowards these objectives has been mixed. While further improvements havebeen made in the country's physical. and social infrastructure (transportation,communication, power, education, and family planning), the economic growthrate has slackened. It appears that the Repelita II target for GNP growth of7.5% a year will not be reached and employment generation - a key strategyfor improving general welfare - is likely to have been less than anticipated.Unemployment/underemployment of unskilled workers has continued to be aproblem: real wages for unskilled labor have not increased appreciably andrecent estimates suggest that about 40% of the population survives on consumptionexpenditures of only US$0.25 (in 1976 prices) per day per capita. Investmentduring the period, largely concentrated in modern sector activities (naturalresource exploitation, infrastructure, industry), has, however, createdincreased requirements for skilled manpower.
1.02 Efforts are now underway to complete the preparation of Repelita III(1979/80-1983/84) and broad development objectives for growth and equity arenot expected to be substantially altered. Continued emphasis will be placedon the need to create new employment opportunities; and renewed emphasis willbe attached to increasing food production to meet domestic demand. Progresstowards increased food production and employment will require expansion andstrengthening of agricultural support services and expansion of labor inten-sive industries. A general strengthening of Government institutions andmanagement, major efforts towards public sector resource mobilization andrestraint on new capital intensive investments would be necessary.
1.03 An economic growth rate of about 6.5% has been set as a target forthe Repelita III period. The agricultural sector is expected to grow at anaverage rate of 3.5% per annum; mining at 4.0%; manufacturing at 11%; andother non-agricultural sectors at 8% to 10%. An increased input of skilledmanpower would be required to achieve these growth targets - in particularto develop the country's agricultural infrastructure, to expand the traditionalmanufacturing industries (foods, tobacco, textiles, wood and wood products)and to obtain greater efficiency in the newer, heavier industries (chemicalsincluding oil derivatives, basic metals, non-metallic minerals). Since themanufacturing sector employs the largest proportion of skilled manpower,most of this demand in the near future would be concentrated in six ofIndonesia's provinces that currently account for about 90% of all large- andmedium-scale industry, as shown in Table 1.1 below:
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Table 1.1: NUMBER AND SIZE OF LARGE- AND MEDIUM-SCALE INDUSTRIES IN INDONESIA, 1976
Large-scale industry Medium-scale industry
Number of Number of Number of Number of Average number of employees
Province /a establishments employees establishments employees Large scale Medium scale
East Java 628 278,539 1,951 69,437 443 36
Central Java 300 126,851 1,669 57,595 422 35
West Java 320 99,336 1,619 58,558 310 36
DKI Jakarta 315 78,076 1,424 44,945 247 32
North Sumatera 116 37,721 458 16,156 325 35
South Sumatera 38 19,975 81 2,609 526 32
Subtotal 1,717 640,498 7,229 249,340 373 35
Other 21 Provincesof which:
West Kalimantan 34 9,122 57 2,300 268 40
DI Jogyakarta 32 10,290 154 5,088 322 33
Lampung 29 8,322 58 1,892 287 33
Bali 19 4,939 70 2,443 260 35
Subtotal 243 66,259 974 35,401 273 36
Total Indonesia 1,960 706,757 8,203 284,741 361 35
/a Provinces listed in descending order of density of large-scale industries.
Source: Biro Statistik, Annual Statistics, 1977.
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Demand for Higher Level Technical Manpower
1.04 Manpower requirements are difficult to project in any country, butin Indonesia, the process is further complicated by data lacunae: employmentstatistics are incomplete, sectoral growth rates are imprecise, aid comprehen-sive education/occupation profiles are lacking. Moreover, effective demandfor manpower can be expected to differ from economic requirements due, forexample, to gcvernment budget constraints. With these reservations in mind,the manpower forecasts presented below should be viewed as indicators of broadpriorities and magnitudes rather than precise projections.
1.05 For macro planning purposes, four broad types and levels of skillsare distinguished, namely (a) professionals, (b) technicians, (c) skilledworkers, and (d) semiskilled and unskilled workers. The education profile for
each of these groups has been mixed in the past, but increasingly professionalsare expected to hold university degrees, technicians to have received somepostsecondary training, skilled workers to have completed 9-12 years ofschooling, and semiskilled and unskilled workers to have received a basiceducation. Nonagricultural employment is disaggregated by these broad levelsas follows:
Table 1.2: ESTIMATED NONAGRICULTURAL EMPLOYMENT BY MAJOR SKILLCATEGORY, 1971, 1975 AND 1990/a
Annual rateof growth
Skill category 1971 1975 1990 1975-90… '------- 1000---------- _ (%)
Professional 180 230 440 4.4Technician 540 700 1,330 4.4Skilled worker 1,450 2,050 4,960 6.1Semiskilled & unskilled worker 12,300 15,700 28,700 4.1
Total 14,400 18,700 35,500 4.4
Note: Figures do not add to totals due to rounding.
/a Data for 1971 were estimated from census tabulations of the occupationaland educational structure of the labor force and additional informationprovided by a previous Bank education sector survey mission (World Bank,Indonesia Education Sector Survey Report, Report No. 443a-IND, 1975,Appendix B, p. 26). The estimate for 1975 and the projections for 1990are based on the assumption that the proportion of total nonagriculturalemployment represented by the professional and technician skill categorieswould remain constant, and that the skilled workers as a proportion oftotal nonagricultural employment would rise from the 10% observed in 1971to 11% in 1975 and 14% in 1990.
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These aggregate estimates suggest that demand for higher level manpower(professionals and technicians) would increase at approximately 4% p.a.through 1990. New nonagricultural employees required to replace retireesand expand the stock of workers would reach 2.5 million per year by 1990, asfollows:
Table 1.3: PROJECTED ANNUAL NONAGRICULTURAL MANPOWER REQUIREMENTSBY MAJOR SKILL CATEGORY, 1990
Additions to Additions to Total newSkill category stock required stock required employees
for replacement for expansion required annually…_____________________ ('000) …----------------------
Professional 5 19 25Technician 27 58 85Skilled worker 160 300 470Semiskilled &unskilled worker 720 1,180 1,900
Total 910 1.600 2,500
Note: Figures do not add to totals due to rounding.
1.06 Over the past decade, the Government has supported expansion andimproved quality of technical training, mainly at the skilled worker level,in an attempt to meet the growing demand for trained technical manpower./lMore recently, it has begun to focus attention on meeting increased demandson, and requirements for, tertiary level manpower in technical and managerialfields, in particular in engineering and accountancy.
1.07 Disaggregated demand for manpower in the fields of engineeringand accountancy have been estimated on the basis of international data,/2available subsector manpower surveys and miscellaneous labor market informa-tion; new entrants to the labor force in 1975 and projected requirements for
/1 The World Bank Group has supported these efforts under the projectsassisted by Credit 219-IND and Loan 1237-IND. Relevant componentsinclude: centralized workshops for senior technical secondary schools(STMs), technical and vocational teacher training programs, vocationaltraining centers (PLKs) and mobile skills training units.
/2 Manual Zymelman, "Productivity, Skills and Education in ManufacturingIndustries," in UNIDO, Planning for Advanced Skills and Technologies,(New York: UN, 1969); and M.A. Horowitz, M. Zymelman and I.L. Herrnstadt,Manpower Requirement for Planning, An International Comparison Approach,(Boston: Northeastern, 1966).
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1990 are shown in Table 1.4. Cross-sectionally derived estimates suggestthat medium-term demand for engineering graduates, both degree and technicianlevel (or equivalents), would approximate 7% annual growth through 1990. Thedemand for degree level (or equivalent) accountants is more difficult toestimate. Comparative data from other countries show considerable variation,and Indonesia has in any case been making use of extremely small numbers ofaccountants - fewer than 5,000 at present (of which about 1,300 are "regis-tered") with annual increments of approximately 8% of stock. Of new accoun-tants entering the labor force, the largest share (about 70 per year) isabsorbed by the Ministry of Finance. The estimated growth of demand fordegree level accountants - about 9% annually - is based on observations thatrecent entrants have not satisfied economic requirements. Better estimatesof demand can only be made on the basis of an improved manpower data base.(Determining demand for subprofessional accountancy staff, not estimatedhere, would be more problematic still due to the absence of a classificationsystem for the numerous subprofessional accountancy occupations and the lackof related information on present stocks.)
Table 1.4: REQUIREMENTS FOR ENGINEERS, ENGINEERING TECHNICIANSAND ACCOUNTANTS, 1990
New entrantsNew entrants in required in Annual growth
1975 1990 rate (%)
Engineers 2,100 6,000 7
Engineeringtechnicians 5,400 15,000 7
Accountants 380 1,400 9
Source: Mission estimates.
1.08 It is estimated that by 1990 all engineers and accountants enteringinto employment would be degree holders and that some 75% of newly recruitedengineering technicians would have completed diploma level programs. In 1975,output from the formal education sector accounted for the following approximateproportions of new stock: engineers, 75%; accountants, 90%; engineeringtechnicians, 55%. On this basis, output from the formal education systemwould need to expand as follows:
Table 1.5: REQUIREMENTS FOR ANNUAL OUTPUT OF ENGINEERS
AND ACCOUNTANTS (FORMAL EDUCATION SECTOR), 1990
Approx./a Annual Annual rateoutput requirements of increase
1975 1990 1980-90
EngineersGraduate level 1,600 6,000 9%
Diploma level 3,000 /b 11,250 9%
AccountantsGraduate level 350 1,400 10%
/a Reliable information on degree and diploma level output is not
yet available. Systematic data collection from private insti-
tutions (accounting for 35% of enrollment) has only recently
been initiated and data from public institutions other than
those operated by the Department of Education and Culture (DEC)
are incomplete. The above estimates are based on partial data
and information on average retention rates.
/b Includes dropouts from degree programs in engineering.
Source: Mission estimates.
The annual rates of increase during 1980-90 for the three categories are
higher than those proposed for tertiary level schooling in general. They
reflect an urgency noted in Repelita II concerning the need to meet wide-
spread shortages of manpower in these fields.
2. HIGHER TECHNICAL EDUCATION
Overview
2.01 Higher technical education suffers from problems common to tertiary
education in Indonesia. Most important among these are:
(a) low efficiency manifested in high repeater and wastage rates, and
small, uneconomical institutions;
(b) inadequate expenditure evidenced by the poor average quality of
training, low formal qualifications of staff, and insufficient
provision of equipment and teaching materials;
(c) inequitable distribution of institutions, and access to, higher
education evident in the concentration of training opportunities in
Java and the disproportionate representation of middle class students;
and
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(d) excessive reliance on degree level training with inadequate importanceattached to other types of postsecondary training.
2.02 The key elements of a development strategy for higher educationgenerally, and technical training specifically, should address these problemsand aim to:
(a) increase internal efficiency by introducing more discriminatingadmission and more appropriate graduation requirements, providingstudent loans/scholarships and consolidating small, uneconomicalinstitutions;
(b) improve the quality of instruction through staff upgrading andprovision of adequate learning materials, equipment and facilitiesand
(c) rationalize the structure and distribution of higher education bydirecting future efforts to meet national and regional developmentneeds and by diversifying the types and duration of postsecondarytraining programs.
Such a strategy would attach overall priority to improving and redesigningthe training provided by existing institutions and would require increasedexpenditure on higher education. However, investment should also be directedtowards expansion of capacity in technical fields to meet identified economicneeds. Forecasted requirements indicate a need for expanding enrollments andoutputs in technician level engineering in the immediate future (para. 1.08)and in degree level engineering and accountancy towards the mid-1980s.
Dimensions and Prospects of Higher Education
2.03 Structure. Tertiary schooling is diverse and in a state of transi-tion. The principal degree course (sarlana) is planned as a five-year program.An intermediate degree (sarjana muda) is awarded upon completion of a three-year program. In addition a four-year baccalaureate has recently been intro-duced. Two to three year diploma level courses are also given. In practicethe number of calendar years specified for a degree or diploma program isgenerally exceeded due both to repetition and part-time study.
2.04 There are five main types of tertiary level institutions atpresent:
(a) universities, which have a number of semi-autonomous facultiesoffering the _arjana, sarjana muda and a limited number of diplomaprograms;
(b) institutes, which comprise a number of faculties in a singleprofessional field and offer the _ariana and sariana muda degrees;
(c) teacher training colleges, which also offer the sarana and sarjanamuda degrees;
(d) academies, which consist of a single faculty and grant a diploma/certificate for technician level courses; and
(e) other postsecondary schools, which also provide diploma levelcourses.
Technical training is provided in each type of school.
2.05 Administration and Organization. Higher education and training areprovided by virtually all government agencies, but eight are predominant: theDepartments of Education, Religious Affairs, Health, Home Affairs, Industry,Manpower, Agriculture and the National Institute of Administration (LAN).Presidential Decree No. 34 of 1972 assigns overall authority for educationand training, including higher education, to the DEC but divides operationalresponsibility among the DEC (general and vocational education), the Departmentof Manpower (specialized and technical training) and LAN (civil servicetraining). The decree authorizes the DEC to define the functional workingrelationships of the three agencies and to regulate education and trainingprograms of all other government and nongovernment institutions.
2.06 The DEC directly controls 40 universities, institutes and teachertraining colleges but has no direct authority over 80 public academies andother postsecondary institutions operated by other departments to providein-service training not available elsewhere. (The implementation of DecreeNo. 34 is incomplete and the future management of these institutions has notyet been determined). Roughly 340 private institutions are loosely administeredby the DEC's Coordinator for Private Higher Education and an unknown number ofunregistered private institutions operate without government supervision. Thusadministrative effectiveness of the DEC (based in Jakarta) is reduced by widegeographic dispersion and autonomy of institutions.
