The opening up of Indonesian higher education must go further

Indonesian law has permitted foreign universities to set up in the country since 2012. However, to come into effect, a ministerial decree is required – and eight years on, we are still waiting.

Last November, however, Indonesia’s president, Joko Widodo, voiced a desire that foreign universities be allowed to operate in order to provide a benchmark for domestic institutions. And at the end of January, Mohamad Nasir, Indonesia’s minister of research, technology and higher education, announced that he would finally issue the decree.

That had not yet happened at the time of going to press, and one speculation is that he was merely testing the water. That is because many people in Indonesia fear that an influx of overseas universities could threaten the future of domestic institutions – even though the law requires foreign universities to partner with a local institution and to prioritise local academics in their hiring.

In his announcement, Nasir confirmed that these conditions would be imposed. He added that only private universities would be eligible for an overseas marriage, and that the foreign universities – of which he said 10 had already expressed an interest – must operate under the name of the Indonesian partner. When you consider that, according to Nasir, such internationally renowned names as the universities of Cambridge, Melbourne and Queensland have all expressed an interest in setting up in Indonesia, that is quite a stipulation.

Assuming the decree is made, the Indonesian government will also decide on the location of the partnerships and on which subjects they can teach. Nasir has reportedly indicated that the priorities are science, technology, engineering, mathematics, business and management.

There has been a lot of debate since the announcement was made. Bambang Soesatyo, the speaker of Indonesia’s parliament, reiterated concerns that foreign universities would threaten the existence of Indonesian universities. However, Jusuf Kalla, the vice-president, expressed support for Nasir’s move and contended that the foreign universities would target Indonesians who were looking to study abroad and would actually be beneficial for Indonesian universities by raising standards.

There are only four Indonesian universities – all of them public – in Times Higher Education’s latest World University Ranking, and all are outside the top 800. The same four institutions are all outside the top 200 of THE’s most recent Asia University Rankings, which surveys a total of 359 institutions. So it is clear that standards need to be raised – especially at private universities. Foreign partnerships would not only improve the universities directly involved but would also provide healthy competition for the entire sector. That is particularly the case given that Nasir has indicated that only “world-class” universities will be allowed into Indonesia.

But will such universities really want to take up his offer, given all the strings attached? It is hard to say because many details of how the law will operate remain unclear. For instance, will the legal requirement to prioritise Indonesian faculty result in hiring limits or seniority ceilings for international staff? While Indonesia has some high-quality existing faculty, bringing in foreign academics – or bringing home Indonesian faculty based abroad – might do more to improve quality, especially if the new recruits work alongside current faculty.

Furthermore, Indonesia needs to improve not only in teaching and research but also in university management. In that regard, it would be counterproductive to impose any limits on the kinds of management positions overseas recruits could occupy. However, it is still unclear whether foreigners will be allowed to be rectors, deans or even heads of department in the new partner institutions; about two years ago, there was fierce debate over government plans to recruit more overseas university leaders, with one former Indonesian rector suggesting that overseas recruits would lack sufficient understanding of the country. Some world-class universities might be put off from operating in Indonesia if they can’t appoint their first choices to leadership positions, regardless of their nationality.

Moreover, while the partnership scheme is a good move in the short term, the government also needs to consider allowing foreign universities to operate independently and without restriction in the future. This would do even more to drive up the overall quality of higher education in Indonesia and to improve the nation’s vital human capital.

Martin Surya Mulyadi is a senior lecturer in accounting and finance at BINUS University, in Jakarta, Indonesia. He is currently doing a doctorate in corporate governance at Bond University in Australia.