THE INDONESIAN EXPERIENCES IN DEVELOPING POVERTY REDUCTION STRATEGIES By Djoharis Lubis Deputy Coordinating Minister of People’s Welfare Republic of Indonesia

Jakarta Los Angeles New York London Bali Ankara

REDUCING THE INSIDENCE OF POVERTY INCREASING INCOME : Employment Opportunities Business Opportunities PEOPLE WELFARE REDUCING EXPENDITURES : Education Health Infrastructure CONSTITUTION PREAMBULE

Social welfare can be improved by reducing poverty Poverty can be reduced through economic growth Economic growth depends on political and social stability Political and social stability depends on economic growth SOCIAL WELFARE & ECONOMIC GROWTH SECURITY POLITICS

POPULATION UNDER POVERTY LINE POPULATION UNDER POVERTY LINE < 5 % (Jakarta) % (Bali, South Kalimantan, Banten) % (West Sumatra, Riau, Jambi, Bangka Belitung, West Java, East Kalimantan Central Kalimantan, North Sumatra, North Maluku) % (North Sumatra, West Kalimantan, South Sulawesi) % (South Sumatra, Bengkulu, Lampung, Central Java, Yogyakarta, West Java, Central Sulawesi, North Sulawesi) % (Aceh, NTB) % (NTT, Gorontalo, Maluku) > 35 % (Papua) Population under poverty line : Sources : CBS 41,8%

Figure: Proportion of The Indonesia Population Below Poverty Line (PO) Resources : Central Statistical Bureau National Summary data for monitoring MDG : Indonesia

Figure: Indonesia Poverty Gap Ratio Resources : Central Statistical Bureau National Summary data for monitoring MDG : Indonesia

The Past Poverty Reduction Approach u Trickle Down Effect u Centralistic u Uniformity u Less Consideration on Socio-Cultural Diversities u Top-down Approach

The New Paradigm of Poverty Reduction u The Definition of Poverty Needs to be Broadened Beyond The Traditional Expenditure u The Poor are The Main Actors in The Fight Against Poverty u The Role of The Government, Donors, NGO’s Society Should Facilitate The Poor to Overcome Their Problems But Not Attempt to Solve The Poverty Problem For Them u Centralistic to Decentralization u Trickle down effect Approach to be Regional Approach u Government as facilitator and mediator u Government more rowing rather than steering

Indonesia has committed to place Poverty Eradication as a priority

TWO GRAND STRATEGIES 1. Increasing income of the poor. 2.Reducing expense of the poor.

FOUR STRATEGIC PILLARS 1.Promoting and creating opportunities. 2.Community empowerment. 3.Capacity building & human resources development. 4.Social protection.

FORMULATION FRAME WORK FOR LONG TERM POVERTY REDUCTION STRATEGY GOAL REDUCTION OF >50% NUMBER OF POOR PEOPLE, 2015 INCREASING INCOME REDUCING EXPENSES CREATING OPPORTUNITY COMMUNITY EMPOWERMENT CAPACITY BUILDING SOCIAL PROTECTION MAPPING OF POVERTY PROBLEMS POLICY REVIEW POLICY FORMULATION MONITORING AND EVALUATION

MECHANISM IN FORMULATING PRSP NATIONAL REGIONAL

STEPS OF STRATEGY FORMULATION INPUT/ACTIVITY PROCESS PROCESSOUTPUT Participatory Poverty Assessment Policy and Program Review Other Supporting Activity/ Priority Developing Data Base Mapping of Poverty Conditions and Characteristics Inventing Models of Poverty Reduction Formulating Alternative Action Formulating Performance Indicator Identifying related Poverty Reduction Policy and Program Criteria/Guideline of Policy/ Program Review Evaluating Poverty Reduction Policy/Program Policy Research Condition, Problem and Model Of Poverty Reduction Poverty Reduction Strategy Poverty Reduction Policy and Program P R S P DOCUMENT Region Facilitation Interim Poverty Reduction Strategy Paper (I-PRSP)

The most significant challenges have encountered in preparing PRSs Population about 210 million Multi ethnics and diversity The prolonged of the Multi dimension impact of crisis The tendency of heating political situation interring the period of General Election. Euphoria of reformation Ethnocentrism /Local centrism

The role of local government Local Policy and regulation Direct role on combating poverty and delivery services to the poor. Facilitating and supporting wider participation in the combating poverty effort Implementing common principles in dealing poverty eradication.

