Post on 27-Feb-2023
INDONESIA’S DEMOGRAPHIC BONUS AND ENGLISH NECESSITY
IN AEC 2015 AND BEYOND
Hesti Wijaya
University of Muhammadiyah Purwokerto
hestiwijaya1402@yahoo.com
Abstract
Indonesia is fast approaching ASEAN Economic Community 2015 as well as the top
ten economies in 2030. With all the competitiveness and the strengths of each ASEAN
Member State, the demographic bonus allows Indonesia to reap the benefits of a burgeoning
population to increases overall productivity and encourages economic growth with the
concentration in 180 millions youngest- and working-age population (those ages 15-64), and
only 80 millions dependent people (<15 or >64 years old). Meanwhile, aging population
problems turn out to be a looming economic and social burden in Europe, the United States,
the United Kingdom, Australia, Japan, Singapore, South Korea, Malaysia, and Thailand.
When the government is hardly able to provide adequate workplaces, the alternative is
preparing the younger generation with education to create qualified and professional
employees not only to work in Indonesia but also to compete overseas.
Evidently, most of Indonesian labor migrants overseas are uneducated and unskilled
(UNESCO, 2007). Their six biggest problems are: poor English skills (44%); computer
illiterate (36%); bad behaviours (30%); weak critical thinking (33%), lack of basic work
skills (30%); having higher education degree (7%). English competency is important as it is a
global lingua franca and has a big influence on workplace readiness and employment
outcomes for Indonesian youth to get better work positions. With the very high number of
working-age population and youth, English is highly necessary to prepare them to be able to
help Indonesian economic growth between 2015 and 2030 or even beyond for they can go
abroad as professionals without a communication burden.
Keywords: AEC 2015, skilled labor, demographic bonus, English Language Proficiency.
Introduction
ASEAN is rapidly approaching a new milestone. After the establishment of the
ASEAN Economic Community Blueprint on 20 November 2007 in Singapore by the leaders
of all ten member states, now the member countries are moving towards achieving AEC
goals with the timeline set on 31 December 2015. This is ASEAN‟s time to seize the moment
as it is located in the heart of the world‟s premier growth corridor; it has got a market of over
600 million customers and combined GDP of nearly US$ 3 trillion.
In assessing Indonesia‟s success of shortfall in AEC 2015 as well as its chance to be
the top ten world‟s economies in 2030, benchmarks are important to make. Some
practitioners believe that Indonesia will easily succeed in AEC as it is strategically located in
dynamic Asian region; it has good macroeconomic fundamental, especially among the six
member countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, and Viet Nam)
which is so-called ASEAN6; it has abundance of natural resources and biodiversity, wide
land area, wide ranging productive capabilities, and not to mention its favourable
demographics. Being the country with the largest population in the region and the fourth in
the world, Indonesia‟s customers are likely to be a great market for exporters. Other scholars
and policymakers, on the other hand, doubt Indonesia‟s readiness for AEC 2015. The
noteworthy challenge besides low capital endowments, limited infrastructure to facilitate
substantial trade flows, corruption endemic problem, and counter-productive foreign
investment regulations, is the low quality of its labor within its demographic bonus condition.
Demographic bonus is not entirely arduousness for Indonesia. It is likely to be a
blessing in disguise as this condition is a rare opportunity for all countries facing it. Such
phenomenon only happens once in a very long period of time and there might not be the
second chance (Reforma UGM, 2014). The great number of working-age population can
optimally support Indonesia‟s economic growth. Nonetheless, when the government is hardly
able to provide adequate workplaces, or when transmigration is no longer attractive to reduce
overpopulation, working overseas is a promising outlook for both the workers and the
national income.
Evidently, most of Indonesian labor migrants overseas are uneducated and unskilled
(UNESCO, 2007). Their six biggest problems are: poor English skills (44%); computer
illiterate (36%); bad behaviours (30%); weak critical thinking (33%), lack of basic work
skills (30%); having higher education degree (7%). English language proficiency is vastly
required as the means of communication when one is engaging in a global network. This
paper seeks to present a critical review on the importance of English language proficiency for
Indonesia‟s generations to contribute to the economic growth. It is in line with certain crucial
reasons, such as: (1) there is no adequate workplace in the home country; (2) being involved
in a broader and global economy requires a lingua franca; (3) free flow of skilled labor has
been established as one of the AEC core elements; (4) countries with the aging population
problems thus certainly need additional employees are mostly English speaking countries or
having English as the second language; and (5) many developed countries annually offer
fully-funded scholarships for preparing future generations and the first requirement is
commonly English language proficiency.
