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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.

English

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Assessment and recommendations

Indonesia’s recovery from the Asian Financial Crisis and the economic, political and social upheaval it caused has led to an impressive reduction in poverty and a significant improvement in living standards. However, the growing prosperity has not been shared by the entire population; inequality has risen strongly over the past two decades. The Government of Indonesia (GoI) has recognised this uneven development as a key constraint on its ambition to become one of the world’s ten largest economies and it has placed social protection at the centre of its inclusive growth strategy.

English

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