CAN INDONESIA'S HEALTH SECTOR COMPETE IN THE ASEAN ECONOMIC COMMUNITY?
Arman Anwar **
I. Introduction
The deliberate interrogative title of this article is not intended to create a pessimistic impression regarding the concerns and inability of the Indonesian health sector, both at the central and regional levels (provincial and district/city) in competing with other ASEAN member countries to seize the benefits of ASEAN economic integration. Rather, the real intention is an implicit optimistic message that all parties and stakeholders in the health sector, as much as possible, are motivated to prepare themselves to strive to become an important part of the regional health production and service chain in the ASEAN region and even globally so that Indonesia is not in the position of being a mere spectator or merely a market. This responsibility, although the leading sector lies with the Ministry of Health in Jakarta or the Health Services in the regions, does not mean it is solely the responsibility of the central or regional government but is a shared responsibility of all components of the nation.
In the era of the ASEAN Economic Community, trade and services, including in the health sector, will become increasingly competitive, and only countries with prepared regional governments will be able to compete and reap the benefits. Potential benefits include the creation of extensive employment opportunities in health care facilities, improved quality of health care and public health, and reduced poverty and socioeconomic disparities. At the macro level, the positive impact will also be an increase in people's economic income and high economic growth by generating significant foreign exchange for the country or regional PAD, expanding the scope of the economy, increasing attractiveness as a destination for investors and tourists, reducing trade transaction costs, and improving trade and business facilities. In addition, it will also facilitate and improve market access, including the health services market.
* Seminar on "Opportunities and Challenges for Indonesian Medical Personnel in the ASEAN Free Market Era", Organized by the ASEAN Study Center with the Central Maluku Regency Government in Masohi, Thursday, January 28, 2016
** Doctorate in Health Law at the Faculty of Law, Universitas Pattimura
This will enhance transparency and accelerate the adjustment of domestic regulations and standardization. Ultimately, health and welfare resources and distribution will be more accessible to the people. Conversely, unprepared countries and regional governments will be eroded by the strong currents of competition and rivalry against other countries for market share in healthcare and production sites for various drugs, medicinal ingredients, and medical devices.
Competition between countries will inevitably give rise to conflict. 'trade war' (trade war), because on the one hand, some countries possess the ability to manage excellent healthcare services, equipped with various advanced medical technologies, and hospital corporate management based on high efficiency principles, supported by quality healthcare resources and strong pharmaceutical and medical equipment businesses. These strong countries will be able to seize market opportunities in the healthcare sector and expand their production and service base. On the other hand, some countries possess large markets with a high potential consumer base for healthcare services, but their healthcare resources and businesses remain weak. If exploited, these markets can promise significant profits for these powerful countries, especially if their governments are not astute in regulating international trade regulations and laws to protect their healthcare market. This reality aligns with the fact that inequality in the healthcare sector among ASEAN member countries remains concerning. Disparities in this sector lead to varying levels of public health across ASEAN member countries. Therefore, it is not surprising that the WHO states that nearly one-third of global maternal and child deaths occur in countries in the Southeast Asian region. WHO estimates that as many as 37 million births occur in Southeast Asia each year, but ironically the total maternal and newborn deaths in the region are estimated at 170.000-1.300.000 per year.
Indonesia has the highest number of dengue fever cases compared to other ASEAN countries. In 2009, it reached approximately 150 cases. This figure did not decline until 2010. According to Ministry of Health data, as of mid-2013, dengue fever cases had occurred in 31 provinces, with 48.905 cases, 376 of whom died. This compares with 90.245 cases the previous year. with the death toll reached 816 people.
The high mortality rate caused by disease in several ASEAN countries is due to the wide economic disparity between them. Singapore's per capita GDP, for example, is 35 times greater than Myanmar's. Similarly, inferior healthcare services in several ASEAN countries further widen this gap. This is due to limited health budget allocations and suboptimal coordination in the use of donor funds. Furthermore, the percentage of private sector capital participation in the total health budget in several ASEAN member countries is quite significant, indicating a clear effect: the health sector has become a profit-oriented economic commodity. Ultimately, healthcare costs become prohibitive, making it difficult for underprivileged communities to access healthcare services.