2.07 Administrative inefficiency is further experienced at individualinstitutions. At public universities, individual faculties enjoy substantialautonomy and the institutions have considerable independence from the DEC.As a result, there is duplication of administrative services, courses, facili-ties and research among and within institutions. Personnel policies are alsoinefficient. Chief administrators of universities (viz., rectors and deans)are rotated on a regular basis, thus allowing for little consistency in insti-tutional operation or policy and preventing long-range institutional planning.Less frequent rotation of administrative staff and introduction of trainingprograms in educational administration could improve this situation.
2.08 As an initial step towards strengthening administration, the Govern-ment has begun a series of reforms to promote greater comparability amonguniversity courses. The basic rationalizing element would be a system ofsemester credits (e.g., the sarIana degree would require 140-160 credits),backed by a more rigorous system of institutional classification/accreditationand a system of nationwide examinations to "certify" semester credit achieve-ments. (The latter, still at a planning stage, is to be assisted by Unesco.)In addition, the DEC supports information exchanges, particularly on curricularmatters, through subject-oriented consortia which meet regularly throughout
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the year./I The groups are composed of representatives from both public andprivate institutions of higher education, and they also serve as advisors tothe DEC. In view of the need to rationalize the organization and improve theoverall management of higher education, however, a more comprehensive approachto long-term development of the subsector should be adopted.
2.09 Planning. In general, planning, evaluation and related research forthe higher education subsector have been limited. Since 1967, central educa-tional planning has been the responsibility of the DEC's Office of Educationaland Cultural Research and Development (BP3K) and the National Planning Agency(Bappenas). However, other responsibilities have left their personnel withinsufficient time for long-term planning. Although efforts were initiated in1975 to systematize collection of university statistics, no such effort hasbeen made for other postsecondary training institutions, and manpower data foreducational planning are lacking (paras. 1.04 and 1.08). The Government hasattached increasing emphasis to the need to strengthen the data base forfurther planning in the higher education subsector. Since development ofhigher education is to be carried out on a regional basis, future data collec-tion efforts need to be region specific in order to determine requirements(and thereby types and levels of supplier institutions) in accordance withlocal development priorities.
2.10 Improved planning and management should also focus on systematicevaluation and monitoring of ongoing programs and projects; analysis of theextent and causes of internal inefficiencies; improved definition of responsi-bilities among agencies involved in higher education; and better coordinationamong formal training programs and between formal and nonformal trainingprograms. A recent government decision to expand public technician traininghas increased the need for improved coordination at this level.
2.11 Enrollment Trends. In 1976 some 285,000 students, 2% of therelevant age cohort, were enrolled in about 460 postsecondary institutions asshown in Table 2.1. Two-thirds of these students attended public institutions,one-third private schools. Roughly 55% of students were enrolled in degreegranting institutions and 45% in diploma granting institutions.
2.12 Enrollments at the tertiary level are concentrated in the socialsciences and humanities and reflect limited emphasis on the sciences, inparticular the basic sciences (including mathematics) as shown in Table 2.2.
/1 Among these are consortia for technology, science, economics, agricultureand education.
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Table 2.1: HIGHER EDUCATION - NUMBER OF INSTITUTIONSAND STUDENTS ENROLLED, 1976
Number ofType of institution institutions Enrollment
UniversitiesPublic 27 109,000Private 78 49,000
Private InstitutesPublic 3 12,000Private 6 3,000
Teacher Training CollegesPublic 10 33,000Private 24 7,000
AcademiesPublic 59 11,000Private 180 26,000
Other PostsecondaryPublic 22 22,700Private 50 12,000
Total 459 285,000
Source: DEC, 1978.
Table 2.2: POSTSECONDARY ENROLLMENTS BY FIELD OF SPECIALIZATION, 1976
Public Private %institutions institutions Total total
Basic sciences 6,000 2,000 8,000 3Social sciences, humanities 64,000 41,000 105,000 37Health sciences 14,000 4,000 18,000 6Agro sciences 13,000 3,000 16,000 6Economics la 26,000 23,000 49,000 17Teacher education 33,000 7,000 40,000 14Engineering, industry & mining 27,000 11,000 38,000 13Others 4,000 7,000 11,000 4
Total 187,000 98,000 285,000 100
/a Includes accounting and business administration.
Source: DEC, 1978.
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2.13 The training of engineers (nonagricultural) is carried out mainly
in faculties of technology (engineering) and mining, and in specialized
academies at the diploma level. Accountants are trained mainly in faculties
of economics, the Ministry of Finance's State School for Government Accountants
and in academi3s. In 1976, the nearly 87,000 students enrolled in these two
fields (degree and diploma programs) accounted for 30% of total tertiaryenrollments and were distributed as follows:
Table 2.3: POSTSECONDARY ENROLLMENTS IN ENGINEERING AND ECONOMICS, 1976
Engineering Economic_. laDegree Diploma Degree Diploma
UniversityPublic 12,100 3,000 16,900 5,100Private 5,700 n.a. 8,900 n.a.
InstitutePublic 10,300 n.a. n.a. n.a.
Private 2,300 n.a. n.a. n.a.
AcademyPublic (non-DEC) n.a. 1,400 n.a. 2,600Private n.a. 3,100 n.a. 11,300
Higher SchoolPublic n.a. 300 n.a. 2,300Private n.a. n.a. n.a. 1,600
Total 30,400 7,800 25,800 22,900
% public 74 60 66 44% private 26 40 34 56
/a Half of degree level enrollments in economics are in accounting.The proportion of students enrolled in accountancy-related programs atthe diploma level is not available.
Source: DEC, 1978.
These figures reveal a strikingly low level of development of training programs
for technician level engineers by comparison with those for degree levelengineers and in view of projected demand (para. 1.08).
2.14 Though recent expansion of tertiary enrollments (estimated at about
4% p.a. since 1970) has contributed to both efficiency and quality problems,it has not yet solved problems of equity - either spatial or socioeconomic.
The five largest universities in Indonesia are located in Java and together
account for about half of all enrollments. While most provinces now have a
public university, technical faculties are more common in the older institu-
tions. Thus access to science and technology faculties remains limited for
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secondary school graduates outside Java. In addition to these inequalities,enrollments reflect the usual disparities in sex, socioeconomic background andlocation: 71% of tertiary level students are male; children of white-collarparents are ten times more heavily represented in the student body than aretheir parents in the work force; and even in Java some provinces have aproportion of the age cohort enrolled which is four times greater than that ofother provinces. (Since fees are charged, even at public institutions, theseoutcomes are not surprising: there are few public scholarships.)
2.15 By the late 1980s and early 1990s, severe pressure will be felt bythe Government to provide additional student places in universities as a resultof the ongoing INPRES primary school building program; this was --roduced in1973/74 and had added 2.6 million places by 1975/76. Recent growth trends inupper secondary school enrollments (estimated at 8% p.a. between 1967 and1976, about twice the recent growth rate in tertiary enrollments) suggest thatsocial pressures are already mounting for additional postsecondary places. Inorder to meet economic needs in 1984, and without a change in internal effi-ciency of the tertiary level system, enrollments in higher education wouldneed to increase by about 140,000 during Rep,lita III (1979-1983). Increasesin internal efficiency, from a 40% completion rate to 80%, would doubleoutputs without increasing enrollments. If these improvements were achieved,the aggregate demand for degree and diploma graduates would likely be satisfiedthrough 1989 and 1986, respectively, without increased enrollments. Degreelevel enrollments would need to expand from 1985 (at 5% p.a.) and diplomalevel enrollments from 1983 (at 8% p.a.) to meet manpower demands beyond 1989and 1986 respectively. At both levels, planned expansion should emphasizetechnical training to alleviate anticipated manpower shortages in fieldscrucial for development (i.e., science, mathematics, engineering, health,economics and teacher training). The Government has already directedattention to planning for systematic expansion of diploma level engineeringtraining for which inadequate capacity exists (paras. 1.08 and 2.13).
2.16 Financing. Central government expenditure on education rose sharplyduring the recent past, from around 1% of GNP a decade ago to 3% in 1975.(If private expenditure is included, expenditure on education amounted tonearly 4% of GNP in 1975). Repelita II has seen an unprecedented investmentthrust in education; planned allocations of development (capital) funds tothe DEC increased 18-fold - to US$1.6 billion - over the Repelita I allocation,the greatest increase for any major sector. While the rate of growth will likelyslow significantly, the Repelita III allocation is expected to increase at8% p.a. in real terms for development expenditure on education, and totalpublic expenditure on education (capital and recurrent) should rise by around15% annually in real terms during the plan period. However, higher educationhas received a very low proportion of total education expenditure in the past.By comparison with eight other Asian countries, higher education expenditurein Indonesia is lowest, as shown in Table 2.4. In 1975, total expenditure onhigher education in Indonesia amounted to about 0.2% of GNP, whereas the averagefor the eight other Asian countries was three times greater (0.6%). Capitalexpenditure, at an estimated US$7.0 million equivalent, was negligible. Totalgovernment expenditure per student in public universities is only about US$125equivalent; fee collection raises the amount by about 25%. Largely as a resultof inadequate expenditure, the average quality of postsecondary training ispoor (para. 2.01). Increased expenditure would improve the quality andinternal efficiency of higher education.
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Table 2.4: EXPENDITURE ON EDUCATION, SELECTED ASIAN COUNTRIES
GNPper capita Expenditure on Education (% of GNP)
Country (US$ 1973) Total Primary Secondary Higher
Malaysia 570 4.99 2.34 1.82 0.82Philippines 280 4.93 2.73 0.94 1.26Sri Lanka 120 4.90 1.73 2.89 0.27Korea 400 3.37 1.57 1.21 0.57Burma 80 3.11 1.09 1.34 0.67Thailand 270 2.97 1.75 0.71 0.50INDONESIA 130 2.17 1.54 0.43 0.19Pakistan 120 1.69 0.61 0.51 0.57Nepal 90 0.73 0.21 0.20 0.30
Source: M. Zymelman, "Patterns of Education Expenditures," World Bank StaffWorking Paper, No. 246, November 1976. World Bank, World Tables, 1976.
Issues in Higher Education
2.17 The most striking problems in higher education are low internalefficiency and poor average quality. Of the public institutions, probablyfewer than 10 are viable economic units providing a consistent standard ofdegree qualifications; prime among these are the five largest institutions,designated by the Government as "centers of excellence" or Class A institutionsin 1970. These are the University of Indonesia in Jakarta, the University ofGadjah Mada in Yogyakarta, Airlangga University in Surabaya, the Institute ofAgriculture in Bogor and the Institute of Technology in Bandung. Of the remain-ing public universities, 20 are grouped at an intermediate level, Class B, and16 fall into the lowest category, Class C. Public and private academies (aswell as diploma level programs within the public universities /1) have anaverage enrollment of about 200 students. Most of these are uneconomicunits, though the quality of training at a small number of non-DEC publicand private academies is adequate.
2.18 Efficiency. Degree level graduates represent only 5% of universityenrollments in any one year. This low internal efficiency is attributed topoor student selection, relatively high fees, poor student motivation, tediousteaching methodology, lengthy courses of study and general student neglect.The requirement that students write a thesis represents an additional barrier.While the high dropout doubles the cost per graduate, student demand forfee-paying places still exceeds the availability of places (by about 2:1 forsome small private universities and 10:1 for the bigger public universities).
/1 A deliberate policy to improve efficiency led to the phasing out of roughly85 DEC academies between 1973 and 1975. A small number, in the fields ofengineering and accountancy, were absorbed into the universities.
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There is thus little incentive for universities to improve their internalefficiency. For nondegree programs, both public and private, the dropoutfigures are generally lower and motivation is higher since most programs canbe completed in two to three years and are directly related to employmentopportunities.
2.19 Despite recent adjustments in the civil service salary scale (which
applies to salaries for faculty of public institutions of higher education),
staff regularly hold several appointments in different faculties or institu-
tions. This necessitates adjustment of teaching loads, i.e., one lecture
course per term on average. Students, likewise, can be considered part-time:many hold jobs and engage in other income-earning activities. Ab a result,the average time required to complete a degree (nominally five years) is eight
years and to complete a diploma level course (nominally two to three years) is
five years (para. 2.03).
2.20 Quality. The lack of efficiency in higher education is closelylinked with weaknesses in quality. The low per student expenditure on highereducation undercuts the quality and relevance of training and is reflected inunderqualified staff, inadequate teaching materials and limited practicaltraining facilities. Many universities share laboratory facilities and somestudents do their practical work at training centers established by governmentdepartments. Even the five centers of excellence are poorly equipped in somefaculties. For example, Gadjah Mada lacks engineering equipment, and theUniversity of Indonesia has no civil engineering laboratory (its students do
their laboratory work at the Institute of Technology in Bandung). The supplyof textbooks in Bahasa Indonesia is also seriously inadequate and reinforces
the already strong inclination toward lecture courses and rote learning.Individual study and use of written instructional materials to supplementclassroom work are usually not part of the teaching process. Library stocksare also limited and little attempt is made to incorporate library assignmentsinto course work.
2.21 Staff qualifications are generally low in the higher education
system: more than a third hold only a sariana muda degree, and about halfreport themselves unqualified to teach all the courses they presently give.Staff qualifications vary widely among the three categories of universities:
approximately 10% of staff at Class A institutions hold doctorate degrees,about 2% at Class B, and less than 1% at Class C. The technology consortiumreports the same disparities for professors of engineering subjects with no
engineering instructor in the Class C universities holding a doctor's degree.
2.22 The problems of dropout, poor quality, prolonged periods of study,
inefficient use of staff and duplication of programs are largely the result ofcurrent financial and administrative practices. Possible solutions to theseproblems include: more discriminating student selection and better orientation;lowering immediate financial burdens on students/parents by introducing a
loan/scholarship program; further reform of staff emoluments; staff upgrading;increased expenditure per pupil on textbooks, equipment and facilities; andconsolidation (or expansion) of small, inefficient institutions to create
viable economic units. Such improvements would entail substantial increasesin annual cost per student but could decrease the cost per graduate and/or per
unit of student achievement.
