Poverty hampers RI social security system<\/p>\n
JIMBARAN, Bali (JP): Aside from mismanagement, poverty and
\noverpopulation have aggravated the development of a social
\nsecurity system in Indonesia.<\/p>\n
Bambang Purwoko, the director of program development and
\nmember service affairs at state-owned social security company PT
\nJamsostek, said disadvantageous economic and demographic
\nconditions impeded government efforts to provide people maximum
\nsocial security protection.<\/p>\n
He noted that the successful development of a social security
\nsystem often depended on economic and population growth, apart
\nfrom the government's political commitment.<\/p>\n
It is generally easier for a social security system to develop
\nin a steadily growing economy with low unemployment, said
\nBambang, who earned his doctorate in social insurance at
\nAustralian National University in 1994.<\/p>\n
Bambang said that in Indonesia around 60 percent of the 207
\nmillion population currently lived at or below the poverty line,
\nwhile some 80 percent of the 80 million workforce were still
\nearning the regional minimum wage.<\/p>\n
Bambang, who was in Bali last week to attend the ASEAN Social
\nSecurity Association's annual meeting, further remarked that the
\ncurrent situation was aggravated by the millions who had become
\nunemployed due to the economic crisis.<\/p>\n
He cited as an example the fact that Jamsostek could only
\nextend limited benefits to workers, because 60 percent of
\nemployees participating in the social security program were only
\nable to contribute a limited amount of money due to their low
\nwages.<\/p>\n
Jamsostek has collected Rp 10.29 trillion from around 10
\nmillion workers participating in its programs. Much of its assets
\nhave been invested in Bank Indonesia certificates, commercial
\npapers and bonds, banking deposits and stocks.<\/p>\n
Bambang said Singapore, Malaysia, the Philippines and Thailand
\nhad been more successful than Indonesia in developing their
\nsocial security systems because of their higher per capita
\nincomes.<\/p>\n
Malaysia, with a population of 22.7 million, has a per capita
\nincome of more than US$3,000; Singapore, with a population of 3.9
\nmillion, has a $22,000 per capita income; while the per capita
\nincome in Indonesia is about $460, he said.<\/p>\n
According to Bambang, in Malaysia the social security program
\n-- consisting of occupational accident coverage, health care and
\ndeath benefits -- was compulsory for workers earning 2,000
\nringgit or less a month.<\/p>\n
Malaysian employers are obliged to confer an equivalent of
\n1.25 percent of their employees' gross salary to the Social
\nSecurity Organization.<\/p>\n
Workers in Malaysia pay 11 percent of their monthly wage into
\na pension fund, while their employers contribute 12 percent to
\nthe scheme under individual employees' names.<\/p>\n
"Malaysia's Employees Provident Fund (EPF) and Singapore's
\nCentral Provident Fund have played a dominant role in the two
\ncountries' stock exchanges because of the huge amount of assets
\nraised through their workers," Bambang said, adding that EPF
\nrecently purchased a small number of shares in Indonesia's PT
\nAstra.<\/p>\n
He said Indonesia should learn from these two countries, where
\nthe investment profits were accumulated to provide benefits for
\nworkers. He further highlighted the fact that social security
\ninstitutions in these countries, unlike in Indonesia, were not
\ntaxable.<\/p>\n
Reform<\/p>\n
Bambang also said it was vital that Indonesian social security
\ncompanies were revamped.<\/p>\n
He argued that the five state-owned social security companies
\n-- PT Jamsostek, PT Askes, PT Taspen, PT Asabri and PT Jasa
\nRaharja -- should be dissolved and a single independent
\norganization be established to handle social security programs
\nfor workers, civil servants and servicepeople.<\/p>\n
"Such a merger is an urgent need in order to make the
\ncompanies efficient in social security management," he said.<\/p>\n
He said the new independent organization should be run by an
\nexecutive board comprising representatives of the government,
\nworkers, civil servants, servicepeople and professionals.<\/p>\n
The executive board should have full authority in managing and
\ninvesting all funds raised from participants in the social
\nsecurity program, he said.<\/p>\n
He lamented the fact that the government had yet to show the
\npolitical commitment to provide better social security for the
\npeople.<\/p>\n
"According to the Constitution, it is the government's
\nobligation to provide social security protection for the people,
\nand not to use (social security) for business purposes," he said,
\nadding that a lack of monitoring contributed to past
\nmismanagement of social security funds.<\/p>\n
Bambang claimed financial leakage in the five state-owned
\nsocial security companies was still rampant.<\/p>\n
The financial leakage has a lot to do with the government's
\nintervention in the five companies, he charged without
\nelaborating.<\/p>\n
He said the government should strictly enforce the 1992 Law on
\nSocial Security, which makes it compulsory for companies
\nemploying 10 workers or more to participate in social security
\nprograms.<\/p>\n
"Of the 80 million workforce, only 8 percent, or around 10
\nmillion, participate in social security schemes," he said,
\nadding that most workers were unaware of the advantages of
\njoining a social security program. (rms)<\/p>",
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