Jamsostek should be reformed

Jamsostek should be reformed

I am writing in response to your Aug. 30 article on the social
security reform draft bill currently being considered by the
House of Representatives.

In the article, you quoted a PT Jamsostek official stating
that there has been no privately provided social security system
anywhere in the world. To set the record straight, private social
security schemes do exist in the world. Not only that, the number
of countries that have chosen to adopt such schemes has grown
during the past decade or so. Most of them are in Latin America
(Chile, Argentina, and Mexico) and in Europe (United Kingdom,
Sweden, Hungary, and Poland).

It has been recognized that public social security schemes
have some fundamental flaws. They would not be able to keep up
with demographic changes in society, where the number of elderly
retirees surpasses the number of younger workers contributing to
the scheme, causing the collapse of the system. They are also
vulnerable to government intervention, causing investment
decisions on the fund to be influenced by political pressure
rather than rational economic arguments.

This is why the above countries have chosen to replace their
public social security scheme with a private one and many other
countries are seriously considering this reform. Given the many
problems facing our social security system today, pursuing this
reform is something that Indonesia should strive
for.

ALEX ARIFIANTO

Jakarta