Poverty Alleviation in Indonesia

Ministry of Social Affairs of the Republic of Indonesia

Presented to the First Meeting of Poverty Alleviation Working Group of COMCEV Member Countries

Ankara, Turkey 27 June 2013

Country Facts of Indonesia

• Population: 245,613,043 (July 2011 est.) • Capital: Jakarta • Area: 1,904,569 sq. km. • Ethnic groups: Javanese 40.6%, Sundanese 15%, Madurese 3.3%,

Minangkabau 2.7%, Betawi 2.4%, Bugis 2.4%, Banten 2%, Banjar 1.7%, other or unspecified 29.9% (2000 census)

• Languages: Bahasa Indonesia, English, Dutch, local dialects (the most widely spoken of which is Javanese).

• Religions: Islam 86.1%, Protestantism 5.7%, Roman Catholicism 3%, Hinduism 1.8%, other or unspecified 3.4% (2000 census)

• Literacy: 90.4% (2004 est.) • Urbanization: 52% (2008) • Population Living on US$1.25 a Day: 19% (2009) • Access to Improved Water Source: 80% (2009) • Access to Improved Sanitation Facilities: 52% (2009) Sources: World Factbook, World Bank

Continued...

• The world’s largest archipelago (17,500 islands or more). • The world’s 4th most populous country has had recent success in achieving

economic growth (a lower middle-income nation). • More than 32 million Indonesians – out of a population of 234 million – live below

the poverty line (The World Bank). • About half of all households remain clustered around the national poverty line set

at 200,262 rupiah per month (US$22). Such families are vulnerable to any shock caused by economic downturn or natural disaster.

• Highly vulnerable to earthquakes (flooding, volcanic eruption, mud volcano in Sidoarjo, East Java Province, fire, etc.)

• Climate change is a major threat with droughts, floods and mudslides expected to worsen in the future.

• As of early 2011, Indonesia faces a shortfall of eight million homes, according to the Public Housing Ministry.

• President SBY has announced a plan to build over one million houses for low-income people within five or 10 years.

• The cheapest houses would be priced between 5 million rupiah (US$560) and 10 million rupiah (US$1,130).

• Nearly 70 percent of low-income housing is built mostly by the families themselves rather than by the government or private developers.

• Almost 25 million families live in urban slums with many others living along railway tracks and riverbanks, on streets and in areas that are unfit for settlement.

Target of Poverty Reduction in Line with MDGs

Poor population

Level of poverty

Source : Statistical Bureau Indonesia (BPS), Multi Years Note: *) Based On Poverty Line (2.100 Calorie)

**) Target Of Millennium Development Goals Year 20153

TIMNASIONALPERCEPATANPENANGGULANGANKEMISKINAN

15.97

17.7516.58

15.4214.15

13.33 12.00 11.5010.50

9.50

8.00

13.5012.50

11.5010.50

10.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Tingkat Kemiskinan Target RPJM (Skenario Optimis) Target RPJM (Skenario Moderat)

TINGKATKEMISKINAN2005-2014

12,49

Sampaisaatinimasihmasukdalam‘rangetarget’tetapisemakinrendah ngkatkemiskinan,semakinsulitmenanganikemiskinan

16

POVERTY CLUSTER

AND

NATIONWIDE PROGRAMS

UNIFIED DATA BASIS 2011

Poverty Line

80% Poverty Line

125% Poverty Line

Very Poor

Poor

Near Poor/Vul-nerable

5%

11,66%

30 %

40 % Unified Data Basis contains name and address of 40% lowest income population

25 % Coverage of Rice fotr the Poor 2013

UNIFIED DATA BASISFOR SOCIAL PROTECTION PROGRAMMES

Health Security for

the Poor

Subsidy for Poor

Students

Condition-al Cash Transfer

(PKH)

Unified Data Basis for Social Protection Programmes

Criteria of membership Stipulated by Line Ministries or Local Governments

The criteria of beneficiaries are based on Unified Data

List of beneficiaries (name and address) according to the programmes

Rice for the Poor

Other Social Protection Programmes for Individuals/Households/Groups/Communities

Poverty Cluster and Programs

CLUSTER I CLUSTER II CLUSTER III

Community Empowerment

SMEs Social Assistance and

Protection

Reducing Poor Household’s Expenditures

Enhancing Community’s Livelihood

Enhancing Community’s Savings and SMEs

Programs:

Rice for Poor (Raskin), Community Health Security (Jamkesmas), CCT (PKH),

Program:

Self-Help Community Empowerment National

Program (PNPM Mandiri)

Program: Credit for SMEs

Food, Education, Health, Sanitation, Clean Water

Building Capacity for

Participation Creating

Entrepreurship

10

I. Health Insurance for the Poor (Jamkesmas) and Maternity Insurance (Jampersal)

• Health Insurance for the Poor is delivered through 8.917 community health centers/ PUSKESMAS) and hospitals (public and private)

• Maternity Insurance is delivered through physician and midwife practitioners, community health center/PUSKESMAS, maternity clinic and hospital

• Fund is channelled from central to district/city through social assistance mechanism

• Beneficiaries for Jamkesmas (with member card): 86.4 Million (Unified Data 2011)

• Beneficiaries of Jamkesmas (non card): Beggar and Vagrants, Clients of Orphans, Prisoners, Patients of Thalasameia Mayor, beneficiaries of CCT Program (who have special member card)

Coverage of Health Insurance (2010)

Distribution of population having Health Insurance according to the types of

Insurances

43.98

56,02

Tidak memiliki Jamkes Punya JamkesLocal Health Insurance (JAMKESDA) exists in 250 districts/cities

