From Jakarta Post

Trading the nation's future for false sense of security

John Riady, Jakarta

President Susilo Bambang Yudhoyono's confidence-inspiring speech last week at the Forbes Global CEO Conference in front of more than 400 top business leaders received a standing ovation. He spoke eloquently, tackled the key points, and even exposed himself to a grueling Q&A session -- something his predecessors would never have done. There is, however, a piece of the puzzle missing.

Putting the issue of implementation aside, there was little or no real mention of education and healthcare -- arguably two of the most vital issues confronting Indonesia today. This is ironic, given Yudhoyono's' goal of convincing foreigners to do business in Indonesia, and education's pivotal role in creating a productive and educated workforce.

Why was it that there was no mention of healthcare and education? It could be that it just slipped the minds of Yudhoyono's speechwriters, but a more plausible reason is that education and healthcare reform is an area where there is nothing yet to be proud of. A look into our nation's medical schools and the healthcare sector will shed some light on the challenges that faces Indonesia's education and healthcare sector at large.

Every year, four million people are born in Indonesia, but Indonesian universities are only capable of graduating 2,500 medical doctors. This yields a doctor to patient ratio of 1:1,600 -- low by any standards. This gap continues to widen as the growth of birth rates increases faster than that of medical doctor's. Furthermore, certain policies, such as the relocation of fresh graduates to remote villages, discourages students from going to medical school.

Not only is the quantity of our doctors lacking, but so too is the quality. The best medical faculty in Indonesia, the University of Indonesia's, did not even make it to the top 250 medical schools in the world. Thus, adjusted for quality, the real doctor to patient ratio in Indonesia might be closer to 1:2,000.

This problem would not be as severe if foreign doctors were allowed to practice in Indonesia and hence tightening the gap in quantity while alleviating the dearth in quality. However, as we are all aware, this is not the case. Foreign educated doctors, regardless of nationality, are given an extremely hard time in being able to get a license to practice.

Proponents of the status quo argue that these regulations help keep the cost of healthcare low as to allow universal access to healthcare, and help protect local doctors who cannot yet compete with foreigners. This way of thinking, however, is leading to foregoing all the potential benefits that opening the industry would give, for the sake of a false sense of security.

Indonesia should open its doors to foreign doctors while still maintaining some regulation to hedge its risks. For example, Indonesia should allow graduates from certain accredited universities with certain grade and experience requirements to automatically be licensed in Indonesia. This is what Singapore has been doing.

There is no reason why a doctor who has a degree from an institution like Johns Hopkins and has had considerable experience should not be allowed to practice in Indonesia. In the field of law, it is still understandable why foreign educated lawyers are not allowed to practice in Indonesia. In medicine, however, a sick man in New York, like a sick man in New Delhi, is the same as sick man in Jakarta. A doctor's knowledge, unlike a lawyer's, is universal.

The above policy could also be accompanied by a requirement that foreign doctors must teach at a local medical faculty for at least a specified number of hours a week and must participate in a mentoring program. Both these policies will encourage the transfer of skill and slowly improve the quality of local practitioners. The deregulation of foreign doctors can even be implemented gradually as to allow time for local doctors to adjust. There are many ways that Indonesia can reap the benefits of "free markets" and yet ensure a certain level of stability.

There seems to be a pattern in Indonesia of implementing policies that are in favor of one cause but are in reality counterproductive. The current Labor Law is one example. Although this law seems to work in favor of employees by protecting them, it is actually creating a severely immobile labor market where it is extremely difficult and costly to let employees go.

Not only does this deter investors from coming to Indonesia since the cost is higher, but it makes employers reluctant to hire employees, as well as promotes laziness and an unproductive work ethic. Under this law, for example, an employee who is fired for misconduct, must still be compensated so generously that it might be cheaper and less of a hassle for the company to keep him/her on the payroll. If I were an investor, I would stay away from Indonesia.

Similar to the solution proposed above to the opening up of the medical profession, the Indonesian government must educate the workforce and labor unions and convince them that our nation does not have a choice but to change and adapt. It is not possible for the government to isolate Indonesia from the pressures of today's globalized world.

Instead of doing the impossible by trying to shield workers, Indonesia should instead focus on preparing the workers to compete by providing retraining and education, while creating "safety nets" to help those that are adversely affected by the changes.

The time when a country can choose whether or not it would like to compete globally is long past. The last question Steve Forbes asked our president last week was how Indonesia was to compete with India and China. Yudhoyono's was caught off-guard and gave a halfhearted answer.

The truth is, if Indonesians are ever going to achieve a higher standard of living -- not only materially but also intellectually, mentally, and spiritually -- a robust education and healthcare system is crucial.

Indonesia's competition is not India and China. Perhaps Steve Forbes' question should have been how Indonesia can compete with countries like Malaysia and Vietnam. The sad fact is that many countries that were once less developed than Indonesia has now pulled ahead of us. In the World Bank's fourth annual Doing Business Survey, Indonesia's competitive ranking slipped and only scored better than Laos among all other ASEAN countries. If Indonesia does not clean up its act, it will find itself increasingly unable to compete.

No doubt that any reform such as this will entail a substantial amount of risk. There will be winners and losers. It is inevitable that some will lose their jobs. As bleak as this may sound, sticking to the status quo will lead to even a bleaker future. If we do not change and prepare for the future, not only will some, but the whole of our nation will deteriorate and what social fabric we have will be destroyed. Not taking risks is the biggest risk we can ever take.

Yudhoyono's anticorruption campaign along with his economic and political reforms is all just fine. However, as John F. Kennedy correctly points out, if you want to know what a nation will be like tomorrow, take a look at its education today. Nothing can be closer to the truth. Hopefully, education and healthcare reform will be a top priority for our leaders and in our President's next speech, he can proudly announce not only reforms in the economy and politics, but also in education and healthcare.

The writer is a graduate of Georgetown University majoring in economics and political science. He can be reached at jr284@georgetown.edu.
_________________________
Jawawa.net: Indonesian Business and Investment News Aggregator