Sunday, 23 February 2014


In a new free market era called the ASEAN Economic Community to be effective on January 1, 2016 traffic of people, goods, services and investment would be free in Southeast Asia. The question is: is MEA blessing or disaster ? This was related to readiness of Indonesia’s human resources to compete against workers of other ASEAN states.

Indonesia with 240 million people is a huge  market, constituting 40% of Asean population. To Indonesian business people, chances to grab market opportunities from the 60% market outside Indonesia was great. But again the question was: how strong was the local industry to compete against industries of the neighboring countries ? Would Indonesia have the strengthen to grab southeast Asian market, or would things turn otherwise?

It must not happen that the vast Indonesian market would serve as sitting ducks for marketers of other countries. Over the past 10 years, the condition had been far from being impressive. Over that period, de-industrialization had been prevalent. Many factories were closed due to heavy import. The textile industry was heavily invaded, thousands of textile producers collapsed. For example, the Tanah Abang Market in Jakarta, which was the largest textile market in Southeast Asia, 80% of the products were imported products.

The same was with forwear industry. The shoe industry center in Cibaduyut Bandung had changed into a market of imported shoes. Although there were still some shoemakers who still persisted, the condition was most disheartening. Many other industries like cosmetics, jamu, infant food and electronics which were also losing steam.

The intra ASEAN free trade agreement put the local industry in a difficult position, they were losing their maneuverability. Indonesia would become a paradise of imported goods. The nation’s trading balance would be in deficit. The Government’s commitment to support local industry was under question.

Supposedly one of the national problems was to make competent personnel of high competitiveness those who were ready to work in industries. The matter would be complicated if MEA were effective in 2016. Even if it was said that Indonesian workers were not less competent than their competitors, they still lack of self confidence in competing.

Although by quality Indonesian workers were not inferior, their readiness to perform at regional level was still handicapped. The handicap was in terms of mental attitude and mindset, known as softskill. One of the thinkable solution was how stakeholders in education could develop softskill for Indonesian workers. Psychological instead of physical readiness was more needed by the industry, although many companies still set hard skill set hard skill as qualification at initial screening,

A sound example was that nearly all employment ads set certain Accumulative Achievement Index [IPK] as qualification requirement. Universities were racing to make competent personnel, among others high IPK qualification. The gap between schools and companies made Indonesia’s human resources less competitive internationally.

Deviation from the right principles must be stopped by conducting dialogue between the industrial and educational world. Some colleges were already doing that, still many schools pursuing to make skilled graduates. And yet workers of high integrity were those having high working ethos needed by the industry. Dialogue between schools and companies was just one of the alternative solutions.

Other thinkable solution was integrated curriculum from kindergarten to High School with more emphasis on soft skill. Development of soft skill was a long process of character building. Japan had been successful in building strong national economy thanks to the support of high quality human resources on account of their Government’s effort to make superior race of strong softskill since early age.

Education at tertiary schools which only took 4 to 5 years was felt as too short to make competent, soft-skilled personnel. The mission was in the domain of the Government, in this case the Ministry of Education and Culture.

To reform curriculum with emphasis on soft skill rather than hard skill was a hard challenge for the Government in view of the system applied at the elementary schools today. Today with reasoning to step up quality of education, many schools set high standard for their students.

Only trouble was there was too much focus on hard skill in the system instead of softskill. A clear example was education at kindergartens where children were stuffed with reading, writing and arithmetics lessons as prerequirement to enter elementary school. This was indeed not the right thing to do because children would miss their innocent and playful childhood whereby by playing they could acquire softskill the easier way.

Soft skill qualities such as discipline, honesty, and responsibility must be implemented instead of reading, writing and arithmetics. This was the area where the Government of Japan had been successful which was why softskills of their workers were above that of other nations.

Nation and character building in Indonesia must be enhanced. This nation had tremendous human potentials which would prove to be productive if they were armed with the right education. If this was realized, the myth that foreigners or overseas graduates were better would vanish. At least the best sons of the nation would have greater confidence to compete internationally.

Sin economic and trading liberalization, very frequently the Government of RI adopted policies which were paradoxical; so it came as no surprise that the execution afield were often discouraging in the effort to build competitiveness. Indonesia was aggressive in making market liberalization, only to be shocked to realize that the nation was not fully ready to compete.

In the banking industry, for example, it was easy to find foreign bank’s branch offices in the cities or even towns; but try to find a representative office of an Indonesian bank which could penetrate other countries: there was bound to be none. The Ministry of Industry MS Hidayat admitted he was anxious and worried about facing MEA. To be exact, he felt that Indonesia was not ready to join MEA. One of the causes was high logistics cost which was 16% of total production cost.

Yet in other countries logistics cost was normally not more than 4% - 10% of total cost. It was this high logistics cost that made Indonesian products lose competition internationally. High production cost in Indonesia was mainly on account of many factors like poor infra structure, mismanagement etc but the most incurable was corruption, illegal collection, collusion being tolerated or untouched.

Above all, human resources development was a crucial thing and of high urgency. There was still time for the Government and all stakeholders to prepare qualified and competence professionals to face MEA by January 1, 2016 next. This nation must not lose confidence, discouraged or feel inferior. To be determined was one of the main prerequisite in entering regional competition. It was better than being forlorn and be lost in self pity, regretting why this nation was not ready to enter MEA 2015. (SS)  

Business News - February 12, 2014 

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