Technical Assistance Report Project Number: P45110-001 Capacity Development Technical Assistance (CDTA) October 2012 Republic of Indonesia: Fiscal Aspect of Social Security Reform (Financed by the Japan Fund for Poverty Reduction) The views expressed herein are those of the consultant and do not necessarily represent those of ADB s members, Board of Directors, Management, or staff, and may be preliminary in nature.
CURRENCY EQUIVALENTS (as of 4 October 2012) Currency unit rupiah (Rp) Rp1.00 = $0.00010 $1.00 = Rp9,560.23 ABBREVIATIONS ADB Asian Development Bank BPJS Badan Penyelenggara Jaminan Sosial (social security administering bodies FPO Fiscal Policy Office ICT information communication and technology GIZ Deutsche Gessellschaft für Internationale Zusammenarbeit (The German Agency for International Cooperation), formerly GTZ SJSN Sistem Jaminan Sosial Nasional (national social security system) TA Technical assistance TECHNICAL ASSISTANCE CLASSIFICATION Type Capacity development technical assistance (CDTA) Targeting classification General intervention Sector (subsector) Public sector management, health and social protection, finance Themes (subthemes) Governance, economic growth, social development, capacity development (organizational development) Location (impact) National (high) Partnership Japan Fund for Poverty Reduction (ii) NOTES The fiscal year of the Government of Indonesia ends on 31 December. In this report, "$" refers to US dollars. \
Vice-President S. Groff, Operations 2 Director General K. Senga, Southeast Asia Department (SERD) Director S. Hattori, Public Management, Financial Sector and Trade Division, SERD Team leader Team members R. Hattari, Public Management Economist (Fiscal Management and Social Security), SERD I. Ahsan, Counsel, Office of the General Counsel E. Masaki, Social Sector Economist, SERD R. Ramilla-Siquijor, Operations Assistant, SERD G. Servais, Health Specialist, SERD R. Soeharno, Social Sector Officer, Indonesia Resident Mission, SERD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.
I. INTRODUCTION 1. The Government of Indonesia (the government) has identified social security reform as a means to achieve inclusive growth under its second medium-term growth strategy for 2010 2014. The government s objective is to expand the coverage and improve the quality of the existing social security framework to cover all Indonesian citizens, regardless of their income status. The government has initiated the reform process by passing Law No. 40 on National Social Security System in 2004 (SJSN Law) and Law No. 24 on Social Security Administering Bodies (BPJS) in 2011 (BPJS Law). The Health BPJS should be established by early 2014 while the BPJS for labor should be established by mid 2015. To meet these deadlines, the government will need support in preparing all related regulations, studies, and institutional arrangements. 1 2. Lessons from other countries indicate that social security reform is a long-term process requiring focus and an appropriate sequencing of steps. The reforms must be credible, scalable, and acceptable to diverse stakeholders. Good organization and sound design are essential but even the best designed program will fail if the government does not establish appropriate and effective business processes, administrative systems, and information management capabilities. Above all, it is critical that the government adopts a sustainable contribution and benefit structure. 3. Since 2002, the Asian Development Bank (ADB) has supported social security reform in Indonesia through technical assistance (TA) and program loans. 2 The TA 3 was listed in the country operations business plan for 2011 2013. 4 ADB support in reforming the social security system in Indonesia is aligned with ADB s social protection strategy that aims to reduce poverty and the vulnerability of the poor to sudden economic shocks. 5 The government also views social security reform as a part of its National Poverty Reduction Agenda. To maintain the momentum and ensure the reforms are effective, the government has requested ADB capacity development technical assistance (TA) to support the creation and launch of the two social security administering bodies. The design and monitoring framework is in Appendix 1. II. ISSUES 4. The current social security system is managed by four state-owned enterprises PT. TASPEN, PT. ASKES, PT. ASABRI, and PT. JAMSOSTEK. The pension and endowment benefits of civil servants and their dependents, which total 13 million, are covered by PT. TASPEN. PT. ASKES provides health insurance to about 14 million civil servants and their dependents. PT. ASABRI provides pension and death benefits to about 1.5 million active members of armed forces, while PT. JAMSOSTEK provides old-age savings, worker s 1 The required regulations cover at least 8 Government regulations/pp, 7 Presidential Regulation/Perpres, and 1 Presidential Decree, which should be enacted for BPJS for Health. 