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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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Executive summary

The Asian Financial Crisis of 1997-98 caused massive economic, political and social upheaval in Indonesia. Two decades later, the country has set its sights on becoming one of the ten largest economies in the world. Social protection has proven a key component of Indonesia’s economic recovery, its transition to democracy and progress towards a more cohesive society. The Government of Indonesia (GoI) considers social protection as a critical means of reducing inequalities of wealth and opportunity that represent a critical constraint to the country’s economic and social ambitions.

English

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