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.



Effectiveness of social protection

A selection of the programmes identified in Chapter 2 have emerged as central to Indonesia’s strategies for reducing poverty and inequality and promoting inclusive growth. This chapter examines the effectiveness of these key programmes: Rastra (formerly Raskin; Rice for the Poor), Programme Indonesia Pintar (PIP; Assistance for Poor Students), Penerima Bayaran Iuran (PBI; Social Health Insurance for the Poor and Near Poor) and Program Keluarga Harapan (PKH; Family of Hope Programme). It analyses their impact across four dimensions: coverage, adequacy, equity and efficiency. This analysis is intended to inform the evolution of these programmes and support appropriate allocation of resources across the social protection system. The chapter concludes with a gender-based analysis of the pension system.


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