The social security bill

I refer to an article in The Jakarta Post on Feb. 17, 2004, on page 4, on the national social security bill currently being considered by the House of Representatives.

First of all, it is not appropriate for the government to push for the quick passage of this bill without properly consulting all involved stakeholders (businesses, labor unions and research institutes) or to disregard the views of those who have expressed concern on the provisions of this bill. Instead, the government should sit together with these stakeholders and revise the bill so that a social security system that takes into account the economic structure of Indonesia can be developed.

Furthermore, it is not correct that the four state-owned insurance firms running the current social security scheme will be merged into a single, nonprofit entity. According to the most recent version of the bill (dated Jan. 16, 2004), these firms would continue to operate the programs they managed currently and would retain their legal status as for-profit (Persero) corporations. This contradicts the aim of the national social security program, which is supposed to be run on a nonprofit basis, and is something the House should address when it deliberates the bill.

Finally, it should be noted that the Southeast Asian countries mentioned as the model for our social security scheme (the Philippines, Thailand and Vietnam) still have problems incorporating all of their citizens into their social security programs and it is estimated that the schemes they run will not be financially sustainable in coming decades. This should serve as a warning for those of us who wish to imitate the system here.

Instead of endorsing this bill without substantial changes, policymakers should significantly revise it so that the bill will not create additional burdens for workers and businesses, is financially sustainable both now and in the future, and will promote competition in the provision of social security coverage for Indonesians instead of running it as a government monopoly.

ALEX ARIFIANTO Jakarta