Human Capital Index Can Attract Investors

Nusa Dua, InfoPublik - Indonesian Finance Ministry's Fiscal Policy Agency head Suahasil Nazara believed that in the future, the Human Capital Index/HCI will become a reference and attract investors to invest in a country.

"I think it (HCI) will become one consideration for investors in seeing a country's potential. Our target is to improve the quality of Indonesian human capital," said Suahasil in Nusa Dua, Bali on Thursday (11/10).

A World Bank report puts Indonesia's human capital index at 87th position out of 157 countries 0.53 score. Indonesia's score remains higher than the average of middle and lower income countries which is 0.48. However, the World Bank records that Indonesia's position is still below that of the average of East Asia and Pacific countries of 0.62.

Compared to other ASEAN countries, Indonesia is also still below Singapore (scores 0.88), Vietnam (0.67), Malaysia (0.62), Thailand (0.6) and the Philippines (0.55).

Suahasil said the government had yet to set the target rank or score to be achieved in the future. The government will pay close attention to the newly launched World Bank index and learn from other countries. However, he emphasized, human capital improvement required cross-sector collaboration. Therefore, to improve Indonesia's HCI, all elements of the government shall work together.

According to Suahasil, the index report will also influence the way the government formulates the 2019 state budget (APBN) posture. "We hope all ministries and institutions would read this and respond to it. For example, how much fund should be allocated for the education sector," said Suahasil.

Previously, Indonesian Finance Minister Sri Mulyani Indrawati praised Indonesia's ratings and scores in the human capital index (HCI) issued by the World Bank. Indonesia scored 0.53 and ranked 87 of 157 countries in the index.

Sri Mulyani Indrawati appreciated the World Bank's for making Indonesia a country of concern. According to World Bank Group President Jim Yong Kim, Indonesia is one of the "early adapters" of advice suggested by the World Bank to climb the index, pointing out a 20 percent allocation of spending in the state budget for education.

"The World Bank’s human capital index is very important. We declare that we are ready to collaborate because Indonesia has valuable experience in investing in human capital," said Sri Mulyani.

In improving the quality of human capital, continued the Finance Minister, the government has given special attention by improving the quality of education, health and millennial generations. "Indonesia has allocated 20 percent of the budget for education. The government also pays great attention to vocational education to face the industrial revolution 4.0," concluded the Minister. (Ismadi Amrin/Gusti Andry/Translator: Penni Patmawati)