4 Provinces with Universal Coverage: South Sumatra, South Sulawesi, Bali, Nanggroe Aceh Darussalam

Proportion of Population with health insurance

12,45 3,33

57,78

20,83

5,61

Askes PNS&TNI POLRI JamsostekJamkesmas Jamkesda

II. Rice for the Poor

• Rice for the Poor is price subsidy given to the poor (cluster 1, 2, 3)

• The price of the rice paid by the beneficiaries is IDR 1.600/kg while the real price is 7.751,86/kg

• Subsidy provided by government is IDR 6.151,86/kg

15,42 14,15 13,33 12,86 11,96 11,66

02468

1012141618

(%

)

Poverty Level

III. Conditional Cash Transfer (Program Keluarga Harapan)

• PKH irovides cash transfer to selected very poor households (RTSM). They have to meet specific conditions to improve human capital (education and health) of children.

• Started in 2007 as pilot with targeting on 400,000 HHs. By end of 2013, 2.4 million HHs enrolled. Plan is to increase program to 3.2 million HHs (aboout 80-90% of extreme poor) by 2014

• Beligible HH are those having: pregnant and lactating mothers, children 0-6 years old, children enrolled in primary and secondary schools, or children 15-18 year olds who have not completed primary school.

Conditions to be met by beneficiaries:

• Pregnant mothers and toddlers should visit the community health centres (Posyandu/Puskesmas) to have their pregnancy and health examined.

• Children of PKH beneficiaries should be enrolled in

schools and must attend at least 85% of school days per month.

16 2007 2008 2009 2010 2011 2012 2013

Number of target of HHs(thousand)

400 642 720 816 1.116 1.516 2.400

Budget allocation (Rp billion)

800 1.000 1.100 1.300 1.600 1.800 2.400

Provinces (Total 33)

7 13 13 20 25 33 33

Districts/Cities (total 500)

48 70 70 88 119 169 337

Subdistricts 337 637 781 946 1.151 2.001 3.430

Beneficiaries of CCT 2007-2013

16

Cash Scenario

Note: - Maximum payment for each RTSM is Rp. 2,200,00, with 3 children. - Health related cash transfer is eligible for RTSM with children under 6 years and/or

pregnant/lactating mothers. - Amount of payment are not based on the number of children .

Payment Schedule

Payment amount for Beneficiaries per year

(IDR)

Fixed Payment 200.000

Payment for RTSM with:

a. Pregnant/lactating mothers and/or children under 6 years

800.000

b. Children attending primary schools (SD/MI) 400.000

c. Children attending secondary schools (SMP/MTs) 800.000

Minimum payment for each RTSM 600.000

Maximum payment for each RTSM 2.200.000

IV. Cash Assistance for Poor Students (BSM)

• Aimed to encourage students from poor families to pursue their study, to prevent drop-out, to pull street children out from the street, to fulfill the students’ basic needs.

• As a bridge to succeed school obligatory of 9 years.

• C ash amount transferred to students:

– Basic School IDR 360.000/annum

– Junior high school IDR 550.000/annum

– Senior high school IDR 780.000/annum

– University IDR 1.200.000/annum

V. COMMUNITY EMPOWERMENT

• The biggest and nationwide program is PNPM Mandiri (Self-Help Community-Based Empowerment)

• PNPM designed as community based complement to household CCT program

• Community members, program facilitators, and frontline service providers work together to achieve common set of health and education goals

• Uses community based targeting methods

• Flexible enough to target demand or supply side problems

• Communities receive performance bonuses based on improvements

• PNPM Roadmap: Integrating community empowerment and poverty reduction program delivery; “One village, one plan, one facilitation”

SOFT LOAN FOR SMEs (KUR)

• Soft Loan for Small and Medium Entrepreneurs (Kredit Usaha Rakyat-KUR) provided for poor people in Cluster 3 (near poor)

• Aimed at enhancing capital access of the poor for small and medium entrepreurships

Other Programmes Conducted By Line Ministries

• Besides nationwide programmes, many sectoral programmes for the poor are implemented

• Targets: farmers, fishermen, street traders, elderly, people with disabilities, etc.

• Schemes are based on individuals, groups, families, communities.

Recipient or care giver’s bank account

Elderly: 26.500 of 2.299.235

(1,15%)

PWDs 22.000 of 1.252.838

(1,75%)

IDR 300.000 (USD 30) Monthly

Example 1: Social Assistance for Elderly and PWDs Conducted by MOSA

IDR 200.000 (USD 20) Monthly

Recipient or care giver’s bank account

Example 2: Indecent Housing for the Poor Indecent housing is a condition of a house which does not

meet the basic requirement of health, security and social aspects for a family.

Rehabilitation for a descent home is an effort to renovate indescent home both the whole of parts as well as a part of it so that the home will be a healthy place for a family to live.

Public facilities rehabilitation is an effort to renovate public facilities to enhance the quality of life and environment of the people.

1. BEGINNGING (0%)

2. PROCESS (50%)

3. FINISHED (100%)

I Ketut Suweta Family, Banjar Tewruna

Desa Tamanbali, Kabupaten Bangli, Bali

Example 3: Group-Based Economic Productive Scheme (KUBE)

• Seed capital provided for a group of poor

• Prior to capacity building, vocational training

• Aimed at creating community entrepreneurs

• Income generating basis

Ministry of Social Affairs of the Republic of Indonesia Achieving Social Welfare of the Societies

Thank You Terima Kasih