ASEAN Economic Community at a Glance and Professionalism
The Association of Southeast Asian Nations (ASEAN), established on 8 August 1967
in Bangkok, currently has ten member states, namely: Brunei Darussalam, Cambodia, Lao
Figure 1. AEC single market and production base core elements
PDR, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Viet Nam.
Besides engaging and collaborating in ASEAN Political-Security Community and ASEAN
Socio-Cultural Community, the ten members also formulated the Blueprint of ASEAN
Economic Community in 2007 in Singapore and hasten its establishment by 2015. An utmost
goal underlying these actions is to transform ASEAN into a stable, prosperous, and highly
competitive region with equitable economic development through joint endeavours in the
spirit of equality and partnership, as espoused in the ASEAN Vision 2020.
More specifically, AEC 2015 seeks to foster economic integration among the member
countries and envisages: (a) a single market and production base, (b) a highly dynamic and
competitive economic region, (c) a region of fully integrated into the global economy, and (d)
a region of equitable economic development (ASEAN Secretariat, 2008). The core goal to
ensure a single AEC market and production base is built on five pillars, as follows:
The quality of education of a country always positively correlates with the quality of
its labor. It is quoted from Nelson Mandela that „education is the most powerful weapon
which you can use to change the world‟ thus it is also noteworthy for poverty eradication and
employability improvement (Wijaya, 2014). For ASEAN member states to successfully
integrate into the ASEAN economy, their education system should provide graduates with the
requisite skills for the changing demands of labor market. This pace is certainly crucial since
ASEAN integration will bring about: (1) greater mobility of human resources, (2) demand on
competitiveness and/or quality of graduates, (3) greater regional cooperation on education
and research (UP FORUM, 2014). As manpower and intellectuality are always parts of a
change and development, AEC welcomes professionals and various talents, especially the
skills required in the priority services sectors.
Indonesia has to learn from its loss that depending on its great amount of natural
endowments, biodiversity, export commodity or even FDI will not be enough to succeed in
AEC highly competitive circumstance. A large pool of professional and skilled labor
becomes necessary. In short, what is wealth without intellectuality to manage it wisely?
The ASEAN countries agreed to facilitate the movement of professionals within the
region because foreign talents are sometimes essential to provide competition, stimulation,
and synergy to improve the quality and productivity of domestic talent (Chia, 2013). A bigger
consideration is also given to the eight prior fields for AEC 2015. These include engineering,
nursing, architecture, accounting, medicine, dentistry, hotel and tourism, and surveying (UP
FORUM, 2014). It becomes higher education institutions‟ roles within ASEAN region to
ensure that the graduates they produce in these fields in particular and in the other fields in
general do not only meet the national but also the regional qualification requirement. At least,
proper curricula must be developed consistently with the AEC 2015 qualification framework
requirements. Most importantly, HEIs provide their graduates with leadership, ICT, cross-
cultural understanding and English communication skills.
Indonesia’s Current Demography Status
Just like what happens in developing countries, Indonesia in the 1950s also suffered
from an untoward demographic condition. This was fairly unprofitable as the dependency
ratio increased significantly, causing a heavier economic burden. Since the late 1960s after
introducing „Program Keluarga Berencana‟ (KB) regulation as a way out to reduce the rate
of population growth by reducing the fertility rate, now the fertility rate is around 2.5 births
per woman. In fact, McDonald (2014) emphasizes that even if the fertility rate declines up to
2.1 births per woman in 2050, Indonesia will still be the country with the fourth largest
population in the world. He adds that this is not a „population explosion‟ yet. It is just so-
called „demographic bonus‟ with its peak moment between 2020 and 2030.
It is calculated that between 2020 and 2030, Indonesia will have 180 millions
youngest- and working-age population (those ages 15-64), and only 80 millions dependent
people (<15 or >64 years old). It means, around ten working-age citizens will only bear three
or four dependent people. For Indonesia to extract the maximum benefit, this rare opportunity
must be effectively utilized to maximize labor productivity and economic growth; meanwhile
some other developed countries are struggling along the severity of aging population
problems. Overall, demographic futures are important in areas of planning with long lead
times, particularly in terms of education for youngsters and health services.
Figure 2. Age distributions of Indonesia in 1970, 2010, and 2050 (population in millions)
Regardless demographic bonus‟ contribution to economic development, it also might
create some serious problems, economically and socially, particularly the colossal
unemployment. Indonesia‟s urban economic development has been concentrated in Java
Island and every year DKI Jakarta becomes no longer adequate to contain the city‟s growth.
