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Strengthening Indonesia’s Economy Through Investments in Health Systems

Investing in health care has immense benefits to local patients and the economy. In fact, for every $1 invested in improving health systems in developing economies, countries can expect an economic return of $2-$4, resulting in a healthier population and higher productivity.

This situation holds true for Indonesia, especially after the country’s economy and health were hurt by the COVID-19 pandemic.

The World Bank has downgraded Indonesia’s economy from an upper-middle economy to a lower-middle economy. Across the globe, the pandemic has been a case study for how strong and resilient health systems are essential for economies to thrive. Currently, Indonesia only spends 2.9% of its GDP on healthcare – a much lower percentage than its neighbors; Vietnam spends 5.25% and Malaysia spends 3.38%. In fact, more than 600,000 Indonesian patients travel to neighboring countries annually for treatments, resulting in a loss of $48 billion yearly. Policies and investment levels that facilitate access to those same therapies in Indonesia could keep that spending at home.

Governments may shy away from investing in health systems due to lack of understanding of tangible policy solutions or their benefits. Investments in health can include hiring and training more skilled providers, funding research, procuring new pharmaceutical treatments and diagnostic tools, or increasing programs around awareness. Investments in prevention strategies and in medicines for chronic illnesses would have the strongest positive impact on Indonesia’s health system and economic status.

Indonesia should increase government spending to reflect the average spending of OECD countries and prioritize the expansion of medicine coverage, including innovative treatments.

Medicine use not only has concrete impacts on patient health but also yields significant savings for nations. In a country like Indonesia where chronic illnesses, including heart disease and diabetes, are prominent, proper medicine adherence lowers total health spending by keeping patients out of the ER or hospital. This money saved can be otherwise invested into the economy.

By increasing investments in health, Indonesia can treat patients at home, reclaim its World Bank status as an upper-middle income economy, and revitalize the economy through a healthy population better poised for the workforce.

Finally, Indonesia has a young population, with about 65 million people between the ages of 10 and 24.

Greater investments in health care today will prepare the country as its young generation enters the workforce and advances in age. This requires forward-looking health care policies and strategies to prepare the country for tomorrow’s health challenges – whether it be a new pandemic or growing non-communicable diseases.

Indonesia has achieved significant economic and social progress over the past quarter century. Challenges remain, but Indonesia can continue to invest in its health systems to support both its populations well-being and the nation’s economic advancements.

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