DEVELOPMENT STRATEGY OF ANTI-POVERTY PROGRAMS IN INDONESIAviviyulaswati@bappenas.go.idSenior Advisor of Minister of National Development Planning/ Bappenas for Social Affairs and Poverty Reduction

Canberra, 17 - 18 February 2020

The Trend of Poverty Reduction in Indonesia

Susilo Bambang YudhoyonoBJ Habibie 21 Mei 1998–

20 Oktober 1999

Abdurrahman Wahid 20 Oktober 1999–

23 Juli 2001

Megawati S.23 Juli 2001–

20 Oktober 200420 Oktober 2009-20 Oktober 2014

Joko Widodo20 Oktober 2014-

sekarang

24.223.43

19.1418.41 18.2

17.42 16.6615.97

17.7516.58

15.4214.15

13.3312.36

11.66 11.47 10.96 11.13 10.7 10.12 9.66 9.22

0

5

10

15

20

25

30

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Sept

201

1

Sept

201

2

Sept

201

3

Sept

201

4

Sept

201

5

Sept

201

6

Sept

201

7

Sept

201

8

Sept

201

9

Ting

kat K

emisk

inan

(%)

3F crises

Some natural disasters:• Lombok earthquake (Jul ‘18) • Palu earthquake (Sep ’18)• Mandailing Natal flood (Oct ’18)• Banten’ tsunami (Dec ‘18)

Aceh’s tsunami (Dec’04)

Jogja’s earthquake (May’06)

20 Oktober 2004-20 Oktober 2009

Gini Rasio and Comparison with Some Countries

Source: https://data.worldbank.orghttps://bps.go.idhttps://www.ceicdata.com

-0.48

-0.75

-0.15 -0.1

0,47

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

Indonesia Brazil China Malaysia Argentina

Average Gini Ratio Reduction per year (poin Gini)

2013-2018 2013-2015 2013-2017 2014-2016

0.396

0.425 0.4240.433

0.4190.409

0.404

0.391 0.391

0.329 0.327 0.324

0.3360.329

0.316 0.32 0.319 0.315

0.388

0.4130.406

0.414

0.4020.394 0.391

0.384 0.380

0.3

0.32

0.34

0.36

0.38

0.4

0.42

0.44

2011 2012 2013 2014 2015 2016 2017 2018 2019

Inde

ks

Gini Ratio, 2011 – 2019

Perkotaan Perdesaan Nasional

2013-2016

0.389 0.513 0.467 0.399 0.424

Urban Rural

Some Challenges Remain

39% head of HH only had elementary education

60% HH without sanitaton, 46,3% withoutdrinking water.

29,7% head of HHis elderly.

63,8% live in rural

Extreme poverty

-4

-2

0

2

4

2012a 2012b 2013a 2013b 2014a 2014b 2015a 2015b 2016a 2016b 2017a 2017b

The rate of poverty reduction in 5 poorest provinces was canceling out

Gorontalo Maluku Nusa Tenggara Timur Papua Barat Papua

16,511,310

80,171,987

103,869,333

54,239,640

< 0.8GK

0.8GK - GK

GK – 1.76GK

1.76GK-3.71GK

> 3.71GK

Number of Population by Welfare Status

Source: Susenas and Podes 2018

Flood: 19,675 villages

Landslide: 10,246 villages

Earthquake: 10,115 villages

2005 2007 2014/15 2017

• Fuel prices increased up to 185%

• Social Economic Census to determine 40% lowest income group.

• UCT was distributed to 19 million HH.

• UCT CCT.• CDD

Integration: PNPM/Nat’l Community Empowerment Program

• Significant cut of fuel subsidy

• Improved UDB• Integrated Social

Protection Card (KPS) Health Card, Smart Card, Welfare Card.

• National Social Security System: health and labor

• PNPM Village Fund.

Some Milestones

5

• Digital payment of CCT

• Rastra BPNT• CCT has

expanded to 6 K, then 10K families

2019

• Piloting Digital payment for energy subsidy

• More integration of social registry and civil registry.

52.7 61.9 69.282 90.1 98.4 99.6 99.6 99.6

121.8139.526.1

30.638.7

60.957.8

76.7 78.3 81.49 85.99

88.7

91.7911.30%10.50%

10.10%

12.60% 12.40%13.30%

13.60%13.50%

12.80%13.70%

14.54%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

0

50

100

150

200

250

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Social Security

Social Assistance

% of Central Government Expenditures

59.7

132.297.9 107.6

240.0

75.2

2014 2015 2016 2017 2018 2019 2020*

Health Social Asisstance Fuel Subsidy

Resource Mobilization For Social Protection

Significantly decline

Progress of Social Protection Program

Benefits:

1. Better targeting accuracy2. More options and controls by the recipient on

quantity & quality of rice3. Offer more nutrition4. Encourage micro and small business5. Provide access to financial services6. More effective use of the government budget

New-SchemeIn-kind food assistance is distributed by BULOG to the target households

Problems:1. Mis-targeted2. Mis-volumed3. Over price (due to logistic and delivery cost)4. Poor quality of rice (related with stock management)5. Late distribution (due to geographic, weather and

logistic issues)6. Poor administered (ample room for error, fraud and

corruption)

BULOG Food (Rice) Distribution

Target Household

Old-Scheme

Transformation From Rice Subsidy To Food VoucherElectronic Voucher

Target Family

Local Retailers act as Bank’s Agent Rice + source

of protein

Assistance is transferred as an electronic voucher to buy rice, eggs, meat, nuts at e-warong/Bank Agent.

