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.

References

Arkoudis, S., Hawthorne, L., Baik, C., Hawthorne, G., O‟Loughlin, K., Leach, D., & Bexley,

E. 2009. The impact of English language proficiency and workplace readiness on the

employment outcomes of tertiary international students. Melbourne: Centre for the

Study of Higher Education, The University of Melbourne.

ASEAN Secretariat, n.d., The ASEAN Economic Community Blueprint 2008. Retrieved on 6

September 2014.

Chia, S.Y. 2013. “The ASEAN Economic Community: Progress, Challenges, and Prospects”. ABDI

Working Paper Series, no.440, Tokyo: Asian Development Bank Institute.

FORUM University of Philippines. 2014. “ASEAN 2015: Higher Education in the ASEAN Economic

Community”. FORUM, Vol. 15, no.3.

Gonzales, A. 1995. “The Cultural Content of English as an International Auxiliary Language

(EIAL): Problems and Issues”, in Makhan L. Tickoo (ed.), Language and Culture in

Multilingual Societies: Viewpoints and Visions. Singapore: SEAMEO Regional

Language Centre (pp. 54-63). Klaus Schwab & Michael E. Porter. 2008. The Global Competitiveness Report 2008-2009. Geneva:

World Economic Forum.

McDonald, P. 2014. “The Demography of Indonesia in Comparative Perspective”. Bulletin of

Indonesia Economic Studies, Vol.50, no.1 (pp. 1-24).

Raharto, A. 2007. “Indonesian Labour Migration: Issues and Challenges”. International Journal on

Multicultural Societies (IJMS), Vol.9, no.2 (pp. 219-235).

REFORMA UGM (Center for Policy and Management Studies). 2014. “Tantangan Indonesia

ke Depan: Bonus atau Bencana Demography?”. Knowledge Notes, Vol.3.

Silber, E.S. 2002. Policies on English Language Education and Economic Development. In

R.E. Silver, G. Hu and M. Lino (eds) English Language Education in China, Japan,

and Singapore (pp. 100-169). Singapore: Graduate Programmes and Research Office,

National Institute of Education, Nanyang Technological University.

UNESCO. 2007. A Human Rights-Based Approach to Education for All. Paris: UNESCO.

Wijaya, H. 2014. “Challenges and Opportunities in Developing Blended-Culture ELT

Materials for Vocational High Schools”. English Language Curriculum Development:

Implications for Innovations in Language Policy and Planning, Pedagogical

Practices, and Teacher Professional Development: Proceedings of the 61st TEFLIN

International Conference held in Solo, Indonesia, 7-9 October 2014 (pp. 274-277).

Solo: Sebelas Maret University.

Xavier Sala-i-Martin. 2009. The Global Competitiveness Report 2009-2010. Geneva: World

Economic Forum.

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

Source: 2006 Census (Australia)

Table 4.4: Food Hospitality: Labor Market Outcomes (2006) in Australia

Source: 2006 Census (Australia)