VZCZCXRO9476
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHJS #0107/01 3090536
ZNR UUUUU ZZH
R 050536Z NOV 09
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0489
INFO RUEHJA/AMEMBASSY JAKARTA 0478
RUEHJS/AMCONSUL SURABAYA 0501
RUCNASE/ASEAN MEMBER COLLECTIVE
RHHMUNA/HQ USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 SURABAYA 000107 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EAP/MTS, PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI EAID ECON ID
SUBJECT: DECENTRALIZATION:  AN EDUCATION TUG-OF-WAR 
 
REF: SURABAYA 106 
 
SURABAYA 00000107  001.2 OF 003 
 
 
This message is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1. (SBU) Summary: Eight years after the government began pushing 
decision making to the local level under a policy of regional 
autonomy, the central government remains deeply involved in 
local-level education.  The Constitution requires that local 
governments devote 20% of their annual budget to educational 
spending.  Implementation is haphazard and exacerbated by a 
fundamental lack of transparency in the budget process.  The 
central government mandates a national test that produces a de 
facto national curriculum standard.   Education activists insist 
that greater funding is required to create a student-centered 
teaching approach, modeled after American teaching methods. 
USAID programs are assisting  in building the capacity of local 
governments and schools as well as increasing the role of local 
stakeholders.  End Summary. 
 
Creative Accounting on Educational Spending 
-------------------------------------------- 
 
¶2. (SBU) As outlined Reftel, regional governments have mixed 
records in their willingness and ability to provide services to 
their populations as envisioned by the policy of 
decentralization. Despite the significant delegation of 
responsibility to local governments required by the 2001 
regional autonomy law, the national government maintains 
significant influence over local budgetary and policy 
priorities.  For example, in 2002, the national People's 
Assembly amended the Indonesian Constitution to include a 
requirement that both the national and local governments 
allocate at least 20% of their budgets to education.  The 
following year, parliament (DPR) passed a law that stipulates 
that this 20% not include spending on teacher salaries and 
administrative costs and allowances.  The DPR intended instead 
that this spending focus on educational development. 
 
¶3. (SBU) Many local governments in Eastern Indonesia claim to 
meet this 20% requirement.  However, in reality local 
governments employ numerous strategies to create the appearance 
of meeting these requirements.  Professor Daniel Rasyid, a 
senior lecturer at the Institute Technology of Surabaya and an 
advisor on the East Java Education Council, reports that many 
local governments in East Java claim to allocate the required 
20% on education, while in fact they devote the majority of 
their education spending to teachers' salaries, administrative 
costs, and other allowances.  Redhi Setiadi, a researcher at the 
Jawa Pos Institute of Pro Autonomy (JPIP), points to Sumenep 
regency on Madura Island in East Java province as one example of 
such deception.  In 2008, Sumanep claimed to devote 22% of its 
budget to education. However, Redhi calculated that the 
percentage of the budget devoted to educational development was 
really only 8.5%. 
 
¶4. (SBU) Some local governments will artificially inflate their 
educational spending by reporting it as a percentage of a subset 
of the total budget.  According to Redhi Setiadi, for example, 
the Banyuwangi regency in East Java claimed to devote 21% of its 
budget to education spending in 2008.  However, the actual 
education spending was not 21% of total budget, but rather 21% 
of what was left of the budget after deducting major 
expenditures for salaries and allowances. Ratna Haris, the head 
of the State Alumni Teachers Association of Eastern Indonesia, 
and Mappinawang, the former chairman of the South Sulawesi 
Election Commission, shared the opinion that such practices are 
also common in their areas. They claimed that in many cases 
regencies or cities "manipulate" education spending by including 
programs that are only tangentially related to education in the 
reported education budget. 
 
Using Newspapers for Public Outreach 
------------------------------------ 
 
¶5. (SBU) In hopes of creating a groundswell of public opinion to 
support truth in budgeting, JPIP published articles in the Jawa 
Pos, the largest media group in Eastern Indonesia, urging the 
public to remind local government officials of the 
constitutional education spending requirement.  According to 
experts, however, a lack of transparency hampers the public's 
ability to become involved in the process.  Many regencies and 
cities do not publicize their budgets at all, beyond press 
releases trumpeting specific spending achievements.  Even when 
they do publicize their budgets, regency and city governments 
often avoid providing meaningful information.  For example, East 
Java's Probolinggo regency informed the public about its budget 
through advertisements in local newspapers.  However, these 
advertisements only included the budget summary, failing to show 
 
SURABAYA 00000107  002.2 OF 003 
 
 
precisely what the individual portions, including education, are 
spent on. 
 