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Engineering and Accountancy Education
2.23 Degree Level Engineering. Engineering degrees are awardedto approximately 1,000 graduates each year from the 16 public universitiesthat have engineering programs, and to an additional 550 graduates fromprivate universities. The two major engineering institutes (the Institutesof Technology at Bandung and Surabaya - ITB and ITS) together enroll overone third of the total engineering student population. ITB, the oldesttechnical institute in the country, has a strong degree program and setscomparatively high examination standards. Nearly 10% of its staff havedoctoral degrees; it is now beginning to conduct post-sarjana programs, someof which lead to doctoral degrees. Its routine budget averages Rp 300,000(US$720) p.a. per student, and it receives a higher annual developmentbudget (Rp 1.2 billion or US$2.9 million) and more capital aid from othersources than other engineering faculties or institutes. (ITS spends only athird as much per student annually.) As a result, ITB's facilities aregenerally better equipped than those of other institutions. Nonetheless,ITB's laboratory equipment in a number of fields is inadequate; much of theinstitute is housed in buildings originally intended as temporary quarters;and planned expansion of enrollment cannot be realized without new construc-tion. ITS is presently improving its physical plant under a campus develop-ment project assisted by the Asian Development Bank (ADB).
2.24 ITB and ITS have both embarked upon programs aimed at improvinginternal efficiency, and ITB indicates that it has reduced its dropout rate tounder 20%. Its sarjana program has been reduced from 5 to 4-1/2 years, andthere is a maximum limit of 7-1/2 years during which every completing studentmust graduate. (The average student now takes 5-1/2 to 6 years.) ITS indicatesthat it has reduced its dropout rate from 70% to 30% over the past five yearsand expects to reduce it further to 25% next year. ITS has a five-year sarjanaprogram, but the average student takes eight to nine years to complete hisstudies.
2.25 Gadjah Mada and the University of Indonesia also have engineeringfaculties, though neither has an engineering degree program comparable to thoseof ITB or ITS. A few other institutions are gradually strengthening theirengineering faculties, primarily the Hasanuddin University, the Universityof North Sumatera and Brawijaya University. However, their budgets, staff andprograms will need substantial assistance if they are to produce degreegraduates of the quality of ITB and ITS. Hasanuddin is beginning such adevelopment program with the assistance of the ADB.
2.26 Quality improvements are needed in all engineering training programs:buildings, equipment, libraries and teaching materials require upgrading;staff development, through both domestic and foreign fellowships, would upgradethe quality of teaching and management; and salary levels should be linked toa minimum number of working hours per week. More assistance should be extendedto universities based on local manpower needs (para. 2.09), and assistance toupgrade engineering faculties at private institutions should also be considered.
2.27 Engineering Technicians. Engineering technicians play an importantrole in most manufacturing and construction industries. They occupy a mid-level
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position between the engineer and the skilled worker and apply/supervise knowntechnologies in a particular engineering field. The training of techniciansshould thus combine the fundamentals of a broad engineering field within a rangeof industry specific options in related skills areas. No coherent system totrain engineering technicians exists in Indonesia. Rather, postsecondaryengineering technicians are trained in a variety of institutions and programs,most of them small (para. 2.17), responsibility for which is dispersed amongthe DEC and other government departments whose prime functions are nottraining. The Department of Industry operates six postsecondary institutionsand enrolled about 2,600 students in 1977. One school provides postgraduatetraining for industrial management and five (with about 2,300 trainees in1977) provide three-year diploma level training in the fields of chemicalanalysis, leather and textile technology, and industrial management.(Graduate output was about 300 in 1976.) These institutions are efficientlyoperated and provide high quality specialized training on an in-servicebasis to Department of Industry employees. Similarly the Department ofPublic Works sponsors specialized two- and three-year diploma level trainingprograms for its staff to meet its urgent need for subprofessional engineers.These programs, which enrolled 800 students in 1977, are carried out undercontract by the ITB and, beginning in 1978, by the ITS and Gadjah MadaUniversity. (Output of graduates in 1976 was 125.)
2.28 Prior to Presidential Decree No. 34 of 1972, most DEC techniciantraining was carried out in eight public technical academies which enrolled6,600 students in 1972. By contrast with the programs of the Departments ofIndustry and Public Works, these academies provided poor quality trainingand were inefficient. The Government phased out the eight academies buttransferred their programs to nearby universities, since these programsprovided technicians to help fill the technical skill gap between the graduateengineer and the skilled worker (the latter trained in senior secondarytechnical schools, STMs). In 1976 these diploma level programs (PendidikanAhli Tecnik, PAT) enrolled some 3,000 technician trainees in the fields ofchemical, civil, mechanical, electrical and shipbuilding engineering. However,quality problems experienced in the academies have persisted: facilities,often rented space in STMs, are inadequate; equipment for practical work islacking; and staff, for whom there is no regular training program, are under-qualified or excessively academic.
2.29 There are an additional 3,000 students enrolled in private technicalacademies which generally experience the same quality problems as the PATs.Two exceptions are the Swiss-assisted polytechnic in Bandung and a Jesuit-runacademy in Solo. These institutions provide three-year postsecondary traininggeared towards production of specialized skilled workers (rather than highertechnicians). Demand for output from these institutions is high and studentsoften receive offers of employment prior to graduation. In addition, somesemi-public and private industries have initiated in-service technician train-ing programs; these include the training institutions of the State Railways,the PUSRI Fertilizer Company, the Electricity Authority (PLN), Krakatau Steeland PT Bharata (machines). While some of these training programs have beendeveloped to meet the special needs of these enterprises, others have beenintroduced to compensate for the general shortage of graduates from formaltechnician training programs.
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2.30 The overriding problems in these existing formal engineeringtechnician training programs are inadequate capacity-(para. 2.13), pooraverage quality and lack of coherence, viz. there is no technician trainingsystem. The Government now plans to strengthen and expand public diplomatraining for engineering technicians by establishment of a system withinexisting universities whenever possible to provide training in the funda-mentals of civil, mechanical and electrical engineering. Training wouldemphasize practical skills required by industry and more effective instruc-tional methods should be developed to better meet the economy's manpowerrequirements. Close working relations with regional business and industrywould link classroom training to future job experience. Provision of betterlaboratory equipment and teacher training and/or upgrading would also berequired. Appropriate administrative structures both at universities and inthe DEC should be developed to support the diploma programs and coordinatetheir output with other sources of supply for technicians (including non-formal and the on-the-job programs).
2.31 Accountancy Training. Most degree level training in accounting isprovided by departments of accounting within the university faculties ofeconomics through programs that start during the third or fourth year. Abouthalf of the 26,000 economics students in public institutions concentrate onaccounting, but recent output is estimated at only 300-350 per year; theother half focus on general economics or business administration. Accountingdepartments exist at six state universities (the Universities of Indonesia,Gadjah Mada, North Sumatera, Airlangga, Pajajaran, Sriwijaya) and threeprivate universities (Parahyangan, Trisakti and Nomensen) and are being setup at the universities of Syiah Kuda, Brawijaya and Diponegoro. Governmentaccounting (degree and diploma level) is offered at the Ministry of Finance'sState School for Government Accountants (Sekolah Tinggi Akuntansi Negara, STAN)in Jakarta which enrolls about 500 students. Only graduates from stateuniversities and STAN, after serving a minimum of three years with theGovernment, are recognized as registered accountants. Law No. 34 of 1954established a Committee of Experts to confer the title of certified accountant.This committee has the authority to set qualifying examinations for candidatesfor the title who have not studied at STAN or one of the six state institutions.Plans for holding this examination on a regular basis exist but have yet tobe implemented. (Reportedly only one such examination has been given todate.)
2.32 The prevailing accountancy degree program in Indonesia emphasizesfinancial accounting and auditing but offers limited scope for intensivespecialization. The teaching methodology tends to be void of domestic cases,texts, and seminars/workshops. Books and periodicals are insufficient,and few useful, current materials have been translated into Bahasa Indonesia.The existing staff need upgrading: most have been theoretically trained andhave had limited experience in the application of accounting methods, but fewhave specialized in such areas as controllership, accounting systems, budgeting,management and industrial accounting, computer accounting and auditing, andgovernment and public enterprise accounting. Student contact hours andguidance are minimal, due in large part to multiple job holding by nominallyfull-time staff members. Teaching assistants are scarce. Course outlines,coordination between courses and administrative control over staff are inade-quate. While public and private universities provide the same programs, theaverage quality of faculty and students is lower at the private institutions.
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2.33 Technician level accountancy training is carried out largely byprivate academies and postsecondary schools which enrolled nearly 13,000students in 1976 in economics-related courses. Another 5,000 studentsattended non-DEC public institutions. (The number of these students followingaccountancy courses is not available, para. 2.13). As with techniciantraining for engineers, a number of public (DEC) accountancy academies wereabsorbed into the universities after 1972. These programs (Pendidikan AhliAdministrasi Perusahaan, PAAP), enrolling some 5,000 students in 1976,suffer from the same problems as the engineering programs, the most signifi-cant of which is poor quality. Teaching staff, materials and facilitiestend to be deficient in both the public and private institutions. Standardi-zation of the variety of programs and examinations is still unsatisfactory,and there is a lack of coordination among middle level institutions.Transfer to universities is virtually excluded. Secondary level accountancy(bookkeeping) courses also require updating.
2.34 Estimated manpower requirements suggest that the need for degreelevel accountants will rise toward the mid-1980s (paras. 1.08 and 2.15).Until then, the most severe constraints on the effectiveness of accountancytraining at both degree and diploma levels are the limited numbers of trainedfaculty and the lack of appropriate teaching materials. The Governmentattaches increasing importance to the need to provide an improved quality ofaccountants for both public and private sector enterprises and plans tostrengthen accountancy and related training at secondary and tertiary educationlevels.
2.35 Major requirements for strengthening accountancy training wouldinclude effective staff training; development of more practical and relevantcourses and programs with greater opportunity for specialization at upper andeven middle accountancy levels; more effective teaching materials and aids,including accounting "laboratories" with some mechanized facilities (e.g.on-line computer set ups); encouragement of research, writing and translationof foreign texts and articles; and creation of postgraduate (post-sariana)accountancy training programs.
2.36 In addition, information on accountancy training programs and theprofession should be improved. An inventory of accounting manpower needsand a related accounting development plan should be initiated. The Consortiumof Economic Sciences is considering a "Survey on Needs for Accountants inIndonesia;" this or a similar survey should be conducted as soon as possible.It should reflect manpower supply and demand projections (including public andprivate sector demands specified by regions, branches, types, functions,levels and specializations of accountants) and thus permit an examinationof the existing and future balance between the two (para. 1.07).
2.37 More effective coordination of accountancy education and moderniz-ation of practices at all levels, in the government and private sector,appear necessary. The Government is now considering establishing an accoun-tancy development advisory council with representatives from the Depart-ment of Education and Culture, the Ministry of Finance, Bappenas, universities,the professional accounting body (Ikatan Akuntan Indonesia), STAN and othereducational institutions.
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2.38 The present government bookkeeping system is still the single
entry system inherited from the colonial administration, which is inadequate
for modern public administration. As an indication of the inadequacy of
present accounting practices, summary financial statements lag by at least
two years and have not been prepared for most fiscal years. The Government
now plans to undertake a study to determine means to modernize the government
accounting system and procedures. It plans to complement this with another
study for business management education to develop a national strategy in
this area.
Education Sector Strategy
2.39 Government Strategy. Throughout the First and Second Plan periods
the Government attached general priority to improving and expanding primary
and secondary education and, during Repelita II, to providing nonformal
education. As Repelita II draws to a close, inefficiency, low output, and the
generally poor quality of teaching at the tertiary level represent urgent
problems that must also be addressed because of their constraining effect on
manpower supply for other development efforts. The Government has thus placed
increasing emphasis on the need for rationalizing the development of higher
education by better defining areas of administrative responsibility, by
guiding development of the subsector on the basis of an improved information
system, and by improving coordination among institutions of higher education.
The Government further plans to base development on regional needs and
improve internal efficiency by diversifying training options, by shortening
the average length of training and by consolidating uneconomical institutions.
Particular emphasis is placed on increasing the output and improving the
quality and efficiency of higher technical training on which the industrial
sector will increasingly depend. Within this category investment is to be
directed towards engineering, economics and the sciences.
2.40 Investment Requirements and Gaps. In order to satisfy social
demand for primary schooling and demand for secondary and tertiary level
manpower, total capital investment required (in 1974 prices) to expand the
education system would be about Rp 700 billion (US$1,700 million) during the
Repelita III period. Incremental recurrent costs (also in 1974 prices)
would be Rp 70 billion (US$170 million) per year, as shown in Table 2.5. If
estimated costs to provide replacement for DEC and INPRES programs are
added, the total investment requirement would rise to Rp 880 billion
(US$2,100 million) and incremental operating costs would represent Rp 80 bil-
lion (US$190 million).
2.41 A comparison of educational financing requirements with trend line
budgets (combined capital and recurrent) suggests that the total resource
gap (in 1974 prices) in the education sector could reach Rp 600 billion
(US$1,500 million) during the Repelita III period. The figures indicate that
even with substantial effort by the Government, investment in human resource
development during Repelita III would tend to lag behind economic needs.
Part of the national deficit could be met through increased spending by local
governments and on private education, and part through external assistance.
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Table 2.5: ESTIMATED INVESTMENT REQUIRED DURING REPELITA III (IN 1974 PRICES)
Additional Recurrent costenrollment Total annual
required during -Capital costs incrementalEducation level Repelita III /a Per place Total Per pupil cost
('000s) (Rp '000) (Rp billion) (Rp '000) (Rp billion)
Primary 4,400 50 220 8 35Lower secondary 640 400 260 24 15Upper secondary 280 500 140 44 12Tertiary sciences/engineering 40 1,800 12 65 } 9
Other tertiary 100 600 60
Total 5,460 700 70
/a Based on the assumption that school efficiency does not change.
