Education and Economic Development

Thesis that education contributes significantly to economic development has become an axiomatic truth that is. Various academic studies and empirical research has proven the validity of the thesis.
William Schweke last book, Smart Money: Education and Economic Development (2004), again giving an affirmation of the scientific thesis of the previous scholars, that education will not only gave birth to human resources (HR) qualified, have knowledge and skills and master the technology, but can also foster a healthy business climate and conducive to economic growth.
Therefore, investment in education is not only beneficial for individuals, but also for the business community and the general public. Educational attainment at all levels will undoubtedly increase their income and productivity of society. Education is the road to progress and achievement of social and economic welfare. While the failure of the education building will give birth to a variety of crucial problems: unemployment, crime, drug abuse, welfare dependency and the political and social burden for the government.
ENTERING THE 21st century, which refers to the development paradigm of knowledge-based economy looks increasingly dominant. This paradigm emphasized three things. First, economic progress in many cases rely on the support base of science and technology. Secondly, the causality between education and economic progress became increasingly strong and solid. Third, the dynamics of education became a major driver of economic growth, which encourages long-term process of structural transformation. As an illustration, Japan was the first Asian country to be a pioneer in the development of a knowledge-based economy. After Japan, following the East Asian countries such as Singapore, China, Taiwan, Hong Kong, and South Korea.
Through this article the authors intend to examine the contribution of education to economic development by looking at the comparison between Korea represent the Asian and African representative of Kenya and Zimbabwe. Options three countries is interesting because the original Korean, which are economically backward, turned out to be able to outperform and then left the two African countries. Some macro economic indicators show very significant changes between the three different countries of the continent. Yang-Ro Yoon, a researcher with the World Bank's economy, in the Born Out of Necessity Effectiveness: A Comparison of Korean and East African Education Policies (2003), revealed some interesting findings based on observations in the three countries. In the 1960s Korea's GNP per capita of only 87 U.S. dollars, while Kenya's 1990 U.S. dollars. Entering the 1970s GNP per capita of Korea began to increase to 270 dollars, but still lower than that Zimbabwe has reached 330 U.S. dollars.
Other indicators such as gross savings rate (percentage of GDP) also shows, Korea is lower than the two African countries. In the mid-1970s, the gross savings rate of the respective countries were: Korea's 8 percent, 15 percent of Kenya, and Zimbabwe 14 percent.
Nevertheless, in terms of agricultural development in Korea is relatively superior. The agricultural sector contributed to GDP by 37 percent in Korea, 35 percent in Kenya, and 20 percent in Zimbabwe.
Entering the 1980s, economic development in Korea is very intensive and rapid progress. Even the period between 1980 and 1996 can be considered as the golden era when the country was capable of ginseng in a fundamental economic transformation. In the years that Korea's economic growth sped away leaving Kenya and Zimbabwe.
In 1996 GNP per capita of Korea has reached 10.600 dollars (although then decreasing to 7980 U.S. dollars in 1998 when monetary crisis occurred). While the GNP per capita of Kenya and Zimbabwe respectively 320 and 610 U.S. dollars U.S. dollars.
Significant differences were also seen in the gross savings rate, namely 36 percent in Korea, 12 percent in Kenya, and 17 percent in Zimbabwe. Korea's impressive economic growth is linked to success in reducing population growth rates for three decades: from 2.7 percent in 1962 to 0.9 percent in 1993.
While population growth in Kenya have been increasing from 3.2 percent in 1965 to 4.2 percent in 1980, although declining to 2.6 percent in 1995.
NO doubt, one key to the success of economic development in Korea is a strong commitment in developing education. Various studies have shown, the base of education in Korea is very strong. The Korean government to take expansionary measures between the 1960s and 1990s to expand access to education for every citizen. Compulsory basic education program (universal basic education) was implemented for a long time and successfully completed in 1965, while Indonesia is only beginning in 1984. While compulsory junior secondary level was achieved in the 1980s; and senior secondary levels is also almost universal in the same period. Amazingly, at the level of higher education also experienced great expansion, more than half of children of school age at this level has entered college.
The Korean government's commitment to education development is reflected in public expenditure. In 1959, the budget for education reached 15 percent of the total national expenditure, to support universal basic education and increasing on a regular basis to be 23 percent in 1971. After the program is successful, the Korean government started to reduce the education budget in the range between 14 to 17 percent of the total national expenditure, or about 2.2 to 4.4 percent of GNP. Recognizing that basic education is part of a public good, reflected in higher social return than the private return, the Korean government allocated a budget for basic education is much greater than the mid-level and higher.
Importantly, factors other than a stronger educational base, the middle class economy in Korea is also well established and well-established. In the decade between the 1960s and 1980s, Korean businessmen had to build trade relations and open up market access to regional countries such as Japan, have even crossed over to America and Europe.
Korea's successful technology innovation (automotive and electronic) for the transfer of technology obtained through trade with the developed countries.
Reflecting on the experience of Korea, the Indonesian government must take strategic steps in the effort to establish national education. Investment in education significantly succeeded in pushing the economic progress and create social welfare.
Therefore, investment in education must be supported by adequate financing, particularly those intended for the completion of compulsory education nine years of basic education. Following the agenda of the Millennium Development Goals (MDGs), in 2015 the Indonesian Government must ensure that all primary school age children will receive basic education.
Simultaneously, access to secondary education and higher education should also be expanded, to support efforts to create a knowledge society that became the basis of accelerated economic development in the future.