2 ADB. 1998. Technical Assistance to the Republic of Indonesia for the Reform of Pension and Provident Funds. Manila (TA 3116-INO); ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Republic of Indonesia for Financial Governance and Social Security Reform Program. Manila; ADB. 2002. Technical Assistance to the Republic of Indonesia for Financial Governance and Social Security Reform. Manila (TA 4024-INO); ADB. 2007. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the Republic of Indonesia for Capital Market Development Program Cluster (Subprogram 1). Manila (Loan 2379-INO); and, ADB. 2008. Technical Assistance to the Republic of Indonesia Republic of Indonesia: Social Security Reform and Economic Modeling Capacity Building (TA 7204-INO). 3 The TA first appeared in the business opportunities section of ADB s website on 1 August 2012. 4 ADB. 2010. Indonesia: Country Operations Business Plan 2011 2013. Manila 5 ADB. 2003. Social Protection Strategy. Manila.
2 compensation, health, and death benefits to roughly 8 million formal sector workers. Coverage for the poor is limited to health through the government's program on social health assistance (JAMKESMAS). 6 The informal sector is not currently covered by any plan. Thus, the current social security system is limited and covers only 12% of the total workforce. 5. The government is mandated by BPJS Law to establish two social security administering bodies (BPJS) on health and labor. The administrative body on health will be responsible for implementing national health insurance, while the administrative body for labor will be responsible for programs that are related to pension, old-age savings, death, and accident benefits. 6. The implementation of the two social security administering bodies entail consolidating all health and pension programs provided by the four current social security organizations. All health programs provided by PT. ASKES and PT. JAMSOSTEK will be consolidated into the new administrative body on health. The new administrative body on labor, on the other hand, would consolidate all the current old-age savings and accidental benefits programs provided by PT. JAMSOSTEK and PT. ASABRI. It will also create a new pension scheme. During the transition stage, the government is required to migrate the participants, programs, assets and liabilities, employees, and the rights and obligations of the four current social security organizations to BPJS. The government understands that implementation will be challenging and will require a gradual approach over time. A. Lack of Capacity for Administering Social Security 7. The success of any social security administering body depends on its ability to reliably collect contributions and pay benefits to the participants in a timely manner. The new administering bodies have not yet developed an effective communication and information network, including accurate data and record keeping that will support routine activities such as collections and payments. Such systems are a prerequisite to preparing financial statements that are transparent and provide for accountability. B. High Administrative and Compliance Costs 8. High costs hamper the government s current system and adversely affect its operations. Currently, administrative costs represent approximately 40% of the contributions made by the participants. In mature and well-run social security systems, administrative costs generally account for less than one percent of contribution collections (or benefits payments). It is essential to lower administrative and compliance costs to enable the social security system to provide greater benefits to its participants. C. Lack of Credible Cost Projections 9. The primary goal of social security reform is to provide a social security system that is adequate, sustainable, affordable, and robust. The reforms should also assist the government in implementing their welfare-improving initiatives. However, the 2004 SJSN law was not supported by a body of analytical work sufficient to design the regulations needed to implement the legislation. No credible projections are available to help model the pension systems. For example, the government has not prepared a forward-looking analysis of the country s demographics, labor market, and economic structure including key parameters such as future wages, labor market participation, and investment returns. The same problem is noted in the 6 JAMKESMAS provides social health assistance to 72 million poor.