Furthermore, internally, there is a wealth gap within each ASEAN member country. For example, in Indonesia alone, the 40 richest individuals possess wealth equivalent to 10% of Indonesia's GDP. Therefore, according to a report from Institute for Management Development (IMD) that Indonesia's economic competitiveness is still below other ASEAN countries, which is in 42nd position. Meanwhile, the Philippines has successfully surpassed Indonesia in 38th position. and the position of three other countries, such as Singapore is in 5th position, Malaysia 15th, and Thailand 27th. Realizing this, only ASEAN countries that have high competitiveness by dominating the market and having strong and efficient business actors as well as an even level of people's welfare will dominate this era.
If the question is how about Indonesia. In the context of ASEAN Economic Community It's possible that Indonesia, instead of dominating, will become the object of domination by other ASEAN countries, even internationally. If so, what must be done? To play a significant role in the ASEAN Economic Community, thorough preparation is required, taking into account the opportunities available and the challenges faced, as well as the strategic steps that must be taken. This is a significant challenge that must be met.
II. A Glance at the ASEAN Economic Community
In the ASEAN Charter or ASEAN Charter, there are three pillars of the ASEAN community (ASEAN Community) that is ASEAN Political-Security Community, ASEAN Socio-Cultural Community and ASEAN Economic Community. The ASEAN Charter was adopted in Singapore on November 20, 2007. Indonesia ratified the ASEAN Charter through Law Number 38 of 2008.
Specifically about ASEAN Economic Community, the blueprint has been set by the ASEAN heads of government in Declaration of the ASEAN Economic Community Blueprint since November 20, 2007 in Singapore and has been implemented several days ago, precisely on December 31, 2015, so that officially the countries that are members of ASEAN, including Indonesia, have entered the era of the ASEAN Economic Community (AEC) or ASEAN Economic Community. The AEC was envisioned by the leaders of ASEAN countries as a free trade area for goods and services, investment, skilled labor, and capital flows. Therefore, the characteristics of the AEC are to make ASEAN a psingle market and regional production base (single market and production base), khighly competitive areas (highly competitive region) and pequitable economic development in the region (region of equitable economic development) and iintegration of regional economies with the global economy(integration into the global economy).Thus The MEA can be said to want to replicate or emulate the existence of the European Economic Community (EEC) or European Economic Community. Compared to the EEC, the MEA can be said to be late because the EEC was formed in 1957 based on an agreement known as Treaty Establishing the European Economic Community or Treaty of Rome and was transformed in 1993 into the European Union (EU) or European. Despite its delay, the AEC is expected to catch up and create progress and equal prosperity for all ASEAN member countries. To achieve this goal, 12 priority sectors are identified: seven goods sectors—agriculture, electronics, automotive, fisheries, rubber, wood, and textiles—and five services sectors—air transportation, healthcare, tourism, logistics, and the information technology industry, better known as e-ASEAN.
Indonesia has committed to advancing ASEAN cooperation, including in realizing the ASEAN Economic Community (AEC). The Indonesian market will be open to foreign businesses and their products or services, and vice versa. Indonesian President Joko Widodo, in his speech at the 25th ASEAN Summit in Nay Pyi Taw, Myanmar, stated that Indonesia's top priority is to increase Indonesia's economic growth rate by 7 percent, in accordance with the Indonesian government's economic target. To achieve this goal, in facing the AEC, Indonesia will strengthen infrastructure and develop Indonesian maritime connectivity, but like any sovereign nation, Indonesia must also ensure that its national interests are not harmed.
III. Trade Model in Health Services in the ASEAN Region
Trade in health services in ASEAN includes four mode of supply. covers cross-border supply, consumption abroad, commercial presenceand movement of natural persons. First, cross-border supply is a cross-border supply of services. For example, services Telemedicine or remote treatment by Singaporean doctors for Indonesian patients domiciled in Indonesia, and vice versa. Meanwhile, Fashion second, consumption abroad This means that domestic consumers travel abroad to purchase healthcare services. For example, Indonesian patients go to hospitals in Singapore for treatment, or vice versa. The third mode is commercial presence, namely, foreign healthcare providers providing their services to domestic consumers. For example, a hospital in Singapore establishing a branch in Indonesia, or vice versa. Then the fourth is movement of natural persons This means that foreign workers providing specialized services come to the consumer country. For example, a specialist doctor from Singapore practicing medicine in Indonesia, or vice versa.
Trade in services in ASEAN is regulated in the ASEAN agreement Framework Agreement on Service (AFAS) agreed by the ASEAN Economic Ministers in Bangkok, Thailand, on 15 December 1995. In general, AFAS regulates, among other things: First, the real elimination of barriers to trade in services for 5 priority integration sectors (Priority Integration Sectors/PIS), one of which is the health sector. Second, encouraging progress in the liberalization of the services sector in each round of negotiations by increasing the number of new sub-sectors being liberalized. Negotiation rounds have been held every two years since 2008. Third, facilitating the free flow of services through mutual recognition of competencies (Mutual Recognition Arrangements / MRAs) eight types of professions to facilitate the movement of professional workers in ASEAN.
