Indonesia is regarded as being a developing country owing to its past and present economic and social conditions. Its reliance on foreign aid to ensure that development occurs is also proof that it is still a developing country. When examining the lending institutions in Indonesia, there are several microfinance institutions that lend loans to people to give them financial freedom to access goods and services (Frieschlad, 2015). This is because the major financial institutions give high interest rates to majority of the population and use shady methods to collect their debt from the already-poverty-stricken cross-sections of the general Indonesian public. The common microfinance institutions present in the country include Wangteman, Tunaiku and Taralite (Frieschlad, 2015).
The Indonesian health care system focuses mainly on maternal practices and newborn care that are influenced by the belief systems of the locals. The system includes provision of both public and private health services, traditional healers and professional medical services, whose primary purpose is to promote, restore and maintain health care of the masses (NCBI, 2017). Indonesia is yet to improve its reliance on human capital despite having an outstanding market economy in comparison to most of its neighbors. The country also lacks social security programmes which can help improve the lives of the poor people and make them more productive in the society (OECD, 2015).
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International financial institutions such as the World Bank and IMF provide funding to Indonesia and this has helped to boost their social and economic development. The funding that the country receives from World Bank is used to finance projects in the country and has been used to try and improve infrastructure within the country. An example is the 11 billion that World Bank loaned the country in 2015, which was used to finance economic projects within the country. The aid has also helped to boost their political development since the government has been able to introduce taxation, property registration and contracts reinforcement as a way of improving the lives of the citizens (The World Bank, 2017). Through this funding, the government has invested in climate reforms and this has acted to facilitate business operations within the country. The government has relocated money towards infrastructure, social assistance and health and is geared towards increasing the productivity of different sectors of the economy such as education, social assistance and agriculture. Also in line with this, funding from the IMF continues to be used to develop the market economies in the country, and this is in form of economic policies that the Indonesian government already has put in place. Generally, the funds from the two financial institutions has helped the government of Indonesia to improve the credibility of its fiscal policy which has enabled the country to set higher targets for their revenues. This move has ensured that the country is able to improve on its spending and prioritize its development (The World Bank, 2017).
Generally, health is connected to economic development since a healthy population will tend to be more productive as opposed to one that is not. Firstly, by promoting health care in Indonesia, more people will be healthy and consequently, also more able to participate in activities that promote economic development within the country, such as agricultural activities. This will ensure that economic produce is sold and revenue paid to the country’s government to increase the amount of money that’s available for the government to use to offset development projects. Secondly, high standards of health care lower mortality rate and thus ensures that the number of working class people in a country, such as Indonesia, remains relatively higher than it otherwise would have been. With 43% of its population being aged under 25, the country is can provide social institutions that will equip the youth with the necessary skills to be part of the workforce since this number is high enough to contribute positively to the growth of the economy. This number is able to contribute to economic growth through establishment of businesses and participation in other areas of the economy. Thirdly, increased levels of public health care reduce the amount of money that the country has to set aside for research on cures for diseases whose vaccines or cures are yet to be discovered. This money is instead used for economic development. People also use their salaries to invest in other sectors of the economy rather than pay for health care services. Lastly, improving health care also ensures that a high number of people remain active both physically and mentally and thus can contribute positively to national productivity. Since the government has started making reforms to the health care sector in the country, many people will receive education regarding health care and pass it on to others as a way of being productive.
Leadership in the country has utilized foreign aid by using it to support medical health care in the country, particularly maternal health care which the country holds in very high regard. This is evident since there has been a reduced number of maternal deaths and the decrease in maternal mortality rate. The launch of the National Social Health Insurance Scheme is geared at promoting access to medical care amongst Indonesians as a way of reducing the spread of infectious diseases among poor people. The central government has set aside budget for the health sector to cater for people at the district level where it is easy to meet the medical needs of most people (Mboi, 2015). This will increase accessibility of the citizens of Indonesia to medical care. Moreover, the government has also provided programs for proper training of medical professionals to increase quality of medical care given to the people. This will significantly reduce the number of deaths.
References
Frieschlad, Nadine. (2015). 3 Startups in Indonesia that lend money to the poor. Tech in Asia. Retrieved from https://www.techinasia.com/three-startups-indonesia-lend-money-to-poor-people
Mboi, Nafsiah. (2015). Health Systems and Reforms. Vol 1, Iss 2. Retrieved from http://dx.doi.org/10.1080/23288604.2015.1020642
NCBI. (2017). Reducing Maternal and Neonatal Mortality in Indonesia: Saving Lives, Saving the Future; Indonesian Health Care System. Retrieved from https://www.ncbi.nlm.nih.gov/books/NBK201708/
OECD (2015). Indonesia should accelerate reforms and invest in human capital to ensure sustainable and inclusive growth. Retrieved from http://www.oecd.org/economy/indonesia-should-accelerate-reforms-and-invest-in-human-capital-to-ensure-sustainable-and-inclusive-growth.htm
The World Bank. (2017). World Bank: Improved Effectiveness of Spending in Indonesia can Boost Growth in 2017. Retrieved from http://www.worldbank.org/en/news/press-release/2017/01/17/world-bank-improved-effectiveness-of-spending-in-indonesia-can-boost-growth-in-2017
