Advanced Knowledge and Skills for Sustainable Growth project (RRP INO 50395) DEVELOPMENT COORDINATION A. Major Development Partners: Strategic Foci and Key Activities 1. The National Medium-Term Development Plan, 2015–2019, the Ministry of Research, Technology and Higher Education (MORTHE) strategic plan, 2015–2019, and the presidential decree on strengthening vocational education set out the directions to improve the quality and relevance of higher education.1 Aligned with these strategies, foreign financing was sought for upgrading and/or supporting universities, polytechnics, institutes, and other higher-education institutions. Development partners that are supporting higher education in Indonesia are the Asian Development Bank (ADB), Canada, Germany, Japan, the Islamic Development Bank (IsDB), Switzerland, and the World Bank. The recent projects are summarized in Table 1. Most funding are for infrastructure provision, with Japan providing support to several top-tier universities, and IsDB providing support to universities under MORTHE and the Ministry of Religious Affairs. The World Bank project supports capacity development in research and innovation. Table 1: Major Development Partners in Higher Education Development Amount Partner Project Name Duration ($ million) ADB Polytechnics Education Development Project 2012–2019 70.0 Analytical and Capacity Development Partnership 2010–2017 55.0 (Grant) (cofinanced by the Government of Australia through DFAT and the European Union) Global Affairs Polytechnics Education Development Project 2012–2019 5.0 (Grant) Canada Risk management, economic sustainability, and 2016–2020 15.5 GAC; actuarial science development in Indonesia 1.0 Manulife; 1.5 Sunlife (Grant) IsDB Support to the Development of Higher Education 2014–2021 174.0 Project (7 in 1), Indonesiaa Development of Four Higher Education Institutions 2017–2020 176.5 Project (4 in 1)b Support to the Development of the Islamic Higher 2012–2020 123.7 Education in Indonesiac JICA Development of World Class University with Socio 2017–2021 78.7 Entrepreneurial Spirit at Universitas Gadjah Mada Capacity Building in Engineering Science and 2015–2020 No amount Technology at Hasanuddin University in the Eastern available Part of Indonesia (South Sulawesi). Development of Bandung Institute of Technology (III) 2009–2018 51.2 to assist higher educational institutions for increased collaboration between higher education and industry. Development of World Class University at University 2008–2018 132.6 of Indonesia Hasanuddin University Engineering Faculty 2007–2017 66.76 Development Project 1 Government of Indonesia, National Development Planning Agency (BAPPENAS). 2015. National Medium‐Term Development Plan (RPJMN), 2015–2019. Jakarta. Ministry of Research, Technology and Higher Education. 2015. Strategic plan 2015-2019. Jakarta. The Presidential Decree No, 9/2016. Revitalization of Vocational Education. September 2016. 2 Development Amount Partner Project Name Duration ($ million) Assistance for the establishment of the Indonesia 2014–2019 3.51 (Grant) Accreditation Board for Engineering Education Capacity Building in Engineering, Science and 2014–2019 3.11 (Grant) Technology at Hasanuddin University in the Eastern Part of Indonesia KfW Hasanuddin Teaching Hospital Project 2017–2020 33.2 SECO Sustainable Tourism Education Development 2017–2022 12.1 (Grant) Skills for Competitivenessd 2018–2022 8.0 (Grant) World Bank Research and Innovation in Science and Technology 2013–2020 95.0 Project ADB = Asian Development Bank, DFAT = Department of Foreign Affairs and Trade, GAC = Government of Canada, IsDB = Islamic Development Bank, JICA = Japan International Cooperation Agency, KfW = Kreditanstalt für Wiederaufbau (Germany), SECO = State Secretariat for Economic Affairs (Switzerland). a University of Tanjung Pura in Pontianak, West Kalimantan; Lambung Mangkurat University in Banjarmasin, South Kalimantan; State University of Yoyakarta in the Special Region of Yogyakarta; State University of Surabaya in Surabaya, East Java; Sam Ratulangi University in Manado, North Sulawesi; State University of Gorontalo in Gorontalo; and Syiah Kuala University in Banda Aceh, the Special Region of Aceh. b The University of Sultan Ageng Tirtayasa focuses on food security research. The University of Mulawarman focuses on tropical studies. The University of Malang focuses on education, lifelong learning, and innovation. The University of Jember specializes in biotechnology innovation and research. c Four State Institutes of Islamic Studies (IAIN), namely IAIN Sumatera Utara (Medan, North Sumatera), IAIN Raden Fatah (Palembang, South Sumatera), IAIN Walisongo (Semarang, Central Java) and IAIN Mataram (Mataram, West Nusa Tenggara). d Establishment of four new polytechnics under the Ministry of Industry. Source: Asian Development Bank. 2. The development of a tourism polytechnic in Lombok supported by Switzerland closely aligns with a technical cooperation project of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) that aims to improve the skills and employability of graduates by strengthening collaboration with employers in specific regions and fields. In addition, for an unrelated project the Saudi Development Fund plans to finance the upgrading of two universities in Jakarta and Bengkulu. 