What if Australia helped pioneer a global HECS for our region?
In the next five years, the greatest risk to regional stability in the Asia-Pacific won’t be warships or cyber hacks. It will be something far simpler, more silent – and more explosive: youth unemployment.
From Indonesia to the Solomon Islands, millions of young people are stepping into labour markets that have no room for them. These are not future problems. They are present realities. And they are already warping the region’s economic, social and political trajectory.
By 2030, over 1.4 billion young adults – more than half of them in Asia and Africa – will be vying for their first job. But in places like Timor-Leste, Papua New Guinea and Cambodia, the economy simply can’t absorb them. In PNG alone, the World Bank estimates that up to 80 per cent of youth are underemployed or engaged in informal work only.
If we tackle this problem successfully, we unlock a demographic dividend and turbocharge regional development. If we get it wrong, we risk a generation trapped in poverty, disillusionment and unrest. The youth bulge could become a youth bomb.
One that will arrive on our shores sooner or later.
I think of Hennessey. I met her last year in Honduras, in a slum pressed against the edge of a massive open-air garbage dump. Her parents had vanished years ago. She was being raised by her grandmother and had spent much of her childhood working 12-hour shifts collecting scrap from the dump to survive.
But what caught me off guard was her brilliance. Every time she found a book in the rubbish, she saved it — built a makeshift shelf from bricks and timber – and taught herself to read. By the time a school principal met her at age twelve, she had already given herself an education. That’s what potential looks like. Raw. Untapped. Everywhere. And in danger of being wasted.
Hennessey is a story from Latin America, but the same dynamic is unfolding across our own neighbourhood.
And yet, the fix isn’t theoretical. It’s not some global moonshot or expensive new invention. It’s an Australian success story, hiding in plain sight: HECS.
When Australia introduced the Higher Education Contribution Scheme in 1989, it solved a riddle that still stumps most governments today – how to expand university access without blowing up the budget. Instead of upfront fees, students repaid their tuition through the tax system, only once they earned enough to afford it.
The results speak for themselves. University enrolment soared. Female participation surged. Write-offs remained modest. And the repayment mechanism became a quiet backbone of Australia’s knowledge economy.
So here’s the idea: what if we exported it?
What if Australia helped pioneer a Global HECS for our region – an income-contingent loan system adapted for low-income and fragile economies? A version that works through mobile payments, kicks in only when a graduate earns above a threshold, and targets the exact skills local employers can’t find?
It’s not a fantasy. It’s already happening. Rwanda has trialled it. Colombia restructured its loans this way. South Korea built a world-class university system on the same model. World Vision is working with partners to also develop a pilot Global HECS program.
A Global HECS program would deliver on three fronts at once:
Security: Idle youth are a magnet for unrest. Equipping them with skills and opportunity is the best form of prevention.
Economics: Every tertiary graduate becomes a taxpayer, a consumer, a stabiliser. In Africa alone, closing the tertiary gap could generate an additional US$500 billion in GDP annually.
Diplomacy: Nothing wins hearts and minds like education. A young person who gets their first job because of an Aussie-backed loan remembers it for life.
Of course, there are sceptics.
Can poor countries afford to subsidise education? They already spend more on fuel subsidies and bloated youth programs with far worse outcomes.
What about the informality of developing economies? Modern tech – mobile wallets, digital IDs, even VAT rebates – offers repayment rails that don’t depend on traditional tax systems.
And the so-called “brain drain”? An income-contingent system follows the graduate, wherever they work. Australia’s own HECS model recaptures repayments from citizens living overseas. So can Global HECS.
A Global HECS is less moonshot, more Ikea flatpack: the parts exist, the manual is written, we just need the will to assemble it.
We spend billions on regional stability, defence co-operation and infrastructure aid. But none of that will hold if the region’s young people are locked out of prosperity. We can build ports and patrol boats, but if a 22-year-old in the Solomons still can’t get a job, the risk remains.
Australia faces a choice. We can be the nation that once solved a problem for ourselves — or the one that scaled that solution to benefit millions. We can let the Asia-Pacific’s youth bomb tick louder each year – or defuse it with the best tool we’ve already got.
We built HECS. The world needs it. And now, our region is asking for it.
Daniel Wordsworth is chief executive of World Vision Australia
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