IO – In retrospect, Jokowi’s first term as president brought mixed results. Jokowi’s signature policy of modernizing Indonesia antiquated infrastructure rightly won him numerous plaudits, but a weakening economy, democratic backsliding, unrest in Papua, massive forest fires and more recently the passing of a controversial law that undermines the nation’s anti-corruption agency has cut deeply into his popularity.
Now, with an interesting array of capable hands entering the president›s cabinet, there are hints of an optimism that Jokowi might be able to turn the corner.
Some of the more impressive personalities to join the cabinet are successful entrepreneurs. This group includes Erick Thohir, the newly appointed Minister of State-Owned Enterprises. Thohir is the founder and chairman of Mahaka Group, a holding company which focuses on media and entertainment. He is also the former owner of professional soccer clubs Inter Milan and D.C. United, and he served as the president of the Indonesian Olympic Committee. Widely recognized as a shrewd investor and businessman, Thohir brings to the table a much-needed set of skills that could potentially help Indonesia improve the performance of its poorly managed state-owned companies.
Erick is joined by entrepeneurs Nadiem Makarim and Wishnutama. Makarim, Jokowi›s new Minister of Education and Culture, founded the transportation network company Go- Jek in 2010. In less than a decade, the Harvard MBA and former McKinsey consultant transformed Go-Jek into a super app, and his company eventually became Indonesia›s first decacorn. Wishnutama, a former Indonesian journalist and co-founder and CEO of NET.Mediatama Televisi, was selected to become the Minister of Tourism and Creative Economy.
Both Makarim and Wishnutama face daunting challenges in their respective ministries. Makarim will need to find ways of improving Indonesia›s educational system, which ranks consistently behind its peers in the region, and he will have to grapple with a ministry that is notoriously corrupt. Wishnutama will be tasked with boosting tourism in ten newly targetted destinations such as Lake Toba, Labuan Bajo and Morotai, as well as develop programs to develop Indonesia›s creative industries.
Whether or not the new cabinet›s dynamic entrepreneurial trio can be successful will depend, in large part, on how well they can make the transformation of being at the center of dynamic industries to working inside government. Many former and successful businessmen are surprised to find moving government bureaucracies in new and innovative directions is an entirely different task than building a business. Career bureaucrats often have agendas that outlive and are at odds with political appointees, and they are skilled at subverting policies not aligned with their vested interests.
New yet experienced hands are also joining the cabinet, the most prominent of which is Gerindra Party Chairman Prabowo Subianto as Indonesia’s new Minister of Defence. A former career soldier who made his mark in the higgest ranks of the military before retiring over three decades ago, Prabowo›s name and his reputation still echoes within the corridors of the armed forces. Given his understanding of military affairs, technology and its culture, Prabowo is a natural fit for his new job, which will include upgrading the military›s hardware, improving the capacity of domestic military suppliers and improving the economic welfare of the rank-and-file.
Also coming into the cabinet from the Gerindra party is Edhi Prabowo. Now serving as the party›s vice-chairman, Edhi will be serving as the Minister of Maritime Affairs and Fisheries. Edhi, a former legislator, is well prepared for his new role since he served once as head of Committee IV in the House of Representatives, which oversees agriculture, forestry, fisheries and maritime affairs. According to party insiders, he will be using that knowledge to improve the welfare of the fisherman community through credit schemes and takeoff arrangements between fisherman and fish canneries.
While these cabinet selections were logical, others made less sense. One example is Airlangga Hatarto, chairman of
ber HK.01.07 / MENKES / 659/2017 concerning the National Formulary pulled out two colon cancer drugs as of March 1, 2019, namely Bevacizumab and Cetuximab, resulting in colon cancer patients having to reach their own pockets to buy the two expensive drugs. Cancer patients’ lives are at stake.
The aides of the President often hold meetings and discuss deficits, but until now they have not been able to find a solution systematically. The deficit in 2019 was very large and caused Health BPJS’s debt to hospitals to continue to accumulate in the trillions of IDR so that the hospitals’ cash flow was disrupted. Not only was the hospital faced with this problem but also JKN patients and drug and medical-devices companies were experiencing bad effects. The one percent fine that must be paid by Health BPJS to hospitals due to late payment, whose value has reached hundreds of billions, will certainly also add to the burden of JKN deficit. The inefficiency of financing due to fines is allowed to continue, so that it impairs the state budget.