Note: Figures do not add to totals due to rounding.
Source: IDA estimates.
2.42 Bank Group Participation. The Bank Group has extended six loans/credits, totalling US$95.4 million, for the education sector in Indonesia.The Bank Group's investment program in education has pursued three mainobjectives, namely meeting manpower requirements, improving quality and, morerecently, increasing equity. The Bank Group began assisting the educationsector, in the absence of a comprehensive analysis of the education sector,through relatively small projects directed towards meeting clearly evidenteducational and manpower needs. Under the First Education Project (Credit219-IND of 1970), US$4.6 million was extended to establish five centralizedworkshops for use by higher secondary technical school students. Thisproject was completed on schedule in 1976 the centralized workshops introducedunder the project have proved successful in providing an improved quality ofskills training in a cost-effective manner. The Second Education Project(Credit 288-IND of 1971) provided US$6.3 million to support expansion ofmiddle level agricultural manpower and was completed with a year's delay inlate 1977. The final evaluation of the agricultural training project indicatesthat it has had an important institution-building impact through creation ofa national agriculture training agency and has expanded the capacity andoutput of agricultural training institutions. The execution of both projectscould, however, have benefited from more advanced preparation at the time ofcommitment of credit funds.ll The Third Education Project (Credit 387-IND of
/1 Details are contained in the completion reports prepared for theseprojects.
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1973), assisted by a Credit of US$13.5 million, is directed towards improvingprimary and secondary education through provision of textbooks and in-serviceteacher training. Thus far 80 million textbooks have been produced and380,000 teachers trained under this project.
2.43 Subsequent projects were identified on the basis of the Government'sNational Assessment Study of Education (completed in 1973) and the Bank'scomprehensive education sector survey (Report No. 433a-IND of 1975). TheFourth Project (Loan 1237-IND of 1976) provided US$37 million to help meetmanpower requirements in the vocational/technical and public administrationfields. The Fifth Project (Loan 1433 of 1977) provided US$19 million forimproving primary and secondary teacher training and the Sixth Project (Loan1486 of 1977) provided US$15 million, to strengthen nonformal education.Aggregate Bank lending is shown on Table 2.6 by level and type of education.Except for technical teacher training, virtually no financing has beenprovided for higher education.
2.44 In response to growing shortages of higher level manpower theBank conducted a subsector survey on higher technical education in 1977.This survey identified two priority areas for investment, viz. the needto introduce a system for training middle level technicians and to improvedegree level technical training (mainly in engineering, science and themanagement sciences including accountancy). The proposed polytechnicproject primarily addresses the first of these two needs. A second projectto improve degree level technical training is being prepared. In addition,in the future it is expected that the Bank will pursue a consolidation andextension of achievements through repeater projects in such priority subsectorsas agricultural training, textbooks, teacher training and nonformal education.
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Table 2.6: AGGREGATE BANK GROUP LENDING FOR EDUCATION IN INDONESIA /a
Approximate annual training places added or improved
and proportion of education lending by level
Type of education Primary Secondary Higher Nonformal Other Total
GeneralAnnual training capacity n.a./b - - - - -
Aggregate lent (%) 14 - - - - 14
Vocational/TechnicalAnnual training capacity - 26,700 2,000 19,000 - 47,700
Aggregate lent (%) - 18 5 13 - 36
AgriculturalAnnual training capacity - 3,000 200 - 23,600/c 26,800
Aggregate lent (%) - 4 1 - 2 7
Teacher TrainingAnnual training capacity 5,500 1,500 - 3,100 - 10,100
Aggregate lent (%) 16 9 - 15 - 40
OtherAnnual training capacity - - - - 1,100/c 1,100
Aggregate lent (%) - - - - 3 3
TotalAnnual training capacity 5,500 28,200 2,200 22,100 24,700 82,700
Aggregate lent (%) 30 31 6 28 5 100
/a Total Bank Group lending to the education sector totals US$95.4 million.
/b Total in this category allocated for production and distribution of primary
textbooks.
/c In-service training for agriculutral extension agents and civil servants.
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3. THE PROJECT
Overview
3.01 The proposed project would pursue the following three objectives:
(a) to establish a new system for training engineering technicians;
(b) to improve the quality of accountancy training and practices; and
(c) to assist in strengthening education planning and management.
3.02 The first objective would be achieved through establishment of sixpolytechnics and accompanying management and program supports. The secondwould be pursued through a program of instructor training, materials developmentand research for accountancy, including a study to develop an improved governmentaccounting system. The final objective would be sought through support of aseries of associated studies centering on manpower analysis and planning forhigher technical training and through assistance with education projectmonitoring and implementation.
Table 3.1: PROPOSED PROJECT INSTITUTIONS
AverageAverage additional
No. of additional annualComponent institutions enrollment output
Technician EducationUnit for Management of Diploma Programs 1Technician Education Development Center 1 - -
Polytechnics 6 4,320 1,330
Accountancy EducationAccountancy development centers 4 n.a./a 1,300
/a Short-term upgrading courses.
Technician Training (proposed outlay, US$59.2 million, excluding contingencies)
3.03 Objectives and Scope. This component would support development ofa new system for training engineering technicians. It would address presentweaknesses in technician training (paras. 2.27 and 2.30) by helping tointroduce:
(a) unit for management of diploma programs;
(b) a technician education development center to carry out curriculum,materials and staff development for industrial technician training; and
(c) six polytechnics to provide new training places for some 4,320engineering technicians.
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3.04 Under the project, financing would be provided for:
(a) civil works, furniture and equipment for a technician educationdevelopment center and six polytechnics;
(b) program development (curriculum, materials, staff training,planning and management, and evaluation) for the polytechnics;and
(c) related technical assistance.
3.05 Organization and Management. The management structure for thetechnician training component is shown in Chart 3.1. Under the project theUnit for Management of Diploma Programs (UMDP) which has been establishedwithin the DGHE to manage all diploma programs, would be provided subunitsrelated to polytechnic programs for: planning, programming and evaluation;budgeting and accounting; recruitment and personnel; and liaison. The UMDPwould be responsible for formulating policy and setting standards andprocedures for development of technician training, including that providedby project polytechnics. In addition its liaison unit would conduct manpoweranalyses related to diploma level training and would maintain internationaland national liaison on technician training developments.
3.06 The Technician Education Development Center (TEDC) would be locatedon the ITB campus; it would report directly to the DGHE through the planningand programming unit of the UMDP. The TEDC would be responsible for theplanning and programming of engineering technician training at the polytechnicsthrough:
(a) development of curriculum and materials for the polytechnics;
(b) provision of pre- and in-service training for polytechnic staff;
(c) monitoring polytechnic operations and carrying out employment andmanpower research related to industrial technicians; and
(d) informing the public and industry about the polytechnic programs.
In order to ensure the relevance of ttaining provided to the job market(para. 2.30) an industrial advisory board, which is expected to compriserepresentatives from the National Chamber of Commerce, the National IndustrialDevelopment Board and public and private enterprises, would be created. Thisboard would provide information on broad industrial manpower requirements andadvise on educational policy for the polytechnics.
3.07 The polytechnics would be new three-year post-secondary school insti-tutions giving industrial technician training leading to a diploma in civil,mechanical and electrical engineering. They would be located within universi-ties, but their training objectives would be distinct from those of universitydepartments of engineering. Their structure has been designed to elicit uni-versity administrative support while allowing for independent programming andoperations. The polytechnic director would report directly to the university
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Chart 3.1 ORGANIZATION OF UNIT FOR MANAGEMENT OF DIPLOMAPROGRAMS AND TECHNICIAN EDUCATION DEVELOPMENT CENTER
Unit for Managementof Diploma Progranis Director General for
Higher Education
| Chairman
| Member Responsiblefor Polytechnics
ChiefPlaning, Chief Chief Chief
Ploganning, Budgeting & RecruitmentLiso
EvaPouation Accounting & Personnel
Technician Educatio'n DevelopnDent CDnte Industrial
(Bandung ITB) Director Advoolr9
Assistantni :,trat-
rgram [ 0 ~~Staff | |Research & Publ&Icd t Devlopmet | |Development Evaluation | IRelatrionsl
World Bank -19437
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rector for administrative matters and to the TEDC for pedagogic matters.Each polytechnic would comprise a director, an assistant director and fourfunctional units with responsibility for administration, teaching programs,student services and liaison with industry. A function of the last unitwould be to provide engineering consultant services, including design andproduction of prototypes, to facilitate transfer of technology. A localadvisory board similar to that for the TEDC would be established for eachpolytechnic. It would include provincial representatives from the Chamber ofCommerce, the Industrial Development Board and industry. The Board wouldprovide liaison with local industry for matters such as advising on programdevelopment, assisting in arranging short-term, on-the-job training forpolytechnic students in local industries, and providing part-time instructorsfrom industry. During negotiations the Government provided assurancesthat it would establish, within six months of the opening of the TEDC andeach polytechnic, an industrial advisory board for the TEDC and for eachpolytechnic with functions and composition acceptable to the Association.
3.08 Locations. The polytechnics would be located in four provinces inJava and in two provinces in Sumatera at the universities of Indonesia(Jakarta), Brawijaya (East Java), Diponegoro (Central Java), North Sumatera(Medan), Sriwijaya (South Sumatera) and the ITB (West Java). The number andlocations of the institutions were chosen by the Government on the basis ofindustrial density (para. 1.03). Locating the polytechnics in theseprovinces should maximize achievement of project objectives: the qualityand relevance of training would be enhanced by cooperation between thepolytechnics and nearby industries (in terms of course development andability to attract instructors with practical experience, para. 2.30);polytechnic graduates would be more likely to obtain immediate employment inthese provinces; and recruitment of qualified teachers would be less difficultthan in more remote provinces. South Sumatera, which by comparison with theother five provinces is less industrialized, has been included because ofrapid growth in the recent past of relatively capital-intensive industries(including petrochemicals). Such growth is projected to continue. However,the polytechnic there would initially be smaller than the others.
3.09 Enrollments. Four of the polytechnics would admit about 300students annually, 100 in each of three major engineering fields (civil,electrical, mechanical); the polytechnic in South Sumatera would admit 200students annually, 100 in each of two (civil, mechanical) fields and thepolytechnic in Bandung would admit 150 students annually, 50 in each of threemajor engineering fields (civil, electrical, mechanical). The maximum enroll-ment capacity for the three polytechnicl models would be about 900, 600 and450, respectively. Facilities would be flexibly designed to allow for futureexpansion. It is anticipated that internal efficiency would be substantiallygreater than the present average for universities (para. 2.18). The TEDCwould open in 1981 and the opening of the six polytechnics would be phasedover the years 1982-84 such that an enrollment of about 4,320 would bereached in 1985. Of this enrollment about 1,550 students would be in thefirst year course, 1,440 in the second and 1,330 in the third./l
/1 An average annual rate of dropout of about 9% is assumed for planningpurposes. However, the Government will attempt to achieve a dropoutrate lower than this.
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3.10 Measures to obtain a higher degree of internal efficiency asplanned would include the development of selection procedures that seek tomatch student aptitude to program requirements; the provision (outside ofthe diploma courses proper) of remedial courses; and the provision ofstudent bursaries for about 15% of the student body (para. 2.22). From 600to 700 bursaries would be financed annually under the project. Studentsrecruited to the polytechnics would be graduates of upper secondary schools,both general secondary (SMAs) and secondary technical schools (STMs).Selection would be based on the results of a national entrance examinationtaken locally, an interview and possibly an aptitude test. The educationalbackgrounds of SMA and STM graduates vary widely and the scientific andmathematical backgrounds of SMA graduates are generally superior. Regionalvariations are also evident. If experience shows that remedial courses arenecessary, they would be provided at the polytechnics until improved qualitycould be effected at the secondary level. The TEDC would be responsible forestablishing requirements for student entrance, promotion, and repetition,and for control of entrance examinations and award of bursuries.
3.11 Staff Recruitment. About 680 new positions would need to becreated between 1978 and 1984 to staff the TEDC and polytechnics as shownbelow:
Table 3.2: TEDC AND POLYTECHNIC STAFFING REQUIREMENTS
Number of Staff Required1981 1982 1983 1984 Total
TEDC 30 - - - 30
PolytechnicsAdministrators - 6 12 17 35Lecturers - 92 72 66 230Laboratory technicians - 64 72 44 180Workshop instructors - 80 70 54 204
Subtotal 30 242 226 181 679
3.12 In view of competing demands for trained technical manpower, bothfull- and part-time personnel would be recruited to meet polytechnic staffingrequirements. Most full-time teaching staff would be recruited directly frompostsecondary training programs. As an incentive the Government plans torecruit such staff prior to their final year of formal training and to provideone year bursaries to enable them to accelerate completion of the variousprograms. Financing for these bursaries is included under the project. Uponappointment to a polytechnic, bursary recipients would be expected to servefor a minimum of two years. Experienced part-time staff would be drawn fromindustry and universities. The TEDC would coordinate all staff recruitment.Selection of polytechnic staff would be the responsibility of the DGHE incooperation with TEDC and the individual university.
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3.13 Staff Training. Three types of training programs would preparemanagers and teachers for their new functions under the project: fellowships,preservice training and in-service training. About 70 man years of fellow-ships would be provided under the project (Table 3.3) nearly 45% of whichwould be local fellowships. This fellowship training for key staff of theUnit for Management of Diploma Programs, TEDC staff and polytechnic adminis-trators would be conducted in institutions with training programs andobjectives similar to those envisaged for the polytechnics. Study contentwould be geared towards the functional responsibilities of the staff member.