3 planning for health services as information on the system s current costs have not been collected and systematically analyzed. The assessments of costs for treating noncommunicable diseases such as diabetes, cancer, hypertension, and tobacco poisoning are incomplete and need to be refined. Likewise, a long-term analysis of the fiscal implications of social security reform will be important for the government, and in particular the Ministry of Finance, to determine the level of sustainability and robustness of the new social security system. D. Limited Fiscal Space 10. The limited fiscal space in Indonesia makes it difficult for the Ministry of Finance to ensure the sustainability of funding for social security reform. Policy makers need to choose a benefit package that is adequate and affordable. The new program will have to strike a balance between providing protection against catastrophic events and the financial resources that will be available to it. The problem for universal coverage also involves the readiness of the supply side, particularly in remote areas. E. Large Number of Informal Sector Workers 11. The Center Bureau of Statistics estimated informal employment to be about 64% of the total labor force in 2006. According to an ADB study, the output of small enterprises, most of which are assumed to be informal, account for approximately 62% of gross domestic product. 7 Currently, about 70% of Indonesia s workers are employed in the informal sector, mostly in agriculture and construction, and mainly in rural areas. ADB studies indicate that women are twice as likely as men to be employed in the informal sector. III. THE TECHNICAL ASSISTANCE 12. The TA will help the government establish the two main BPJS. The TA will also provide direct support to BPJS to strengthen the administration of its core functions, including: collecting member contributions, (ii) paying benefits for health and pension in a timely manner, (iii) managing plan assets in a proper and effective manner, (iv) keeping records through an efficient system, and (v) implementing and abiding by a reliable system of governance. The TA will also help BPJS incorporate the lessons and experiences of other countries. The TA activities will be coordinated with other development partners in support of social security reform. The Japan International Cooperation Agency has expressed interest in assisting the government in social security reform and on social safety net issues. The World Bank has been providing assistance to the Ministry of Finance related to civil servant pensions and savings programs. German development cooperation through Gesellschaft für Internationale Zusammenarbeit (GIZ) has been supporting the National Development Planning Agency in setting up a road map for implementing universal basic coverage for health. A. Impact and Outcome 13. The impact of the TA will be an increased number of participants of the social security administering bodies. The outcome will be the establishment of the social security administering bodies. 7 Government of Indonesia, National Statistic Agency, 2012. Berita Resmi Statistik No. 33/05/Th. XV, 7 Mei 2012: Keadaan Ketenagakerjaan Februari 2012. Jakarta.
4 B. Methodology and Key Activities 14. The TA will support the transformation of the current social security operators into two social security administering bodies on health and labor. The TA will help the government in assessing the financial viability of the new bodies, prepare actuarial projections, and make recommendations to improve the scope of coverage and fiscal sustainability of the reforms. The TA will also recommend new business processes and procedures for the new social security administering bodies. This will include recommendations on a new system for collection and payments, and capacity building for policy formulation and implementation. In addition, the management and development of assets of the social security administering bodies as well as assets of trust funds owned by participants (Dana Jaminan Social) need to be clearly defined. 15. Output 1: Administration plan to implement social security programs in the social security administering bodies is completed. The TA will help the government to design an administration plan for the establishment of the social security administering bodies. The Law No. 24 mandates that PT. ASKES will be transformed as the social security administering body in the beginning of 2014 and PT. JAMSOSTEK will be transformed as the social security administering body for pension in 2015. The transition requires a revamp of the existing administration policy in the two social security companies. The new social security body will handle all the major functions, including collection of revenue and payment of benefits. Experiences of other countries show that a high level of administrative efficiency is essential to reduce compliance cost. Social security arrangements that are well administered at a reasonable cost will gain more legitimacy and wider support than those that are inefficiently run and perceived as unnecessarily expensive. The TA will help the new social security administering bodies reduce and maintain their administrative and compliance costs at the most efficient levels possible. Cost savings in administration will translate into higher rates of return to members. In addition, lower compliance costs and statutory levies for employers and employees have a positive impact on labor markets because they reduce the real burden of statutory levies. They do not discourage firms from hiring more employees. 16. Output 2: Analytic work on the financial management of universal health program is produced. The key to building a sustainable social security program is the level of funds or funds management. With a larger pool of available funds, a larger percentage of the population can be covered, and a more comprehensive service package can be provided while minimizing the cost borne by the participants. Often times, governments face a situation wherein funding is limited while health service costs continue to rise due to growth in the population and evolving health technology. To ensure that the new social security system is affordable, adequate, sustainable, and robust, the TA will examine the existing system and provide an analysis to improve health insurance management and the fiscal governance of the new system. In addition, the TA will analyze the costs of incorporating informal sector workers and will provide alternatives to contain costs at the micro and macro levels. 17. Output 3: Good governance framework for asset liability management is established. The quality of investment outcomes is linked to, and affected by the quality of governance structures. The impact of this linkage can be substantial. The costs of investment management are as important as investment returns because they directly affect the value of pensions. The factors that contribute to good governance within social security administration include governance structures, well-defined accountabilities, policies, and procedures, and the processes used to select and supervise governing bodies and managing institutions. The TA will assist the new administrative bodies to set up an investment policy framework that can control the fiscal burden of the social service programs.