Transmigration as the population redistribution and the movement of population from
densely settled Java to other islands also cannot significantly attract the citizens. This
counter-productive regulation as well as the problem of inadequate workplaces will just add
the list of joblessness. Table 1 shows that even the rate of unemployment in Indonesia is
decreasing but it has got the second position of unemployment rate among ASEAN member
states. The question is, “Do we dare to answer the call to work abroad as professionals?”
Table 1: The Unemployment Rates in ASEAN Region in 2014
Source: International Labor Organization
According to Raharto (2007), Indonesia is one of the world‟s major sources of
international labor migrants but mostly they are unskilled due to the limited or even none
practical training to prepare them to work overseas. For them, working abroad is a better
alternative to unemployment in their home villages but many of them end up with employer
vulnerability and exploitation stories.
Another evidence Indonesia‟s low qualification is showed in its global
competitiveness report, in comparative perspective with the other ASEAN member states. Its
rank for higher education and training in 2009-2010 was 69, far from Singapore, Malaysia,
Thailand, Brunei Darussalam, and Philippines. However, in terms of innovation, the position
is quite good, which is ranked 39 in the world between 2009 and 2010.
Table 2: ASEAN Countries Competitiveness Index in 2008-2009 and 2009-2010
Source: Klaus Schwab & Michael E. Porter, The Global Competitiveness Report 2008-2009 (Geneva:
World Economic Forum, 2008) & Xavier Sala-i-Martin, The Global Competitiveness Report 2009-
2010 (Geneva: World Economic Forum, 2009).
In this case, education is expected to bring about betterment by producing well-
trained workers and professionals to participate in national, regional, and not to mention
global competition. However, it seems that the government‟s commitment to education
improvement is still low, compared to some other ASEAN countries, in terms of the total
amount of public expenditure on education and on research and development in various fields.
The Impact of English Language Proficiency and Employment Outcomes
English language teaching has been a barometer of modernization and English
language proficiency, first and foremost, underlies one‟s international engagement. English is
also the means for understanding cultural and scientific knowledge which are mostly
developed in western countries.
Gonzales (1995) points out the significant of English use in international trade and
business, diplomacy, and scientific discourse, which are covered as the eight prior disciplines
in AEC 2015. Additionally, Silver (2002) states that there is an immense connection between
English language education and economic development of a country as what she proofed in
Singapore. To compete in international level, students as the future employees must be
provided with the specific English language skills necessary to compete in a global job
market, which prepare them for their various intended employment. They need to master
several linguistic and communicative competences to communicate with people from
different countries.
In line with Indonesia‟s preparation for entering ASEAN Economic Community in
2015, particularly related to the Mutual Recognition Arrangements (MRAs), the recognition
and registration of certified professionals will also cover their English language proficiency.
In the broader areas, English language skills even become a key predictor of successful
employment in every single step of the job, from finding work in the field of study, job
performance, social interaction with peers, and their work outcome as well.
Based on Arkoudis et.al (2009), beyond initial labor market barriers, excellent level
of English communication skills are considered critical for international
students/graduates/employees to progress further in their careers once they have gained
employment. In Australia, for instance, before 2004, international students enrolling
universities there were not required to take the IELTS test. Since 2004, however, these
applicants have had to demonstrate language proficiency by sitting the IELTS as part of the
application process. This now also happens to international workers there. The overall score
of 7 is necessary before immigrant can practice in any of Australia‟s health professions, such
as medicine and nursing, while the overall score of 6 is required for engineers.
a) ELP and Workplace Readiness
Arkoudis et.al (2009) elaborates that in English speaking countries‟ context, such as
Australia, Britain, the USA, Canada, and New Zealand, the term „workplace ready‟ ELP
includes both general and specific occupation language skills. These include high-level
workplace communication skills with an emphasis on social and oral English, and with
literacy as well as cross-cultural skills. The table below indicates that employers valued
workers‟ communication skills in English both written and oral as the most important
criterion, before the other skills such as leadership skills, attitude and commitment, work
experience, and even academic qualification.
Table 3: Importance of Skills and Personal Attributes Required from International Employees
Student (University and Beyond) Employers (Graduate Outlook)
Attitude, drive and commitment 1 3
Communication skills (written and oral) 2 1
Teamwork skills 3 6
Reasoning & analytical/technical skills 4 2
Emotional intelligence 5 7
Leadership skills 6 10
Academic qualifications 7 5
Work experience 8 8
Cultural/social alignment and values fit 9 4
Intra and extracurricular activities 10 9
Source: University and Beyond, Graduate Careers Australia 2008
As there are wide opportunities to work overseas as professional, Indonesia has to
really prepare its citizens for it. Given the complexity of developing ELP, there is no magic
formula to assist international students and employees in developing their proficiency.
