A Policy Option for Financing Older Persons in Indonesia

Not many people realize that a country such as Indonesia also faces ageing population. This paper aims to provide a policy option on how to finance the Indonesia’s older population. It starts by showing why ageing population is a relevant issue in Indonesia, particularly its financial implication. It then shows that in 1960s and 1970s Indonesia had policies on how to finance the baby boomers with its strong family planning programme. Today Indonesia faces a different question: how to finance the rising number and percentage of the baby boomers who will soon become older persons.
Before elaborating on the recommendation to manage the economic consequences of the explosion of older persons, the paper discusses the theory and debate on the relationship between population growth (and size) with economic development. From this discussion, the paper arrives at a recommendation on a life-long approach, considering population of all ages, and not only the older persons. It is an integrated package of four recommendations which have to be implemented simultaneously. If not implemented simultaneously, the package can create feeling of injustice among the society. This package is not only aimed for older persons, but for the whole population.