Social Protection in Indonesia

Ester Fitrinika HW Directorate of Social Protection and Welfare National Development Planning Agency – Republic of Indonesia

Seminar on “Social transfer in the fight against hunger” Pnom Penh-Cambodia, 21-23th of February, 2013

- Area : 5.193.250 km2 (no.6 biggest country after Canada, USA China, Brazil, Australia).

- 13.000 island. - Population : 240 million (no.4 highest population after China, India, USA) 2

BACKGROUND OF SOCIAL PROTECTION IN INDONESIA

1. Economic shock in 2005/6 due to the oil price hiked made the gov’t had to shift from commodity subsidy to household subsidy.



Indonesia have a significant number of the poor, thus commodity subsidy is unfair for the poor



Targeted household subsidy (Unconditional Cash Transfer (UCT) then transformed to CCT in 2007, Health insurance, Scholarship, and Rice for the Poor) as an embryo to Social Protection 2. Due to internal political pressure, Indonesia have to prolong fuel price subsidy to maintain its low price domestically. As a result:



Price difference between domestic price and international price.



Big burden and uncertainty in government budget.

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Dimension of Poverty in Indonesia

A significant number of vulnerable

Access inequality in health, nutrition, education, water & sanitation, etc., especially for the poor in remote and isolated areas

Non-monetary Poverty

N

Interregional disparity L e g e n d : 0 - 5 5 - 1 0 10 - 15 15 - 20 20 - 50 1000 0 1000 2000 Kilo m eter s Poverty rate across regions, 2009

5

Rural-Urban Disparity

Poverty Rates in Rural and Urban Areas Gini ratios in urban and rural areas

Source: BPS, Susenas 2011

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CURRENT SOCIAL PROTECTION SCHEME

MACRO ECONOMIC POLICY

Social

Insurance

Social Assistance

Cluster 3 •Pension.

•Old Age Security.

•Health.

•Work Injury.

•Death.

Cluster 1 •Scholarship for the poor •Supplemental food for School Children Program •Subsidized Rice •CCT & CCT-Nutrition (for the poorest) •UCT •Disabled •Children with adversity •Neglected old ages •Indigenous communities Cluster

2

• National Program on Community Empowerment (PNPM): Urban, rural, rural infrastructure, less-dev’d regions • PNPM Generation (+Nutrition) Credit Facility to SMEs 7 Poverty targeting beneficiaries by unified database – 2011, with validation, verifikation, community poverty mapping.

Spending Priority of State Budget

Transfer to region Subsidy Education Poverty Programs Health Agriculture Infrastructure Total Spending

2005

26.63

21.38

13.89

4.14

2006

32.36

15.36

17.59

6.67

2007

33.67

19.96

18.90

7.06

2008

29.55

27.82

15.58

6.12

2009

30.84

13.80

20.81

8.00

2010

30.61

17.11

20.00

7.23

2011

31.14

22.37

20.21

7.10

2012

33.18

19.03

20.20

6.91

2.26

2.51

3.22

2.59

3.26

2.98

2.47

4.15

2.78

4.33

2.81

4.13

3.32

3.82

3.34

3.76

4.62

7.72

7.95

7.95

9.12

8.83

9.51

11.25

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

Source: LKPP audited, except 2011 (unaudited) and 2012 (APBN-P)

Stunting 37 Peringkat 5 stunting di dunia Wasting 14 WHO Child growth standards Underw eight 0 18 20 40

Will achieve 32% stunting in 2014 (end of MTDP)

Social protection related to food and nutrition:

• Supplemental food for School Children Program (1997, 2010): to contribute to acceleration of achievement of national development goals related to: overcoming malnutrition (the incidence of stunting in children aged 6-14 years was 13.3 % for boys and 10.9 % for girls) – universal • Subsidized Rice (foor the poor): - Subsidy to rice price for very poor h.h

- Deliver by local government (using the data from Central Statistic Agencey) 10

• CCT (2007) & CCT-Nutrition (for the poorest, start 2013) : - CCT: for pregnat mother and children up to 18 years (junior high school) to access health and education – #20 - Nutrition intervention for pregnant women up to 2 years old children  to reduce stunting. Pilot project in 2 prov.

