The Japan International Cooperation Agency (JICA) on Tuesday signed a Record of Discussions with the Government of Indonesia in Jakarta, the capital city, for the Project on Strengthening the Capacity for Social Insurance Operation, a technical cooperation project.
A press release by JICA states that the project will introduce the unique system of labor and social insurance attorneys used in Japan in a form that is suited to Indonesia with the aims of appropriately administering social insurance and improving the insurance premium collection system in the country.
“This is the first time JICA has provided cooperation anywhere in the world for supporting the introduction of a social insurance system,” JICA states.
JICA states that being that Indonesia is currently experiencing rapid economic growth, the current demographic dividend in the country is expected to peak somewhere between the years 2025 and 2030, resulting in a gradually aging population with a decreasing birthrate, and a stable, efficient social insurance system must be established soon.
“With the labor insurance enrollment rates (workers’ compensation, old age lump sum benefit, temporary welfare for death of family and annuity) at 37 percent in the formal sector  and at 0.4 percent in the informal sector  (both figures as of October 2015), the Government of Indonesia has set the objective of improving the enrollment rates to 80 and 5 percent, respectively, by 2019. Covering the entire population with health insurance by 2019 is also a national goal, but little headway has been made in the number of subscribers because many workers are unfamiliar with the existence of and the need for a health insurance system,” JICA states.
In 2016, JICA partnered with the Ministry of Health, Labour and Welfare of Japan and the Japan Federation of Labor and Social Security Attorney’s Associations to provide training to high-ranking officials of the Government of Indonesia to expand the administration of social insurance and to enhance the functions of insurance premium collection.
When the system of labor and social insurance attorneys in Japan was discussed, there was a strong interest in the efficiency and effectiveness of using such a system, and a request was made for assistance to introduce such a system in Indonesia. The project aims for the appropriate administration of insurance, including premium collection, in Indonesia and future applications to other countries, through assistance for constructing a system for operating an Indonesian-style system of labor and social insurance attorneys, and conducting seminars and certification examinations for attorneys.
Next year, Japan and Indonesia will celebrate 60 years of diplomatic relations and an established history of cooperation, and JICA will continue to provide support for new challenges such as these while contributing to development in Indonesia.