Education transformation, emphasizing global workplace competition, must be gradually
developed as ELP is a long-term developmental process. Little can be achieved in a few
workshop of short duration.
b) ELP and Finding Work in Related Field
An employee cannot be possibly hired without firstly passing the interview session as
an initial process. This will be the intensive examination of employees by the recruiter.
Similarly, almost all the international students and graduates thought that English
communication skills, especially speaking skills, is essential for finding work, predominantly
in the interview process. ELP, in fact, does not only affect one‟s ability to communicate, but
it also affects their confidence and hence performance in the interviews. Besides, when they
know a lot about their chosen field‟s registers, this can widen their chance to be accepted in
their related field.
c) ELP and Job Performance
English language proficiency possessed by employees will be a beneficial support for
them for several reasons. For their professional development, they can independently acquire
as much knowledge as possible from articles, journals, books, international conferences and
forums, which use English as the means of knowledge transferring. Moreover, excellent ELP
is the path to work promotion to more senior positions (Arkoudis et.al, 2009).
d) ELP and Employment Outcome
ELP has become a key point of eligible international students and/or employees. The
overall English communication skills (written and oral) one owns in a global workplace is
essential in determining his/her success from the beginning of job application until the
outcome he/she produces. In the research report, The Impact of English Language Proficiency
and Workplace Readiness on the Employment Outcomes of Tertiary International Students,
Arkoudis et.al (2009) found that international students and workers generally faced greater
challenges concerning their ELP and successful employment outcomes compared to local
graduates and local talents. It was also revealed that the work outcomes achieved were best
from those with English Speaking Background (ESB). Commonwealth-Asian migrants from
Singapore, Malaysia, Hong Kong, India, Sri Lanka and Bangladesh also achieved strong
outcomes in Australia‟s workplaces. Migrants who had Non-English Speaking Background
(NESB), including Indonesia in this case, had relatively poor outcomes in fields such as
medicine, accounting, engineering, and food hospitality (see Appendix: Table 4.1, 4.2, 4.3,
4.4, and 4.5).
Not to mention nationally, it seems that Indonesia‟s professionals, particularly
professors, practitioners, and higher education members also have low English competency.
As it is known, universities‟ rank and credibility are not only measured from the quality of
their graduates, building, academic partnership, and facilities, but also from the number of
their research and publications in international level. The graphic shows the continuous
increase in the Internet users of 18% in 2010, compared to around 1% of scientific journals
papers (both Indonesian and English). In 2008, the number of Indonesian journals reached
1150, while English journals were only 559.
Figure 3. The gap between the Internet users and the number of English journals
In sum, workplaces and career development opportunity are widely opened overseas,
particularly those with aging populations, such as Singapore, Europe countries, the United
States, the United Kingdom, Australia, Canada, Japan, South Korea, Malaysia, and Thailand.
Despite of its coincidence, most of these countries use English as the first language, some
other use it as a second language. Thus, the government of Indonesia as well as the people
have to settle the commitment to provide better English language teaching for students as
well as English training for employees. This step hopefully widen the future generations‟ path
to work overseas for reducing the unemployment rate, for increasing their wealth and
experience, as well as to contribute to Indonesia‟s economic growth. As the role of English
in Indonesia is still as a foreign language (EFL), is there any possibility to make it as the
second language (ESL)?
Conclusion
The approaching ASEAN Economic Community challenge in 2015, demographic
bonus as well as large number of manpower, and low English language proficiency of the
people are united to be Indonesia‟s destiny. Indonesia is the country with the fourth largest
population in the world but there are inadequate workplaces for all working-age population.
As the rate of unemployment is increasing every year, working overseas becomes a
promising chance. However, again, the list of abused employees abroad is getting countless
as they dare to go abroad as unskilled labor, especially with very low English competency.
Thus, the government and policymakers need to re-examine the English curriculum in all
level of education and make them suit the demand of professional labor to work in ASEAN
region and other aging population countries.
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Appendix: Differential Employment Outcomes for Recent Migrants in Australia by Selected Field
Table 4.1: Engineering: Labor Market Outcomes (2006) in Australia
Source: 2006 Census (Australia)
Table 4.2: Medicine: Labour Market Outcomes (2006) in Australia
Source: 2006 Census (Australia)
Table 4.3: Accounting: Labor Market Outcomes (2006) in Australia