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

Social Protection in Indonesia Ester Fitrinika HW

Directorate of Social Protection and WelfareNational 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)

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1. 1. Economic shock in 2005/6 due to the oil price hiked made the Economic shock in 2005/6 due to the oil price hiked made the gov’t had to shift from commodity gov’t had to shift from commodity subsidy subsidy to household to household subsidysubsidy.. Indonesia have a significant number of the poor, thus commodity Indonesia have a significant number of the poor, thus commodity

ssubsidy is ubsidy is uunfair for the poornfair for the poor

Targeted Targeted household household subsidy (Unconditional Cash Transfer (UCT) then subsidy (Unconditional Cash Transfer (UCT) then transformed to CCT in 2007, Health insurance, Scholarship, transformed to CCT in 2007, Health insurance, Scholarship, andand Rice for Rice for the Poor) as an embryo to Social Protectionthe Poor) as an embryo to Social Protection

2. Due to internal political pressure, Indonesia have to prolong 2. Due to internal political pressure, Indonesia have to prolong fuel price subsidy to maintain its low price domestically. As a fuel price subsidy to maintain its low price domestically. As a result: result: Price difference between domestic price and international price.Price difference between domestic price and international price. Big burden and uncertainty in govBig burden and uncertainty in governmenternment budget. budget.

BACKGROUND OF SOCIAL PROTECTION IN INDONESIA

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Dimension of Poverty in Indonesia

Le ge nd :0 - 55 - 1 010 - 1515 - 2020 - 50

1000 0 1000 2000 Kilometers

N

Access inequality in health, nutrition, education, water & sanitation, etc.,

especially for the poor in remote and isolated areas

Poverty rate across regions, 2009

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Rural-Urban Disparity

Gini ratios in urban and rural areas

Source: BPS, Susenas 2011

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Poverty Rates in Rural and Urban Areas

CURRENT SOCIAL PROTECTION SCHEME

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Social Insurance

•Pension.

•Old Age Security.

•Health.

•Work Injury.

•Death.

•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

Social Assistance

• National Program on Community Empowerment

(PNPM): Urban, rural, rural

infrastructure, less-dev’d regions• PNPM Generation

(+Nutrition)

Credit Facility to

SMEsCluster 1

Cluster 2

Cluster 3

MACRO ECONOMIC POLICY

Poverty targeting beneficiaries by unified database – 2011, with validation, verifikation, community poverty mapping.

2005 2006 2007 2008 2009 2010 2011 2012

Transfer to region 26.63 32.36 33.67 29.55 30.84 30.61 31.14 33.18

Subsidy 21.38 15.36 19.96 27.82 13.80 17.11 22.37 19.03

Education 13.89 17.59 18.90 15.58 20.81 20.00 20.21 20.20

Poverty Programs 4.14 6.67 7.06 6.12 8.00 7.23 7.10 6.91

Health 2.26 3.22 3.26 2.47 2.78 2.81 3.32 3.34

Agriculture 2.51 2.59 2.98 4.15 4.33 4.13 3.82 3.76

Infrastructure 4.62 7.72 7.95 7.95 9.12 8.83 9.51 11.25

Total Spending 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Spending Priority of State BudgetSpending Priority of State Budget

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

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14

37

0 20 40

Underweight

Wasting

Stunting

WHO Child growth standards

Peringkat 5 stunting

di dunia

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

•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)

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Social protection related to food and nutrition:

•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

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14

37

0 20 40

Underweight

Wasting

Stunting

WHO Child growth standards

Peringkat 5 stunting

di dunia

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

• 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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THE WAY FORWARD (PLANNED)

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Cluster-41. PROGRAM RUMAH SANGAT MURAH2. PROGRAM KENDARAAN ANGKUTAN UMUM MURAH3. PROGRAM AIR BERSIH UNTUK RAKYAT4. PROGRAM LISTRIK MURAH & HEMAT5. Program Peningkatan Kehidupan Nelayan *)6. Program Peningkatan Kehidupan Masyarakat Miskin Perkotaan

*)

Peningkatan

Kesejahteraan

Masyarakat, serta

Perluasan dan

Peningkatan

Kesempatan

Kerja

Pengurangan

Angka

Kemiskinan

RTSM *)

RTM *)

RTHM

RTSM

RTM

RTHMCluster-1

1.BEASISWA MISKIN2.JAMKESMAS3.RASKIN4.PKH5.BLT (bila diperlukan saat krisis)

6.Dll.

Cluster-2

PROGRAM-PROGRAM

PEMBERDAYAAN MASYARAKAT

(PNPM)

Cluster-3

UMKM,KREDIT USAHA

RAKYAT

(KUR)

MACRO ECONOMIC POLICY

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MP3EIMP3EI

MP3KIMP3KI

CSR or NGOs

CSR or NGOsLocal Gov’tLocal Gov’t

Synergi of cluster 1, 2, 3,

& 4

Synergi of cluster 1, 2, 3,

& 4

Access toConectivity

Arec

Access toConectivity

Arec

Terima

kasih

Thank

You

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PKH (Family Hope Program) INDONESIA’S CCT

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Objective:Objective:•Contribute to the acceleration of MDGsContribute to the acceleration of MDGs

Break the circle of poverty chain for future Break the circle of poverty chain for future generationgeneration

Reduce child and maternal mortality Reduce child and maternal mortality Indonesia is among the highest in SE Asia.Indonesia is among the highest in SE Asia.

