Ageing in Southeast and East Asia: Family, Social Protection, Policy Challenges

5. Public Policy Towards the Elderly in Indonesia

88 88 Alex Arifianto 5 PUBLIC POLICY TOWARDS THE ELDERLY IN INDONESIA Alex Arifianto INTRODUCTION In the past, old age policy has not been a major priority for the Indonesian Government, due to the fact that the number of elderly Indonesians (those who are 60 years of age or older) only formed a small percentage of Indonesia’s population. The government focused most of its priorities on younger Indonesians of working age in order to assist them in gaining employment. Responsibility for the care of the elderly largely fell to their families, since it was assumed that productive citizens would take care of their aged and infirm parents. Very few government resources were allocated to assist elderly Indonesians, especially those who are poor and/or have no immediate family members to assist them. Since the late 1990s however, changes have begun to occur in the way the Indonesian Government views the problem of ageing and old age security. This is due to the fact that demographic projections have predicted that the number of elderly Indonesians will increase significantly in the next few decades. In addition, due to the changes in family structure and economic conditions, it becomes increasingly difficult for families to care for elderly relatives by themselves, leaving many elderly Indonesians vulnerable to poverty or at risk of falling below the poverty line. Thus, ageing increasingly becomes a policy issue that needs to be addressed by the government. Several new laws were passed which aim to ensure that 88 05 Ageing_East Asia_Ch 5 1/10/08, 10:29 AM 88 89 Public Policy Towards the Elderly in Indonesia 89 elderly Indonesians receive adequate support for their livelihood in their old age. Questions remain, however, on whether the approaches undertaken by this legislation are the best way to address the ageing problem in Indonesia and its policy implications. This chapter will describe the problem of ageing in Indonesia and the development of ageing policy in the country, looking at both past and current legislation. Part I will describe the demographic trends on ageing in Indonesia, while Part II will outline their possible policy implications. Part III will describe current developments in Indonesia’s ageing policy, primarily by looking at past and current legislation enacted by the Indonesian Government related to ageing. The analysis will focus on the newly enacted national social security law that is aimed at protecting elderly Indonesians from old age insecurity. Finally, Part IV will suggest some future directions for the ageing policy in Indonesia and review possible policy alternatives directed at addressing this problem. DEMOGRAPHIC AGEING TRENDS IN INDONESIA For more than three decades, Indonesia has made significant progress in its economic and human development. This has resulted in better health conditions for Indonesians and longer life expectancy. The country’s life expectancy has increased dramatically during the last three decades, from 45 in 1970 to 66 in 2004 (UNDP 2003). Consequently, the number of Indonesians aged 60 years and older has increased from 4.48 per cent of the population in 1971 to 7.97 per cent of the population in 2000 (ADB 2004, p. 47). During the past three decades, Indonesia has also successfully implemented the family planning (keluarga berencana) programme, which has reduced the number of children born into typical Indonesian families. While in the early 1950s the average Indonesian family consisted of six children and their parents, in the 1990s the typical Indonesian family consisted of approximately 2.5 children and their parents (United Nations 1999). While family planning has been credited with helping to reduce poverty among Indonesian families (by reducing the cost for parents in raising their children), it also creates adverse consequences for them when those parents grow older, as will be outlined in the next section. At the same time that the birthrate has declined, the number of older Indonesians has increased at a rapid rate. It is estimated that by the year 2020, elderly Indonesians over 60 years old will account for about 11.34 per cent of the population (ADB 2004, p. 47). This trend will continue for the forseeable 05 Ageing_East Asia_Ch 5 1/10/08, 10:29 AM 89 90 90 Alex Arifianto future. It is estimated that in the year 2050, about one-third of all Indonesians will be aged 55 years or older and about 20 per cent will be aged 65 years or older (ILO 2003). Currently most of...