POVERTY REDUCTION PROGRAMS 1.Provision of basic needs for the poor to help them with food, basic services in health, education and shelters. 2.Development entrepreneurship and skills of the poor. 3.Development of Social Security System. 4.Partnership.

1.Provision and sustainable stocking of basic needs; 2.Control of the prices of basic items; 3.Provision of basic services, especially in health and education; 4.Expansion of distribution networks for basic needs, and 5.Improvement of residential environments including supply of save water. The first program includes activities for :

1.Development of business education and training; 2.Advocacy through guidance and consultations; 3.Development of business collaboration networks supported by local community organizations, local government, private sector and universities; 4.Opening of accesses to resources; 5.Provision on infrastructure and facilities for business of the poor, and 6.Establishment of new transmigration location for farmers and agricultural laborers (non-land farmers). The second program includes activities on :

Development of effective Social Security System suitable with local customs; Consolidation of the existing social security system, and Strengthening of regional government capacity and population in social security management. The third program includes activities on :

REGIONAL COOPERATION Exchange of information and experiences. Joint efforts on : - research - anti-poverty campaign Study visits Establishment of Regional Financial Institute for Poverty Eradication.

Thank You Terima Kasih Dhanyabaad Sjukria Salamat Po

Thank You Xie Xie Cam On Namaste Namaste Mazvita Innge abougga Dhanyawad

Introduction Indonesia: A Country of Many Splendoured Thing l Many islands. The largest archipelago on earth;

Socio-Cultural Structure l Many religions: Islam, Christian (Catholics & Protestants), Hinduism, Buddhism. Constitutional guarantee; l Many differences and similarities “Unity in Diversity”; l Many changes, big and small. Impact of National Development, Global Interchange of ‘Culture’ in may aspects of life.

INTRODUCTION u Indonesia is the world’s largest archipelago, comprising more than 17,000 islands with a total coastline of 81,000 km. It extends across a land mass of 741,101m square miles, has territorial water of 3.17 million sq.km.; u Indonesia’s population 215 million people makes it the Worlds Fourth most populous after China, India, USA. Its growth rate is less than 2%; u People living in poverty: u July 1997  76,4 million, December 1998 : 49.5 million u August 1999  37,5 million, February 2000 : 33,2 million.

- TO SYNCHRONIZE MACRO AND MICRO POLICY STRATEGY - TO SYNCHRONIZE MACRO AND MICRO OPERATIONAL PILICY CREATINGOPPORTUNITYCREATINGOPPORTUNITY COMMUNITYEMPOWERMENTCOMMUNITYEMPOWERMENT CAPACITYBUILDINGCAPACITYBUILDING SOCIALPROTECTIONSOCIALPROTECTION INCREASING INCOME EXPENCE REDUCTION Mean streaming Poverty Reduction as an effort to place a right perspective And inter-policies consistency, Inter progames, budgeting, targeting and delivery system TO IMPROVE PEOPLE’S WELFARE POVERTY REDUCTION

BUDGET ALLOCATION FOR POVERTY ERADICATION 2002 Sectoral institution : Rp. 16 trilliun. Oil subsidy compensation : Rp trilliun. Logistic Agency : Rp. 4.7 trilliun. Dept. of Kimpraswil : Rp. 3.1 trilliun. Family Planning : Rp. 1.4 trilliun. Dept. of Health : Rp. 1.2 trilliun. Dept. of Home Affairs : Rp. 1.1 trilliun. Dept. of Social Affairs : Rp. 1.1 trilliun.

Social welfare can be improved by reducing poverty Poverty can be reduced through economic growth Economic growth depends on political and social stability Political and social stability depends on economic growth SOCIAL WELFARE & ECONOMIC GROWTH SECURITY POLITICS

Jakarta Los Angeles New York London Bali Ankara

Thank You Terima Kasih Dhanyabaad Sjukria Salamat Po ORKUN

Thank You Xie Xie Cam On Namaste Namaste Mazvita Innge abougga Dhanyawad