Jakarta. Indonesia is enjoying strong economic growth, but investment in vocational education and tertiary training can help the country go from strength to strength, according to former Australian trade, tourism, and investment minister Steven Ciobo.

Asia today is the most significant continent in which investors should consider investing in, and Indonesia is a clear example of the region’s robust growth, Ciobo said.

The archipelagic country’s economic reforms resulted in sustained GDP growth. Indonesia is forecast to be the world’s fourth largest economy —with a projected GDP of around $10.5 trillion at PPP— by 2050. Indonesia has also shown commitment to drawing foreign investment into the country.

The ex-minister added that building the national capacity was among the key areas that could put Indonesia on a stronger footing in the years ahead.  

“In particular, the opportunity to invest in vocational education and training,” Ciobo recently told the 2022 Investor Daily Summit in Jakarta.

“The World Bank and the OECD [Organization for Economic Co-Operation and Development] have both nominated vocational education and training, and the ability to bring Indonesian children into the schooling system at an even younger age, as being the critical drivers of Indonesia’s growth in the future,” Ciobo said.

And this would include hospitality training in the tourism sector and vocational education for construction and plumbing, to name a few. 

Ciobo said, “those are examples of where with the appropriate investment by the government, Indonesia can go from strength to strength and build a true national capacity.”

Investment in training can also take Indonesia’s digital economy to the next level. For instance, further investment in English language training would help Indonesia export its digital services to other parts of the world such as Europe, Ciobo told the forum.

IA-CEPA and Vocational Training
As vocational education becomes pivotal for growth, Ciobo sees the potential for Indonesia to bolster cooperation with Australia in this sector by taking advantage of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

“The IA-CEPA affords Indonesians the opportunity to undertake vocational study either in Australia or based on an Australian-developed curriculum. This materially builds capacity,” Ciobo said.

“Scope now exists for domestic investment in Indonesia’s vocational education sector, coupled with, for example, Australian-derived intellectual property, to grow the sector and train tens of thousands of Indonesians with practical, job-ready skills in diverse areas from hair-dressing through to carpentry and plumbing,” he added.

The IA-CEPA has created a framework for stronger cooperation in vocational training. It has enabled Australian vocational education providers to establish training institutions in Indonesia with up to 67 percent ownership. It also opens up new possibilities for Indonesians to receive training in Australia and in Indonesia from Australian training providers.

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