Indonesia will increase scholarships for overseas study and seek to use strategic research to boost economic development after again allocating 20 per cent of its total national budget to education.

In its 2026 state budget, the government has earmarked IDR 757.8 trillion (?34.5 billion) to fund improvements in teacher and professor ¡°welfare¡±, the upgrading of campuses and an expansion of scholarships.

According to the Ministry of Higher Education, Science and Technology, the Indonesia Endowment Fund for Education will support 1.2 million students at domestic institutions and 4,000 students overseas, the latter of which is?a 23 per cent increase from 3,240 awards in 2024.

Minister Brian?Yuliarto?emphasised the role of higher education in driving research and innovation to boost Indonesia¡¯s economy.

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¡°Strategic research, for example on rare earth minerals found in different parts of Indonesia, is currently already being carried out by higher education institutions. These minerals are in high demand globally. We hope that such research, along with the establishment of refining facilities, will strengthen Indonesia¡¯s national industry,¡± he said.

Anthony R. Welch, professor of education at the University of Sydney, told 51³Ô¹Ï that the large budget allocation, along with?the expansion of overseas scholarships and research funding,?would be welcome.

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¡°International returnees with overseas qualifications and high-level skills contribute disproportionately to R&D and strengthen domestic human capital,¡± Welch said.

¡°Equally, the ¡®knowledge diaspora¡¯ who remain abroad help build bridges, collaborate on research, and often return to teach short courses. Expanding scholarships is a powerful way to strengthen international knowledge networks.¡±

Welch also noted persistent challenges in the system, including the ¡°mushrooming of the not-well-regulated private sector¡±?that enrols many more students than public institutions, alongside persistent corruption.

¡°Poor public sector salaries lead to substantial levels of moonlighting by public university teachers in private HEIs, arguably weakening both.¡±

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The expansion of LPDP funding is expected to generate direct recruitment opportunities for overseas universities, particularly in the UK, a leading destination for Indonesian students.

Expanded domestic scholarships will also strengthen the pipeline of future postgraduate students, while the government¡¯s emphasis on research opens doors for joint projects, PhD programmes and industry-linked partnerships.

According to a recent , scholarships are also likely to drive growth in transnational education, including dual degree programmes and branch campuses, which would increase the visibility of UK institutions in Indonesia.

The council noted that education funding is closely tied to Indonesia¡¯s broader national priorities in food security, energy transition, health, the digital economy and defence, meaning that UK universities which align their expertise with these areas are especially well placed to secure collaborations and research partnerships.

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tash.mosheim@timeshighereducation.com