5 18. Output 4: Long-term fiscal risk analysis on the implementation of the National Social Security Programs (SJSN) is completed. Indonesia is currently in a strong demographic position with 50% of its labor force below the age of 30. However, the country s demographic dividend will not last long. As the economy grows, the birth rate is expected to drop due to the improvements in medical facilities. This will increase life expectancy. With more people aging, the dependency ratio, or the ratio of people of nonworking age compared to the number of those of working age, will also increase, and thus increase the future fiscal cost of caring for the elderly through a social insurance scheme. The TA will provide an updated fiscal risk analysis using recent population survey data. The inputs will be important for developing a fiscal risk reserve fund that will need to be incorporated in the national budget. C. Cost and Financing 19. The TA is estimated to cost $800,000, which will be financed on a grant basis by the Japan Fund for Poverty Reduction, and administered by ADB. The government will provide counterpart support in the form of counterpart staff, office space and housing accommodation, domestic transportation, communications facilities for consultants, and other in-kind contributions. The cost estimates and financing plan are in Appendix 2. D. Implementation Arrangements 20. The Fiscal Policy Office of the Ministry of Finance will be the executing agency due to its mandate to improve fiscal risk management. The implementing agencies will be the Fiscal Policy Office, which is responsible for the implementation of the new social security administering bodies, and the Directorate General of Budget of the Ministry of Finance, which is responsible for allocating the government budget for the new social security system. The project is expected to start on 3 September 2012 and end on 2 September 2014. 21. ADB will hire individual consultants in accordance with its Guidelines on the Use of Consultants (2010, as amended from time to time). Disbursements under the TA will conform with ADB s Technical Assistance Disbursement Handbook (2010, as amended from time to time). A total of 44 person-months of consulting services (17 international and 27 national) will be required. The consultants will assist the government in the implementation of the social security administering bodies for health and pension. All procurement will be done in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). Any equipment purchased under the TA will be handed over to the government upon completion of the project. All consultant reports and deliverables required under their terms of references will be delivered to the executing agency at the end of the TA. The consultant team will be responsible for disseminating the reports to the implementing agencies with the help of the executing agency. IV. THE PRESIDENT S DECISION 22. The President, acting under the authority delegated by the Board, has approved ADB administering technical assistance not exceeding the equivalent of $800,000 to the Government of Indonesia to be financed on a grant basis by the Japan Fund for Poverty Reduction for Fiscal Aspect of Social Security Reform, and hereby reports this action to the Board.