Table 3.3: TEDC AND POLYTECHNIC SCHEDULE OF FELLOWSHIPS
Duration ofNumber of fellowships Total Starting datestaff (months) man-months (month/year)
UMDP/PIU 6 3 18 3/79
TEDC
Director 1 6 6 7/79Teacher trainers 30 15 450 /a 7/79CurriculumDevelopmentand research 4 12 48 7/79
POLYTECHNICS
Directors 6 6 36 7/81Vice Directors 6 6 36 7/82Department heads 17 12 216 7/82
Total 70 - 810
/a Of which 360 man-months would be local fellowships.
3.14 The 30 teacher trainers with TEDC would undergo 15 months of
preservice training, 12 months training in manual skills, includinglaboratory and workshop techniques, as well as in pedagogy. For this train-ing special courses would be organized with assistance from existing localinstitutions (e.g., the Swiss-assisted polytechnic, technical teacher trainingcolleges) or from institutions in nearby countries (e.g., the Colombo PlanStaff College for Technician Education in Singapore). A final three months oftraining would be taken abroad. Preservice training would also be givensystematically to staff recruited for full-time teaching appointments at thepolytechnics. This training would be developed and conducted by TEDC teachertrainers in cooperation with technical specialists (para. 3.32). The trainingwould aim to upgrade the qualifications of the teachers in their respectivefields of study, to orient them to the purpose of the polytechnic and toenable them to plan and utilize effectively project facilities. In order to
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allow prospective personnel to undertake preservice training, TEDC and poly-technic staff would be recruited at least 12 months in advance of appointment.Preservice training of polytechnic staff (average duration one year) would beprovided beginning in 1981, and thereafter as necessary to fill vacancies orto meet new demand,/1 as follows:
Table 3.4: SCHEDULE OF TRAINING POLYTECHNIC STAFF
Department 1981/82 1982/83 1983/84
Civil engineering 96 80 72Electrical/electronic engineering 70 80 50Mechanical engineering 90 78 60
Total 256 238 182
Appointment of staff to the polytechnics would follow in May of each year asthe training course is completed (viz. 256 staff would be appointed in May1982, 238 in May 1983, and 182 in May 1984).
3.15 An important element of the training program would be continuousin-service training for full- and part-time polytechnic teaching staff. Thisshort-term training would begin with first year operations at project institu-tions. It would mainly take the form of a minimum of two workshops per yearconducted by TEDC staff at the polytechnics. Training would focus on orientingpart-time staff and assisting all teaching staff to plan courses for the nextsemester. During the workshops, teaching staff would be assisted in developingcourse outlines, daily lesson plans, laboratory experiments, workshop projects,homework assignments, laboratory and workshop instructions for students, andexaminations/proficiency tests. The project would finance the costs of pre-and in-service training of polytechnic instructors. During negotiations,agreement was reached on the schedule (para. 3.14) of appointment and trainingfor polytechnic staff.
3.16 Teaching Programs. Polytechnic training programs would be designedto produce personnel for middle level technical positions in industry andconstruction./2 The curriculum would. cover civil, electrical and mechanical
/ To meet actual staffing requirements (Table 3.2) and to allow for normalwastage, up to 10% more staff than required would be trained. Thiseffort would, however, be reduced to the extent that experienced part-timestaff could be recruited.
/2 Programs would be consistent with the functions of technicians which include,inter alia, erecting and commissioning engineering equipment and structures,and supervising such work; engineering and building drawing; inspecting andtesting engineering and building construction and equipment (quality andstock control); use of surveying equipment in setting out works and makingsite plans; operating, maintaining and repairing engineering machinery, andsupervising such activities (plant and engineering services); and activitiesconcerned with research and development, testing of materials and components,and equipment servicing.
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engineering (para. 2.30). It would give adequate emphasis to practicaltraining with projects in workshops and laboratories occupying at least 40% ofstudent time. General courses, accounting for 15% of time, would consist ofmathematics, civics, English., and the principles of organization and management(appropriate to middle level management tasks); costing, quality and stockcontrol and technological theory would account for 45% of time. There wouldbe six study options with enrollments projected as shown on Table 3.4:Within each main field, basic courses would be taught during the first twoyears with options chosen for the second and third year. It is anticipatedthat three years of study would be necessary to meet required skill levels;however, the type and duration of polytechnic programs could be modified asmanpower requirements change. Overall responsibility for curriculum develop-ment rests with the TEDC. Initial assistance would be provided by a teamof expert advisors to be financed under the project; polytechnic staffwould also participate in this process through workshops and by testingprototype materials.
Table 3.5: POLYTECHNIC ENROLLMENT BY FIELD OF STUDY AND SPECIALIZATION (1985)
Enrollment by field of study First year Second year Third year Total
Civil 550 510 470Engineering construction - - 235Building construction& services - - 235 1,530
Mechanical 550 510 470Plant installation andmaintenance - - 235
Production - - 235 1,530
Electrical /a 450 420 390Plant installation
and maintenance - - 195Instrumentation & control - - 195 1,260
Total 1,550 1,440 1,330 4,320
/a The polytechnic at the University of South Sumatera would not offerelectrical engineering.
3.17 Materials Development. The development of teaching materials forthe polytechnics, to be coordinated by the TEDC, would be conducted in twophases. The first phase would consist largely of selecting, importing andadapting technician training textbooks and teaching manuals from materials
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available abroad. Appropriate criteria for selection of materials wouldensure that they correspond with the planned curriculum and pedagogic objec-tives of the polytechnics. Selection would be monitored by the TEDC inconsultation with polytechnic staff. Necessary adaptations of materialsavailable abroad. Appropriate criteria for selection of materials wouldensure that they correspond with the planned curriculum and pedagogic objec-
tives of the polytechnics. Selection would be monitored by the TEDC inconsultation with polytechnic staff. Necessary adaptations of materialsprocured, including translations, would be carried out by the TEDC on a
contract basis. The second phase of development would center on preparationof new materials, initially workshop manuals, laboratory manuals and othersupporting (loose-leaf) materials (e.g., workshop modules, laboratory exercises),
and eventually textbooks. The TEDC would play an active role in defining thepurpose and design of particular materials but would contract authors to write
them; author teams would include engineers (from industry, ITB and elsewhere),industrial workers, polytechnic staff and specialists (publishers, editors,teachers) in design, development and use of instructional materials. Technicalassistance would be provided under the project for local specialists toassist with materials development. Polytechnic staff would assist in testingand revising new and the adapted materials.
3.18 Outputs. The first polytechnic students would graduate in June1985. Beginning in 1986, total planned output of about 1,330 graduates per
year (470 each in civil and mechanical engineering and 390 in electricalengineering) would be achieved. In view of the general shortage of engi-neering technicians, polytechnic graduates should find employment within areasonable amount of time after graduation (paras. 2.29-2.30).
3.19 Evaluation and Planning. A planning and performance monitoringsystem would be built into the project's technician training component. The
monitoring system would be set up with assistance from the technical advisorsand would be implemented jointly by the polytechnics and the TEDC. Thepolytechnics would be responsible for record keeping on enrollments, dropouts,repeaters, employment performance of graduates, and results of trainingprograms and staff development. Polytechnic staff would analyze these datafor their respective institutions. The research and evaluation section in
the TEDC would be responsible for coordinating analysis of this informationon a cumulative basis and for initiating and analyzing graduate tracerstudies to determine the relevance of polytechnic training, success inplacing graduates in industry and graduate performance on the job. The TEDCwould recommend changes in polytechnic programs and procedures needed to
improve effectiveness, and these would be implemented with the approval ofthe UMDP.
3.20 In addition, a review of the polytechnics would be conductedduring 1984 by a team consisting of representatives from the Consortium ofTechnology, BP3K and with professional engineers who would be potential field
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supervisors of polytechnic graduates. The focus of this review would bewider than that of the monitoring process: it would determine how far thetechnician training component is achieving its objectives under the projectand identify its strengths and weaknesses. The results of the review wouldserve as a basis for strengthening diploma level training and for possiblesecond phase Bank Group assistance. The project would provide technicalassistance to assist with the review. During negotiations, the Governmentprovided assurances that it would conduct a review of the project techniciantraining component and submit it to the Association by December 31, 1984.
3.21 The UMDP, charged with overall implementation of the project,would further supervise implementation of two studies designed to improvethe information system for planning and management for higher education(paras. 2.09-2.10). The first of these studies would seek to establish asystematic base for middle and higher level manpower analysis. It would becarried out by staff of the Manpower Planning Office of the Departmentof Manpower and would complement ongoing investigation assisted by the ILO.(The ILO would assist with developing terms of reference for the manpowerstudy.) The second would involve a series of substudies on issues in highereducation (i.e. financing, structure, determinants of student flows and useof facilities and staff) to be carried out under contract by universitypersonnel. The project would include the financing of expert services insupport of these two studies. -
Accountancy Training (Proposed Outlay, US$5.2 Million, excluding contingen-cies).
3.22 Objectives and Scope. This component is designed to upgrade theaccountancy training both in universities and the Ministry of Finance. Thequality of such training is presently inadequate (paras. 2.32-2.35) andhinders the modernization of accounting practices at all levels, both in thegovernment and the private sector. This component of the project wouldhelp to alleviate the present constraints to effective accountancy trainingthat can be attributed to limited trained faculty and lack of appropriateteaching materials and facilities at both secondary and tertiary levelinstitutions. This would be achieved by establishing three accountancydevelopment centers (Centers) within university faculties of economics and afourth at the Ministry of Finance accountancy training school, STAN.These Centers would:
(a) provide training to upgrade accountancy instructors and practicingaccountants;
(b) develop improved courses and teaching materials relevant toIndonesia's public and private sector accounting and auditingneeds; and
(c) carry out practice-oriented research projects to improve Indonesia'saccounting methods.
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3.23 The project would finance:
(a) the rental of facilities for use by the university Centers,the conversion of existing facilities at STAN, and furniture forthese facilities;
(b) instructional materials and equipment;
(c) program development for the Centers (training programs,research contracts and evaluation); and
(d) related technical assistance.
3.24 Organization and Management. The organization of each Center is shownin Chart 3.2. The staff of each Center would consist of a director, an asso-ciate director, two program officers, six instructors (full-time equivalent) andsupport staff. The proposed schedule for appointment of ADC staff is as follows:
(a) directors, January 1979;(b) associate directors, February 1979; and(c) program officers and instructors, April-December 1979.
Management staff would be selected from senior university and STAN accountancyteaching staff, while instructional staff would be recruited from full- orpart-time university and STAN instructors and from qualified graduate students.The director of each university Center would be administratively responsibleto the dean of economics; the director of the STAN Center would be responsibleto the head of STAN. For purposes of program development and implementationof the accountancy component, directors would report to a project managementauthority in the DGHE. Each Center would develop and monitor its own trainingprograms and materials development and research projects. Overall coordinationwould be provided by an executive committee made up of the directors of eachCenter, one of whom would be its chairman.
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Chart 3.2: ACCOUNTANCY DEVELOPMENT CENTER ORGANIZATION
DIRECTOR
Assoc. - Director
Secetry
MaterialsTraining Development, Research Clearing
and Evaluation House
Istructors
3.25 Locations. The university Centers would be located at the universi-ties of Indonesia (Jakarta), Gadjah Mada (Yogyakarta) and North Sumatera (Medan).These institutions are among the few that have established accountancyprograms and staff capable of providing the required professional leadershipand expertise. The Center at STAN is included because of the Ministry ofFinance's important role in public accounting and auditing.
3.26 Enrollments. The potential participants and planned training atthe university Centers and the STAN Center are given in Tables 3.6 and 3.7respectively. By 1981, the university Centers would each provide upgradingannually for about 480 teaching staff of university departments of accounting,practicing accountants and bookkeeping teachers; the STAN Center wouldupgrade annually about 800 Ministry of Finance accountants and budgetofficials. In addition, some 2,500 accountancy instructors and practitionerswould attend workshop, lecture and seminar series given by the four Centers.
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Table 3.6: UNIVERSITY ACCOUNTANCY DEVELOPMENT CENTERS - POTENTIALPARTICIPANTS AND SCHEDULED ANNUAL TRAINING
University Centers Number of Partici- Annual man-potential participants courses pants per months train-
Indonesia Medan Gadjah Mada per Center course Duration ing per Center
UpgradingUniv. & AcademyInstructorsA /a 160 65 70 2 30 2 mos. 120B /a 100 90 245 2 30 2 weeks 120
Practicingaccountants /b 200 150 150 1 20 2 mos. 40
Bookkeepingteachers 1,040 1,290 1,200 6 40 2 weeks 120
2 25 2 weeks 25
Workshops 500 305 465 25 20 1/2 week 60
Lecture Series 500 305 465 24 30 1 session 25Total 515
|a A includes universities and academies in city where Center is located; B includesuniversities and academies within the region but outside the city where Centeris located.
/b Training programs would be offered based on specific requests and as time andresources permit.
Table 3.7: STAN ACCOUNTANCY DEVELOPMENT CENTER - POTENTIAL PARTICIPANTSAND SCHEDULED ANNUAL TRAINING
STAN Center Annualpotential Number of Participants man-months
participants courses per course Duration training
UpgradingSTAN instructors 60 4 15 3 mos. 180Government and publicenterprise accountants 1,800 15 40 2 mos. 1,200
State budget officials 400 3 40 2 mos. 240
SeminarsSTAN instructors andgovernment accountants 2,000 52 25 1 session 45
Total 1,2665
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3.27 Staff Development. The project provides for 72 man-months (seeTable 3.7) of short-term (approximately 3 months) overseas fellowships forCenter instructors to develop courses and materials urgently needed to upgradeaccountancy training. Short-term fellowship training would be carried outduring 1978/79, but study leave related to development of the most vitalcourse materials would be given priority to enable the Centers to incorporatethese materials into their programs as soon as possible. Four PhD and eightMS level fellowships would be provided to the Centers' staff between 1979 and1982. Research grants would be awarded to four professors of accountancy to(a) improve their qualifications as teachers and researchers, and (b) undertakeresearch projects that support the Centers' development efforts. The executivecommittee would be responsible for selecting candidates for fellowships andawarding research grants. In addition, each Center would be assisted over atwo-year period by a team of two experts. Since existing teaching staff atthe universities and STAN would be jointly appointed to the Centers, recruit-ment of additional professional staff would not be required. The Centerswould require a small number of secretarial and other support staff.
