Global Business Guide Indonesia

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Joint Ventures | Business Services
Jamsostek | Mr Elvyn G. Masassya
Mr Elvyn G. Masassya

We have made it a priority to improve upon our quality of service, and make it easier for workers to obtain the benefits they are entitled to

Mr Elvyn G. Masassya, President Director

As a state owned enterprise that specialises in administrating social benefits for private sector workers in Indonesia, what can you tell us about Jamsostek and its strategies going forward?

Jamsostek is one of the primary social security institutions in Indonesia, owned by the government. We are currently focused on four programs that strive to protect the country’s workers; the first of which is old age benefits, which differs from pensions in that we provide a lump sum to elderly workers when they retire. Other programs include accident benefits, death benefits and health benefits. However, our organisation will undergo a substantial transformation over the next few years as part of Indonesia’s move to improve upon its social security and health care standards.

New regulation from the government necessitates that Jamsostek transforms from a state owned enterprise into a non-profit public legal entity. As things currently stand, I report to the minister but as of next year (2014) I will need to report to the president directly. This change will also require us to transfer our health benefit program to another social security provider, Askes, who are also in the process of becoming a public entity in 2014. A later stage of this evolution will take place on 1 July 2015, when Jamsostek begins formally focusing on a new pension program in addition to its three remaining benefits services.

These changes are taking place as part of Indonesia’s decision to form a Social Security Organising Body (BPJS) that merges existing social security services offered by state owned enterprises in a bid to provide universal healthcare to the public. Upon pooling the resources of Jamsostek and Askes under one organisation, we hope to be able to move beyond our current focus on formal workers and offer better social security to Indonesia’s many informal workers.

Going forward, our organisation is targeting a move away from being program-centric in an effort to focus more on customers and capture the sizeable portion of formal and informal workers yet to obtain social security. This strategy involves an initiative to offer total benefits as opposed to just financial benefits. In the past, our members typically received benefits only in the form of cash. We have made a concerted effort to improve upon this by also offering a more comprehensive array of services such as down payment financing for houses as well as food and education benefits to our members. We also plan on launching a more active marketing campaign to educate the public on the advantages of becoming a Jamsostek member.

How do you intend to educate the market and raise awareness about the changes that have taken place within Jamsostek?

Our organisation has set itself a goal of opening up 497 new outlets across Indonesia over the next three years. We also plan on opening desks at banks to better socialise information about our programs. Jamsostek has also rolled out conferences and financial clinics for local workers, to give them the opportunity to learn about financial planning and insurance.

Ultimately, being successful in educating the local market depends heavily on our ability to change the prevalent mindset amongst the public that a Jamsostek membership is a cost that they must bear, as opposed to being something that they need. We must help workers recognise that signing up for our programs is in their best interest.

What are the main challenges to your organisation as it makes its transition to BPJS?

One of the major hurdles we face in successfully transitioning to BPJS on schedule is the need to implement all the required regulation within the year. These regulations make up the foundation from which we are able to pursue the changes that must be undertaken prior to the formal launch of the BPJS. The second challenge is figuring out how to convince labour unions and workers that this transformation will improve upon the current standard of social security programs offered to them.

One of Indonesia’s key strengths as a leading investment destination in the region is its labour costs and flexibility. With the new social benefits system to be introduced by 2015, do you foresee any changes to the country’s competitiveness in this regard?

It is the true that introducing this new social benefits system will make costs associated with labour more expensive. However, when one takes into consideration the abundance of opportunities available to foreign investors in infrastructure, agribusiness, power plants and so on, it is evident that the country’s competitiveness as an investment destination will not be dramatically affected by this. Even with the projected increase in costs, Indonesia’s labour will still be inexpensive relative to other markets around the world.

What can you tell us about Jamsostek’s innovation priorities, new technologies that will be implemented and new products that are going to be introduced in the future?

We have made it a priority to improve upon our quality of service, and make it easier for workers to obtain the benefits they are entitled to. This involves introducing a standard whereby our employees are expected to process claims and provide benefits to workers on the same day that they come into our office.

Furthermore, we are in the process of creating an efficient electronic claim system that would mitigate the need for members to come to our offices just to make claims. This system is part of our plan to introduce a comprehensive electronic platform that would also allow workers to register for our programs, make payments and check their balance online. We are also working with Telkom to launch a mobile version of this system by next year, and it is our hope that doing so will allow us to reach more workers from the informal sector. In conjunction with this technological advancement, we will also begin replacing existing membership cards with smart cards.

Finally, we hope to continue to improve upon our high standards of organisational governance and further our reputation as Indonesia’s most transparent state owned enterprise, a title given to us by the country’s leading anti-corruption agency, KPK.

Do you see any opportunities for cooperation between Jamsostek and an international partner?

Jamsostek is currently a member of the International Social Security Association (ISSA) and the ASEAN Social Security Association (ASSA) and we actively engage in transferring knowledge and expertise within these forums. With the upcoming ASEAN Economic Community, we are particularly interested in working with our regional neighbours to discuss what free movement of labour between member countries will mean for the social security industry. Greater cooperation is needed to determine who will cover expatriates coming into Indonesia, and which social security agency will cover Indonesians going to work in another ASEAN nation.

We are also interested in partnering with foreign organisations to develop new programs for our customers. Aside from our core four programs, we would like to expand our ‘additional benefits’ services and are open to cooperating with other social security agencies to achieve this goal.

What would you like our readers to remember about Indonesia as a final message?

Indonesia presents many opportunities to foreign investors, but in order to be successful in entering the market it is very important to find a good local partner. It is also advantageous to target sectors that receive support from the government, such as agriculture and infrastructure.

Global Business Guide Indonesia - 2014

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