- in 2007 using data frm Central Statistic Agency, starting 2012 using “unified data base” • UCT (Unconditional Cash Transfer) • aimed to reach one-third of Indonesian households to provide some compensation for the reduction in the fuel subsidy at a time of rapid fuel and food – particularly rice – price inflation. Cash was disbursed in several rounds in 2005-06 and again in 2008-09.

 30 $/month.

PNPM Generation (CCT with nutrition program through community empowerment) 11

Stunting 37 Peringkat 5 stunting di dunia Wasting 14 Underw eight 0 18 20 Will achieve 32% stunting in 2014 (end of MTDP) WHO Child growth standards 40

THE WAY FORWARD (PLANNED)

•

2012 – 2014:

Accelleration of poverty reduction strategy.

•

2015-2025:

Transformation of poverty reduction program: − Consolidate poverty alleviation programs (social assistance)  complementary, well targeting − Strengthening social insurance program.

“Master Plan of Poverty Reduction Acceleration in Indonesia” as complementary of “Master Plan of Economic Development in Indonesia”.

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RTHM RTM RTSM

MACRO ECONOMIC POLICY Cluster-1

1. BEASISWA MISKIN 2. JAMKESMAS 3. RASKIN 4. PKH 5. BLT

(bila diperlukan saat krisis) 6. Dll.

Cluster-2

PROGRAM PROGRAM PEMBERDAYAAN MASYARAKAT (PNPM)

Cluster-3

UMKM, KREDIT USAHA RAKYAT (KUR)

RTHM

RTM *)

RTSM

*) Cluster-4

1. PROGRAM RUMAH SANGAT MURAH 2. PROGRAM KENDARAAN ANGKUTAN UMUM MURAH 3. PROGRAM AIR BERSIH UNTUK RAKYAT 4. PROGRAM LISTRIK MURAH & HEMAT 5. Program Peningkatan Kehidupan Nelayan *)

6. Program Peningkatan Kehidupan Masyarakat Miskin Perkotaan

*)

Peningkatan Kesejahteraan

Masyarakat, serta

Perluasan dan Peningkatan Kesempatan Kerja Pengurangan Angka Kemiskinan

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MP3EI

Local Gov’t Synergi of cluster 1, 2, 3, & 4 CSR or NGOs Access to Conectivity Arec

MP3KI

Increase economic growth, inclusiveness & equity Equal economic dev’t in the whole country Increasing job creation Reduce the poverty level 15

Terima kasih Thank You

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PKH (

Family Hope Program

)

INDONESIA’S CCT

• •

Objective: Contribute to the acceleration of MDGs



Break the circle of poverty chain for future generation



Reduce child and maternal mortality



Indonesia is among the highest in SE Asia.



Improve education attainment of poor Improve the quality of human resources through improvement in access to health and education services for the poor

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PKH DESIGN

•

ELIGIBILITY. CCT to the poorest households (based on PMT targeting) which have expecting or lactating mothers and children between 0-15 years old.

•

TIMELINE. PKH will be conducted from 2007 to 2020: Original design assumed beneficiaries remain in the system for a max of 6 years.

•

SPATIAL EXPANSION. Through phased expansion now reaches 25 of the 33 provinces.

•

COVERAGE AND BUDGET. Total number of beneficiaries 2011 estimated at 1.1 million HHs at a cost of $177,7 million; and for 2014 will target 3.0 million HHs at a cost of US$466,6 million.

•

BENEFIT. Benefit ranges from a flat benefit of US$60 (min) to max of US$220 per household per year.

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Conditionalities

HEALTH

The mother or the adult woman responsible for taking care the children in the family receives cash if:

 

She goes to a nearby health facility for pre and post natal check-ups; and or Children under 5 years old receives regular immunization and check-ups.

EDUCATION

The mother or the adult woman responsible for taking care the children in the family receives cash if:



Their school year old children are enrolled in a school for basic education, and



Their children attend the school with minimum 85% attendance.

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BENEFIT SCENARIO

Benefit Scenario Annual Benefit per Poor HH

Fixed Benefit Additional Benefit for Poor HH who has: a.

