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Victoria State Government Business Office: Export market opportunities for healthcare services in

+ Official report
November 2010

The government of Victoria state in Australia engaged Spire Research and Consulting in Malaysia to
define market opportunities for Victorian companies in providing healthcare facilities, construction and
management to the healthcare service sector in Indonesia.
Commissioned by the Victoria State Government Business Office (VGBO), the report, entitled Export
Market Opportunities for Healthcare Services in Indonesia, was prepared by Spire Malaysia to identify
and quantify potential trade opportunities specifically for medical and surgical devices, healthcare IT,
and healthcare infrastructure and services.

Opportunities in Indonesia
With a population of 234 million people in 2010, Indonesia is a huge market for many industries,
including healthcare services. This has attracted domestic and foreign investors from countries such as
Australia, Europe, Singapore and USA to participate in Indonesias healthcare sector.
Since 2001, the Government of Indonesia has decentralized its public healthcare structure into a multitiered regional system encompassing provincial, district and sub-district levels, with local government
having regional autonomy to set healthcare budgets. However the local government sector has limited
capabilities in healthcare provision.
Indonesias healthcare industry
Indonesias total healthcare expenditure in 2011 was only 1% of GDP, with the private sector accounting
for 70% of the total. The main challenges faced in Indonesias healthcare sector are inequalities between
rural and urban areas, a declining public healthcare sector contribution, an inequitable health financing
(health insurance) system and the growing prevalence of non-communicable lifestyle related diseases.
In exporting medical products to Indonesia, foreign manufacturers are advised to collaborate with local
distributors, though direct sales to end-users is legally possible. This is because local agents can play a
vital role in developing the market and providing post-sales services.
Trends in the private healthcare industry in Indonesia
Increasing private sector participation in healthcare services is stimulating change in the Indonesian
healthcare industry. The demand for quality healthcare has increased, with more preference for private
healthcare facilities. Private healthcare services vary in terms of quality and cater more to the needs of
the rich, middle-class and urban segments of the population. At the same time, Indonesia is inviting
more foreign investment into healthcare to improve services and the quality of Indonesian human
resources. Consequently, there are significant investment opportunities for Victorian healthcare
companies in Indonesia, particularly in:
Medical and surgical devices
Health infrastructure and services
Hospital and clinic projects

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