President Jokowi must immediately address this issue, and not let his aides later in the new cabinet repeat the habits of previous officials who were eager to talk and argue at the conference table without daring to execute anything meaningful.
BPJS Watch hopes that Mr. Jokowi after the inauguration immediately executes the assistance to Health BPJS so that the debt to the hospital is immediately resolved, and continues to evaluate the performance of his assistants in resolving the JKN deficit problem, including evaluating several regulations as above which indeed hamper participants’ access to JKN guarantees.
Employment Social Security
The implementation of workers’ social security still entails problems. Operational regulations are set but not following the provisions of the law that mandate them, and there is a mandate in a Government Regulation that is also not implemented by the Government.
The management of the JKK and JKm Program for ASN (National Civil Employees), namely PNS (State Civil Employees) and PPPK (Government Employees with Work Agreements) to PT. Taspen is not following the mandate of Article 92 paragraph (2) of Law and Article 106 paragraph (2) of ASN Law No. 5 of 2014 concerning ASN and Perpres no. 109 of 2013 and Article 75 paragraph (2) PP No. 49 of 2018. When referring to these provisions, the JKK and JKm Programs for ASN should be submitted to BPJS Employment.
The Corruption Eradication Commission (KPK) also conducted a study and wrote to the President on 16 September 2019 regarding the management of JKK and JKm for the ASN and PPNPNS. In its letter, the KPK stated that “the Government did not immediately issue a Presidential Regulation (PP) on the procedures for transferring the social security program as requested by Article 66 of Law Number 24 of 2011 concerning BPJS”. Then the KPK also stated, “Non-compliance with the road map by all parties so that there is deviation from the Law in the form of issuance of legal products that are not according to what is needed.”
In the Executive Summary of the Employment Social Security Policy Review as an attachment to the letter to the President, in the 9th paragraph, the Corruption Eradication Commission stated “Another thing that was reviewed was the simulation if the organizing of social security by 3 organizers was merged into one body to Employment BPJS, then the potential operational costs saved amounting to approximately IDR 1 trillion per year.” The KPK letter corrects the implementation of social security so far, pointing out that it does not follow the law, giving rise to inefficiency.
BPJS Watch hopes that President Jokowi after being sworn in will respond seriously to the KPK study and letter so that the implementation of the social security program returns to the three principles and nine SJSN principles, and all workers, both private as well as ASN and PPNPNS, work together and get the same benefits. Over the short term, the Government must continue to ensure the implementation of JKK and JKm at the Employment BPJS, no more effort should be made to tug at PT. Taspen.
Related to the revision of PP No. 44 of 2015 concerning the implementation of the JKK and JKm programs that refer to articles 29 and 36 PP no. 44, the benefits of the JKK and JKm programs are evaluated periodically, every 2 years at the most. Since the benefits were published on July 1, 2015, the two the Golkar party and former Minister of Industry, who was elevated to become the Coordinating Minister of Economics. Normally a position reserved for technocrats, Airlangga has little training in economics, which means most of the economics agenda will be driven by the line ministries. Exactly how Airlangga will make much of a difference remains to be seen.
Given the weak state of the economy, a critical factor will be Minister of Finance Sri Mulyani›s thinking on how much of a stimulus is needed to boost consumption and capital investment. Sri, who served under Jokowi›s Working Cabinet, was well known for her conservative fiscal and monetary policies. But with the global economy set to weaken in the coming year, a more Keynesian approach is needed. The question is, will she move towards providing a stimulus and, if so, will it be sufficient to stave off an economic downturn.
Finally, in the arena of national security, the departure of Wiranto, who was the Coordinating Minister for Politics, Legal and Security Affairs, and his replacement with Mahfud MD, should be seen as a positive development in the cabinet. Mahfud, a former minister of defence and Chief Justice of the Constitutional Court, is much more outward looking than his predecessor, and it would be a safe bet that he will display a softer and more sophisticated approach when dealing with matters such as student protests and unrest in Papua.