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Evaluation report

1999 Indonesia: Impact of the Economic Crisis in Basic Education: A Study in Ten Rural Districts in Indonesia

Executive summary


High priority has been given to educational development in Indonesia particularly with respect to universal basic education. Significant progress has been made over the past decade. However, the 1997-98 financial and economic crisis has recently interrupted this progress. This crisis also has impacted many countries in the region. It was noted that this crisis occurred at a time when crop harvests were in failure having been affected by the El Nino cycle.

Purpose / Objective

The study aims to assist educational planners and schools in their attempts to provide educational services in an uncertain future. The main objective of the study is to measure the impact of the current economic crisis on primary and junior secondary schools in both semi urban and rural areas. More specifically, it measures:
- the effect of the economic crisis on the enrollment at primary (MI and SD) and junior secondary (SLTP and MTs) levels
- the effect of the economic crisis on the drop-out rates at primary and junior secondary levels
- the effect of economic crisis on school finance


Since this study is basically a repeat study, most of the schools sampled are those used in a previous cohort study. Two rural districts (kabupten) were chosen from each of the following provinces: West Java, NTB, NTT, South Sulawesi and South Kalimantan. Within the district, one semi-urban sub-district and two rural sub-districts were chosen. 374 schools were surveyed in total: 277 primary schools and 97 junior secondary schools. After four months, 93 schools were randomly selected for a follow-up study: 62 primary schools and 31 junior secondary schools.

A questionnaire was distributed to administrators regarding student enrollment, drop outs and mobility. Focus group discussions were held with parents, teachers and principals concerning the current economic crisis.

Key Findings and Conclusions

Primary school enrollment seems to be sensitive towards the economic crisis, with a small 0.6% decrease in enrollment for the academic year 1998/1999. Enrollment in the 1998/199 school year is still higher than that in 1995/1996. The 1998/1999 enrollment should have increased by about 1.2% had the crisis not occurred. No significant difference was found in the enrollment at the junior secondary level. Both semi urban and rural primary schools demonstrate a similar pattern in the enrollment trend for the last two years. For junior secondary schools, enrollment in rural schools increased whereas the enrollment in semi urban schools declined.

With respect to grade level in primary school, a decrease in enrollment was found for Grades IV, V and VI. The decrease in enrollment may relate to the reduction of parent net purchasing power. For poor families, students of grade IV and above are regarded as old enough to help their parents work and they are already literate and numerate. In regard to grade I, overall student enrollment was steady, which was mostly contributed by a big increase in South Sulawesi. This region was affected positively by the crisis due to the increased value of their agricultural products. The policy to extend the registration date in 1998/1999 school year has significantly increased enrollment in Grade 1 (4.30%) and somewhat in junior secondary schools (0.94%).

Over the periods of 1995/1996 to 1997/1998 school year, no changes existed in the drop-out rate in primary schools and a slight increase was found at the junior secondary level. Overall, the number of absences in both primary and secondary schools is relatively low (only about 0.50%). This shows that the number of potential drop outs will most likely not be high for this year. However, the estimates of mobility seem high.

In primary schools, the crisis has impacts on a decline in the school budget in real value of public and private schools. During the crisis (1997/1998 - 1998/1999), parent contributions tend to increase whereas government subsidy tends to decrease. A tendency is that the poorer the student, the higher the percentage of parents' contribution. During the crisis years, the monthly fees in real value (adjusted for inflation) tend to decline whereas in nominal value (not adjusted for inflation), these fees have increased except for private junior secondary schools. Among those sample schools being promised to receive block grants, 20% of the primary schools and 15% of the junior secondary schools have not received the grants as of December 1998.


The extension of registration date has proven to be a valuable policy to increase the enrollment during difficult economic and political situations. It needs to be continued in the coming years.

Although the magnitude of the impact was not as severe as people have predicted, the provision of scholarships is needed to prevent further negative impact on student enrollment. These scholarships should be prioritized for those poor students already enrolled in school and for those who are academically talented but unable to continue to junior secondary schools, especially in semi-urban areas.

The development of a new system to more accurately calculate the number of drop outs is needed. A follow-up survey in the same sample schools is needed to examine further impact of the crisis as well.

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Education - Other

UNESCO, UNDP, Ministry of Education and Culture


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