Social Protection System Review of Indonesia

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Indonesia has made impressive progress in reducing income inequality and improving living standards since the Asian Financial Crisis but the decline in poverty has slowed in recent years while inequality has risen and a large part of the population remains vulnerable. The Government of Indonesia has recognised the potential of social protection to address these challenges and to underpin a long-term development strategy based on more inclusive economic growth. As a consequence, social assistance programmes have grown significantly in recent years while social insurance has undergone major reforms. The Government is gradually realising its vision of a system of social protection, based on comprehensive and coherent coverage for all age groups.The Social Protection System Review of Indonesia charts the evolution of social protection. It explores the current context for social protection and how this is likely to evolve in the future, analyses the extent to which existing programmes are aligned to those needs and how effective these programmes are at reducing poverty. It also examines the financing of social protection. Finally, it proposes policies to enhance the social protection system across a number of dimensions, including programmes, institutions, financing and information architecture.



Strengthening the social protection system

Indonesia has made great strides towards establishing a social protection system, supported by sustained political backing across administrations, the scaling up of key programmes and the emergence of a strong information architecture. This chapter charts the progress that Indonesia has made towards establishing a social protection system and identifies the key levers for strengthening this system in the future. It also recognises the constraints to systematisation and proposes reforms to the institutions, policies and information systems that underpin social protection as a means of enhancing its capacity to address the challenges identified in the report and underpin inclusive economic growth.


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