Mutual Recognition Arrangement (MRA) is an agreement that regulates natural person in Mode 4. MRA is intended to facilitate mobilization natural person in ASEAN so that they can work in any ASEAN country. This requires uniformity and understanding regarding licensing requirements and procedures (licensing requirements and procedures), prerequisite qualifications and procedures (qualification requirements and procedures), and technical standards (technical standard) applicable in each ASEAN country. However, efforts to standardize (harmonize) trade in services are not easy. This is because it involves regulating human quality/competence and differences between countries regarding education systems, training, and experience. Therefore, the solution is mutual recognition (mutual recognition) competence natural person between countries, so that professional health practitioners can practice in other countries as in their own country.
In ASEAN there are 3 MRAs for health services, which have been signed by the ASEAN Trade Ministers, namely: ASEAN MRA on Nursing Services, December 8, 2006 in Cebu, Philippines; ASEAN MRA on Medical Practitioners, February 26, 2009 in Cha-am, Thailand; and ASEAN MRA on Dental Practitioners, February 26, 2009 in Cha-am, Thailand. So, based on this agreement, for example, a dentist from one of the ASEAN countries can only apply for registration to practice in Indonesia if he has qualifications recognized by the PDRA. (Professional Dental Regulatory Authority) from the country of origin, and PDRA from Indonesia (host country). Not only that, to be able to practice in host country, The dentist must have practiced for at least 5 consecutive years in his home country and must comply with the continuing education process (Continuing Professional Development) applicable in that country. In addition, the dentist must also be declared free from any form of professional or ethical violation by the PDRA of his/her country of origin, both at the local and international levels, related to the practice of the doctor in his/her country of origin and in other countries (within the limits of the PDRA's knowledge in that country). In addition, the person concerned must not be involved in any legal problems in his/her country of origin or in other countries.
In Indonesia, the Indonesian Medical Council (KKI) is the official institution that acts as a PDRA. KKI has the function of regulating, approving, determining, and fostering doctors and dentists who carry out medical practices, in order to improve the quality of medical services in Indonesia. In 2009, KKI issued Indonesian Medical Council Regulation No. 157/KKI/PER/XII/2009 concerning Procedures for Registration of Doctors and Dentists of ASEAN Citizens Who Will Practice Medicine in Indonesia. This regulation also requires a letter of recommendation from the local PDGI branch at the location where the practice will be held. In addition, this regulation also requires an adaptation program, as a learning and teaching activity for Indonesian or foreign doctors and dentists who graduated from abroad to adjust the competencies obtained during their education and attitudes and behaviors that are appropriate to the socio-cultural conditions and health problems of the community, so that they can practice medicine in Indonesia.
IV. Mapping Challenges to Reaching Opportunities
To compete in the ASEAN Economic Community (AEC), Indonesia needs to understand the challenges it faces. Some of the challenges facing Indonesia in the health sector include the still-limited readiness of health infrastructure, which impacts competitiveness. The latest data from the Global Competitiveness Report 2013/2014 from World Economic Forum (WEF)Indonesia's competitiveness ranks 38th globally. Meanwhile, the quality of Indonesia's infrastructure ranks 82nd out of 148 countries and 5th among ASEAN member states. These rankings indicate that infrastructure remains weak.
The number of medical personnel in Indonesia is also far from ideal. Indonesia experienced a shortage of over 26.000 general practitioners from 2007 to 2010, over 8.000 specialist doctors, over 14.000 dentists, over 63.000 nurses, and over 97.000 midwives. Consequently, the doctor-to-do list in Indonesia remains at one per 5.000 residents. Compared to Malaysia, where the doctor-to-do list is one per 700 residents, patients there can be adequately served. The shortage of doctors and the need for specialist doctors remain difficult to meet because only a few medical universities offer specialist programs.AThe existence of gaps in health services and the uneven distribution of doctors in Indonesia, especially specialists, are obstacles that are difficult to overcome. The Indonesian Pediatrician Association (IDAI) database,Data from the Indonesian Pediatric Society (2005) showed that the number of pediatricians in Jakarta was recorded at 443 (a ratio of 5,29 pediatricians per 100.000 population), while in Papua there were only 7 (0,32 pediatricians per 100.000 population). The lack of adequate health care facilities and limited and low-quality health resources resulted in nearly 1 million Indonesians seeking medical treatment abroad each year, with the amount spent abroad for medical treatment reaching Rp 20 trillion.