*BULOG is state enterprise agency who responsible for rice reserve, distribution, and price control7

Bigger Context: Food Security and Value for Money

8

DEMAND SUPPLY INTERVENTION DATA

1. Reform Rice Subisidy to Food Assistance

2. Education on healthier eating behavior

1. Reform on fertilizer subsidy

2. Irrigation improvement3. Agribusiness

improvement

1. Rice market operation improvement

2. Food import policy improvement

1. Agriculture statistics improvement

2. Unified Database Improvement

How can the allocation of IDR 21 trillion could have a bigger impact?

1 in 3 children <5are stunted

1 in 8 children <5 are overweight

1 in 4 Indonesian are anemic

1 in 4 adults areoverweight

BPNT support financial inclusion

87% HH have access and opened a formal account for

the first timeMICROSAVE STUDY (2019)

The Effectiveness of CCT in Targeting and Impact on Spending

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

subsidies in-kind educ in-kind health Raskin PKH BSM

Effe

ctiv

enes

s, in

dex

Tota

l ben

efits

dis

trib

uted

, ind

ex effectiveness, index (RHS) total benefits distributed, index (LHS)

Effectiveness at Reducing Inequality Relative to Spending Levels (2012)

PIPRastra

0

10

20

30

40

50

60

Phillipines(2013)

Indonesia(2014)

Mexico(2012)

Jamaica(2010)

Colombia(2012)

Ecuador(2012)

Brazil(2012)

Share of beneficiaries from the poorest quintile (%) Total population coverage (%)

PKH has high targeting accuracy

7

8

22

0 5 10 15 20 25

Pre-Natal Visits

Completed immunization

Growth Monitoring check ups*

Percentage points

Health impacts

1.8

9.5

4.5 3.9

2

5

0

2

4

6

8

10

Gross primary enrollment Gross secondary enrollment

Perc

enta

ge p

oint

s

Positive education impacts compared

PKH Pantawid Pamilya (Phillipines) Familias en Accion (Colombia)

Impact of CCT on Health and Education

Indicators World BankMidline Study 2010

TNP2KEndline Study 2014 Microsave, 2019

Childbirth Delivery Improved probability of childbirth delivery assisted by medical staff/ at health facility.

Endline impact was bigger than midline.

No significant result

Ante and Post-Natal visit

• Health visit of CCT was bigger than non-CCT families.

• Antenatal increased 13%• Postnatal increased 7%

No significant differences between CCT and non CCT families in health visit

• Ante Natal: No significant result

• Post Natal: CCT families 7.4% higher than non CCT families

Baby Health Check Increased 15-22% No significant result CCT families 20.9% more often to check than non CCT families

Immunisation and Vaccination

<5 year old of CCT families had 3% higher to complete immunication and vaccination

<5 year old of CCT families had 5% higher to complete immunication and vaccination

n/a

Enrollment rate No significant result, but CCT children improved of learning time

• 7-15 year old: 4%• elementary: 1.8%• Junior high: 9%

n/a

Unified Data Base as a Basis of Targeting of Social Protection ProgramsUDB consists 40% of population who have the lowest income status, by name, by address, and by ID

9,22%

38%

40%

Poor

25%

Vuln

erab

le

20%

HEALTH CARD

FOOD ASSISTANCE

CCT

National Poverty Line (Sept 2019)24,78 million people

Number of HH27.110.241

Number of Families29.157.990

Number of People98.608.619

Number of people in the institutions (not in family)

615.646

SCHOLARSHIP

96.8 million people

15.6 million families

20,1 million students

10 million families

2020 2024 2030Universal Social Protection 2030

G2P/Digitalization as a tool of integration

More integration of social assistance & security

Reducing burden and protecting from the shock

Human Capital Development SUSTAINABLE

LIVELIHOOD Job

Toward Comprehensive Social Protection and Poverty Reduction

U

D

B

Improved access to basic services of the

40% poorest population

Reduction of disparities between

income groups & among regions

Achievement of Minimum Standards

for Basic Services

Social Security

Social Assistance

Training, Coaching, Mentoring

Value Added, Market Linkages, and Social Impact

Land Ownership

Local Institutional Capacity &

Collaboration

13

Stage of Development

Poverty Measurement

Social IssuePolicy

Intervention

Less Developed

Developing

Emerging

Developed

Advanced

Calorie Poverty

Expenditure (Basic Needs)

Poverty

Relative Poverty

SWB & Subjective

Poverty

Subjective Poverty

Hunger

Decent Living

Social Exclusion

Satisfaction and Political

Instability

Satisfaction and Political

Instability

Food Policies

Growth Policies

Redistribution Policies

Social Policies

Social Policies

Source: Dartanto and Otsubo (2013)

1. Indonesia has become an upper middle incomecountry. Focus of poverty reduction moves fromabsolut to relative poverty Productive economy/sustainable livelihood Inclusiveness (basic rights). Review poverty measurement.

2. Inclusive development has to be part of abroader strategy to address economic growth, longer term structural poverty, human capital development, and inequality Fundamental ingredients to expand access

to available labor market opportunities.

The Way Forward

Poverty and development stage

Thank You

Terima Kasih