¶6. (U) Some local governments are spending the required amount 
on education and encouraging transparency in reporting their 
budgets.  The Surabaya City government, for example, openly 
announced its planned 2010 education budget through 
advertisements in major newspapers that included detailed 
budgetary information.   According to its newspaper ad, the city 
has allocated approximately $135 million, out of at total budget 
of $415 million, to education spending.  This amount includes 
approximately $51 million in teachers' salaries.  The remaining 
$84 million devoted to education meets the 20% required by the 
Constitution.  The advertisement claims that this is the highest 
budget allocation for education in Indonesia. Redhi Setiadi said 
that the city of Batu in East Java won the JPIP award of 2009 
for education as it allocates 23% of its budget to education. 
 
Central Government + Mandated Exam = Stagnant Curriculum 
--------------------------------------------- ------------ 
 
¶7. (U) The central government is also involved in local level 
education through the centralized examination system.   Enacted 
in 2003, the current system requires all students to take a 
standardized exam at three points during their education: at the 
end of elementary school in grade 6, at the end of junior high 
school in grade 9, and at the end of high school in grade 12. 
Students must pass each exam in order to advance to the next 
level of their education.  The exam tests students' ability in 
Indonesian, English, Mathematics, and Basic Sciences.  Students 
who fail the exam have the opportunity to retake it a few months 
after the initial examination date.  According to Prof. 
Zainuddin Maliki, chairman of the East Java Education Council, 
approximately 95% of students pass the exam nationally. 
 
¶8. (SBU) Local education experts said they oppose this 
centralized examination system for a variety of reasons. 
According to Prof. Rasyid, the system neglects the cultural 
heterogeneity of Indonesia, conducting the same examination with 
students from Aceh to Papua regardless of background or local 
conditions.  This also exacerbates discrepancies in education 
quality.  For example, a high school in Surabaya may have a good 
physics laboratory, but a similar school in a remote area would 
not have such a facility.  As a result, students from areas with 
better-developed educational institutions will score higher on 
the nationwide exam and have an advantage when competing for 
slots in prestigious universities.  He also pointed out that 
this system does not test students' abilities in other subjects 
such as writing or debate skills.  Ratna Haris argues that the 
current system encourages teachers to focus on subjects that are 
included in the exam and abandon other subjects.  She also said 
that it is not fair to judge the performance or the quality of 
students based only on three days of examinations.  Prof. Rasyid 
added that the centralized system ignores the need to nurture 
the individual students and to create autonomous, independent, 
and accountable human beings. 
 
Need for Education Reform 
-------------------------- 
 
¶9. (U) Prof. Daniel Rasyid noted that the issue of education 
spending is significant because the education system in 
Indonesia needs basic structural reform.  He said that most 
teachers continue to practice the old system of teaching -- a 
one-way teaching method where teachers lecture and students 
listen and memorize.  He expressed the opinion that the 
education system should change to a more "student-centered" 
system where students are given wider opportunity to discuss and 
debate the topics at hand.  Prof. Zainuddin Maliki echoed this 
sentiment, stating that Indonesia should adopt the American 
education system of critical thinking in order to produce high 
quality students.  In both professors' view, this sort of reform 
can only happen when local governments devote the full 20% of 
the budget to educational development and when the centralized 
examination system is altered to allow for more flexible 
curriculum reform. 
 
USAID Assistance 
---------------- 
 
¶10.  (U) USAID's Decentralized Basic Education (DBE) program 
works within 57 local district governments in seven provinces in 
three project components: district and school-based management 
and community participation (DBE1); teacher training (DBE2); and 
relevant education for youth (DBE3). DBE1 is strengthening the 
capacity of local government and school principals to 
effectively plan, manage, and deliver quality basic education 
services as well as strengthening the position and role of local 
 
SURABAYA 00000107  003.2 OF 003 
 
 
stakeholders - parents, teachers, school committees, community 
organizations, and local parliaments - in planning and managing 
basic education. DBE2 is training teaching teachers in 
student-centered pedagogy and the use of teaching aides to 
improve students and the classroom learning environment. DBE3 is 
helping middle school and out-of-school youth to develop life 
skills - critical problem thinking and solving, self management 
and communication and interpersonal skills - that will better 
prepare them for lifelong learning, participation in community 
development and the world of work.  Eventually, the programs are 
expected to reach 9,000 public and private schools; 2.5 million 
students; 90,000 educators; and 1 million youth through 
replication. Some of the major results from the five year, $133 
million investments are increased capacity of local governments 
to plan and manage education services; increased community 
participation in providing education; better teaching 
performance as a result of in-service teacher training; better 
student and school performance; livelihood skills increased for 
in-school and out-of-school youth; and adoption of USAID 
materials by donors, universities, and the Ministry 
organizations. 
MCCLELLAND