The COVID-19 pandemic and measures to contain it are having a significant impact on Indonesia’s economic growth and efforts to reduce poverty. The country’s gross domestic product fell 2.1 per cent in 2020 – a painful reversal of the 5.3 per cent growth projected before the pandemic – causing widespread loss of jobs and income. To avert this worst-case scenario, the Government of Indonesia implemented an emergency fiscal stimulus package and temporarily expanded its social assistance programmes to support low-income families during the crisis.
This policy brief explores how the economic fallout from COVID-19 affects child poverty and the success of social protection measures aimed at mitigating the impact. It was developed by the Fiscal Policy Agency and UNICEF Indonesia with support from Development Pathways. Although the pandemic is affecting the incomes and wellbeing of people of all ages, the study finds that children and adolescents are disproportionately affected by income losses and reduced social mobility.
However, the emergency expansion of child-focused programmes such as the Program Keluarga Harapan (PKH) cash transfer scheme and the Kartu Sembako food assistance programme contributed to preventing 1.3 million children from falling into poverty in 2020. The study also suggests that rolling back these emergency measures now would lead to a rise in child poverty – bringing an estimated 2.1 million children under the national poverty line in 2021.
Based on analysis and projections, the study recommends that the Government maintains its investment in expanded social protection to help reduce child poverty and vulnerability in 2021 and beyond. Without continued measures, Indonesia risks losing several years of progress in its efforts to achieve the Sustainable Development Goals.