Children under 6 years old b.

Pregnant/lactating mother c.

Children in elementary school age d.

Children in junior secondary school age

$ 20 $ 80 $ 80 $ 40 $ 80

Average benefit per poor HH Minimum benefit per poor HH Maximum benefit per poor HH Notes: - Average benefit is calculated based on 16% of total annual income of poor HH.

- The range for minimum and maximum benefit is between 15-25% average annual income of poor HH.

- Benefit scenario will be evaluated periodically.

$ 140 $ 60 $ 220

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Trend of PKH Budget

1. National Budget

2007 2008 2009

726.000

Target (HH) Budget 500.843

Rp 843 B (US$ 93,7 M) *) 1 USD = ~Rp9.000

720.000

Rp 1 T (US$ 111,1 M) Rp 1.1 T (US$ 122,2 M)

2010

816.400

Rp 1,3 T (US$ 144,4 M)

2011

1.116.000

Rp 1,6 T (US$ 177,7 M)

2012

1.516.000

Rp 1,8 T (US$ 200 M)

2013 2014

2.400.000

3.000.000

Rp 2,8 T (US$ 311,1M) Rp 4,2 T (US$ 466,6 M)

2. International support



Technical Assistance/Grant

 World Bank: Project preparation and evaluations  GIZ (Germany) & AusAID: Technical expertise on management improvement  UNICEF: additional intervention for stunting (pilot phase) 22

PKH Future Plan

1. Achieve the coverage for all poorest families in accordance to target of the National Mid Term Development Plan (RPJMN) 2010-2014.

2. Preparing “Exit Strategy” to guarantee the “graduate beneficiaries” to have a fundamental transformation of livelihoods

•

Re-certification to measure the progress of socio-economic condition of beneficiaries

•

Transition and graduation schemes to link beneficiearies to other related social

•

protection programs (i.e: scholarship, health insurance, rice subsidy, livelihood, etc).

Strengthen cross sectoral coordination related to local government particularly in improving supply side.

3. Improving level of benefit and other incentives such as ‘bonus of transition’ for children of school level 6 to 9



to reduce school drop out and child labor.

4. Continue to improve program implementation: enhancing facilitator’s quality, and synchronising benefit payment with school intake.

5. Improve the quality of database and monev instruments (MIS, households survey).

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Terima kasih Thank You

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Planning and Budgeting Process - Indonesia

Level / Periods National Ministry Local 25 Years Long Term Plan (RPJP) 5 Years President’s Platform (Vision) Medium Term Plan (RPJMN) Ministerial Strategic Plan (Renstra KL) Leaders’s Platform (Vision) Local Strategic Plan (Renstra SKPD) 1 Year Annual Plan (RKP) State Budget (APBN) Ministerial Workplan (Renja KL) Detailed Workplan (RKA-KL) Local Workplan (RKPD) Local Budget (APBD)

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Regional Disparity

Poverty Rate

Under-five mortality, 2010 Timor-Leste Cambodia Papua New Guinea Indonesia Philippines Vietnam China Thailand Maternal mortality, 2008 Lao PDR Timor-Leste Cambodia Indonesia Philippines Vietnam Thailand China 250 1000 5000 25000 75000 GDP per capita, US$ 250 1000 5000 25000 75000 GDP per capita, US$ 27

Social Assistance Expenditure

Categories Assistance for Elderly Health Assistance (Jamkesmas) Child Protection Disaster Assistance and Relief Other Social Assistance (disability, old age benefits) Rice for the Poor (Raskin) Scholarship for the Poor CONDITIONAL CASH TRANSFER/CCT (PKH) All Social Assistance Share to State Budget (APBN) Share to GDP 2011 Annual Expenditure (IDR) 101.114.400.000 5.100.000.000.000 287.127.300.000 429.040.000.000 358.890.800.000 15.267.000.000.000 3.900.000.000.000 1.610.000.000.000 27.053.172.500.000,0 1.320.751.300.000.000 7.226.900.000.000.000 % 0,37% 18,85% 1,06% 1,59% 1,33% 56,43% 14,42% 5,95% 100,00% 2,05% 0,37%

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