Jakarta. Swedish businesses need to consider investing in the Indonesian healthcare sector, as people’s spending to stay healthy is expected to grow over the years, coupled with the country’s large population size, according to Health Minister Budi Gunadi Sadikin. 

Government estimates show that the average life expectancy in Indonesia is about 72 years. On average, a person in Indonesia spends approximately $130 annually. Close neighbor Malaysia has a life expectancy of 76 years old, with the annual healthcare spending amounting to $430 per person on average. Fellow ASEAN member Singapore’s life expectancy reaches 84 years, with an annual spending of more or less $3,000. Considering Indonesia’s population size, businesses could reap huge profits by investing in the country’s healthcare sector, Budi said.

“Assuming that our system is as efficient as Malaysia, Indonesians’ [annual healthcare spending] will increase by $300. If you multiply [the increase] by [the total Indonesian population] of 280 million people, that’s over $81 billion,” Budi said at the Swedish ambassador’s residence in Jakarta on Friday. 

If Indonesia can extend its life expectancy to 84 years old within the next decade, healthcare spending is set to go up by $3,000 (without calculating inflation), according to Budi. If multiplied by the total population, the potential that the Indonesian healthcare sector holds can reach over $800 billion. Budi said that healthcare companies --regardless of whether they are pharmaceutical or medical device producers-- will still gain profit when investing in Indonesia. 

“When we talk about revenue in the healthcare sector, about 30 percent goes to pharmaceuticals, and the same number goes to medical devices. Some 30 percent of the money will go to medical services and hospitals,” Budi told the conference, which had a number of Swedish business representatives in attendance.

Indonesia reported that foreign direct investments (FDI) from Sweden topped $50.4 million throughout 2023. The money went to 270 projects. Swedish Ambassador to Indonesia Daniel Blockert revealed what his country’s businesses thought of investing in the Indonesian healthcare sector.

“From what I heard from Swedish companies, there is a lot of optimism because reforms have been made, and reforms are on the way. Businesses see this as a big step in the right direction. With this market, these possibilities, and a large number of universities here, I would be very surprised if Swedish investment in Indonesia’s healthcare sector does not increase in the coming years,” Blockert said.

The British-Swedish pharmaceutical giant AstraZeneca was among the business representatives who attended the forum. AstraZeneca already has a packaging plant in Cikarang. Saj Molaee, the ad-interim country president at AstraZeneca Indonesia, said that any expansion plan would have to be a long-term, well-deliberated decision.

“It requires further collaboration with the Indonesian government to be able to create and find spaces that we can invest in, but we also need to have certainty in terms of how that investment would mean for the company. We also need to operate sustainably,” Molaee said.