Foreword

Social protection in Indonesia has evolved as fast as the country itself over the past two decades. Today, the Government of Indonesia (GoI) recognises social protection as being central to its economic, political and social development as well as its ambition of becoming one of the world’s ten largest economies by 2030. Social protection is at the core of the 2015-19 Medium Term Development Plan (RPJMN), which articulates a vision for inclusive economic growth that promotes equality of income and opportunity as a precondition for escaping the middle-income trap and fulfilling the country’s potential.

This Social Protection System Review of Indonesia (SPSR) is produced by the European Union Social Protection Systems Programme (EU-SPS) in close collaboration with the Ministry of National Development Planning (BAPPENAS) and with the broader support of the GoI as well as development partners. The SPSR intends to inform next Indonesia’s RPJMN for the period 2020-24 as well as related policy processes.

The SPSR examines how social protection has evolved since the Asian Financial Crisis. It maps social protection provision and analyses the impact of key programmes. It also examines the financing of social protection and the challenges of harmonising programme implementation and poverty-targeting across Indonesia’s vast geographical area.

The SPSR also focuses on the GoI’s progress in closing gaps in social protection provision and achieving greater coherence and co-ordination amongst different programmes, institutions and levels of government in order to create a social protection system. This is essential for reducing poverty and high levels of inequality as well as optimising financial resources. New challenges, such as shifting demographics, climate change and the fourth industrial revolution, heighten the urgency of strengthening the social protection system.

Numerous stakeholders in the GoI, development partners involved with social protection, and representatives from academia and broader civil society worked together to develop the recommendations in this report. These address challenges such as enhancing the impact of social assistance on poverty, expanding social insurance coverage, optimising the institutional and information architecture for social protection, and mitigating gender imbalances. We hope this review will contribute to further enhancing social protection in Indonesia, maximising its potential to promote inclusive growth and thus underpin the country’s progress towards achieving prosperity for all Indonesians.

Mario Pezzini

Director of the OECD Development Centre

and Special Advisor to the OECD Secretary-General on Development

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