Is LPDP Scholarship Program Too Costly?

This article was published in The Jakarta Post on October 9th, 2014.

A recent article published by The Jakarta Post on September 19th, 2014 regarding the concern of the House of Representatives on the budget of the Endowment Fund for Education (Lembaga Pengelola Dana Pendidikan/LPDP) surprised me. The article mentioned that the House questions the necessity to increase LPDP budget to Rp. 20 trillion next year. According to the House, the budget should be allocated to the infrastructure which the House considered to be “the pressing needs of the economy”.

Furthermore, the members of the House argued that the LPDP awardees come mostly from well-educated students in Java, while lacking students from other regions of Indonesia, particularly from the eastern part of Indonesia. The lawmakers blame this to the lack of academic abilities and English skills of the participant to pass the scholarship test. It is inferred that there is somewhat a practice of discrimination in the selection of the candidates.

In my opinion, the arguments of the House are flawed and convoluted. This writing is therefore aimed to straighten the misleading view on LPDP.

Firstly, we may address the issue of additional budget by relating it to the vision of the President-elect Joko Widodo during the presidential campaign. The vision of the President-elect Joko Widodo is to create a “mental revolution”. One may question how should such revolution be implemented without education? Does the House suggest that mental revolution will be achieved faster with an increasing fund allocated for physical infrastructure instead of human capital? It is even more surprising that the loudest voice, according to the article, came from the Indonesian Democratic Party for Struggle (PDI-Perjuangan) which supports Joko Widodo.

According to the Human Capital Index of the World Economic Forum published in 2013, Indonesia ranked at 53 out of 122 countries in the study. The report highlights countries which “invest in health sector, education, and talent of their people, and providing an environment where these investments translate into productivity for the economy”. Unfortunately, Indonesia lagged behind other Southeast Asian countries. Singapore was ranked third, while Malaysia and Thailand were at the 22nd and 44th respectively. Indonesia was slightly ahead of the Philippines which occupied rank 66 and Vietnam at rank 70. Hence, Indonesia must continue to strive to improve its position on the Human Capital Index by empowering its citizen through education.

In the past, national development was preoccupied with the construction of infrastructure. The development of human capital was neglected. While it is true that the development on infrastructure has revived Indonesia’s economy from the ruins in the 1960s, but it failed to distribute wealth equally among the people. Corrupt practices also characterized the construction of various public infrastructures. A light indication could be seen from a newly constructed road that required a complete overhaul already in the succeeding year.

Secondly, in the spirit of fairness and balanced of information, one should understand the program that has been carried out by LPDP in the past years. LPDP was created in order to enable potential Indonesian young generation to receive post graduate education in various universities around the globe. Up to now, LPDP has a list of around 200 universities around the world which the institution will provide scholarship to enrolled Indonesian students. Furthermore, it is a blatant myth that LPDP mainly provides the scholarship to students in Java. In my own batch, the awardees came from all regions of Indonesia. This was possible because LPDP has an affirmative program that specifically scouts potential students in regions outside of Java.

The most important characteristic of LPDP that has been widely misunderstood is that the scholarship main target is for the less fortunate or from the lower income family. The fact is that the scholarship is open to every Indonesian who fits the criteria of LPDP regardless of his or her financial background and ethnicity. In other words, the scholarship of LPDP is based on merit. Therefore, the current policy of LPDP is in line with Article 28 C of the 1945 Constitution which grants the right of every citizen to education and self actualization.

It is not rocket science to understand that every investment has its price. It is also no secret that studying abroad is costly. But that is the price required to produce better Indonesian human resources. Such positive program only deserves a continuation and full support from all element of the State, including the House of Representatives. The support and proper mindset to provide equal access to education for every Indonesian citizen will result in a higher Human Capital Index and eventually lead to an improved wealth and prosperity of the Indonesian people.