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4 - Short-term Poverty Dynamics in Rural Indonesia during the Economic Crisis
- from Part One - Trends in Poverty and Technical Issues of Measurement
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- By Asep Suryahadi, SMERU Research Institute, Wenefrida Widyanti, SMERU Research Institute, Sudarno Sumarto, SMERU Research Institute
- Edited by Joan Hardjono, Nuning Akhmadi, Sudarno Sumarto
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- Book:
- Poverty and Social Protection in Indonesia
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 May 2010, pp 63-80
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Summary
INTRODUCTION
During the economic crisis in Indonesia, the headcount rate on poverty changed relatively quickly over short periods of time. Poverty increased rapidly when the crisis worsened and, likewise, decreased rapidly when the economy stabilized. This implies that large numbers of households were moving in and out of poverty relatively frequently. It also implies that a significant number of households experienced relatively short periods of poverty, that is, just a fraction of a year.
Generally, the movement of households in and out of poverty is assessed on a yearly basis (for example, Bane and Ellwood 1983; Baulch and Hoddinott 2000; Jalan and Ravallion 1999a, 2000). These studies utilize panel data of households with a year as the basic time unit. According to these data, a household deemed not poor in two consecutive surveys will be considered as having never been poor during the whole period between the two surveys. In reality, however, the household could have experienced a period of poverty in between the two surveys. Such a situation could occur, for example, if each year the survey was conducted in the harvest season, a period when rural households are generally better off.
To understand the short-term dynamics of poverty, it is necessary to have panel data that rely upon a time unit that is less than a year. Muller (1997), for example, uses quarterly panel data in a one-year period between 1982 and 1983 to estimate the transient seasonal and chronic poverty of peasants in rural Rwanda. He finds that the worst poverty occurs after the dry season at the end of the year. Severe poverty is generally the result of a seasonal, transient component of annual poverty, where the seasonal component of the incidence of poverty is much smaller. Hence he concludes that the actual differences in the severity of poverty, either between developing and developed countries or between rural and urban areas in developing countries, may be much worse than shown by the usual chronic annual poverty measures or by measures of the seasonal incidence of poverty.
Similarly, Dercon and Krishnan (2000) use a panel data set of households in rural Ethiopia that were visited three times over an eighteen-month period.
8 - New Approaches to the Targeting of Social Protection Programs
- from Part Two - Poverty Alleviation Policies and Programs
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- By Asep Suryahadi, SMERU Research Institute, Wenefrida Widyanti, SMERU Research Institute, Daniel Suryadarma, Australian National University, Canberra, Sudarno Sumarto, SMERU Research Institute
- Edited by Joan Hardjono, Nuning Akhmadi, Sudarno Sumarto
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- Book:
- Poverty and Social Protection in Indonesia
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 May 2010, pp 190-217
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Summary
INTRODUCTION
The Indonesian experience of implementing social protection programs during the economic crisis of the late 1990s and also during the post-crisis period shows that targeting in programs of this kind is always difficult. As a consequence, social protection programs always suffer from the problems of undercoverage and leakage at the same time. Both problems cause these programs to become less effective and less efficient than they have potential to be (Sumarto et al. 2002). Hence there is a clear need to improve targeting at two levels simultaneously: the geographic and the individual levels. This paper describes attempts to develop more effective targeting tools than those already in use in Indonesia.
POVERTY MAPPING: A TOOL FOR BETTER GEOGRAPHIC TARGETING
The Advantages of Small-area Poverty Mapping
Ideally, geographic targeting should be based on a description of poverty incidence and other indicators of economic welfare in small areas or at low administrative levels. It is here that poverty mapping offers advantages. Detailed poverty maps of small areas can provide benefits to help address many of the shortcomings of aggregate poverty profiles and can greatly enhance and sharpen poverty analysis.
First, small-area poverty maps can obviously reveal the variations in local poverty levels. Almost all countries in the world have regions that are well off and others that have lagged behind. Such differences are often obscured in national-level statistics, a problem that is particularly critical in large and heterogeneous countries like Indonesia. Second, poverty maps can improve the targeting of interventions, which means that resources can be used more effectively. Poverty maps have the potential to reduce the risk that benefits may be leaked from a program to non-poor households. Similarly, they can also reduce the risk of undercoverage, that is, the possibility that poor households will be missed by a program.
Third, poverty maps can help governments to state their policy goals objectively. If allocation decisions are based on observed geographic poverty data rather than on subjective rankings of regions, the transparency and credibility of government decision-making is increased. Poverty maps can therefore help limit the influence of special interests in allocation decisions. This is particularly relevant in the context of currently decentralized Indonesia.
6 - Designs and Implementation of the Indonesian Social Safety Net Programs
- from Part Two - Poverty Alleviation Policies and Programs
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- By Sudarno Sumarto, SMERU Research Institute, Asep Suryahadi, SMERU Research Institute, Wenefrida Widyanti, SMERU Research Institute
- Edited by Joan Hardjono, Nuning Akhmadi, Sudarno Sumarto
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- Book:
- Poverty and Social Protection in Indonesia
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 04 May 2010, pp 111-148
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Summary
INTRODUCTION
At the onset of the Indonesian economic crisis, an important concern was raised over whether the achievements that had been made in the social sectors and poverty reduction over the previous decades could be sustained. Furthermore, there were some warnings about the looming social impacts of the crisis. This prompted the Indonesian Government to react rapidly and to institute a number of interventions aimed at safeguarding real incomes as well as access to social services for the poor.
To mitigate the social impact of the economic crisis, the Indonesian Government established a series of new and expanded programs known as the JPS (Jaring Pengaman Sosial, or Social Safety Net) programs. They were launched in early 1998, although many did not start until the second half of the year. It was hoped that through the implementation of these programs, the worst impacts of the crisis, such as widespread hunger, malnutrition, poverty, unemployment, and children dropping out of school, could be prevented or at least reduced.
This paper is an evaluation of how effective the various social safety net programs have been in reaching their intended target, namely, the traditionally poor and those newly poor due to the crisis. This is done by assessing the coverage of the programs among the poor as well as the way in which the benefits of the programs have been distributed between the poor and the non-poor.
THE SOCIAL SAFETY NET PROGRAMS
Indonesia's Social Safety Net Prior to the Crisis
The Indonesian people had never relied heavily on government-run safety net programs. The country has had neither the economic apparatus nor the political mechanisms necessary to deliver large-scale and widespread transfer programs. Instead, government social spending was largely focused towards “social services” such as health and education, while the family and communities provided “social insurance” in times of difficulty. There was some subsidized health care and a workers’ social security program, made compulsory for all formal sector employees by the 1992 law on Workers’ Social Security (McLeod 1993), but Indonesia did not have a social safety net system like the JPS. Establishing the social safety net programs in 1998 was, therefore, more like casting a new net rather than merely expanding an existing one.