POVERTY FOCUS: INDONESIA’S EXPERIENCE IN MAINSTREAMING POVERTY INTO NATIONAL PLAN Dr. Bambang Widianto, MA. Deputy Minister for Poverty, Labor, and Small Medium Enterprises National Development Planning Agency (BAPPENAS) Indonesia Indonesia Forum on National Plans and PRSPs in East Asia Vientiane, Lao PDR, April 4-6, 2006

FIGURE 1 MAP OF SOUTHEAST ASIA

FIGURE 2 POVERTY TRENDS Using 1998 Methods Target

15.1% below National Poverty Line 7.3 % below $1/day 53% of population below $2/day FIGURE 3

FIGURE 4

Human Poverty Index Percentage of people without access to safe water Percentage of people not living beyond 40 Percentage of people lack of health access Percentage of adult illiteracy Percentage of child malnutrition FIGURE 5 HUMAN POVERTY INDEX,

FIGURE 6 SOCIAL INDICATORS,

FIGURE 7 SCHOOL ENROLLMENT BY AGE GROUP AND QUINTILE 2004 Years age

FIGURE 8 SCHOOL ENROLLMENT BY URBAN AND RURAL 2004 Urban Rural

29,30% 52,32% 21,21% 43,86% 7,86% 20,76% 9,29% 27,89% Noon Poor Poor Household without access to safe water Household without access to sanitation Household with children aged not enolled in junior high school Household with birth attended by traditional paramedics FIGURE 9 MULTIDIMENSIONAL POVERTY REMAINS A SERIOUS PROBLEM 0,00%10,00%20,00%30,00%40,00%50,00%60,00% Source: SUSENAS 2002, BPS

FIGURE 10 HUMAN DEVELOPMENT INDEX TRENDS SOME COUNTRIES’ COMPARISON

Percentage of Poor in Each Region, 2004 Java Island FIGURE 11

FIGURE 12 HUMAN DEVELOPMENT INDEX BY PROVINCE 2002

INTERNALIZING PRIORITY INTO PLANNING DOCUMENTS Poverty reduction is integrated into the 3 priority agendas and several of the development programs Includes the MDGs: 8 development goals used to frame our medium targets as part of our international commitments, to be achieved by 2015 Includes the Poverty Reduction Strategy (SNPK), developed through a multi-stakeholder process, with targets for reducing multi-dimensional poverty by addressing 10 basic rights RPJM Government’s annual development plan (RKP) The Government sets development priorities each year. Poverty reduction has always been on the top priority The priorities provide guidance to ministries’ work plans and subsequently expenditure budgets RKP 1.Prosperous Indonesia 2.Just and Democratic Indonesia 3.Safe and Peaceful Indonesia Elected President Vision/Mission These development priorities are binding on both central and regional governments

TABLE 1. Aiming at Results Alignment of Key Government Priorities with MDGs Indicator/Target (%)2002RPJM 2009MDGs 2015 ActualTarget Poverty Population below US$ 1 a day Poverty head-count ratio Health Under 5 mortality rate (per 1,000 live births)6026 (<1 mortality) 33 Maternal mortality ratio (per 100,000 live births) Education Net enrollment rate in primary education Gross and net enrollment rate at junior level Literacy rate of y.o Water & Sanitation % of population that has access to improved water7880 Rural Development Agricultural sector growth3.5

