JAKARTA (ILO News): In Indonesia only 17 per cent of the employed population enjoys formal social security of which a fraction works in the informal economy. With respect to health, the coverage has recently been substantially expanded through the Jamkesmas/Askeskin programme targeting poor households. However, social security for informal economy workers, more than two-thirds of all workers, leaves still a great deal to be desired. In terms of solutions, the Constitution is explicit in that it emphasizes the role of the State in providing universal social security coverage.
Given the fact that the number of informal workers is expected to increase as a result of the impact of the global financial crisis, ILO and Jamsostek undertook a feasibility study to assess supply and demand of social security for informal workers, determine their current coping mechanisms and assess the impact of the current global crisis on the informal economy.
To get feedback from stakeholders on the survey findings of the feasibility study prepared by Dr Theo Vanderloop and Dr Roos Kities Andadari, the International Labour Organization (ILO) in collaboration with PT. Jamsostek will organize a seminar to present the preliminary findings of the survey entitled: “Social security for informal economy workers in Indonesia; Looking for flexible and highly targeted programmes” on Wednesday, 17 June 2009, in the ASEAN Room 1 to 3, Hotel Sultan Jakarta, from 09.00 to 13.00. Dr Dina Wisnu, Director of the Graduate School for Diplomacy of the University of Paramadina and Ahmad Ansyori, Managing Operations of PT Jamsostek will review the report, while the proceedings will be chaired by Rahma Iryanti, Director for Employment of BAPPENAS. The seminar will be opened by President Director of PT. Jamsostek, H. Hotbonar Sinaga, and the ILO’s Deputy Country Director in Indonesia, Peter van Rooij.
The survey found that 80 per cent of the 2,068 informal workers interviewed have no social security whatsoever: no formal social security and no stated informal social security apart from within the family. Almost 60 per cent of the informal workers know about the Jamsostek programme. Different levels of knowledge in the sample areas and subsectors can help target awareness raising activities of Jamsostek.
While 81 per cent of the respondents indicated that they currently have no formal insurance, half of all respondents stated that they do not intend to acquire formal insurance in the future. The reasons for the former are mainly: no knowledge about insurance, not able to pay, too busy, or not interested/no need. The reasons for not acquiring insurance deal mainly with the inability to pay. There is a task to inform women specifically since they more often stated to have no knowledge about insurance than men (50 versus 37 per cent).
Among the different elements of social security, the first priority of informal workers is insurance for accidents at work (36 per cent). The second priority is insurance for the worker’s health (29 per cent). However, for female informal workers the order is reversed: health is priority number one (31 per cent) and accident comes second (25 per cent).
The willingness to pay is high with 80 per cent willing to contribute financially on a regular basis. The preferred method of payment is monthly. The amounts that respondents indicated they are able to contribute are relatively low: 64 per cent is ready to contribute anything between 1 and 20,000 rupiah per month. However, 11 per cent is willing to pay more than 20,000 rupiah per month which comes close to what is required by Jamsostek, apart from the employer’s share. Men and women are willing to pay almost equal amounts.
On the impact of the global financial crisis on the effort of extending social security to informal workers, 54 per cent feel an impact of the crisis on their work and also noticed the influx of laid-off formal sector workers into the informal economy.
The seminar presenting the results of the survey on social security will provide an excellent opportunity to get feedback from the relevant stakeholders through an exchange of views and experiences to finalize the report and to formulate a better strategy to extend social security coverage to informal economy workers.
“Extending social security to informal economy workers is crucial to realize decent work for all and social security should not be seen as a cost, but as an investment in human capital. To this end, the survey is trying to capture which sectors of the informal economy workers should be prioritized and targeted and to asses the ability and willingness to pay for any contributory scheme.” said Peter van Rooij, Deputy Country Director of the ILO in Indonesia.
The seminar will also examine case studies of laid-off formal sector workers, formalization of the informal economy and the lessons to be learnt in extending social security coverage to informal workers in looking for flexible and highly targeted programmes.
The seminar will be attended by around 100 invitees from government, trade unions, the Indonesian employers’ organization, international and national organizations and academia.
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