Education in Indonesia: Opportunities open for Australia

13 January 2014 | By Jared Heath (Partner)

By 2030, Indonesia is projected to spend $42 billion educating its 135 million consumers. Yet it could also face a gap of 9 million workers educated to secondary and tertiary levels. It’s a gap that Indonesia is seeking to fill and Australia is able to assist.

Australia is already the number one destination for Indonesians studying abroad, with more than 11,600 Indonesian students in Australia.

Several Australian universities are already active in Indonesia, including Monash University, the University of Melbourne, ANU, RMIT and the University of Queensland.  Some have partnered with local institutions to offer foundation courses (which prepare Indonesian students for study in Australia), while others are establishing representative offices.[1]

New opportunities for Australian providers

Last year Indonesia’s parliament enacted the Higher Education Law.

The Law contemplates international co-operation in higher education and sets out the framework for foreign tertiary education providers to deliver undergraduate and postgraduate study programs in Indonesia.  In doing so, it opens a world of opportunity for Australian institutions.

Under the Law, foreign providers will be able to obtain a licence to deliver higher education in co-operation with Indonesian tertiary institutions.

Foreign providers must demonstrate that they are accredited in their country of origin and that their Indonesian operations are not-for-profit.  They must also prioritise engaging Indonesian lecturers and teaching personnel and support the national interest.

Foreign providers will need to meet minimum accreditation requirements and seek approval for their study programs.

The Law will be implemented through regulations which have not yet been issued.  This means the scope, structure and documentation for the co-operation between the foreign and Indonesian tertiary providers remain to be explored.

A current constraint

Following the passage of the Higher Education Law, the Ministry of Education and Culture received an overwhelming number of applications for new higher education institutions (HEIs) and study programs. 

As a consequence, the Directorate General of Higher Education has imposed a moratorium on establishing new HEIs and "academic" study programs until 31 August 2014.  The moratorium does not appear to apply to applications in relation to “professional” or “vocational” education.

Professional education is defined as higher education after completing a bachelor’s degree which prepares students for employment that requires a specific qualification, while vocational education is higher education of a diploma program which prepares students for employment with specific applied proficiency.  While the academic, professional and vocational categories are broad and may overlap, the good news is that the moratorium is not absolute.

Indonesia’s decision to open its higher education market to foreign tertiary education providers offers much promise for Australia’s institutions – one worth studying closely.

It’s an opportunity reflected in the Australian government’s announcement of a new Australian Centre for Indonesia Studies to be based at Monash University and involving ANU and the University of Melbourne.  The Centre demonstrates not only a commitment to strengthening bilateral links, but also the importance of education to the Australia-Indonesia relationship.

Jared Heath is a Senior Associate currently seconded to one of Indonesia’s leading law firms, Soemadipradja & Taher (S&T) as Foreign Counsel.  S&T is currently advising several Australian education providers on establishing a presence in Indonesia.  More information on S&T is available from its website.

Corrs is not licenced to practice law in Indonesia and this should not be construed as providing Indonesian legal advice.  If you would like further advice, please contact S&T.

  [1] For more information on establishing a Foreign Representative Office in Indonesia, refer to the article available here.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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Jared Heath

Partner. Melbourne
+61 3 9672 3545