Residents living on the banks of the Ciliwung River in the Bukit Duri area of Jakarta are being relocated to a number of low-cost apartments. Their homes along the river have started to be taken down.
JAKARTA, KOMPAS — Population-related policies must be outlined by taking into account the changes in the population structure of Indonesia, so as to maximize Indonesia’s demographic bonus (or demographic dividend), resulting from the larger population of working-age people compared to the youth and elderly populations. This will also be pertinent to fiscal planning for the future.
“The current demographic bonus in Indonesia –based on an earlier estimation– will last until 2030, perhaps longer. By 2045, we will face the problem of an aging population, like what is being experienced by western countries and Japan. The question is, will we let this take place naturally, or will we take a strategic approach?” said National Development Planning Minister/National Development Planning Agency (Bappenas) head Bambang PS Brodjonegoro during the “Dialog on Indonesia’s Demography Policy: The Future That We Want”, which was held Tuesday (11/7) to commemorate World Population Day in Jakarta.
Bambang said so far, the population issue was seen as something natural, as was the demographic bonus, which is predicted to start around 2020 and peak in 2030. Then would come the phase of an aging population, while no new population policy has been developed since the Family Planning (KB) program of 1971. The KB program is seen to have been successful in affecting the structure of population in Indonesia today.
At present, Bambang said, Bappenas was outlining a new projection of Indonesia’s population for 2045, the centennial of Independence. The focus is Indonesia’s economic condition, which is now in the shadow of the middle income trap. In the past 15 years, Indonesia’s per capita income remained around US$3,500-3,600, or listed as a middle- to lower income nation.
Inline with projected economic growth through 2045, Indonesia would only exit from the middle income trap by 2038, assuming that economic growth would hit at least 5 percent per annum starting now. That means that at the 100th year of independence, when it will have enjoyed being a high-income country for 7 years, Indonesia will be faced with the problem of an aging population.
Bappenas data shows, in referring tothe 2013 UN Population Projection, that by 2045, the percentage of the economically active population will be 66 percent and the elderly population (over 65 years of age) will be about 14 percent. The elderly population then will be higher than at the peak of Indonesia’s demographic bonus in 2030, when the elderly population is 9 percent and the economically active population is around 68 percent.
The growth of the population serves as one of the pillars of economic growth, especially through domestic consumption. Moreover, there is a growing middle class.
Seventh position
Bambang added that, based on a reliable study, Indonesia’s population in 2045 will be around 306 million, the seventh largest in the world. In fact, the birth rate is predicted to keep declining until 2045. By 2045, the total fertility rate (TFR) in each province will be varied, with the highest rate projected for East Nusa Tenggara with 2.81 births per woman and the lowest for Yogyakarta with 1.45 births per woman.
In fact, the ideal TFR, according to Bambang, is 2.1 births per woman. The KB program, which started in 1971, decreased the TFR from 5.6 to 2.6 births per woman by 2012.
“Life expectancy will also increase so that the elderly population, covered by the BPJS health insurance, will become a time bomb. We cannot cut life expectancy, but [the issue is] how to expand the working-age population. Our target was to reduce the birth rate. But now we want to maintain the ideal TFR at 2.1,” he added.
Turro S Wongkaren, head of the demography center at the University of Indonesia’s economics and business department, said the demographic bonus was related not only to the total population, but also to productivity and consumption. If we only calculated demographic bonus in relation to the total population, this would be assuming a constant productivity and consumption rate. “In other countries, an elderly population means greater spending on health problems. Also, it concerns the tax scheme,” Turro added.
Researcher Sukamdi at Gadjah Mada University’s center for population and policy studies said policies should be outlined based on the condition in each province. “The government policy needs to differentiate between provinces with low birth rates and those with high birth rates. Variations in the birth rate should be taken as the basis for policy-making, which is not universal,” Sukamdi said.
The Population and Family Planning Agency’s deputy for population control, Wendy Hartanto, said the TFR of 2.1 births per woman had been projected for 2015. However, since this was not achieved, the projection was revised for 2025.
“In Korea, people do not want to have babies because of the high cost of living. This could also happen in Indonesia,” Wendy said.
