September 9, 2014 OFFICE OF THE VICE PRESIDENT THE REPUBLIC OF INDONESIA BUILDING A BETTER NATIONAL TARGETING SYSTEM FOR IMPROVING SOCIAL SAFETY NET PROGRAMS: INDONESIAN EXPERIENCE IN SHIFTING FROM COMMODITY SUBSIDIES TO TARGETED SUBSIDIES Dr. Bambang Widianto Deputy for Social Welfare and Poverty Allevia;on/ Execu;ve Secretary of THE NATIONAL TEAM FOR THE ACCELERATION OF POVERTY REDUCTION (TNP2K)
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Building a Better National Targeting System for Improving Social Safety Net Programs: Indonesian Experience in Shifting from Commodity Subsidies to Targeted Subsidies (EN)
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September 9, 2014 OFFICE OF THE VICE PRESIDENT
THE REPUBLIC OF INDONESIA
BUILDING A BETTER NATIONAL TARGETING SYSTEM FOR IMPROVING SOCIAL SAFETY NET PROGRAMS: INDONESIAN EXPERIENCE IN SHIFTING FROM COMMODITY SUBSIDIES TO TARGETED SUBSIDIES
Dr. Bambang Widianto Deputy for Social Welfare and Poverty Allevia;on/ Execu;ve Secretary of THE NATIONAL TEAM FOR THE ACCELERATION OF POVERTY REDUCTION (TNP2K)
BACKGROUND
Despite a declining trend in poverty rates, this has slowed in recent years
28.28 million people live below the poverty line (March 2014)
Health EducaTon Infrastructure Sosial Assistance Energy Subsidy
TARGETING MECHANISMS
BASIC IDEA SHIFT FROM COMMODITY SUBSIDIES TO HOUSEHOLD SUBSIDIES Commodity subsidies are simple but unfair. They are not pro-‐poor. Have a big impact on government budgets. Aggregate poverty data is not adequate. Targeted subsidies as the basis of social assistance: UncondiTonal Cash Transfers (UCT), Health Care (Jamkesmas), Student Aid (BSM), Rice for the Poor (Raskin), etc.
World Crude Oil Price Increased Since the Last 15 Years
Fuel Subsidy ReducTon CompensaTon Program UncondiTonal Cash Transfers CondiTonal Cash Transfer Rice for the poor EducaTon Health Rural Infrastructure Community-‐Based Development
SHIFTING TO MORE TARGETED PROGRAMS
TARGETING OPTIONS Means tesTng: this requires high-‐quality data that is not available in many countries and may be expensive to put in place.
Geographical targeTng: transfers are provided to those living in areas with a high incidence of poverty.
Community-‐based targeTng: uses community structures to idenTfy the poorest members in a community or those eligible, according to agreed criteria.
Providing benefits to those recognized as belonging to a specific vulnerable category of the populaTon.
Self-‐targeTng: for example, in work programs that offer a below-‐market wage, based on the logic that individuals choose to opt into the program.
EXAMPLES OF SPECIFIC VULNERABLE GROUPS
1. Most Poor (Fakir Miskin) 2. Orphans, Street Children 3. Homeless without Support 4. Isolated Tribal CommuniTes 5. Mentally Ill 6. Displaced PopulaTons
SELF TARGETING: KEROSENE CONVERSIONS TO LPG Government provides free small bokles (3 Kg) of LPG to poor households, small restaurants, food vendors and other micro businesses.
Billion
Litres
59.7
39.3 36.8
1.5
0
10
20
30
40
50
60
70
2005 2008 2009
Fuel Consump;on
Conversion from Kerosene to LPG
(Estimation)
BUILDING A UNIFIED DATABASE SYSTEM
30% Only
of poor people received
Household Consumption (Decile)
Rec
eivi
ng A
ssis
tanc
e (%
)
REVISED DATA COLLECTION METHODOLOGY
Goal: To reduce inclusion and exclusion errors
Individual data from other programs
Consulta;ons with poor households
Popula;on Cencus 2010
Ini;al list of targeted
households
Poor Not Poor
Beneficiaries
Non-‐Beneficiaries
Construction of Initial Lists of Targeted Households
PROCESS OF DEVELOPING THE UNIFIED DATABASE
Data collec;on (PPLS 2011)
BPS*
Data analysis & development of
TNP2K** PMT models
Unified database
Improvements to the Methodology: -‐ More households surveyed (43% vs. 29% in 2008) -‐ Use of census data as a starTng point -‐ Community involvement -‐ More variables collected for beker poverty predicTon -‐ Improvements to Proxy Mean TesTng (PMT) methods
Note: * BPS: NaTonal StaTsTcs Office ** TNP2K: NaTonal Team for the AcceleraTon of Poverty ReducTon
DATA COLLECTION
Involved 120,000 enumerators
Using initial lists, enumerators surveyed every individual household and collected information for variables on their social and economic status.
Initial list contained “the bottom“ 50% of households. Survey results were sent to TNP2K, and then processed to produce the Unified Database. The Unified Database contains information only on the bottom 40% of households.