6 Appendix 1 Design Summary Impact Increased number of participants of the social security administering bodies DESIGN AND MONITORING FRAMEWORK Performance Targets and Indicators with Baseline By 2018: Coverage of publicly provided social security system increased from 108 million persons in 2010 to 150 million persons. Data Sources and/or Reporting Mechanisms Central Bureau of Statistics and the social security administrators data Assumptions and Risks Assumption The government is committed to social security reform. Risks Weak coalition building leads to a stalled social security reform. Negative economic shocks reduce the government s capacity to finance the social security system. Outcome Establishment of the social security administering bodies By the end of 2014: A new social security administrating body for health is established. Government website and government records Assumptions Resources required to implement reforms are available in a timely manner. Risk Implementation capacity and coordination among government agencies and stakeholders for implementing reforms are weak. Outputs 1. Administration plan to implement social security programs in the social security administering bodies is completed. The administration plan for social security administration body is produced. Revised white paper incorporates new census data Government website and government records Risk Lack of capacity impacts negatively the TA outputs. 2. Analytic work on the financial management of universal health program is produced. Knowledge product on the analysis on unification of participation data with the service data and claims data is produced. Project review mission report Government regulation on benefits and contributions 3. Good governance framework for asset liability management is established. Government issues guidelines on the social security administration body s administrative procedures on asset liability management. Government s regulation on asset and liability s management
Appendix 1 7 Design Summary 4. Long-term fiscal risk analysis on the implementation of National Social Security Programs (SJSN) is completed. Performance Targets and Indicators with Baseline One analytical report on long-term fiscal projection is produced by end of 2012 and updated regularly every 3 years thereafter. Data Sources and/or Reporting Mechanisms Fiscal Policy Office s intergenerational report Medium-Term Development Plan - Rencana Pembangunan Jangka Menengah (RPJM) 2015-2019 Annual Government Work Plan - RKP (Rencana Kerja Pemerintah) Activities with Milestones 1. Administration plan to implement SJSN programs is completed. 1.1 Recruit national consultant (September 2012) 1.2 Recruit international consultant (September 2012) 1.3 Conduct a feasibility study to support the possible issuance of a single identification number. (March 2013) 1.4 Conduct a feasibility study to identify best well-protected information and communication technology (ICT) system that can be used to manage participant data (October 2012) 1.5 Conduct a risk analysis of the current social security ICT system and propose ICT system for new social security system (March 2013) 1.6 Conduct a study on the design and implementation of public education campaigns for the new social security program (October 2012) 1.7 Provide support for the implementation of BPJS (September 2012 September 2014) 1.8 Prepare guidelines on accounting procedures for the new BPJS for health (May 2013) 1.9 Prepare administrative procedures for implementing social security programs that deal with long-term liability schemes, such as old-age savings under Jamsostek (June 2013) 2. Analytic work on financial management of the universal health program is produced. 2.1 Recruit international consultant (September 2012) 2.2 Complete a technical analysis to support implementation of national social security programs on health (September 2012 December 2013) 2.3 Provide required inputs for implementing regulations to run BPJS for health (September 2012 December 2013) 2.4 Facilitate technical assistance on unification of participation data with the service data and claims data (December 2012) 2.5 Provide inputs to government on service tariffs related to fiscal impacts (September 2012 June 2013) Assumptions and Risks Inputs Japan Fund for Poverty Reduction: $800,000 Inputs include: (1) Consultant costs: $625,000 (2) Workshops, training: $35,000 (3) Surveys: $20,000 (4) Administrative cost: $40,000 (5) Contingencies: $20,000 The Government will contribute in kind including counterpart staff, office accommodation, provision of office space, and communication facilities for the consultants. 3. Good governance framework for asset liability management is established. 3.1 Prepare guidelines on asset liability management for old-age savings program (January 2014) 3.2 Design a policy on asset liability management for health fund (December 2012) 3.3 Conduct a study on benefits and required contributions for the National
8 Appendix 1 Activities with Milestones Social Security Program long-term liability schemes, such as pension (December 2013) 3.4 Conduct a study on contribution and data collection and enforcement for the BPJS for health (March 2013) 3.5 Provide training on health model and pension model enhancement (May 2012 February 2014) Inputs 4. Long-term fiscal risk analysis on the implementation of the SJSN programs is completed. 4.1 Complete long-term fiscal analysis of fiscal implications of social security reform (June 2014) 4.2 Produce a feasibility study of incorporating informal sector workers in the National Social Security Program (September 2014) Source: Asian Development Bank.
