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8 - Improving Indonesia’s Targeting System to Address the COVID-19 Impact
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- By Vivi Alatas
- Edited by Blane D. Lewis, Firman Witoelar
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- Book:
- Economic Dimensions of Covid-19 in Indonesia
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 09 October 2021
- Print publication:
- 17 March 2021, pp 137-149
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Summary
Abstract
In an increasingly complex environment of COVID-19, improving Indonesia's targeting system is needed more than ever. Both the poor and the bottom middle class need support during the current crisis. However, improving Indonesia's targeting system is technically and politically challenging. Support is needed from different stakeholders, and we need to ensure the system will improve the accuracy of targeting. Targeting accuracy could be improved by better collecting poor household data and better selecting the beneficiaries from those data. Better collection of data relies on ensuring the right households are surveyed. Accurately identifying the poor and the bottom half of the population from among those surveyed will lead to better selection of beneficiary households. Improving the selection method without improving the data collection will not improve the exclusion error. Improving data collection without improving the selection method will not address the changing environment. There are several choices in improving data collection and selection methods, each with different advantages. Because there is no best method for all situations, a mixed-method approach is recommended.
Introduction
COVID-19 is a double malady that creates not only health shocks but also economic shocks. In Indonesia, with businesses closed and largescale mobility restrictions imposed after the COVID-19 outbreak, the World Bank estimated 24 per cent of households’ breadwinners had stopped working by early May 2020 (Purnamasari and Ali 2020). Among household breadwinners who continued working, 64 per cent experienced reduced income and 32 per cent experienced food shortages. There was a significant improvement from May to August 2020, with only 10 per cent of breadwinners not working. Those experiencing food shortages also decreased, from 32 per cent to 24 per cent. Wealthier and female-headed households experienced faster improvement than others. However, 13 per cent of households are experiencing worsening food shortages, mostly in the poorest 40 per cent of the population and outside Java.
It is not only the poor who need help. Households in the bottom middle class are also experiencing hardship. Indonesia's major household social assistance programs are critical in providing a safety net for affected households. Via Presidential Regulation No. 72/2020, the Indonesian government has allocated Rp 203.9 trillion for various programs (Table 8.1).
15 - Targeting of the Poor and Vulnerable
- from PART 4 - Connecting with the Poor: Government Policies and Programs
- Edited by Chris Manning, Sudarno Sumarto
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- Book:
- Employment, Living Standards and Poverty in Contemporary Indonesia
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 30 May 2011, pp 313-332
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Summary
Economic growth does not always lift the poor out of poverty, or may not do so as quickly as either governments or the poor would like. Drawing on the World Development Reports for 1990, 1997 and 2000, Coady, Grosh and Hoddinott (2004) note the emerging consensus that elements beyond growth are required for poverty alleviation, such as more intensive growth in the sectors in which the poor predominate, and a building of their asset base. They also recognise that such strategies need to be complemented by shorter-term assistance for the poorest households.
A range of transfers and social assistance is now targeted towards the poor in many developing countries, as a means to provide shortterm poverty alleviation. Social programs can be targeted broadly, where spending is directed not specifically at the poor but at the sectors where they are more likely to benefit, such as primary education, health care and rural development (van de Walle 1998). Programs may also target selected regions where pockets of poverty have been identified, or poor households or individuals by directly assessing their means (Coady, Grosh and Hoddinott 2004). How well these programs are targeted (and the costs involved) will have a large impact on how effectively they achieve their objective.
Particularly since the 1997–98 Asian financial crisis, Indonesia has implemented a range of social programs targeted both broadly and narrowly, using a variety of targeting methods. At its peak in 2006, spending on programs directly targeting poor households represented 5 per cent of all public expenditures and 45 per cent of social spending.
This chapter examines targeted social assistance and protection programs in Indonesia. We restrict ourselves to the more narrow targeting of poor households and individuals. We begin by briefly examining the evolution of targeted social programs. We then provide a quick overview of different approaches to targeting the poor, followed by an analysis of how effectively current programs are targeted. We outline some possibilities for future targeting in Indonesia before presenting our conclusions.
THE EVOLUTION OF TARGE TED SOCI AL PROGRAMS
A brief history of social assistance in Indonesia
Targeted poverty reduction and social assistance programs have been in place in Indonesia for a number of years. Here we briefly examine major events in their history. The first generation of social assistance programs targeted at households arose in response to the Asian financial crisis.