PERCENT OF THE POPULATION WITH SIMILAR SOCIO-ECONOMIC
CHARACTERISTICS
Includes 5.7 million households or 28.6 million individuals
Includes 24.7 million households, or around 96.4 million individuals
Includes 15.5 million households or 65.6 million individuals
Exclusion Error
Inclusion Error
Poor
Near Poor/ Vulner-‐able
11,66%
40 %
60 %
25 %
WHICH OF THESE HOUSEHOLDS WILL RECEIVE SOCIAL ASSISTANCE?
… due to the number of household members, the number of dependents and the wife’s employment status, the household on the right is
the real beneficiary of social assistance.
At first glance, this household would be the beneficiary, BUT …
Research
Program Services (Opera;on)
Informa;on System
• Ensure that programs use the Unified Database.
• Provide technical support to the programs.
• Ensure the validity of various studies to improve targeTng.
• Monitor & evaluate the use of the Unified Database.
• PMT modeling and analysis of cost-‐effecTveness for future data collecTon (presumably next in 2014).
TNP2K TARGETING UNIT TASKS: MANAGING UNIFIED DATABASE
�
�
� • IT-‐based management • Provide informaTon extracted
from the Unified Database through IT, media.
Beneficiary List of Social ProtecTon Program
Unified Database for social assistance
Eligibility criteria social assistance program
Beneficiary List of Social ProtecTon Program
Beneficiary List of Social ProtecTon Program
Beneficiary list for social assistance programs
NATIONAL TARGETING SYSTEMS USING THE UNIFIED DATABASE
Set by each program. For example, for PKH, the criteria was set by the Minister of Social Affairs: extremely poor households with elementary school-‐aged children or pregnant mothers.
Data by name and address. Contains informa;on on the bogom 40% of the popula;on.
Names and addresses of eligible beneficiaries for social assistance programs.
25% of households with the lowest socio-economic status or 15.5 million poor and near-poor households.
For accessing: BLSM, BSM, Raskin and the JKN card
Started 2013
Data Update by Combining Top Down and Bottom Up
PT. Pos
Households Village Level Deliberation
Recapitalisation
TNP2K’s Unified Database
Number of Complaints as of July 2014
Online Complaints Service (LAPOR!) with UKP4
Complaints received
Followed up
Finished/complete
UNCONDITIONAL CASH TRANSFERS (UCT)
UNCONDITIONAL CASH TRANSFER Program descripTon and size:
Each beneficiary family received IDR 100,000 per month, paid quarterly, from October 2005 to December 2006. 2005-‐2006 program budget was IDR 23 trillion. 2008 program budget was IDR 13 trillion.
In 2013, the Government of Indonesia implemented the uncondiTonal cash transfers (UCT) program for 15.5 million poor and near-‐poor families, as compensaTon for inflaTonary effects linked to fuel price increases. Each family received IDR 150,000 per month for four months 2013 program budget was IDR 12 trillion
Reasons for Providing Cash Transfer as Compensa;on for Rising Fuel Prices
Recipients of cash transfers can benefit immediately. Cash is easier for beneficiaries when making adjustments in their consumpTon needs.
In terms of programme implementaTon, giving cash is more efficient and the distribuTon costs are cheaper.
Fuel Price Increases and Necessary Compensa;on for the Poor
• If fuel prices rise by IDR 3,000 to total IDR 9,500, it would be necessary to compensate +/-‐ IDR 200,000/household/month for 6 months.
• A compensaTon period of 6 months is considered adequate because inflaTon
tends to return to normal levels by that point.
Premium Fuel Price Increases
(IDR)
Fuel Price Increases (%)
Baseline + Addi;onal Infla;on
Linked to the Consumer Price Index
(pp)1
Baseline + Addi;onal Infla;on
Incurred by the Poor (pp)
Compensa;on for Poverty
Line Increases (IDR)
Compensa;on Amount per month (IDR)
2,000 30.77 1.8 3.861 695,077 115,846
3,000 46.15 3.2 6.864 1,235,692 205,949
4,000 61.54 4.6 9.868 1,776,308 296,051
PT. POS INDONESIA NO. DESCRIPTION NUMBER
1. Post Office Branches 3,892 2. Mobile Services 3,062 3. Cars and Motorcycles 10,523 4. Employees 28,900 5. Online Post Offices 3,500 6. Delivery People 9,867
34
Website BLSM www.kompensasi.info
SMS: INFO<spasi>BLSM Send to ….
SMS INFO UNCONDITIONAL CASH TRANSFERS
E V A L U A T I O N
Queuing Time
POTENTIAL FOR INJURY: Long queuing times, particularly for the elderly
Wai;ng Times for UCT Beneficiaries, 60+
Distance from collecTon point (PT. Pos)
79.72%
16.87%
2.21% 1.20%
Time to Collection Point (Phase 1)
Less than 1 hr 1 - 2 hrs 3 - 5 hrs more than 5 hrs
POTENTIAL FOR INJURY: Long distances to the nearest post office