Table 3.8: ACCOUNTANCY DEVELOPMENT CENTERSSTAFF FELLOWSHIP TRAINING
Number of Totalfellows man-months
Three University CentersAccounting systems 4 12Management accounting 3 9Management auditing 2 6Financial accounting andauditing 3 9
Theory and researchmethodology 1 3
Macro accounting 2 6Governmental accounting 3 9PhD fellows 3 126Master's degree fellows 6 144
Subtotal 27 324
STAN CenterManagement auditing (government
sector) 2 6Management accounting 1 3Macro accounting 1 3Systems (government & stateenterprises) 2 6
PhD fellows 1 42Masters degree fellows 2 48
Subtotal 9 108
Total 36 432
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3.28 Training Programs. Training programs would attempt to improve thequalifications of accountancy teachers and practicing accountants at alllevels. At the university Centers, courses for university and academy instruc-tors and practicing accountants would initially focus on accounting andmanagement information systems, data processing, operational auditing, andmanagement and national income accounting. Training for bookkeeping teacherswould begin with elementary accounting and upgrading in basic bookkeepingmethods. STAN's training programs would emphasize management auditing andaccounting, financial accounting, government and budget accounting, dataprocessing and information systems, and national accounting. Teachingmaterials to be developed for these courses could subsequently be used byparticipants in their own institutions. The project would provide financingfor the training programs, including the cost of transportation and subsistencefor participants.
3.29 Materials Development and Research Projects. The executive committeewould be responsible for planning, selecting and coordinating teaching materialsdevelopment and research projects. Teaching materials development would includetranslating or writing eight standard textbooks, writing 10 Indonesian casestudies and developing course materials (outlines, study notes, problems andvisual aids) for 15 accountancy subjects (9 for university/academy instruction,3 for upgrading practicing accountants, and 3 for bookkeeping instruction).The executive committee would also be responsible for selecting qualifiedauthors/translators and research personnel. Four research projects would beimplemented under the project. These projects would be practice-orientedwith a potential for a short-run impact on accounting practices; they shouldbe within the competence of available staff and be completed, on average,within two years. Possible topics would include: uniform bookkeeping systemsfor small businesses, uniform accounting systems for plantations, and Indonesianstandards of auditing and financial reporting. The project would includefinancing for materials development and research contracts. During nego-tiations the Government agreed to submit annually for Association comment andthereafter implement a schedule for training, materials development andresearch programs at the four accountancy development centers.
3.30 Evaluation and Planning. A planning and performance monitoringsystem similar to that for the polytechnics would be established under theaccountancy training component. Each accountancy development center would beresponsible for supplying data on annual training programs, numbers of parti-cipants, materials development and research projects to the project managementauthority in the DGHE. A system for obtaining feedback on the relevance oftraining and materials provided would also be established; data would beanalyzed by the centers' directors and relevant DGHE project staff so thatrecommended improvements for training programs could be effected.
3.31 In addition, relevant staff within the UMDP would oversee imple-mentation of three planning studies designed to formulate recommendations forthe future development of accountancy training as well as business managementeducation and improved government accounting and auditing procedures (paras.2.36-2.38). The first study would focus on accountancy manpower requirementsby level and type of training and would be carried out under the auspices ofthe Consortium for Economic Sciences. The business management study, also to
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conducted under the Consortium for Economic Sciences, would attempt to definethe type of training required in the field of business management. The thirdstudy, to be carried out by the Ministry of Finance, would be undertaken forthe purpose of developing an improved government accounting and auditingsystem and training inputs required to implement it throughout the Governmentand public enterprise system. Financing of specialist services would beincluded under the project to support these studies. During negotiations, theGovernment submitted to the Association for its review terms of referencefor the above studies as well as for the two studies to be included under thepolytechnic component (para. 3.21).
Planning and Management Support (Proposed Outlay, US$15.6 Million, ExcludingContingencies)
3.32 Objectives and Scope. The project would provide technical assis-tance and professional services to support implementation of the projectand to assist the Government in strengthening planning and management inthe education sector, in particular in the higher technical educationsubsector. The first objective would be achieved through a combination offellowship training and specialist services and the second would be attainedthrough provision of specialist and professional services as summarized below:
Table 3.9: PLANNING AND MANAGEMENT SUPPORT
Specialist Services Fellowships /aIndonesian Expatriate Local ForeignNo. man- No. man- No. of No. man- No. of No. man-years years persons years persons years
UMDP - - - - 6 1.5
TEDC & Polytechnics 30 74.5 30 30 /b 64 36
ADCs - 16 - - 36 36
Planning andmanagement 215 38.5 - - - -
Total 245 129 30 30 106 73.5
/a Tables 3.3 and 3.8 provide the detailed breakdown for project staffdevelopment fellowships.
/b Excludes bursaries for prospective polytechnic staff and students.
The qualifications and experience of the major consultants financed underthe project and the terms and conditions of their employment would besatisfactory to the Association. Expatriate specialists would be phased outduring the last years of the project as local staff assume the relevantresponsibilities. During negotiations the Association and the Governmentagreed on procedures and criteria for awarding fellowships.
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3.33 TEDC and Polytechnics. Initially a team of specialists financedunder a cooperative agreement with a private Swiss agency (Swiss Contact)advised on administrative requirements, curriculum outlines and preparation ofmaster equipment lists and bidding documents for the polytechnics. Moreextensive technical assistance, comprising a team leader plus six specialistsin various fields, would assist the TEDC under the proposed project for aperiod of five years. In addition, 17 specialists would be assigned for aperiod up to three years each to assist the six polytechnics./l The teamleader and six TEDC advisors would begin arriving in July 1979. The otherexperts would be scheduled to arrive in accordance with individual polytechnicscheduling needs. The specialists would assist in the development of thepolytechnic programs through job analyses and the preparation of learningobjectives, curriculum details, detailed equipment lists, teaching materials(including laboratory/workshop manuals) and monitoring procedures. Theywould also assist in devising and executing training programs for polytechnicstaff and in the training of TEDC (counterpart) staff. An additional 30man-years of local specialist services would be included to support polytechnicmaterials development. Bursaries for about 3,500 prospective polytechnicstaff and students (at US$200 equivalent per year each) would also befinanced under the technical assistance component.
3.34 Accountancy Development Centers. Eight expatriate specialistswould be assigned in teams of two to assist each accountancy developmentcenter in developing and providing training courses, teaching materials anda monitoring scheme for a period of two years beginning in January 1980; theseexperts would have CPA, PhD in accountancy specializations or equivalentqualifications. In addition, the experts assigned to the STAN Center shouldhave a strong background in public management and auditing.
3.35 Planning and Programming Expatriate services (13.5 man-years)would be provided to assist with the second and third level manpower study(3 man-years), the business administration study (0.5 man-years) and the studyon government accounting and auditing procedures (10 man-years). A total of45 man-years of local experts would assist with educational planning study(20 man-years), the accountancy manpower study (10 man-years), the businessadministration study (5 man-years), and the government accounting and auditingstudy (10 man-years).
3.36 Another 25 man-years of expatriate services and 170 man-yearsof local services would be included mainly to provide assistance with procure-ment and implementation under this and ongoing education projects andpreparation of completion reports and future education projects. Includedis one man-year of local specialist services to enable the Government tocarry out its review of the polytechnic component under this project. Inaddition, this component includes financing (US$1.4 million equivalent) forprofessional services required to prepare future projects.
/1 The specialists would include experts in: technical teacher training;curriculum, materials and methods; mechanical prime movers; electricalgeneration and power distribution; workshop technology and production;construction; building service; electrical plant installation and manage-ment; mechanical plant installation and maintenance; construction organi-zation and management; and factory organization and management.
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4. PROJECT COST, FINANCING, IMPLEMENTATION AND DISBURSEMENTS
Project Cost /1
4.01 The total cost of the project is estimated at US$104 million equiva-lent (Annex 2). The estimated cost by project item is summarized in Table 4.1.
Table 4.1: SUMMARY OF COSTS BY PROJECT ITEM
Local Foreign Total Local Foreign Total--- (Rp billion) --- --- (US$ million) ---
Technician TrainingSix new polytechnics }Technician Education } 14.45 10.11 24.56 34.8 24.4 59.2Development Center }
Accountancy TrainingFour accountancydevelopment centers 1.36 0.82 2.18 3.3 1.9 5.2
Planning and Management 1.47 5.00 6.47 3.5 12.1 15.6
Total Base Cost 17.28 15.93 33.21 41.6 38.4 80.0
ContingenciesPhysical 1.73 1.59 3.32 4.2 3.8 8.0Price 3.74 2.90 6.64 9.0 7.0 16.0
Total Project Cost 22.75 20.42 43.17 54.8 49.2 104.0
A summary of the project cost by types of expenditure is given in Table 4.2.
4.02 Base cost estimates refer to December 1978 prices, including a 10%cost increase adjustment for 1979. Construction costs were estimated on thebasis of functional and economical accommodation schedules, preliminary sketchplans and recent bidding experience. Site development costs were estimated at
/1 The project was appraised and negotiated before the November 15, 1978,devaluation of the rupiah from Rp 415 to Rp 625 to the US dollar. Thefigures contained in this report are based on the exchange rate prevailingat negotiations (US$1 = Rp 415). A preliminary assessment of the impactof the devaluation on the local costs of the project (including contin-gencies) indicate that they would rise when expressed in rupiah termsfrom Rp 23 billion to Rp 31 billion, and fall in dollar terms from$55 million to $50 million. The foreign exchange component would remainunchanged in dollar terms, at $49 million. On this basis the proposedcredit would cover 52% of the total cost of the project.
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15-35% of construction costs (depending on availability of services, acces-sibility of sites and landfill requirement); professional services at 8% ofthe cost of civil works (construction and site development). Regional costadjustments were applied to the cost of civil works. Furniture and equipmentestimates were based on preliminary lists which are considered reasonable.The technical assistance program was costed as follows: US$12,000/man-yearfor fellowships for overseas training, US$80,000 to $90,000/ man-year forexpatriate specialist services; and Rp 2.5 million/man-year for local spe-cialists. Incremental operating costs were calculated for the period 1979-84.They include costs attributable to the project for development of the TEDC andthe ADCs; in-service training for (polytechnic) staff; materials development,production and distribution; and program evaluation. They further include netincremental salaries of polytechnic teaching staff (a portion of which repre-sents a years' preservice training to be undertaken by all such staff). Nodisbursements would be made from the Credit against incremental operatingcosts.
Table 4.2: SUMMARY OF PROJECT COSTS BY CATEGORY OF EXPENDITURE
Local Foreign Total Local Foreign TotalType of expenditure --- (Rp billion) --- --- (US$ million) ---
Civil WorksSite development 1.59 0.85 2.44 3.8 2.1 5.9Construction 5.49 2.95 8.44 13.2 7.1 20.3Professional services 1.02 0.26 1.28 2.5 0.6 3.1
Subtotal 8.10 4.06 12.16 19.5 9.8 29.3
Furniture & EquipmentFurniture 0.40 0.22 0.62 1.0 0.5 1.5Equipment 0.82 5.42 6.24 1.9 13.1 15.0
Subtotal 1.22 5.64 6.86 2.9 13.6 16.5
Technical AssistanceFellowships 0.29 0.41 0.70 0.7 1.0 1.7Specialists 0.61 4.57 5.18 1.5 11.0 12.5
Subtotal 0.90 4.98 5.88 2.2 12.0 14.2
Incremental Operating Cost 7.06 1.25 8.31 17.0 3.0 20.0
Total Base Cost 17.28 15.93 33.21 41.6 38.4 80.0
Contingencies 5.47 4.49 9.96 13.2 10.8 24.0
Total Project Cost 22.75 20.42 43.17 54.8 49.2 104.0
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4.03 Utilization factors for the project polytechnics would average 75%based on 40 teaching periods per week. Unit building costs would amount toabout US$220/sq m for school buildings, which is in line with building costsin the region (Malaysia, Philippines and Thailand). The capital cost perstudent place at a typical polytechnic would amount to US$7,400, comprisingUS$5,000 for civil works, US$300 for furniture and US$2,600 for equipment,books and materials. The per student cost is roughly equivalent to that fora similar Malaysian institution (at about US$4,150 in 1973 prices) underLoan 974-MA of 1974.
4.04 The foreign exchange component of US$49.2 million was estimated asfollows: civil works, 35%; professional services, 20%; furniture, 35%;equipment, 85%; technical assistance and studies, 90%; and incremental opera-tion costs, 15%. These percentages were derived by: (a) estimating the costsof civil works and locally manufactured furniture and equipment attributableto materials, labor, overhead, taxes and profit; (b) analyzing the c.i.f. costof imported furniture and equipment, inland transportation and insurance, andthe delivery and installation of furniture and equipment; and (c) estimatingthe costs of expatriate and local expert services to be provided.
4.05 The contingency allowance of US$24.0 million includes (a) physicalcontingencies estimated at 10%, and (b) price contingencies averaging 20% ofthe base cost. Price contingencies were calculated on the basis of theimplementation schedule (Annex 3) and expected annual price increases between1979 and 1985, as follows:
Table 4.3: ANNUAL PRICE INCREASES
Annual Percentages of Price IncreasesYear Local Foreign Total
Civil works, furniture 1979 9 7.5 8.5& professional services 1980-85 8 7 7.7
Equipment 1979 8 6.5 6.71980-85 8 6 6.3
Technical assistance 1979 8 7 7.i1980-85 8 7 7.1
4.06 Taxes amount to about 8% of the total project cost includingcontingencies. Project items imported by the project management authoritywould be exempt from customs duties and taxes.
