Helping Kids Up The Ladder

Indonesia takes aim at poverty with junior high school scholarships

When Didin Mujahidin lost his job as an assistant bus conductor amid Indonesia's economic crisis last year, things got grim quickly. He sold the TV, then the stereo--the modest luxuries he had struggled to afford. Eventually, he ripped five teak window frames out of the bare cinder-block hovel where he lives with his wife and five daughters. But there's one thing 45-year-old Mujahidin didn't do to feed his family: He never took 15-year-old Dian out of school in Cibinong, the gritty industrial suburb of Jakarta where the Mujahidins live. Next June, Dian will graduate from Public Junior High School No. 2.

There's no gravy train waiting for Dian. She will earn $32 a month at one of the footwear, garment, or cement manufacturers clustered in and around Cibinong. "I'd rather continue my studies and become a nurse," Dian says, "but working in a factory is the easiest option." Dashed dreams? Yes, but Dian has had a measure of luck, too. Since the family hit hard times, the World Bank and the Asian Development Bank (ADB) have paid $33 a year for the tuition Indonesian public schools charge. At graduation, she'll be among the 18% of Indonesian children to make it through junior high. She'll also represent the more realistic economic goals of Indonesia's just-elected leaders.

The World Bank and the ADB have committed $140 million to emergency scholarships in Indonesia this year. The immediate intent is to keep the nation from slipping backward. If all goes well, says Supriano, manager of the Education Ministry's scholarship programs, Indonesia can move the same percentage of students through the system until 2003--when Jakarta hopes to start improving on the numbers.

There's a longer-term objective, too: to lay the groundwork for a sustainable economy. In the new Indonesia, Supriano and other officials hope, a workforce with better basic education will keep pace as the economy grows more sophisticated and jobs more demanding. "The challenge in Indonesia," says Charles Currin, the chief education specialist at the ADB in Manila, "is to develop a dynamic education and training system that responds quickly to the economy's demands in a competitive, globalizing environment."

It's new thinking--or a return to forgotten basics. Either way, it signals a radical break with the strategy once favored by Indonesia. Under former President Suharto, heavy industry and high tech were the holy grails of modernization. B.J. Habibie, Suharto's successor, who was just defeated in his bid for election, famously favored a domestic aircraft industry.

No more. Many of Indonesia's car plants are now battling bankruptcy, and Habibie's pet projects are history. With 3% of Indonesian adults holding university degrees, it's now recognized that the glam strategy was a bad fit in the first place. The buzzwords may be out of fashion, but the talk in Jakarta these days is all about "comparative advantage" and "appropriate technology."

For Kwik Kian Gie, the new Coordinating Minister for Finance & the Economy, Indonesia's best advantage is its low cost structure. Even before the economic crisis, Indonesia's wages were among the world's lowest. The rupiah's fall halved wages in dollar terms. Then there's the workforce: It's 93 million strong and growing by 3% yearly. In numerical terms, just 17 million of those workers have been through high school, 2 million through university. Kwik wants to see a lot more agribusiness and low-end, labor-intensive manufacturing in areas such as textiles to soak up this labor pool. High-tech factories are not part of the current equation.

STRATEGIC OVERHAUL. International aid agencies support Kwik and his ideas. For them, the approach is tied to a new way of treating poverty in Asia. Since the Soviet Union's collapse and Asia's crisis, the number of people living on less than $1 a day is spiraling across Central and Southeast Asia; these regions now account for almost three-quarters of the world's poor. Reflecting this, ADB President Tadao Chino announced a strategic overhaul of the bank's poverty policies just after he took office last January. At the same time, the International Monetary Fund, the ADB, and the World Bank began to recognize that, just as it was a mistake to measure progress by growth numbers alone, it was also an error to rely on national governments to spend aid money wisely.

Now, the agencies want to reach poor people such as Dian as directly as possible. The idea is to take advantage of the durable social relations found in local communities. It's an approach some analysts believe holds promise. "Indonesians take to voluntary or spontaneous self-help well," says University of Michigan Southeast Asia specialist Linda Y. C. Lim. "That makes the country more economically and socially stable than it may appear." That's what the ADB's Chino had in mind when he unveiled the new strategy on Nov. 9. It aims to begin "lending directly to local governments and supporting nongovernment agencies with proven track records."

The new scholarship program in Indonesia is a test case for international agencies. And success will be measured modestly. The program is focused chiefly on junior high school students: Only half a million of the 4 million scholarships are for senior high students, and none go to university students. The point is to hold the system steady until a recovery is consolidated, while not turning out too many overqualified job seekers.

The emergency scholarships are a lifeline to those drowning in the stark reality of the industrial suburbs of Java's big cities. Dian and her classmates are the children of migrants who chose the promise of Cibinong, 40 kilometers from Jakarta, over the stagnation of villages all over the Indonesian archipelago. They have chosen tough work with conveyor belts and shrink wrappers over rice paddies and foraging in forests. But they have also given up the safety of traditional communities. There's no turning back: The children of these suburbs plan to stay. Their ambitions are to get factory jobs to avoid lower-paying work as domestic servants or farmhands.

Dian is among the fortunate few. Others, says Didih Suwardi, head of the Education Ministry's Cibinong subdistrict, leave school as young as 10 to support their families by begging spare change from motorists at traffic lights. For the impoverished parents of teenage girls, the most common alternative is to sell them into the red-light districts of Jakarta, Yogyakarta, and Surabaya, the three largest cities on Java. Didin Mujahidin puts it as well as anyone: "I'm illiterate," he laments, "and I want my daughters to be smart." In the new Indonesia, that represents a national aspiration. And that means starting with the basics.

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