Indonesia's 'Demographic Dividend' May Be Ticking Time Bomb

Some critics may argue that the culture of business monopolies and corruption has become so entrenched in Indonesia that only a revolution can save the Republic

Indonesia's population will be over 300 million by 2030 and more than 65 percent of our countrymen and -women will be of working age by then. Although this sounds promising for Southeast Asia's largest and still-expanding economy, it very much depends on the government's decisions in the coming years whether we will be able to make the most of this unique competitive advantage.

While Indonesia's economic growth might be slowing somewhat at the moment, the country is politically stable and in many ways far ahead of many other developing nations that have so far failed to install a functioning democracy.

Take a look at the Middle East and North Africa, for instance. We share with many countries there the prominent place of religion in public life and also many of the social and political challenges those countries have long faced.

Indonesia has the largest Muslim-majority population in the world, and while the vast majority of the faithful adhere to a peaceful understanding of Islam, this does not mean that all of our people are immune to extremist thought.

The roots of discontent in the Middle East lie in poverty, corruption, unequal opportunities and the inability of the government to deliver essential public services.

And now, while countries like Iraq, Libya and Syria may not see light at the end of the tunnel for quite some time, groups like the Islamic State, Al Qaeda and the Taliban are growing stronger.

Terrorist organizations like these recruit men and women who are in their productive age and have nothing to lose, as they can be easily influenced and manipulated. This is not something Indonesia should be overly concerned about right now, but it could become a serious problem down the road.

Educate, empower, employ

Education and job opportunities are key for a young population to prosper. But currently, our educational institutions consistently score low on any international ranking lists. Serious attention and investment is needed to bring our schools up to par, quickly.

To guarantee prolonged growth and create more equal opportunities, Indonesia needs to embrace its role as Southeast Asia's leading economy.

Free trade within the Association of Southeast Asian Nations, coupled with investment in infrastructure, the protection of property rights, the enforcement of contract law and credit systems to help start-ups, will create plenty of opportunities in Indonesia. But most of these sectors are currently still in their infancy.

Indonesia under Suharto's New Order regime was not a competitive economy. Exploitative state institutions made sure only the well-connected could profit, leading to social instability and, ultimately, the failure of the state.

The reformation we have experienced since 1998 has allowed our political institutions to grow and the political process to prosper under a functioning democracy. Then again, we face plenty of challenges when it comes to the implementation of government policy.

In short, while we are on the right track, we still have long way to go.

No time to waste

Some critics may argue that the culture of business monopolies and corruption has become so entrenched in Indonesia that only a revolution can save us, but that is too pessimistic. In just 17 years we've turned a failing, utterly corrupt state into a thriving democracy. Surely in the years ahead we we can iron out the flaws we face today.

But to make sure that indeed there will be no revolution by the time our demographic dividend comes around, we need to implement change now, starting with educational reform and the firm adoption of an economic policy with a clear, international outlook.

Structural reforms need to be enacted between now and 2030, because if we fail to increase the quality of our education system, many of the almost 200 million Indonesians of productive age by then will not be equipped with the tools they need to succeed. And if that happens, our demographic dividend will not turn out to be an advantage after all -- rather, a possibly dangerous disadvantage.

This is not to say that the Islamic State is at our doorstep in Indonesia, but we do need to make sure our youths never lose faith in their own future. And it is never too soon for the government to start working on that.

Satya Hangga Yudha Widya Putra is a graduate student in global affairs at New York University.