POVERTY-RELATED DIAGNOSTICS (1) POVERTY-RELATED DIAGNOSTICS (1) Increase gross and net enrollment for students from poor families in 2009 Reduce drop-out rate at the SD/MI/Package A to 2.06% and at the SMP/MT/Package B to 1.95% in 2009 Increase the continuation and completion rate Increase life expectancy from 66.2 years to 70.6 years Reduce prevalence of infant nutritional deficiency from 25.8% to 20% (RPJM) Increase the number of infant <1 year old to be immunized against measles to 90% in 2009 Increase the percentage of deliveries assisted by skilled health workers to 90% in 2009 Decrease the number of HIV/AIDS cases to 0.9 in 2009 High cost of education for poor families Lack of access to junior secondary schools Limited education facilities (i.e. secondary schools, libraries and books in rural, left-behind and remote areas) Lack of access to health services and skilled medical/health workers High cost of services in remote areas and low quality of health services nationwide Low priority budget allocation for the delivery of health services to the poor High incidence rate of communicable diseases, i.e. HIV/AIDS, TBC, malaria Targets Diagnostics EducationHealth Reducing number of poor to 8.2 percent in 2009 is primary target. Other targets are:

POVERTY-RELATED DIAGNOSTICS (2) Increase the percentage of poor families with access to clean and safe water to 80% in 2009 (SNPK) Reduce the percentage of the population without access to basic sanitation to 50% in 2009 (SNPK) Lack of access by the poor to water and sanitation facilities in rural, less developed and remote areas Lack of information dissemination on the importance sanitation Targets Diagnostics Water and Sanitation Increase quantity and quality of infrastructure in rural areas including access to facilities such as roads, sea ports, irrigation network, electricity, clean water, etc Increase role and contribution of rural areas to national economy, including increase growth of the agricultural sector at an average rate of 3.52% in the period Lack of access to rural infrastructure such as roads, bridges, irrigation network, electricity, and business centers Lack of access to secure land tenure Limited access to credit Limited number of micro-finance institutions Dependency on rice as staple food and commodity Rural Development

Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and Budget POVERTY REDUCTION FOCUS: I.Promoting Quality Growth -Labor intensive industries -Trade and exports -Micro and SMEs II.Increasing opportunity for the poor to access basic needs -Education -Health -Basic infrastructure -Food and Nutrition

Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and Budget POVERTY REDUCTION FOCUS: III.Empowering the poor -Community based development Economy, social, environment  Change our views toward the poor from liability into assets IV.Improving social protection system -Social assistance -Social Insurance -Exploring conditional cash transfers

POVERTY AND FUEL SUBSIDY In 2005, Government reduced regressive fuel subsidies & reallocated savings to four programs that benefit the poor: Social Protection  Unconditional Cash transfer Education  Operational aid to schools and scholarships to allow free tuition Health  Basic health care through district health centers (PUSKESMAS) & third class hospital through insurance Infrastructure  village infrastructure Government committed to assessing these four programs before 2007 budget established

FIGURE 13 Linking National Poverty Priorities to Regional Poverty Priorities and Budgets Regional Medium Term Plan Gov’t Annual Work Plan National Medium Term Plan Regional Annual Work Plan Strategic Plans Ministries’ Annual Work Plan Strategic Plans Regional Sectoral Unit Annual Work Plan National Budget Regional Budget Ministries’ Budget Regional Office’s Budget Central Government Local Government Law No. 17/2003: State Finance Law No.25/2004: National Development Planning System

Enhancing Poverty Focus of Plans and Budgets 1. Better Use of Poverty Diagnostics  Deepen poverty diagnostics, for example, to better understand regional disparities  Make better use of poverty maps  Increase use of poverty diagnostics in (i) setting sectoral priorities, and (ii) designing and assessing programs 2. Reduce regressive subsidies to free up resources for implementing more pro-poor programs  Reducing subsidies, such as the fuel subsidy reduction, presents challenges in terms of protecting the poor, but also opportunities for budgetary reallocation to better achieve the Government’s poverty reduction targets 3. Use poverty program assessments in the annual planning and budgeting process  Use findings from qualitative and quantitative poverty program assessments to improve programs and/or activities, and/or revise budget allocations 3. Intra-governmental Coordination  Continue collaboration and coordination between the National Development Planning Ministry and the Finance Ministry --- at policy and technical level  Enhance coordination within sector ministries between planning and budgeting units  Broaden consultation by government in plan and program development  Synergize approaches and base of information for programs relevant to reducing poverty

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