Financing
4.07 The proposed credit of US$49.0 million would finance 100% of theforeign exchange cost, equivalent to 47% of the total project cost. TheGovernment would finance the remaining 53%. At full operating capacity,programs at the project institutions would require recurrent expenditures ofUS$5.1 million equivalent (1977 prices) which represents an increase of 1%over recurrent public education expenditures in 1977.
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Implementation
4.08 Management. The project would be implemented by the Directorate
General for Higher Education in the DEC. A Unit for Management of Diploma
Programs within the Directorate has been established under a decree by the
DGHE and would serve as the project management authority. The Minister of
Education and Culture has appointed a member of the Unit as Project Director
with broad responsibility and authority to implement the project. For purposes
of implementation, a procurement officer and architect and subunits to manage
associated studies and the accounting component of the project would be
attached to this office (Chart 4.1). During the period of project implementa-
tion, directors of the TEDC and the polytechnics would be directly responsible
to the member of the Unit for Management of Diploma Programs who has beenappointed project director.
Chart 4.1: ORGANIZATIONAL STRUCTURE FOR PROJECT MANAGEMENT AUTHORITYUNIT FOR MANAGEMENT OF DIPLOMA PROGRAMS
ANDPROJECT IMPLEMENTATION AUTHORITY
mhan
Member Responsiblefor Polytechnics &
Project Director
Asst. to theProject Director
_
Chief Chief Chef Planninhief Chief
Accountancy I Associated I Programming Budgeting Recruitment Liaio I ent Sre- I I laning IDvlopment..I..Studies..LiaiLin IProcur Construction,
Development Studi IA & Evaluation & Accting & Personnel meLnt ser Planning… J
Note: The Unit for Management of Diploma Programs is a body within the Directorate
General for Higher Education (indicated with solid lines) responsible for all diploma level
programs (including polytechnics). The project implementation authority (represented by
the entire figure) is the Unit or Management of Diploma Programs with additional
staff (indicated by the dashed lines) for specialized project functions, The Member
of the UMDP responsible for Polytechnics would simultaneously be Project Director.
World Bank - 19443
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4.09 Procurement Unit. Because of past inefficiencies in procurementfor education projects, the Government attaches priority to creating apermanent corps with expertise in this area. A central advisory procurementservice unit would therefore be established under the project. The unitwould be temporarily attached to the project management authority, andafter a trial period the unit would be given permanent status within the DEC.This unit would pool expertise in civil works and procurement of equipment andfurniture from various directorates general for execution of the project. Theunit would be provided technical assistance for local training of procurementofficers assigned to ongoing Bank Group-assisted education projects and forpreparing procurement manuals. During negotiations the Government providedassurances that it would establish by June 30, 1980 a central advisory procure-ment service unit with staffing arrangements satisfactory to the Association.
4.10 Professional Services. Professional services required for civilworks and procurement of furniture under the project would be provided by aconsortium of two or three consultant architects firms. Eight local qualifiedfirms have been short listed; final selection would be made on the basis ofproposals made by these firms. Preparation of site and sketch plans hasbeen completed for four polytechnics and is to be completed for the remainingtwo polytechnics and the TEDC by January 31, 1979. The project also includesfinancing (US$1.4 million equivalent) for professional services required toprepare future education projects (para. 3.36).
4.11 Sites. Lands for all project polytechnics except that in Bandung havealready been acquired. The site for the Bandung Polytechnic has been identifiedand an agreement in principle for its purchase has been reached with its ownersor their representatives. During negotiations the Government indicated thatfunds would be released to complete the transaction by December 31, 1978.
4.12 Implementation Schedule. Civil works would be carried out in threephases. Project construction would start in December 1979 and be completedin 1982. Procurement of furniture and equipment would start around 1980 andbe completed in 1982.
4.13 The Government has made substantial progress in an effort toexpedite detailed project preparation. Under the cooperative agreement withthe Swiss Contact Agency, financed by the Swiss Government in the amount ofUS$100,000, work has progressed on details of polytechnic curriculum outlines,master equipment lists, equipment specifications and bidding documents.Swiss Contact submitted a report in this regard on October 15, 1978. Siteshave been acquired for five polytechnics, and acquisition of the remainingsite is to be completed by December 31, 1978. Architectural sketch and siteplans have been completed for four polytechnics. A decree outlining theframework of the project organizational structure has been issued and aproject director has been appointed. Based on this organizational frameworkthe Director General for Higher Education plans to issue in early 1979separate decrees to establish administrative subunits for accountancy,procurement, associated studies and civil works; and authorize the organiza-tional structure of the technician education development center, the fouraccountancy development centers and the six polytechnics. During
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negotiations the Government and the Association agreed that the schedule toissue the decrees in January 1979 is appropriate and that key staff to theproject management authority would be appointed as follows:
Deadline forPositions appointment
Unit for Management of Diploma Programs- Chairman Appointed- Member Responsible for Polytechnics and Director of Project Appointed- Chief, Planning & Programming and Project Education Officer 1/31/79- Chief, Budgeting and Accounting and Project Accountant 1/31/79- Chief, Recruitment and Personnel and Project Personnel Officer 4/30/79- Chief, Liaison and Project Liaison Officer 6/30/79Other- Chief, Accountancy Development 1/31/79- Chief, Procurement Services 1/31/79- Chief, Construction Planning and Design 1/31/79- Chief, Associated Studies 1/31/79- Sub-PIU Chiefs (6) 12/31/79TEDC- Director 4/30/79- Chief, Program Development 7/31/79- Chief, Staff Development 7/31/79- Chief, Research and Evaluation 7/31/79- Chief, Public and Industrial Liaison 7/31/79Institutions- Heads of Accountancy Development Centers (4) 1/31/79
During negotiations the Government provided assurances that it wouldmaintain the project management authority, the technician education develop-ment center, the six polytechnics and the four accountancy developmentcenters during execution of the project and keep them staffed with qualifiedpersons. A condition of effectiveness for the credit would be to signcontracts for professional (architectural) and technical assistanceservices required for all polytechnics.
4.14 Procurement. To the extent practicable civil works and procure-ment of furniture and equipment including vehicles would be grouped to formattractive bid packages. Contracts for civil works above US$500,000 wouldbe awarded on the basis of international competitive bidding in accordancewith Bank Group guidelines for procurement. In bid evaluation local contractorswould be given a domestic preference of 7.5%./1 Contracts below US$500,000would be awarded on the basis of competitive bidding advertised locally
/1 The domestic preference of 7.5% is based on a GNP per capita of US$240in 1976. Since the project was discussed and appraised with the Governmentbefore June 1978 when new guidelines for eligibility for domesticpreference were issued, Indonesia's eligibility for the preference iscontinued in this project.
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following procedures acceptable to IDA and subject to an aggregate amount of
US$6.0 million. Prior IDA review would be required with respect to contract
awards for civil works estimated to cost US$200,000 equivalent or more.
4.15 Equipment, vehicle and furniture packages over US$50,000 equivalent
would be awarded on the basis of international competitive bidding in accor-
dance with Bank Group guidelines. In bid comparison, local manufacturers would
be allowed a preferential margin of 15% on the c.i.f. cost of equipment or
the customs duty, whichever is lower. Equipment, excluding vehicles, and
furniture that cannot be grouped to form packages of US$50,000 equivalent or
more would be awarded without prior IDA review on the basis of competitive
bidding advertised locally under procedures satisfactory to IDA, subject to
an aggregate amount of US$3.0 million. Miscellaneous items, in packages each
costing less than US$10,000 equivalent and subject to an aggregate total not
exceeding US$1.5 million equivalent, could be purchased through prudent local
shopping on the basis of at least three price quotations and a maximum of
nine vehicles could be purchased through prudent local shopping on the basis
of a minimum of three price quotations. Instructional materials and books
produced outside Indonesia would be procured through international shopping,
also on the basis of a minimum of three price quotations. Books produced
locally would be procured on the basis of competitive bidding advertised
locally under procedures acceptable to IDA or, where appropriate, from
publishers after negotiations for bulk purchases. During negotiations an
understanding was reached between the Government and the Association that if
existing restrictions on vehicle imports are not waived to allow international
competitive bidding, the vehicles (excepting those needed for the start-up
period) would be financed by the Government. During negotiations the Govern-
ment provided assurances that it would submit to the Association for comment
by December 31, 1980, and thereafter implement, an equipment maintenance and
inventory control system.
Disbursements
4.16 The proposed credit of US$49.0 million equivalent would be disbursed
over a period of six years as shown in Table 4.4.
4.17 Disbursements would be made on the basis of:
(a) 35% of the cost of civil works;
(b) 100% of the cost of professional services;
(c) 100% of the c.i.f. cost of imported furniture, materials and
equipment, 95% of the ex-factory cost of locally manufactured
furniture, materials and equipment, 65% of the cost of imported
furniture, materials and equipment procured locally and 40% of the
cost of locally procured vehicles; and
(d) 100% of the cost of fellowships and expert services.
To the extent practicable, withdrawal applications would be aggregated in
amounts of US$50,000 or more prior to submission to IDA for reimbursement
out of the proceeds of the proposed credit. It is recommended that the
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Association provide retroactive financing for up to US$200,000 of thetechnical assistance costs incurred after July 1, 1978 for finalization ofsketch and site plans, master equipment lists, and specifications andbidding documents. Disbursements are expected to be completed by June 30,1985. During negotiations the Government and the Association agreed onprocedures for an annual audit of project expenditures.
Table 4.4: SCHEDULE OF DISBURSEMENTS FROM CREDIT
Accumulated UndisbursedIDA Fiscal Disbursements Disbursements Balance
Year Semester -----------------…US$ millions…---------------
FY80 1 0.1 0.1 48.92 0.2 0.3 48.7
FY81 1 0.2 0.5 48.52 0.5 1.0 48.0
FY82 1 3.0 4.0 45.02 3.5 7.5 41.5
FY83 1 8.0 15.5 33.52 10.0 25.5 23.5
FY84 1 6.5 32.0 17.02 6.0 38.0 11.0
FY85 1 6.0 44.0 5.02 5.0 49.0 0.0
5. BENEFITS AND RISKS
5.01 Higher education in Indonesia is characterized by poor averagequality, a high degree of inefficiency and underfinancing. The trainingprovided is biased towards the social sciences and degree level programs;systematic planning for alleviation of technical manpower constraints, inparticular at the diploma level, has not yet been undertaken. The proposedproject would address these weaknesses. It would introduce a new system oftechnician training; improve the quality of accountancy training and practice;and assist the DGHE to systematically expand collection and analysis of datarelated to higher education.
5.02 Benefits. The main benefits expected from the technician trainingcomponent would be improved quality and expanded output of engineering techni-cians. These would be achieved through establishment of an effective systemfor managing and developing technician training and through provision of thesix polytechnics. At full operating capacity, annual output from the
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polytechnics, at about 1,330 graduates, would constitute a 45% increase overpresent levels of output from technician training programs and would meet about12% of estimated annual requirements for trained technicians between 1986 and1990 (para. 1.08). Part of the deficit would be met through a combination ofoutput from existing technician training institutions and in-service programsand the rest through upgrading of skilled workers through on-the-job experience.Further expansion of institutions could be undertaken to balance supply anddemand of trained technicians after the polytechnic system introduced throughthe project has been fully established. In addition, policies and programsdeveloped by the Unit for Management of Diploma Programs would have an impacton the quality and efficiency of other public and private diploma leveltraining institutions. The accountancy component would assist the Governmentto strengthen the quality of accountancy training and practice in the publicand private sectors through development of teaching staff and improvedcourses and materials. It would further pave the way for expansion ofaccountancy training in accordance with economic requirements. On an annualbasis each of the three university accountancy development centers wouldprovide upgrading for nearly 500 accountancy instructors and practitioners.About 800 (nearly 40% of total) Government accountants and budget officerswould receive upgrading at the STAN center each year. Their participation incourses on modern Government auditing procedures would contribute to improvingGovernment financial management, planning and decision-making. The associatedstudies would assist the Government in rationalizing development of thehigher education subsector and in modernizing its accounting and auditingsystem.
5.03 Risks. Achievement of anticipated benefits would depend largelyon recruitment and training of teaching staff. There is a risk that adequatenumbers of qualified staff could not be readily recruited to run the polytech-nics on a full-time basis. Recognizing that it would be necessary to recruitsome initially underqualified staff, the project would provide intensivepreservice training and in-service support for polytechnic teachers. Tofacilitate implementation of preservice training, bursaries would be used topermit early recruitment of appropriate numbers of staff. In addition, apolicy to encourage employment of experienced part-time staff would bepursued. A related concern is that the polytechnics, located within univer-sities, could be relegated to second class status within the more academicenvironment of the university. The structure and organization of thepolytechnics have, however, been designed to allow for semi-independencefrom the universities. Further support would be provided by the Unit forManagement of Diploma Programs through its responsibility for settingstandards and procedures for the development of technician training, and bythe TEDC through its responsibility to develop relevant instructionalmaterials and train polytechnic instructors. More generally, the monitoringsystem built into all project components should serve to highlight deviationsfrom project objectives during initial operations and to provide the basisfor possible corrective action.
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6. AGREEMENTS REACHED
6.01 During negotiations the Government and the Association agreed on:(a) schedules for staff appointment and training (paras. 3.15 and 4.13);(b) procedures and criteria for award of fellowships (para. 3.32); (c) aschedule for establishment of relevant organizational structures (para. 4.13);and (d) annual audit procedures (para. 4.17).
