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On Friday (08/11) Indonesia Investments released the October 2019 edition of its monthly research report. The report aims to inform the reader of the key political, economic and social developments that occurred in Indonesia in the month of October 2019 and also touches upon key international developments that impacted on the Indonesian economy.
Per September 2017 around 70 percent of the Indonesian population participates in the government's universal healthcare program (in Indonesian: Jaminan Kesehatan Nasional or JKN), a program that was implemented by the social security agency Badan Penyelenggara Jaminan Sosial Kesehatan (BPJS) in early 2014. This government-subsidized program aims to provide all Indonesian citizens with access to a wide range of health services by 2019.
For its raw materials the pharmaceutical industry of Indonesia is highly dependent on imports. Around 90 percent of medicines' raw materials, roughly IDR 7 trillion (approx. USD $526 million), may be imported this year. Meanwhile, given the Indonesian government is eager to develop its universal health care program (launched in 2014), demand for pharmaceutical products in Indonesia is expected to rise further. Total clients under the national health insurance program is expected to rise from 162 million in 2015 to 186 million in 2016. By the year 2019 the government wants to provide universal health care to all Indonesians.
There is a growing mismatch between claims paid and premiums received by Indonesia's Healthcare and Social Security Agency (Badan Penyelenggara Jaminan Sosial, or BPJS Kesehatan). This year the deficit could reach IDR 9.8 trillion (approx. USD $731 million), leading to concern about the financial sustainability of the program and the need to search for additional and innovative ways to fund Indonesia's National Health Insurance (Jaminan Kesehatan Nasional, or JKN) program.
Armida Alisjahbana, Head of the National Development Planning Ministry (Bappenas) expects that Indonesia’s poverty rate will ease to 9-10 percent in 2015, from 11.3 percent currently. The minister is optimistic that the target for next year can be achieved because the government is currently optimizing several poverty alleviation programs. These programs are arranged in four clusters (expounded below). According to Alisjahbana, the key to success of these programs is good coordination between the central and regional governments.
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The Indonesian government launched its universal healthcare program (Jaminan Kesehatan Nasional, or JKN) on 1 January 2014. This government-subsidized program aims to cover all Indonesian citizens - providing them with access to a wide range of health services – by the year 2019.
State-controlled pharmaceutical company Kimia Farma is expected to show steadily improving corporate earnings in the years ahead supported by Indonesia's universal healthcare scheme (in Indonesian: Jaminan Kesehatan Nasional or JKN) that was implemented by the social security agency Badan Penyelenggara Jaminan Sosial Kesehatan (BPJS) in early 2014. The scheme aims to provide all Indonesian citizens with access to a wide range of health services. Obviously, local pharmaceutical companies are in a great position to benefit from this program.
Although Indonesia's National Health Insurance program is not without problems, it does benefit Indonesian hospitals and makes investment in the nation's hospital sector attractive, particularly as the Indonesian government targets to provide universal health care to all Indonesians by the year 2019. Reportedly, those hospitals that receive patients that fall under Indonesia's Healthcare and Social Security Agency (Badan Penyelenggara Jaminan Sosial, or BPJS Kesehatan) are the busiest hospitals in Indonesia at the moment.
Senior economist at the Institute for Development of Economics and Finance (INDEF), Didier Damanhuri, believes that Indonesia’s two presidential candidates - Joko Widodo (popularly known as Jokowi) and Prabowo Subianto - are both similar in economic approach as both men are primarily focused on high gross domestic product (GDP) growth as the measurement for economic development, while, in fact, many countries that only focus on GDP growth show a high degree of economic inequality.
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