26th November: A recommendation that Indonesia moves from a social protection system that only targets the poorest to one that is inclusive of all citizens is included in a new Government-commissioned report.
The social protection system proposed by Indonesia’s National Team for the Acceleration of Poverty Reduction (Tim Nasional Percepatan Penanggulangan Kemiskinan or TNP2K) would protect all citizens facing vulnerability throughout the lifecycle. It would “address many of the key challenges facing Indonesia and its citizens,” according to TNP2K, “particularly stunting in early childhood, low enrolment in secondary level education, disability and old age poverty”.
The Future of the Social Protection System in Indonesia: Social Protection for All recommends that Indonesia progressively moves from only providing ‘social assistance’ limited to a small fraction of the population towards an inclusive social protection system that includes those on middle incomes. The report’s drafting team included Stephen Kidd and Bjorn Gelders of Development Pathways, and the document signals that the current investment of 0.35% of GDP in social assistance “is less than expected for a middle-income country, resulting in major gaps in coverage”. The system thereby fails to address “the vulnerability those on middle-incomes face to risks and shocks,” it adds.
TNP2K is based in the Vice-President’s office and promotes coordination to improve the implementation of poverty reduction programmes, improve the living standards of the poor and vulnerable, and reduce inequality among income groups. Announcing the publication of the strategy, it states: “Indonesia’s average growth rate dropped from seven per cent to approximately 5.6 per cent a year between 2007 and 2016, signalling the need to stimulate the economy, generate demand and increase consumption. Even households living above the official poverty line are still subsisting on vulnerable incomes and are still susceptible to falling back into poverty.”
Development Pathways undertook the work on an Indonesian social protection system as part of the MAHKOTA programme and provided an update on a workshop to discuss a range of options for achieving wider pension coverage back in May.