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community, and the limited contribution of basic education to individuals’ labor marketprospects, underlines the nature of basic education as a public good, and therefore justifiesfull public funding for its provision.
School Financing and Disparity
5. The basic education system in Indonesia consists of primary schools/madrasahibtidaiyahs (SD/MI) and junior secondary schools/madrasah tsanawiyahs (SMP/MTs). Thegeneral stream, SD and SMP, are predominantly public; around 91% of SD and around 59%of SMP are public schools. The madrasah stream, on the other hand, is dominated by theprivate sector; more than 90% of madrasahs (
s) are privately operated and funded.6. Funding for public schools/madrasahs comes from district/city governments (for
) and MORA province/district office (for
s) and covers teachers and otherpersonnel salary costs, other recurrent expenditures to support day to day school operations,and investments in infrastructure, equipment, and institutional and personnel capacityimprovements. Schools also receive resources for infrastructure, equipment, and training fortheir teachers and school principals from the central government in a less systematic way.7. Parents are obligated to make financial contributions at rates mutually agreed betweenthe school and the parents in a school committee meeting. These financial contributions aregenerally used to support expenditures oriented towards enriching teaching and learningprocesses in school. It is also a significant source of funds to top-up teachers’ salary. Inaddition parental contributions are also made through the practice of school officials solicitinginformal/ illegal payments. This is acknowledged as a significant problem.8. Funding for private schools/madrasahs mainly comes parental contributions. Parentalcontributions fund investment and other day to day operational expenditures includingteachers’ salary and benefits. Many private schools also receive government subsidies in avariety of forms. The most common form is secondment of civil service teachers to privateschools and in kind contributions including equipment, furniture, teaching media, andinfrastructure. Until recently public subsidies to private schools/madrasahs were awarded in aless systematic way, based more on discretion rather than rules, leaving private schools withuncertainty as regards resource planning.9. Uneven, and often insufficient, government funding for public schools and the demanddriven nature of expansion of the private schools has led to greater reliance on parentalcontributions, which has in turn led to greater disparity in access to resources among schoolsserving different communities with different socio-economic status. This situation haspersisted for more than four decades now and has created substantial disparities in theavailability of resources, including infrastructures, equipments, and human resources – principal, teachers, and other support staff – which has ultimately led to disparities in thequality of basic education.10. Free basic education policy, in compliance with constitutional and legal mandates,needs to be situated within the overall objective to systematically improve the quality of basiceducation, and to close the gaps in access to quality education between children from differentsocio-economic backgrounds. This implies the need for affirmative public funding to ensuresufficient access to resources for all schools to support good quality teaching and learning.11. The necessary inputs and resources to secure adequate quality of basic educationservices that are to be provided for without costs to students and parents will be benchmarkedto the Minimum Service Standards (MSS) for Basic Education. The MSS (MinisterialRegulation 15/2010) is therefore one of the primary parameters in developing free basiceducation policies, strategy, programs and financing.
New Policy Environment and Opportunity