The Asian Development Bank (ADB) has approved a $500-million policy-based loan to boost Indonesia's human capital and improve labor productivity. This is the second of three subprograms under the Boosting Productivity through Human Capital Development Program and builds on the success of the first subprogram approved in 2021.
"The program is ADB’s commitment to continue our close and long-standing collaboration with the Government of Indonesia to help build resilient and responsive health, education, and social protection systems to stimulate economic growth and reduce poverty," said ADB Country Director for Indonesia Jiro Tominaga. “Reversing the setbacks in human development and productivity caused by the COVID-19 pandemic is among our priorities in supporting developing member countries,” he added.
The Boosting Productivity through Human Capital Development Program facilitates integrated reforms in education, skills development, health, and social protection aligned with the Sustainable Development Goals (SDGs). These reforms have helped strengthen policies for financing and monitoring SDG implementation, including the establishment of 11 new SDG centers in Indonesia. These centers will further localize the SDGs through research and education, outreach, and policy advice. The government has provided performance-based fiscal transfers to local government units to incentivize SDG achievement.
To improve educational attainment, upskilling, and reskilling, the government has implemented market-responsive skills development programs for unemployed youth and adults. This includes the JobStart and Kartu Prakerja (pre-employment card) for skills development programs to provide market-responsive training to unemployed youth and adults.
In addition, more than 30,000 teachers, the majority of whom are women, have been trained as “learning leaders” as part of the Guru Penggerak master teacher program, while 2.9 million teachers have been provided access to the master teacher’s digital platform on teaching and learning resources using their smartphones, laptops, and desktop computers.
Furthermore, the Indonesia Cyber Education Institute has established an innovative digital credentialing system for its world-class and market-oriented online higher education courses. More than 2,500 students, mostly women, have gained digital credentials and enhanced their school-to-work transition.
In improving health access, the government has laid the groundwork to strengthen and transform the primary care system, leading to health promotion and community empowerment, and expanding community-based maternal and child health care. The government has also improved the delivery of social protection services to the poor and vulnerable groups through measures to implement the unemployment benefit program and strengthen implementation of its conditional cash transfer program.
The Boosting Productivity through Human Capital Development Program is aligned with the government’s Vision of Indonesia 2045, which prioritizes human resource development. It is also aligned with ADB’s country partnership strategy for Indonesia, 2020–2024, which includes improving well-being and strengthening resilience. The program complements ADB’s other investments in the human and social sector in Indonesia.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
This article was first published by ADB on 15 November 2023.