Appendix 2 9 COST ESTIMATES AND FINANCING PLAN ($ 000) Total Item Cost Japan Fund for Poverty Reduction a 1. Consultants a. Remuneration and per diem i. International consultants 482 ii. National consultants 143 b. International and local travel 40 c. Reports and communications 20 2. Equipment 0 3. Workshops 35 4. Surveys 20 5. Miscellaneous administration and support costs 40 6. Contingencies 20 Total 800.00 Note: The technical assistance is estimated to cost $800,000, of which contributions from the Japan Fund for Poverty Reduction are presented in the table above. The government will provide counterpart support in the form of counterpart staff, office space and housing accommodation, domestic transportation, communications facilities for consultants, and other in-kind contributions. a Administered by the Asian Development Bank. Source: Asian Development Bank estimates.
10 Appendix 3 A. International Consultants OUTLINE TERMS OF REFERENCE FOR CONSULTANTS 1. Social Security and Financing Expert Team Leader (12 person-months, intermittent) 1. The consultant will have at least 10 years of experience working in an international setting on issues related to social security reform. Special preference will be given to those who have experience in social protection policy and financing, including design and evaluation of insurance and financing options (particularly social insurance schemes). The expert must be knowledgeable of health financing theories and models and must be able to adapt them to suit the needs and objectives of Indonesia. The expert should possess workshop facilitation skills and be able to work effectively with in-country stakeholders. Previous working experience in Indonesia is an important advantage. Tasks will include the following: (ii) (iii) (iv) (v) (vi) (vii) The expert will advise the government on the broader macroeconomic implications of the different policy options. In collaboration with government counterparts, the expert will organize and administer (including financial arrangements) required stakeholder consultations and workshops. The expert will conduct workshop(s) with policy makers in Indonesia to clarify what health care and pension schemes will be established and how to ensure their long-term financial sustainability. Working closely with in-country stakeholders, the expert will develop and propose a feasible and sustainable health financing scheme for Indonesia that will help balance health spending and revenue while meeting the country's health care objectives. The proposal will include a review of Indonesia's health financing system, priorities and challenges, advantages and disadvantages of different revenue sources in the Indonesia context (including risk-pooling and social health insurance), and long-term needs for sustainable financing. Working closely with in-country stakeholders, the expert will develop and propose a feasible and sustainable pension scheme for Indonesia. In consultation with stakeholders, the expert will analyze and report on policy issues and implications of the proposed health financing scheme(s) for policy consideration and consultation, reporting, and dissemination of findings and policy information. The expert will provide inputs to the ADB s project officer. Deliverables: (ii) The expert will produce an inception report within 2 months of deployment. The report will: a) outline the outcome of initial stakeholder consultations, b) clarify the main health financing problems, c) establish the priorities to be addressed, and d) provide recommendations on developing a sustainable health financing scheme. The consultant will submit a final report that provides a policy proposal for a feasible and sustainable health financing scheme for social security administering bodies (BPJS) for health and BPJS for pension, including administrative capacity requirements.