Other challenges include domestic regulations that are not yet detailed and harmonized, the lack of detailed arrangements for healthcare facilities, and the existence of underdeveloped types of healthcare services, such as medical engineers, flying doctors, and telemedicine.To increase access to global health knowledge and telemedicine services, regulatory rules are certainly needed, but The development of regulatory regulations on telemedicine in Indonesia can be considered late. Unlike Malaysia, India, and the United States, which already have laws on telemedicine, Indonesia has only regulated it through the Decree of the Director General of Health Efforts at the Ministry of Health of the Republic of Indonesia, through Directorial Decree Number: HK.02.03/V/0209/2013 dated January 31, 2013, concerning the Implementation of Telemedicine. Pilot Projects Telemedicine and Designation of Telemedicine Health Service Facilities in the Fields of Teleradiology and Telecardiology.
Regarding the liberalization of healthcare services in ASEAN, policy harmonization is still under exploration, particularly regarding the healthcare business, such as prerequisites for establishing hospitals, opening clinics, using medical equipment, and discussing the standardization of medical education curricula. When the time comes for an agreement, Indonesia must be prepared.
Indonesia's hopes for success still offer ample opportunities. To achieve this, Indonesia needs to improve the competency standards of its medical workforce while striving for uniformity of shared competencies across ASEAN countries. Furthermore, regular evaluation of established competency standards is necessary to keep pace with developments in other countries. Increasing the number of doctors through the addition of medical education institutions is also necessary. Similarly, the distribution of doctors and medical institutions, which have been concentrated on Java, needs to be evenly distributed throughout the regions. Furthermore, supporting infrastructure, specifically medical technology and adequate medical education institutions, must also be strengthened. Regarding the practice of foreign doctors, the government needs to consider exploiting loopholes in the MRA to position Indonesian doctors more competitively compared to doctors from other ASEAN countries. Regional governments must also play a more active role in preparing health infrastructure and resources in the regions, both in terms of quantity and quality, and creating a safe and conducive investment climate, considering that Indonesia is a destination for ASEAN investors, where the proportion of ASEAN investment in Indonesia reaches 43%, compared to the proportion of ASEAN investment in ASEAN, which is only 15%. Moreover, the economic conditions of Indonesia and ASEAN continue to improve while other countries experience a slowdown. The facts prove that the ASEAN region has now become a primary focus for global investment flows.
The abundant potential of natural resources means that Indonesia has biodiversity (biodiversity) that can be utilized as a source of raw materials for medicines. Therefore, in the pharmaceutical sector, Indonesia can capture the export market and investment opportunities in this sector. Indonesia has the potential to become an exporting country, where the value of Indonesian exports to intra-ASEAN is only 18-19%, while to outside ASEAN it ranges from 80-82% of its total exports. There is still a wide opportunity to increase exports to intra-ASEAN to balance the rate of increase in imports from within ASEAN. Moreover, the liberalization of trade in ASEAN goods can ensure the smooth flow of Indonesian goods for the supply of raw materials and finished goods within the ASEAN region because tariff and non-tariff barriers no longer exist. Such market conditions will encourage producers and other domestic businesses to produce and distribute quality goods efficiently so they can compete with products from other countries.
Indonesia must capitalize on its demographic bonus. Its largest population in the region (40% of the total ASEAN population) makes Indonesia a country with a productive and dynamic economy, and therefore, in the future, it can lead the ASEAN market by exploiting market dominance and investment opportunities. The ratio of Indonesia's productive population to other ASEAN countries is 38:100, meaning that for every 100 ASEAN residents, 38 are Indonesian citizens. It is hoped that this productive population will become a distinct advantage for Indonesia, enabling it to support economic growth and increase per capita income.
V. Closing Event
Deficiencies and weaknesses are inevitable, but Indonesia must still have high confidence (high confidence) to face the MEA by leading and being able to cooperate within ASEAN. UIntensive and massive efforts need to be made by the government by conducting outreach about the MEA, allocating an adequate health budget to improve soft skills, hard skills and the welfare of medical personnel, good coordination between the central and regional governments, and the transformation of the AEC blueprint into national law, all must be accelerated dynamically and harmoniously because they have strategic value for Indonesia's competitiveness in the health sector in the ASEAN economic community competition.
