EDUCATION REFORM IN INDONESIA: LIMITS OF NEOLIBERALISM IN A WEAK STATE A DISSERTATION SUBMITTED TO THE GRADUATE DIVISION OF THE UNIVERSITY OF HAWAI‘I AT MĀNOA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN SOCIOLOGY MAY 2014 By Sulaiman Mappiasse Dissertation Committee: Hagen Koo, Chairperson Patricia Steinhoff Sun-Ki Chai Hirohisa Saito Barbara Watson Andaya Keywords: Neoliberalism, Education, Reform, Indonesia ABSTRACT This is a study about the recent neoliberal education reform in Indonesia. With the strong support of the people, Indonesia has undertaken a large-scale education reform since the late 1990s. The government was highly confident that this would make Indonesia’s education more efficient and competitive. After more than a decade, however, Indonesia’s education has not significantly improved. Contrary to expectations, the series of policies that was introduced has made Indonesia’s governance less effective and has deepened the existing inequality of educational opportunities. This study examines how and why this reform ended up with these unsatisfactory outcomes. The argument is that Indonesia’s domestic politics and history have interfered with the implementation of the neoliberal policies and led to a distortion of the reform processes. Although neoliberal globalization was a powerful force shaping the process of the reform, domestic conditions played a more important role, especially the weakening of the state’s capacity caused by the crisis that hit Indonesia in 1997/1998. In the process of decentralization, the new configuration of relations between the state, business groups and classes and the emergence of new local leaders brought about unintended consequences. The effort to transform schools and universities to become independent legal entities stagnated. Teacher professionalization faced problems. Principals and teachers were entangled in local politics. These conditions allowed the middle classes and capitalist groups to benefit most from the public resources. In the area of vocationalization, conversion of general secondary schools to become vocational did not work and was not cost effective because good vocational education became more expensive, yet more attractive to the poor. Public-private partnership that was supposed to solve this problem did not work, either, and as a result, the state had to spend, rather than save, more money to carry it out. Finally, in the area of internationalization, the government made some progress because this program was popular among the rich middle class. However, it deprived public schools of resources, excluded citizens from access to quality education, and created a new hierarchy in education. As a result, the state found it very difficult to continue implementing it. EDUCATION REFORM IN INDONESIA: LIMITS OF NEOLIBERALISM IN A WEAK STATE A DISSERTATION SUBMITTED TO THE GRADUATE DIVISION OF THE UNIVERSITY OF HAWAI‘I AT MĀNOA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN SOCIOLOGY MAY 2014 By Sulaiman Mappiasse Dissertation Committee: Hagen Koo, Chairperson Patricia Steinhoff Sun-Ki Chai Hirohisa Saito Barbara Watson Andaya Keywords: Neoliberalism, Education, Reform, Indonesia ii ©copyright by Sulaiman Mappiasse All Rights Reserved iii To Hamdy Mappiasse and Hamdan Mappiasse iv ACKNOWLEDGMENTS This study would have been impossible without the continuous support and advice of the people who were around me while I was doing research. I specially thank Professor Hagen Koo, the chairperson in my dissertation committee. I have been working with him since I started my days in the Department of Sociology, and he showed me how important it is for a social researcher to be passionate about their research interests. I would also like to thank Professor Patricia Steinhoff and Dr. Hirohisa Saito, who have been saviors for me in certain stages of my study. My special thanks also to Professor Barbara Andaya; even though I did not have an intense academic exchange with her, she gave me the mental courage to talk about Indonesia. I would also like to mention Dr. Terrance Bigalke from the East-West Center’s Academic Program, who shared with me an interest in studying educational reform in Indonesia. Additionally, I would not forget Professor Mike Lawson from Flinders University, Australia, who was willing to give me constructive comments on my first draft. Many fellow students were also very helpful to me during my study. Among them are Yoko Wang and Shinji Kojima from Japan, Gita Neupane from Nepal, and Lance Nolde from the United States. Thank you so much for your honest friendship. Finally, I would like to thank several organizations that provided me with invaluable financial support to undertake my doctoral study: the United States Department of State (Fulbright Presidential Scholarship), the University of Hawai'i at Mānoa (Achievement Scholarship and Graduate Teaching Assistantship), the East-West Center (Degree Fellowship), the American-Indonesian Cultural & Educational Foundation, Inc. (AICEF), and the South East Asia (SEA) Grant. v ABSTRACT This is a study about the recent neoliberal education reform in Indonesia. With the strong support of the people, Indonesia has undertaken a large-scale education reform since the late 1990s. The government was highly confident that this would make Indonesia’s education more efficient and competitive. After more than a decade, however, Indonesia’s education has not significantly improved. Contrary to expectations, the series of policies that was introduced has made Indonesia’s governance less effective and has deepened the existing inequality of educational opportunities. This study examines how and why this reform ended up with these unsatisfactory outcomes. The argument is that Indonesia’s domestic politics and history have interfered with the implementation of the neoliberal policies and led to a distortion of the reform processes. Although neoliberal globalization was a powerful force shaping the process of the reform, domestic conditions played a more important role, especially the weakening of the state’s capacity caused by the crisis that hit Indonesia in 1997/1998. In the process of decentralization, the new configuration of relations between the state, business groups and classes and the emergence of new local leaders brought about unintended consequences. The effort to transform schools and universities to become independent legal entities stagnated. Teacher professionalization faced problems. Principals and teachers were entangled in local politics. These conditions allowed the middle classes and capitalist groups to benefit most from the public resources. In the area of vocationalization, conversion of general secondary schools to become vocational did not work and was not cost effective because good vocational education became more expensive, yet more attractive to the poor. Public-private partnership that was supposed to solve this problem did not work, either, and as a result, the state had to spend, rather than save, more money to carry it out. Finally, in the area of internationalization, the government made some vi progress because this program was popular among the rich middle class. However, it deprived public schools of resources, excluded citizens from access to quality education, and created a new hierarchy in education. As a result, the state found it very difficult to continue implementing it. vii TABLE OF CONTENTS ACKNOWLEDGMENTS............................................................................................................................. iv ABSTRACT ................................................................................................................................................... v LIST OF TABLES ........................................................................................................................................ xi LIST OF FIGURES ..................................................................................................................................... xii LIST OF ABBREVIATIONS ..................................................................................................................... xiii CHAPTER 1 ................................................................................................................................................. 1 INTRODUCTION ........................................................................................................................................ 1 1.1 The Crisis that Legitimized the Neoliberal Reform ...................................................................... 1 1.1.1 Objectives of the Reform ............................................................................................................. 3 1.1.2 Problems of the Reform ............................................................................................................... 5 1.1.3 The Price of the Reform ............................................................................................................... 9 1.2 Research Problems and Arguments .............................................................................................. 11 1.3 Indonesia in Perspective ............................................................................................................... 20 1.4 Methodology ............................................................................................................................... 21 1.4.1