3. On top of the larger investment projects, several development partners are providing targeted technical assistance for higher education, such as financing for students, teachers, and management through exchange and scholarship programs; competitive research grants; and targeted training.2 B. Institutional Arrangements and Processes for Development Coordination 4. The Government of Indonesia carries out development partner coordination at three levels in the higher education subsector (i) The National Development Planning Agency (BAPPENAS)— more specifically its Human Development, Society and Cultural Affairs Division, and its Development Funding Division—is the main agency responsible for national higher education planning. It coordinates development partner financing and decides which proposals from line ministries to approve for foreign financing; (ii) The MORTHE is the main ministry responsible for higher education policy, preparing project proposals for external funding to present to BAPPENAS, and implementing the projects; and (iii) The Ministry of Finance—more specifically 2 For example, the Japan International Cooperation Agency, State Secretariat for Economic Affairs (Switzerland), the United States Agency for International Development, and the Netherlands provide this kind of support. 3 the Loan and Grant Financing Department—considers financing from domestic or foreign funding sources. The Development Funding Division of BAPPENAS organizes quarterly meetings to monitor ongoing development-partner-supported projects; development partners and executing agencies are invited to present project progress and issues. 5. The development partners inform and coordinate among each other through the Skills Development Working Group, an informal coordination mechanism among the partners. ADB presented the project to this working group in May 2018 and received useful suggestions. ADB communicated separately with the Japan International Cooperation Agency, the World Bank, and IsDB—the partners involved in financing universities during project preparation—to coordinate and share lessons learned. 6. To support preparation of the RPJMN, 2020–2024 for the education sector, BAPPENAS requested support for an education sector review and background study from the Government of Australia’s Department of Foreign Affairs and Trade, the World Bank, and ADB. The Department of Foreign Affairs and Trade is coordinating. ADB is taking the lead in the review of higher education and, together with the German Organization for International Cooperation, for TVET. C. Achievements and Issues 7. The proposed ADB financing is fully aligned with the RPJMN, 2015–2019 and with the MORTHE’s strategic plan, 2015–2019. The MORTHE and BAPPENAS ensured that the design process does not overlap with ongoing and/or planned support from other development partners by selecting the participating universities. The MORTHE coordinated knowledge sharing with ongoing IsDB- and JICA-supported projects, and will use lessons learned from the proposed ADB project for future infrastructure projects. Coordination of development-partner support at the national level by BAPPENAS ensures that national-level priorities are met. The Skills Development Working Group provides added value as a platform for information sharing and coordination. Joint efforts to support BAPPENAS’ education sector review and background study for the RPJMN, 2020–2024 (para. 6) are a case in point. 8. The need for stronger coordination between TVET and higher education is becoming more evident, especially as the MORTHE, the Ministry of Education and Culture and other relevant ministries, and schools, universities, polytechnics and other education providers all aim to engage in a more comprehensive way with industry. D. Summary and Recommendations 9. The proposed project has a clearly defined boundary by focusing support at the four universities and contributing to priority areas as outlined in the RPJMN, 2015–2019 and the MORTHE’s strategic plan, 2015–2019. During project implementation, the MORTHE will guide the project activities to create synergies and add value. MORTHE will share lessons learned on infrastructure development among the different projects. The MORTHE and BAPPENAS will oversee the development of the medium-term higher-education investment plan under the RPJMN, 2020–2024. The MORTHE and the Ministry of Education and Culture will collaborate in developing the medium-term strategy to educate TVET teachers and, with support from BAPPENAS, will identify how to involve stakeholders. The Indonesia University of Education aims to develop its center of excellence for TVET-teacher education as a network organization, and will actively seek collaboration with partners, including development partners supporting skills development. .