1. Viviyulaswati@bappenas.go.id Christof.kersting@giz.de November 2, 2016
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CHALLENGES OF DEVELOPING COMPREHENSIVE SOCIAL PROTECTION IN INDONESIA
November 2, 2016

2. THE SLOW DOWN DECREASED OF POVERTY
Poverty has been decreased, yet the rate is getting slower.
The reduction in rural areas between was faster than the one in urban areas. However, in period of , poverty reduction in urban area was much faster than in rural area.

3. Expenditure Rate Per Capita, 2008-2014 47.3 Million Vulnerable Workers
INCOME GROWTH OF THE POOR IS LOWER THAN THE MIDDLE TO THE TOP  INCOME INEQUALITY
Expenditure rate per capita of the poorest in of grew slightly above 2%
While around the poor and vulnerable to the 40th percentile slightly below 2%, the national average grew about 3,41%
Expenditure Rate Per Capita,
47.3 Million Vulnerable Workers
Source:
processed based on BPS data, Agriculture and Economic Census

4. CHALLENGE OF THE “MISSING MIDDLE”
Government of Indonesia offers:
Social insurance: Health Insurance and Labor Insurance (pension, old age insurance, accident & death benefit).
Social assistance for the poor
Middle class
Social insurance
However:
Those in the middle are excluded from social protection
25,8% (42 million) members of National Health Insurance don’t have single identity number.
Lack of formal sector participation.
Lacking vertical and horizontal coordination
Lack of understanding and synchronization among sectors and Local Governments on the participation of poor population in national programs.
Unclear verification/validation data of poor and near poor.
Missing middle
Insecurity
Poverty
Social assistance
Extreme poverty 4

5. POVERTY REDUCTION STRATEGIES IN NATIONAL MEDIUM-TERM DEVELOPMENT PLAN 2015-2019
Comprehensive Social Protection
Social Security
Natural Resources Assets
Social Assistance
Voluntary Insurance
Physical Assets
Improving the Access and Quality of Basic Services
Basic Infrastructure & Public Service Facilities
Human Assets
Welfare Improvement
Expansion of Public Services
Gini ratio was 0,397, slightly reduced after increasing for the last 5 years.
Only 20% richest people have spending growth above the national average
40% lowest income people have spending growth less than 2% per year.
Inequality is increase due to unequal opportunities for people to contribute and be benefitted from development.
Social Assets
Reducing Poverty and Inequality
Sustainable Livelihoods Development
Sustainable Livelihoods
Financial Assets
Poverty Rate
Existing
(2016)
2016
RPJMN
2019
Existing
(2016)
2016
RPJMN
2019
Gini Ratio
0,39
0,36
10,86%
9-10 %
7-8 %
0,397 3

6. UNIFIED DATABASE FOR TARGETING OF POVERTY AND SOCIAL PROTECTION PROGRAMS
10,86%
40%
60%
25%
POOR
38%
NEAR POOR/VULNERABLE
13%
Need to build ownership from sectors and local governments
Need to build capacity on merging and managing
Need to update to capture the dynamic of poverty
Exclusion Error
UNIFIED DATA BASE
Covers 25,7 71million households/27,046 million families or around 92,994 million people
PEOPLE WHO GETS GOV’T CONTRIBUTION FOR HEALTH INSURANCE PREMIUM
Covers 22,05 million households or 92.4 million people
Inclusion Error
RICE SUBSIDY, SCHOLARSHIP FOR THE POOR
Covers 15,5 million households, including 19.7 million children
CONDITIONAL CASH TRANSFER
Covers 6 million families (with children 0-18 years old, disable and elderly)
NATIONAL POVERTY LINE (Mar 2016)
Covers 5 million households or around 28,01 million people

7. CHALLENGE IN TARGETING
Poverty based (eg, “poorest 10%):
Administratively difficult
Least transparent – open to abuse
Difficult to justify where poverty is pervasive – “leapfrogging”
Suitability – where poverty is not pervasive / data rich environments
Categorical (eg, Old Age Pension):
Popular - widely understood and accepted
Administratively simple
Flexible, But, who to prioritise?
Suitability – Social Welfare Grants
Universal:
Politically appealing
Expensive
Elements of self-targeting & cost recovery
Suitability - support vulnerability and economic growth
Self targeting (eg Public Works):
Addresses concerns about dependency & perverse incentives
Wage rate issues
Conditionality concerns
Suitability – support to the able- bodied poor

8. TRANSITION TOWARD INTEGRATED SOCIAL ASSISTANCE
Poorest
Poor
Vulnerable
PREPARATION TOWARD:
DIGITAL PAYMENT
SINGLE/COMBO CARD/E-WALET
PART OF FINANCIAL INCLUSION NAT’ L STRATEGY
Health
Risk 1
CCT
Basic Health
Subsidy of Health Insurance Premium
Catastrophic 2
Continuation
Of Education
Basic Education
Education Assistance
CCT
Higher Education
Economy 3
Incapable
Rice Subsidy
Energy subsidy
Seed & fertilizer
Policy Impact
Cash for work
More complicated coordination & enggagement set up
Needs to set up/revise regulatory, institutional & funding framework.
Interconnection and interoperability of banks.
Support & facilitation of local governments.

9. INTEGRATED REFERAL AND SERVICES SYSTEM AT DISTRICT LEVEL
To compile and inform all national and local programs
To verify/validate and revise information about poor and vulnerable families/HH.
To refer and register the poor and vulnerable who are excluded from programs to related offices.
To develop all needed guidelines by local governments & programs
To disseminate all information about national and province programs to local governments and villages.
To identify local stakeholders and develop network to local governments
To facilitate innovations that involve local stakeholders (youth association, faith-based organization, NGOs, CSRs, etc) for poverty reduction
FUNCTIONS
ENABLING FACTORS
1. Governance & Readiness of LGs
2. Funding (CSR, State & local budget)
3. Human Resource Capacity
4. Local Political Situation
5. Stakeholders Relation

10. Thank You NEXT STEPS TO CONSIDER.....
A prolonged and ongoing debate: search for perfection?
High vulnerability (incl. hidden population, remote places that data is empty and needs specific intervention)
Households’ growing understanding of how to play the system (moral hazard)
High administrative cost
Social tension/equity
Social inclusion policies
Reducing Exclusion  Equality of opportunity
Promoting Inclusion  expand access, realize formal rights, equality of result
“Targeting within universalism” – find ways to treat everyone the same although some are more in need and will benefit more than others
3. Political will and commitment are pre-requisite for comprehensive & sustainable social protection.
Thank You