The social security bill

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