Lessons learned and way forward in Indonesia Valerie Schmitt, ILO DWT Bangkok Experts meeting December 2011, Jakarta

What we have done this week Bachelet report and development of the SPF Social protection floor Assessment Comparative analysis with convention 102 Discussions and recommendations – on health care (including HIV) and children – on income security for the working age population (in case of work injury, unemployment, underemployment & poverty) – on income security for the elderly (combination of pensions (DB, Savings fund, minimum), long term care) In the framework of the implementation of the SJSN and beyond

The Bachelet report A floor is the basic entitlement, everyone should have access to it either through contributory or non-contributory schemes – Access to at least basic services – Minimum income security – Build capabilities SPF not comprehensive from the beginning, progressive development, combination of packages to address several dimensions of poverty Endorsement and support from G20, B20 and L20

The Bachelet report The SPF is affordable (2.2% GDP to complete the SPF in Indonesia) – it is not a cots but an investment It is a way to organize solidarity at country level The SPF cannot be ad hoc but sustainable, systemic, predictable  budgetary implications, and legal implications Social protection has an impact on the rest of the economy, it should be part of the whole building ; SPF need to be defined in coherence with fiscal, economic, trade policies

The Bachelet report To implement the SPF in an efficient way, a few recommendations: – Pilot test and establish a M&E system can help to know what works and what does not – Targeting the poor can create threshold effects – Inclusion of both FS & IE into the same system in order to avoid that the rich go to a private sector and nobody finance the public sector – Universal (does not need the same for everybody), non discriminatory – Involve policy makers, the experts, local govts, civil society, workers and employers, SS institutions… – Use new technologies

The Bachelet report With the SPF, rapid extension of coverage and new needs (social services) and opportunities (jobs particularly for the youth) Work both on the supply and demand of social services; particularly relevant for health care Linkages with other policies such as employment policies (the SPF increases productivity, it needs to be designed in such a way that people have incentives to work) Aging population  new challenges in terms of financing pensions, and new needs such as long term care

Recommendations - Health care Health care – Jamkesmas Benefit package only 8 US $/capita/year  increase to 49 US $/capita/year for all informal economy + HIV prevention and treatment = 0.76% of GDP – Design a specific benefit package = Basis for BPJS No1, appeals and complaints mechanism, know what we are entitled to, anticipate health care expenditure Basis for supply side improvements (investments, staff development) – Coordination of the development of the roadmap(s) – Long term care & needs in terms of “social” workers – paramedical sector – Plan to increase the number of doctors, midwives, etc. in remote areas From 50,000 (60% in central Java) to 200,000 medical doctors – Reactivate compulsory civil service?

Recommendations - Children & youth Children and youth – Free education does not mean that children really have access – Increase the PKH & scholarship programs to all poor children; merge PKH and scholarship program to avoid duplication – Tackle the problem of youth employment & mismatch: Social service system of 2-3 years at all levels (undergrad., graduates) to serve as a paid health volunteer in social protection programs, communities, single window service… Example of China Apprenticeship program… Example of Malaysia

Recommendations – Working age Working age – Almost no income security measures for the informal economy workers (only PNPM, BLK, KUR…) – In the formal sector high levels of evasion (9 million FS employees registered under SS instead of 30 million) – Low number of labour inspectors … Video from China (how to increase the capacity of labour inspectors)

Recommendations – Working age Working age - unemployment – If funded the severance pay would cost 6.5% of salaries (>> UI contributions) – Rigid hiring and firing policies  contributes to the informal sector, youth employment… – No protection for all those workers who work in informal sector, are contractual workers… so the flexibility is high without any protection for the majority – Promotion of a “flexible but protective” system in Indonesia for all workers with different and adapted measures including income security, measures to facilitate return to work, increasing capabilities …

Recommendations – Working age Working age – employment injury, disabilities – Establish measures to facilitate return to work or specific programs for people with disabilities in the formal and informal sector – Need to reduce the risks by systematically including OSH components – Role of labour inspectors in the prevention of accidents

Recommendations - Elderly Elderly – Aging issues  how to fund pensions? New needs (Long term care)? Combination of old age pension and partial activity of the elderly (especially < 70 years old) – Minimum pension for all informal economy workers – For the formal sector – many options (DB, Savings funds) but need to take into account affordability of premiums also for employers, risk of disincentives to hire workers, risk of evasion… – Need also to have pragmatic approach with maybe a lump sum upon retirement and a pension after when the elderly cannot work ; or different levels of benefits according to the level of incapacity – Need to include long term care (Thailand)

Future steps (ILO) Experimentation towards the implementation of the Law – the Single Window Service “SP Home”– NTT, Jember (East Java) – Channel all the schemes in place at decentralized level, inclusion of all (non discrimination) – Reinforce linkages between demand and supply (ex: ensure that the new HC benefit package is available at supply level ; contractual arrangements) – Linkages with central database of the TNP2K for regular update, monitoring and evaluation – Explore new technologies (ID cards with chips) – Explore “utilization” of volunteer workers (youth) for increased capacity of the supply side, employment services (ex: Jember) and inspection

The Single Window Service & Database  Consultation & update of the central database  Monitoring of coverage Impact evaluation on poverty, inclusion in the labour market … Database SPF Provisions Database beneficiaries TNP2K MoH MoE Bappenas MoL Raskin Jamkesmas(da) PNPM Scholarships, PKH Support to M-E Jamsostek Registration, Assessment of vulnerabilities, skills… Linkages Supply/Demand TVET/BLK … Role of communities, NGOs, volunteers …

Future steps (ILO) Study on “employment security” set of measures including – Compensation of income (UI) / minimum allowance (non contributory), – Measures to facilitate return to work (job placement, creation of micro-enterprise, paid volunteer workers), – Development of capabilities (vocational training, apprenticeship program) – For formal sector workers – For informal economy workers

Future steps (ILO) Implication in the development of regulations under BPJS Law, particularly for BPJS1, based on lessons learned from experimentation in coordination with other agencies South-South cooperation with China, Cambodia, Viet Nam, Malaysia, Thailand, Philippines… – EI and ALMPs – SWS, community services – Labour inspection …