The Importance of Human Capital and Good Government Governance

It is one of my favorite book, not only because it’s really close to my research interest, but this book also give a vivid description of good government governance correlation with economic development. The title is From Poverty to Prosperity by Arnold Kling and Nick Schulz.

Many people stuck with the view that to have a really good economic development, the most important thing needed is a huge amount of natural resources. But, that’s not the case for this book, the authors elaborate really well how human capital (creativity and innovation) as well as good government governnance are the things that matter most.

This thoght in line with what President Yudhoyono adress around 2 weeks ago in a limited cabinet meeting directly after the G20 and APEC summit earlier this month. He adreessed that China, South Korea, and Japan are really developed rapidly because of their hard work and human capital quality. He really stressed that human capital is the most importatnt.

Human Capital

What I we mean by human capital here are the creativity and innovation maker ability. It is really related with the ability to master the technology. That’s why, educationa and knowledge are something highly very important.

In this case, I think indonesia already in the right move, with 20% budget for education, it’s really show that now we put education as an important thing. Is that enough? Nope. When I’m in the student exchange program at Univeristy of Utah, I met with three malaysian student. The most interesting thing is that their study here is finance indirectly by the government. Malaysian government made a partnership with the local company in malaysia. The local company will give money which will be administered by the government to finance the study of many malaysian student abroad.

Many of them go to USA, Europe, and India. They select the highly capable student and the send them abroad. After completeing their study, those student will apply their knowledge for malaysian sake, whether it through malaysian local company or others.

This kind of program, although look really simple is really amaze me. I never hear this kind of program in Indonesia. This program is really a big investment in human capital. I am firmly believe that Indonesian stedents are as capable as student from developed nations, even much more better, what they lack of are the opportunities and informations. I am really hope the govenment can take this example as the consideration.

Good Government Governance

This factor is one of the most important factor. The budget, the development of a country, really highly depended on how well the government govern or manage that country. A highly capable leader and respected by its citizen is the key. It is exactly what Allah said in Qur’an. without a capable leader, prosperity is only a dream. That’s why, we need a really capable government officer and leader in this country.

Wish Allah strenghten us to achieve it. Allah, help us, we love you.

Salt Lake City, Nov 23rd 2010

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