Indonesia’s Population Promise: The Economic Potential of its Demographic Dividend

By Gemma King

Indonesia is on the cusp of a demographic dividend that will transform the Indo-Pacific region over the next 30 years. Australia needs to act now to harness the potential of its nearest neighbour.Central to unlocking Indonesia’s economic power will be creating enough jobs for its growing working age population. But Indonesia can’t do this on its own – it needs help from countries like Australia to upskill its labour force.Australia can benefit from Indonesia’s demographic dividend in two important ways: 1) As an education provider to the large Indonesian market, and 2) As a recipient of Indonesian workers to address its own skills shortage.  

This publication recommends that Australia:

• Expand the sectors included in the Indonesia-Australia Skills Development Exchange to help address some of Australia’s skills shortages.

• Promote Australian VET and tertiary education in Indonesia, including by establishing in-country partnerships and offering TVET scholarships to Indonesian students seeking to study in Australia.

• Boost the number of places for Work and Holiday visas for Indonesians seeking to come to Australia, and lower the tertiary education requirement given Indonesia’s limited access to university. Visa recipients will learn on the job and be more likely to return to Australia upon completion.