Jakarta, 15 May 2023

The Ministry of Health (Kemenkes) and the International Finance Corporation (IFC) as a member of the World Bank group collaborate on Indonesia's health sector development program. The goal is to increase resilience efforts and health sector growth, while attracting investment and technology transfer to drive the post-pandemic economy.

As a first step, the Ministry of Health and IFC signed a memorandum of understanding (MoU) related to an opportunity exploration program to strengthen the development of health sector projects in Indonesia. The projects are specifically in the fields of pharmaceuticals, vaccines, and health technology in line with the transformation of Indonesia's health system.

Minister of Health Budi G. Sadikin said the importance of partnerships between the public and private sectors in building pandemic preparedness.

"I hope that the lessons from COVID-19 will spur preparedness for the pandemic. Hopefully, this important agenda can trigger the national pharmaceutical and medical device industries to continue to work and innovate in supporting the production of domestic medicines and medical devices," said Minister Budi.

Following the lifting of the global pandemic status by WHO, the government is refocusing the health system and increasing the production capacity of the pharmaceutical and medical device industries. It aims to fulfill the need for accessible and affordable health services.

At the start of the pandemic, Indonesia's pharmaceutical and medical device sectors were still significantly dependent on imports. As many as 90% of drug raw materials are still imported, 88% of medical device transactions in e-catalogs are imported products, and there is low funding for research and development in the health sector in Indonesia.

The COVID-19 pandemic has provided very important lessons in the health sector in Indonesia and has become a milestone for the Ministry of Health to transform through integrated policies from upstream to downstream. One of them is by increasing the resilience of the pharmaceutical and medical device sectors.

Various efforts are made to realize the transformation agenda, including by establishing cross-sector coordination for research networks, technology transfer and global cooperation for innovation in the development of domestically produced medicinal raw materials and medical devices.

The great need for investment to increase production, update technology, efficiency and reach global markets, requires global cooperation that is mutually supportive and beneficial. In this context, the MoH and IFC partnership will help address some of the challenges faced by the pharmaceutical and medical device industries, which in turn can improve industry competitiveness and national competitiveness.

The MoU was signed by DG L. Rizka Andalusia and Kim-See Lim, Regional Director of IFC East Asia and Pacific, witnessed by Minister of Health Budi G. Sadikin and IFC Managing Director Makhtar Diop.

Furthermore, Director General Rizka explained that increasing the competitiveness of the domestic pharmaceutical and medical device industry is one of the government's steps to achieve national health independence and resilience, which will ultimately increase the national competitiveness of the Indonesian nation.

"We expect more solidarity and international cooperation to be established as an effort to build pharmaceutical and medical device resilience," said Director General Rizka.

Furthermore, IFC Regional Director for East Asia and the Pacific Kim-See Lim revealed that this timely partnership builds on IFC's commitment in supporting Indonesia's determination to transform the health sector by increasing private sector participation, which has a key role," he said.

This collaboration marks a new chapter in the Health Public & Private Partnership program, which is critical to improving access to healthcare services and creating more investment in the country.

"We believe IFC's support will contribute to a stronger healthcare ecosystem in Indonesia, playing a catalytic role and ensuring future health resilience," Kim added.

Through this cooperation, it is hoped that the domestic pharmaceutical and medical device industry will be able to increase its production capacity, be able to meet domestic needs, and gain the widest possible access to investment opportunities from abroad.

IFC is the largest global development institution focused on the private sector in emerging markets. IFC works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.