Opinion

Hoping for social security
in Indonesia

The passing of the healthcare reform bill in the US, despite bitter partisanship at the elite and grassroot levels, generated admiration of the leadership of President Barack Obama.

With the delay of Obama’s visit to Indonesia, which was to ensure the passing of this very bill, there were murmurs of why can’t Indonesia do the same, i.e. take significant steps to secure healthcare or overall social protection for all citizens?

What’s wrong with Indonesia? A labor demonstration on April 5 reminded us that there is a civic desire for social protection. But why hasn’t it materialized into real social protection?

Healthcare reform is usually part of a bigger reform in social security systems. While healthcare is among the basic needs that should be secured by the state, the controversy surrounding its reform usually pertains to the cost of extending its coverage (either its given benefits or targeted groups) or the consequence of options for claiming benefits (given different ideological leanings or socioeconomic statuses).

Two important factors should exist in any effort to advance a reform agenda: Elite will and civic solidarity. Certainly these two factors alone cannot guarantee the quality of the output. The variable of negotiation skills, elite will and civic solidarity will determine output.

No doubt healthcare reform is needed in Indonesia and is long overdue. With rising healthcare costs and proneness to expensive-type illness, protection coverage to all citizens needs to be developed.

The 2009 Healthcare Law and the 2004 National Social Security System Law stipulate that the government shall plan, regulate and organize healthcare programs for all citizens, including the poor and the unemployed, particularly for service in public facilities.

The passing of these laws, however, have not yet secured healthcare protection for Indonesian citizens. Healthcare insurance for the poor does not cover all poor people, due to limited resources, debate rages over who should manage the program (between the Health Ministry and PT Askes) and accusations are rife of corruption and late payments to hospitals. Even the definition of poverty is debated.

All the while almost all working people do not qualify for this type of healthcare and barely any of them take advantage of the healthcare protection paid for through PT Jamsostek (healthcare insurance for private sector workers). Most private sector employees rely on private insurance schemes paid for by employers or themselves.

It is indeed an irony that despite the goal of the Indonesian government to attract investors, tourists and innovation, the very security of its human resource does not receive priority attention.

A lesson learned from the most liberal economy of the world, i.e. the US, is that one cannot rely solely on the market. The very nature of markets is volatility, shock and even crisis.

With markets expanding around the world and borders diminishing among them, volatility is the middle name of any market system.

If we care to notice the policies that the US has always taken amid market volatility and crisis, we would find that the US treats the American people as their prime capital. They may even sacrifice pacts made with allies whenever global shocks shake the lives of their citizens.

In the past they dared to defy Gold Standard, created Bretton Woods, even supported the practice of high tariffs that protected their strategic sectors (where most of their citizens were employed in).

Today, they dared to commit to spending about US$350 billion on subsidies for 24 million low-and-middle income Americans (Time April 5); all amid a ballooning trade deficit with China, a high unemployment rate and bitter controversy over the use of nation’s state budget.

Unlike Obama, Indonesia’s President SBY is not in the position to prove his skill in translating vision into manageable action. The reputation of Indonesia is not yet a concern to global players.

Most of the criticism against President SBY is launched domestically, his party still enjoys popularity and the majority, while the media skillfully sways public attention away from President SBY by moving from one scandal to another.

Unfortunately, at the elite level, there is barely any will to launch an inclusive and universal social security system. The passing of laws may be viewed optimistically as the first step to an improved social security system, but these were just baby steps, steps that have not yet been followed up. The laws are mere promise of implementation of the more abstract promise of the Constitution.

In reality divisions continue to exist among the elite over who should have authority over the collection of social security funds, which ministry should have authority over the social security agency, and what the legal status of the social security agency would be.

The Health Ministry insists on being the provider of healthcare for the poor. The State-Owned Enterprises Ministry insists that any social security agencies should remain SOEs and under their portfolio. The Manpower and Transmigration Ministry also wants to take a piece of control to ensure all things related to workers will remain under their purview. All the while PT Askes and PT Jamsostek have debated over who deserves to be the social security agency for a national program.

All the debates have never been resolved since the social security system law was passed in October 2004. The National Social Security Council, which supposedly has authority over the implementation of the law, has only little operational funds, unclear internal decision making processes, and remains but a project under the Coordinating Public Welfare Minister’s Office, with no attention from the President or Vice President. Legislature is busy with other things and none of the political parties have a clear stance on social security.

At the grassroots level, there is barely any solidarity among citizens of various social economic statuses. The middle class fights as a working class, trying to make ends meet with an income that does not cover many lifestyle “needs” such as phone and Internet connections, long commutes to work, housing ownership and baby sitters.

The upper middle class aspire to higher-end lifestyle choices, such as fancy cars and nice apartments. The lower class fights for income above the minimum wage and for cheaper staple food. Hence for healthcare, pensions and work cover, people rely on savings rather than insurance.

When offered a single national social security system, questions rise over the reliability of public hospitals or even local medical staff. Given limited savings, alternative medicine wins attention.

According the research conducted by the CSIS, on average, healthcare spending only constitutes 2.95 percent of household income, while over 66 percent of healthcare spending would be out-of-pocket.

Such fragmentation of preferences hinders solidarity across social groups.  

With Indonesia’s borders opening more and more to trade and investment, there is no denying that the provision of a social security system is a must.

No more should the aware minority of citizens have to shout to convince the elite to act. The government should realize that inclusive social protection under one neat management is the best equipment a state can provide to citizens expected to excel in open liberal market systems.


The writer is the dean of Paramadina Graduate School of Diplomacy & Strategic International Policies.

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