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Indonesian Healthcare and Dental System

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Indonesian Healthcare and Dental System

In Indonesia, the standard of dental care for the general population is rather low and is proportionate to the recipient's financial means. For many poor people dental care just means having a tooth extracted when it gets to the point that it hurts so bad that they can't stand it. You'll find that many Indonesians have never been to a dentist. This is a huge barrier to entry for our product. It centers on the fact that Indonesians are extremely poor. Perhaps we need to narrow our focus to only the wealthy class at first while Indonesia evolves into a more developed and prosperous nation. Indonesia has 33 provinces, each with a Provincial Health Office, and 349 districts, and each having a District Health Officer, looks after government hospitals in the district. For basic health services, each sub-district (3625 in 2003) has at least one Primary Health Centre where one or more doctors, a public health nurse, midwives and other paramedics are posted. There were nearly 8000 health centers in 2000 - one per 26,000 populations. Each center is supported by two or three sub-centers, generally headed by a nurse. The Integrated Health Post provides preventive and promote services at the village level. A midwife is deployed at this level. This post covers 50-100 households. (WHO, 2011) The Decentralization Policy has been implemented in Indonesia, with the implementation of Act No. 22/1999 regarding Regional Governance and Act No. 25/1999 regarding the financial equality between Central and Regional government. With the implementation of the aforementioned Acts, the government system in Indonesia has been changed from Centralized to Decentralized type of government, which provide regional autonomy. In the Act No. 22/1999, there have been three levels of regional autonomy, i.e., Province, District, and City regional autonomy. (WHO, 2011)

General Economic Data for Indonesia

Having a GDP size of nearly US$ 550 billion in 2009, Indonesia is the third fastest growing economy in Asia and the largest economy in Southeast Asia. Much less affected by the global financial crisis than its neighboring countries, Indonesia's economy grew by 4.5% last year and is forecast to climb to 5.6% in 2010 and further still to 6% in 2011, providing a case for Indonesia's inclusion in the so-called BRIC economies. Future economic expansion is expected to include more inclusive growth as nominal per-capita GDP is expected to quadruple by 2020, according to a Standard Chartered report.

A large part of Indonesia's economic success is a result of prudent fiscal policy that focused on reducing the debt burden. Indonesia's debt to GDP ratio has steadily declined from 83% in 2001 to 29% by the end of 2009; the lowest among ASEAN countries, aside from Singapore which has no government debt. The country is ranked 1st among Asia-Pacific sovereigns by Standard & Poor's for best fiscal balance.

In January 2010, Fitch ratings upgraded Indonesia's credit rating to BB+ with a stable outlook. The rating upgrade is in line with Indonesia's strong and sustained growth, and improving fiscal position. It is especially an enormous vote of confidence for investments in Indonesia - putting it only 1 notch below investment grade. Indonesia is on the right path towards attracting larger pools of fixed income and capital flows, as well as drawing in those funds which have so far been precluded from investing in non-investment grade countries.

These achievements have increased the frequency with which Indonesia is being compared to middle-income developing nations like Brazil, India and Mexico. Economically strong, politically stable, reform minded, Indonesia is an emerging global powerhouse in Asia. (BKPM, 2011)

2010 Economic Indicators

GDP, US$ million: 46,527

GDP Growth Rate: 4.5%

GDP per capita at current prices, US$: 2,362.1

PPP, US$: 4,174.9

Exports, US$ million: 116,508.8

Imports, US$ million: 4,358

Unemployment Rate: 8.4%

(ASEANSEC, 2009)

According to the US Department of State:

"Indonesia's overall macroeconomic picture is stable. By 2004, real GDP per capita returned to pre-financial crisis levels and income levels are rising. In 2009, domestic consumption continued to account for the largest portion of GDP, at 58.6%, followed by investment at 31.0%, government consumption at 9.6%, and net exports at 2.8%%. Investment realization had climbed in each of the past several years, until the global slowdown in 2009. It is again rebounding in 2010"

Political Stability and Legal Protections

After the fall of President Suharto in 2001, Indonesia embarked on series of reforms aimed at decentralization of power. While this was popular politically and a good step towards democracy, spreading autonomy over 17,000 islands and 500 legislatures gave rise to rampant and extreme corruption. This corruption is currently threatening future business investment in Indonesia. As one US government official speaking on the condition of anonymity, "Corruption is pervasive from the soccer league to the supreme court. There is a saying among businessmen that if you have to enter the court system to mediate a dispute, you have already lost." (Sagalyn, 2011)

There is also a known Al-Qaida presence in Indonesia responsible for 2002 suicide-bombings of tourist spots in Bali

Openness to FDI and Government Incentives

Indonesia has embarked on a "pro-growth, pro-poor, pro-employment" economic program. Some of its highlights include:

Investment Law No. 25/2007:

This updated investment law redefines "capital investment" as all investments, whether by domestic or foreign investors, for the first time offering equal treatment to all investors. There is no longer a limit of 30 years on foreign investment permits, and gone is the provision in Law 1/1967 for there to be divestment. Additionally, the new law allows for the unimpeded reparation of capital (BKPM, 2011)

One-stop-shop (PTSP) and National Single Window (SPIPISE)

BKPM has launched a one-door integrated service (PTSP) and an electronic automation platform for investment licenses

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