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

PKH DESIGN• ELIGIBILITYELIGIBILITY. CCT to the poorest households (based on PMT targeting) . CCT to the poorest households (based on PMT targeting)

which have expecting or lactating mothers and children between 0-15 which have expecting or lactating mothers and children between 0-15 years old.years old.

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

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

• COVERAGE AND BUDGETCOVERAGE AND BUDGET. Total number of beneficiaries 2011 estimated . Total number of beneficiaries 2011 estimated at 1.1at 1.1 million million HHs HHs at a cost of $1at a cost of $177,7 77,7 million; and for 2014 will target 3.0 million; and for 2014 will target 3.0 millionmillion HHs HHs at a cost of US$4 at a cost of US$466,666,6 million. million.

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

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HEALTHThe mother or the adult woman responsible for taking care the children in the family receives cash if: SShe goes to a nearby health facility for pre he goes to a nearby health facility for pre

and post natal check-ups; and orand post natal check-ups; and or CChildren under 5 years old receives hildren under 5 years old receives

regular immunization and check-ups.regular immunization and check-ups.

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EDUCATIONThe mother or the adult woman responsible for taking care the children in the family receives cash if: Their school year old children Their school year old children are are enrolled enrolled

in a school for basic education, and in a school for basic education, and Their children attend the school with Their children attend the school with

minimum 85% attendance.minimum 85% attendance.

Conditionalities

BENEFIT SCENARIOBenefit Scenario Annual Benefit per Poor HH

Fixed Benefit $ 20

Additional Benefit for Poor HH who has:a. Children under 6 years oldb. Pregnant/lactating motherc. Children in elementary school aged. Children in junior secondary school age

$ 80$ 80$ 40$ 80

Average benefit per poor HH $ 140

Minimum benefit per poor HH $ 60

Maximum benefit per poor HH $ 220Notes: - 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.

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Trend of PKH Budget1. National Budget1. National Budget

2. International support 2. International support Technical Assistance/Grant Technical Assistance/GrantWorld Bank: Project preparation and evaluations

GIZ (Germany) & AusAID: Technical expertise on management improvement

UNICEF: additional intervention for stunting (pilot phase)

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*) 1 USD = ~Rp9.000

2007 2008 2009 2010 2011 2012 2013 2014

Target (HH)

500.843 720.000 726.000 816.400 1.116.000 1.516.000 2.400.000 3.000.000

Budget Rp 843 B(US$ 93,7 M)

Rp 1 T(US$ 111,1 M)

Rp 1.1 T(US$ 122,2 M)

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

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

Rp 1,8 T(US$ 200 M)

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

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

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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25 Years

5 Years

1 Year

25

President’s Platform (Vision)

Medium Term Plan(RPJMN)

State Budget(APBN)

Annual Plan(RKP)

Ministerial Strategic Plan (Renstra KL)

Ministerial Workplan(Renja KL)

Detailed Workplan(RKA-KL)

Planning and Budgeting Process - Indonesia

Level/Periods National Ministry Local

Long Term Plan(RPJP)

Local Strategic Plan (Renstra SKPD)

Local Workplan(RKPD)

Local Budget(APBD)

Leaders’s Platform (Vision)

Regional Disparity

Poverty Rate

Indonesia

Thailand

Timor-Leste

China

Cambodia

Philippines

Papua New Guinea

Vietnam

25

10

25

50

100

250

Under-

five m

ort

alit

y ra

te

250 1000 5000 25000 75000GDP per capita, US$

Under-five mortality, 2010

Indonesia

Philippines

China

CambodiaTimor-Leste

Lao PDR

ThailandVietnam

525

100

500

1500

Mate

rnal m

ort

alit

y ra

tio

250 1000 5000 25000 75000GDP per capita, US$

Maternal mortality, 2008

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Social Assistance Expenditure

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Categories 2011 Annual Expenditure (IDR) %

Assistance for Elderly

101.114.400.000 0,37%

Health Assistance (Jamkesmas)

5.100.000.000.000 18,85%

Child Protection

287.127.300.000 1,06%

Disaster Assistance and Relief

429.040.000.000 1,59%

Other Social Assistance (disability, old age benefits)

358.890.800.000 1,33%

Rice for the Poor (Raskin)

15.267.000.000.000 56,43%

Scholarship for the Poor

3.900.000.000.000 14,42%

CONDITIONAL CASH TRANSFER/CCT (PKH)

1.610.000.000.000 5,95%

All Social Assistance

27.053.172.500.000,0 100,00%

Share to State Budget (APBN)

1.320.751.300.000.000 2,05%

Share to GDP

7.226.900.000.000.000 0,37%