6.02 During negotiations the Government provided assurances on:(a) timely establishment of industrial advisory boards for project insti-tutions (para. 3.07); (b) evaluation of technician training (para. 3.20);(c) development of training, materials and research programs at accountancytraining centers (para. 3.29); (d) staffing and maintenance of projectorganizations (para. 4.13); and (e) a system for maintenance of control ofequipment (para. 4.15).
6.03 A condition of effectiveness of the credit would be to sign contractsfor professional (architectural) services for all polytechnics and technicalassistance for the polytechnic programs (para. 4.13).
6.04 It is recommended that the Association provide retroactive financingfor up to US$200,000 of the technical assistance costs incurred after July 1,1978 for preparation of project components.
6.05 Subject to the above conditions, the proposed project constitutes asuitable basis for an IDA credit of US$49.0 million equivalent to the Republicof Indonesia for a term of 50 years, including a 10-year grace period.
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U .
COMPARATIVE EDUCATION INDICATORS (CONTD) ANNEX I PAGE 2
NOVEMBER S, 1978
I I GNPO I I GNP it TOTALS% OF PUBLIC I I I iPRI. EAV,PRI. I aSEC I I ICAPITAI DEVOTEDIPUBLIC I EDUCATION ILITER- I PRI. ICOMPLE. I5TU. ISCH.TEACHIPROGRESSI1 SEC. ISTU- IHIGMER:I I AT I TO IDU.1 EXP. I RECURRENT lACY ,ENROLL,TION :DENTSIBALARY INSION RATE IENRULLIDENTSiENAOLLII gMARqETg CPUBLIC:DEVOTEDIEXP ALLOCATED: RATE IRATIO IRATE FORIPER $RELATION IFROM PRI.IRATIO IPER IRATIO a
* O.:P1ICFSu ICR a TOU :I.TOC. act1 OF I: NET *PRI.SCM.:TEACH, TO GNP/ ITO SEC. INET :TEACH; GROSS,YRIM'LRLS.I CusS) ONLY ED.:~I SEC I.ADU LTS) (I) C YCLEIK)ER ICAPITA I(II I (I ER I M
a (1) ii - (2i a Cl3) I (-4 I (5) I (6) I (7) I(8) I (9) 1 010) I ( 11) 312) I 1(13) 1 ( 10 3
ASIA AND OCEANIA
AFGHANISTAN 71M; 14.3 1tOG 1.5 11.6 447 1 Is1 12 290X~ 37 3.IG 62 Bk 11 1.01
BANGLAQEIM 73 78.6F 900 1.2 20,2 ANy 22Y 210 23D 56k . .. ABC ... ... 2300 28CHINA(TAIAAN) 73 16.OF 9350 3.2 1A.C 28 RI 22 52 98C 94 40 1'm.0 84 61C 26 .400-CCINDTA 75 605.1 140 2.6VY ... ....... 295 6500 ... 43A ... ... 290Y 20AY 2.34EvINDONESIA l6 130.2 240 0.0 11.0 26 32 15 605 19EX 43E ICE 2 .0 52E 19EX IAE 2.00IRAN 73 33.aF 1,660F 3.3 12.6 508 ISV I2B sC 77 74A 32 5.06 80A 24 32 A. 32C YIRAQ 75 11.1 1,250 6.TC 16.3DR ..... ... 26C 93Cy . .,. 22 .. .. 350y 26C a 470JORDAN 73 2.TF sseOF 1 .0 8.8 52 15 21 59 9fC 76( 38 5.0 A s0x 22 41 :0DKOREA 75 35.3 560 2.9 16,09 65 33 2 920 iCAC 98 52 3.5 71 Six 38 7.8LEBANON 72 3.2F 1,oToF 3. 5 18,0 39 AC 10 68 56 65 I9 2. 0 63 260 25 .43.0 0MALAYSIA 16 1 2.6 660 6.1 26. 0 42 34 15 6CC 95 93 32 3.17 78 48 28 3.0 0NEPAL lt 12.6F 1)0F 1.1 10. 0 29 20 VI 19 59 25 31 2 .3 64 IA1 2k 0.8aOMAN 12 0.8F 2,3C~F l.lN 3.8 96 - - 20 24X 99 33 7. 0 ... 0 .45 9 ..PAKISTAN 75 69.2 16 0 1 .6 I6 2 a45 as 18a 2 1 All SC 39 2. C .. . 11 7 IV 6,.0 0PAPUA N4.G. 7 5 2. 8 410 5.6 I16 .1 38 1 6 241 32 57? l3P 3 1 1 1. 0 90a 1207 24, 0.907PHILIPPINES 74 42.2F 3600 2.5 14.9 13 is 12 51 ICAC .,. 341 15.0 ., . 4 60 . .. .41.00,SINGAPORE 7A 2.3F 2,"5oF 2.70 A.2v 39Y 39Y 17Y 75A 10900 12A 310 ... 994 44XY 214 l.66YSYRIA 15 7.4 720 3.6 6,9 39 25 26 53 89 10 35 2.0 92 415 21 12.00THAILAND 13 41.9F 3500 A.ONF 20.10 65 9 15 82 87x 93C 32 3. 0 U 9IC 210 2"1 2,00TURKEY 713 40.2F 90OF 5.6CY 20.6CYv... .. ..... 850 ... 340Y ... . .. 2kY 27DY 5,83YYE
MEN 73 5.90 2000 0.5 4,0 ASP ZIP 23P 10 150 IS 36 5 .0 15 20v 19 0.YSRY
YEMEN P,D,R, 76 1.7 280 6.6 ... 5 7 28 B 20 890 C8 30 5.0 94 21 2 i4 0.00
SUMMARY FOR DEVELOPING COUNTRIES,
NUMBER OF COUNTRIES, 82 79 77 72 13 lb BA 59 84 56 63 83 40 04
MANGE: ~~~~~~~~~~~~~~(0.5- ( 3.8. ( 25. (5- (2- (3- (14.- 013- ( 19- ( 1.9- (7- 1'. (9- (01 -12. 0 )1 33,0) 96 1 47) 41 98) 1 330) 99 69 25. 0 1 99) AC 39 2 3.0)
IUARTILESIUPPEM 5.1 21.2 54 32 22 13 94 76 46 7 83 36 25 1.0MEDIAN: 3.9 16,3 45 23 18 s0 iB 55 36 4 63 17 23 2.3LOwER a3. 0 12. 4 38 lB (2 20 53 30 32 3 0i3 9 2 0 .4
SYMMOLS:... DATUM UNAVAILABL ----E...... ----970--OR--BEFORE MUCURRENETS P----ICES-------CE----MAGNITUDE NIL OR NEGLIGIBLE 83,1971 NSGDPQUESTIONABLE C:1972 PUINCLUDING FOREIGN I10 COLUM;NS:) AND 2 WORLD BANK ATLAS
*INCLUDES PART.TIME STUDENTS D:1973 OSCENTRAL GOVT. ONLY OR IARD MISSIONSW. COMBINED WITH PRIMARY Es1A7A RtMINISTRY OF EDUCATION (MOE) ONLY 3 TO la 0a80 MISSIONS
MMM UNDER REVIEW 0:1975 $-MOE AND STATE GOVT. ONLY AND/OR UNESCOGx1916 TREXCLUDING CENTRAL GOAT. STATISTICAL
URPUBLIC ONLY YEAABUOKVSINCLUDING PRIVATE EXPENDITUREXxINCLUDING OVERAGED STUDENTS
YEUNESCO SOURCES
COMPARATIVE EDUCATION DATA ARE USEFUL IN THE EVALUATION OF VARIOUS EDUCATION SYSTEMS AND ANALYSIS OF RELATIVE STAGES OF EDUCATIONALDEVELOPMENT BETMEEN VARIOUS COUNTRIES. HOWEVER,ON THE BASIS OF THE PRESENT DATA,CROSS.NATIDNAL COMPARISON SHOULO BE APPROACHED .ITHGREAT CAUTION. DATA PRESENTED IN THE ABOVE TABLE HAVE BEEN COLLECTED LARGELY BY THE BANK MISSIONS FROM GOVERNMENT SOURCESJ TH'EREMAINDER ARE STAFF ESTIMATES OR DATA FPOM UNESCO. EFFORTS HAvE BEEN MADE TO STANDARDIZE DEFINITIONS AND WITHIN LIMITS, TO CHECK THEACCURACY OF THE DATA. NEVERTHELESS,SUCH DATA ARE STILL IMPERFECT IN SEVERAL RESPECTS AND THE BANK IS WORKING TO IMPROVE THEMPROGRESSIVELY ON THE OCCASION OF ITS OPERATIONAL WORK, IN THE USE OF THESE DATA, THE FOLLOWING QUALIFICATIONS SHOULD BE BORNE INMIND,
(I)EDUCATION' AS DEFINED IN THE TABLE INCLUDES ALL EDUCATION AND TRAINING, FORMAL AND NON-FDMMALI(2ZIPRIMARY EDUCATION REFERS TO EDUCATION AT THE FIRST LEVEL AND "SECONDARY" EDUCATION REFERS TO ALL EDUCATION AT THE SECONDARY
LEVEL REGARDLESS OF TYPE (E.G. GENERAL, TECHNICAL, AGRICULTURAL) I(31'LITERACY RATES"CCOL.61 ARE OFTEN OBTAINED FROM COUNTRY CENSUSES. IN MANYCOUNTRIES THEY ARE ONLY APPROXIMATIONS AND IT Is
DOUBTFUL THAT ANY UNIFORM DEFINITION OF "LITERATE' HAS BEEN FOLLOWED CONSISTENTLY:(A)
TMPUBLIC EXPENDITURE IN EDUCATION'ICOLS.3,A AND 51 REFER TO ALL CAPITAL AND RECUJRRENT EXPENDITURES DEVOTED To EDUCATION BY
PUBLIC AHD QUASI-PUBLIC AGENCIES:(5)"ENROLLMENT RATOOSM(COLS 7, 12 AND 1k) REFER TO SCHOOL YEAR AND MEAN THE PERCEN4TAGE OF ELIGIaLE CHILDREN ENROLLED FULL.TIML
IN THE APPROPRIATE SCHOOL, PUBLIC AND PRIVATE BY LEVEL. THEY ARE OFTEN SUBJECT TO A WIDE MARGIN OF ERROR IN THE DEVELOPINGCOUNTRIES OWING TO VARIATTION IN THE ACCURACY OF BASIC DATA(I.E. AGE-SPECIFIC POPULATION AND ENROLLMENTS). ENROLLMENT FIGURESFREQUENTLY ARE HIGHER THAN THE NUMBER OF STUDENTS ACTUALLY IN SCHOOL, OVERAGED) STUDENTS WHOSE INCLUSION IS INDICATED ByFOOTNOTES ALSO CAN INFLATE THE RATIOS,
ANNEX 2
INDONESIA
SEVENTH EDUCATION PROJECT
Polytechnics Project
Estimated Cost(in Rp billion & US$ millions)
Civil works Furniture & equipment Technical assistance InitialSite Construc- Prof. Furni- Equip- Special- operation Total Totaldev. tion serv. Total ture ment Total Fellows ists Total cost in Rp. in US$
Technical Training_Local 1.587 5.475 0.558 7.620 0.371 0.756 1.127 0.292 0.075 0.367 5.810 14.924 35.961
Foreign 0.855 2.984 0.140 3.943 0.199 5.038 5.237 -0.232 -- 7-.692 2.924 0. 832 12.934 31.166
Total 2.442 8.423 0.698 11.563 0.570 5.784 6.364 0.524 2.767 3.291 6.640 27.856 67.127
Accountancy TrainingLocal - 0.009 0 002 0.011 0.032 0.067 0.099 - - - 1.245 1.355 3.265Foreign - 0.005 0.001 0.006 0.018 0.383 0.401 0.179 0.598 0.777 0.415 2.599 3.853
Total - 0.014 0.003 0.017 0.050 0.450 0.500 0.179 0.598 0.777 1.660 2.954 7.118
Associated StudiesLocal 0.535 0.535 0.535 1.289Foreign 1.278 1.278 1.278 3.079
Total 1.813 1.813 1.813 4.368
Preparation Future ProjectsLocal 0.465 0.465 1.120Foreign 0.116 0.116 0.289
Total 0.581 0.581 1.400
TotalLocal 1.587 5.484 1.025 8.096 0.403 0.823 1.226 0.292 0.610 0.902 7.055 17,279Foreign 0.855 2.953 0.257 4.065 0.217 5.421 5.638 0.411 4.568 4.979 1.245 15.927
Total 2.442 8.437 1.282 12.161 0.620 6.244 6.864 0.703 5.178 5.881 8.300 33.206
Total in US$Local 3.824 13.214 2.470 19.508 0.971 1.983 2.954 0.704 1.470 2.173 17.000 41.636Foreign 2.060 7.116 0.619 9.795 0.523 13.063 13.586 0.990 11.007 11.998 3.000 38.378
Total 5.884 20.330 3.089 29.303 1.494 15.046 16.540 1.694 12.477 14.171 20.000 80.014
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I
ANNEX 4
INDONESIA
POLYTECHNIC PROJECT
Selected Documents and Data Available in the Prolect File
A. Reports and Studies Related to the Project
A.1 Government of Indonesia, Diploma Level Technician and AccountancyTraining, Project Proposal, October/November 1977
A.2 Indonesia, Education Sector Survey Report, February 5, 1975A.3 Indonesia, Higher Technical Education, Subsector Memorandum, January 1978A.4 Indonesia, Industrial Census (1974/75), February 1977
B. Working Papers
B.1 Technician ComponentB.2 Accountancy ComponentB.3 Associated Studies, Draft Terms of Reference for the Accountancy
Manpower Study, Business Administration Education Study andGovernment Auditing and Accounting Study
B.4 Project Costs, Financing, Implementation and Disbursements
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