Appendix 3 11 (iii) At the end of the technical assistance (TA), the expert will produce a final report that will be approved by the executing agency and the Asian Development Bank (ADB). The final report will comprise all the knowledge products produced during TA (i.e., analytical reports and studies). 2. Social Security Identification System Design/Administration Expert (5 person-months) 2. The expert will have expertise in the design and administration of social security identification systems. The expert deliverables will include the following: (ii) (iii) (iv) (v) (vi) (vii) (viii) The expert will coordinate closely with the ongoing projects of the other development partners to develop the system that will be used as a basis for a unified social security identification system. The expert will coordinate closely with provincial and/or district government in the expansion of membership. The expert will synchronize the participation data with the service data and claims data. The expert will produce a study on transfer of enrollment of PT. ASKES for civil servants and armed forces and of PT. Jamsostek s health care benefits to the new BPJS for health. The expert will integrate enrollment of Health insurance program that is run by regional government and PT. ASKES to the new BPJS for health. The expert will survey management of existing social security schemes to determine the issues involved in switching over to a unified social security identification system. The expert will recommend practical steps for moving toward a unified social security identification system. The expert will assist the team leader and the ADB mission leader. Deliverables: The expert will produce an assessment report on the institutional capacity and other investment requirements for management and administration of the proposed financing plan of BPJS for health and pension. This will include an assessment of government regulations and of any structural or other implementation obstacles. B. National Consultants 1. Health Policy Expert (9 person-months) 3. The expert will have substantial experience in facilitating the implementation of reforms related to financial sector governance and social security reform. 4. The expert will have substantial experience in project management and in working with external funding organizations and government counterpart agencies. The consultant will report directly to the Fiscal Policy Office (FPO) and will have the primary responsibility for the following:
12 Appendix 3 (ii) (iii) (iv) (v) The expert will undertake short-term modeling based on historical projections of health care utilization and cost of services to estimate capitation and premium rates of the proposed risk-pooling scheme(s). The expert will conduct medium- and long-term modeling to analyze and cost health financing policy choices and different scenarios, including the impacts of rising cost pressures, aging populations, and the growing importance of noncommunicable diseases. The expert will monitor and document the progress of reforms through ongoing data collection and policy dialogue with relevant stakeholders. The expert will facilitate the organization of meetings, as necessary, to monitor progress of reforms under the program and address outstanding issues. The expert will assist the team leader and the ADB mission leader. Deliverables: The expert will prepare and submit monthly draft reports in Bahasa Indonesia and English to the FPO program director and ADB on the progress of reforms, including identification of existing and potential obstacles and the provision of practical advice on how to effectively address these. 2. Actuary (6 person-months) 5. The expert will have graduate level training in actuarial science. He or she will have considerable experience in working at the country level producing sustainability analysis of pension and health financing models and schemes. The consultant must be knowledgeable about pension and health policy issues and be able to feed into the design process of sustainable pension and health financing or insurance scheme(s). The expert deliverables will include the following: (ii) (iii) (iv) The expert will improve the actuarial model for pension and health that belongs to the FPO. The expert will model the long-term needs of pension and health care financing and expenditure in Indonesia. The expert will assist the government develop strategies for contributions, data collection, and enforcement. The expert will design and deliver sustainable training and capacity building programs to the Risk Management Unit and other officials. 6. In support of the capacity building program, the consultant is expected to have good relationships with local academic institutions and the Indonesian Society of Actuaries, so that they can provide a capacity building program on risk management. 3. Health Economist, Specialist in Health Insurance (6 person-months) 7. The national public health economist expert will have experience in designing and expanding nationwide health insurance schemes. The expert will have broad experience and understanding of health insurance in Indonesia. He or she will work in close collaboration with FPO team and assist the health economist international expert in the expert s tasks. The expert deliverables will include the following:
Appendix 3 13 (ii) (iii) (iv) (v) (vi) The expert will establish contact and ensure proper communication between health experts and key stakeholders. The expert will collect relevant information on existing or proposed health benefit packages. The expert will collect relevant information on costing health services, summarize the current knowledge on costing of the health services, and compute an estimate of the costs of different options for benefit packages. The expert will project the total costs of the different packages over the short and medium terms. The expert will estimate the costs of different options for different benefit packages. The expert will estimate projections of the total costs of the benefit packages. 4. Organization Development National Expert (6 person-months) 8. The organization development expert will have broad experience in consulting on organization development in Indonesia. He or she will provide inputs to the MOF team to develop their organization and capacity to provide their service. More specifically, the consultant will be responsible for the following tasks: (ii) (iii) The expert will assess, in a participatory manner, the current status of the organization, its managerial challenges, and its prospective for future growth. The expert will support the senior management of both organizations in setting priorities for the development of their organization. The expert will organize regular seminars and/or workshops with top management.