Social Protection Programs and Basic Needs

Much of Indonesia’s current social safety net is rooted in the massive new system of social protection programs, Jaring Pengaman Social (JPS), that was created in 1998 to alleviate the

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negative impacts of the Asian Financial Crisis and ensure social stability in the midst of both economic crisis and major political change. JPS programs included the sale of rice at subsidized prices; nutritional supplements for infants and children; scholarships for elementary and junior secondary students from poor families, and block grants to health centers and to schools. Beginning in 2005, these programs have evolved from relatively ad-hoc temporary measures towards a more permanent system of social assistance (Donaldson 2011), while shifting from donor financing to being part of the GOI budget.

Today, Raskin, which provides highly subsidized rice to poor households, is the largest assistance program in Indonesia. Initially called the OPK program, it was revamped as Raskin, under which the Bureau of Logistics (Bulog) distributes low-quality rice to distribution points throughout the country. Local governments determine eligibility based—in principle--on needs, and eligible individuals can purchase limited amounts (currently 14 kilograms) at a below- market price (Rp1,600 versus Rp 5,060). The target for the Raskin program in 2010 was to reach 17.5 million households. The target population is defined as poor households as well as vulnerable households, i.e., those living on less than 20% above the poverty line. Raskin is thus viewed as a core component of the basic social protection programs.

A second pillar of social protection for the poor is social health insurance. GOI began providing health insurance for the poor in 2003 with a program that eventually became Askeskin (Health Insurance for the Poor) and then in 2008, Jamkesmas (Health Insurance Scheme for the Population). Jamkesmas currently provides health service fee waivers for 18.2 million households, making it the largest permanent program in terms of coverage in the country. Like Raskin it is targeted to poor and vulnerable households. A health card is distributed to eligible households (based on need, determined at the district level). The card entitles holders to free services in health centers and hospitals. After Raskin, Jamkesmas is the largest assistance program in Indonesia in terms of expenditures. Together the two programs account for 73% of total expenditures on social protection. Other important public-health programs include commitments to universal vaccination and delivery assistance.

The third major program, BSM (scholarships for the poor) was begun in 1998 as part of the JPS and later renamed. Currently managed by the Ministry of Education (Kemdiknas), BSM provides cash transfers to low income students in public secular schools at each of the different levels. The target for 2010 was 2.77 million students in elementary schools; almost one million in junior secondary; 349,000 in senior secondary and 306,000 in vocational schools. At the same time, the BOS (school grants) program was initiated in order to provide schools with direct assistance. The BOS scheme currently also includes efforts to improve the quality of education via improvements in school-based management.

The BLT (Bantuan Langsung Tunai) was a temporary unconditional cash transfer program that twice was used to offset the impacts of rising fuel costs on the poor (arising from the reduction of the subsidy for fuel), first in 2005 and again 2008-09. The 2005 program provided support for over 19 million households, making it the largest cash transfer program in a developing country. Recipient households received approximately Rp 1.2 million each and Rp 900,000 in 2008/9. The BLT, while considered successful, has been discontinued, and a conditional rather than unconditional approach to cash transfers has been adopted. Program Keluarga Harapan (PKH) is

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a conditional cash transfer program for very poor households that was initiated in 2007. To determine eligibility, BPS, in conjunction with local governments, determines the poverty status of families with children. Those deemed “very poor” are eligible for the program. They receive cash if the mother attends pre and post-natal health checkups, has childbirths attended professionally, brings young children (newborns and toddlers) to professional health check-ups, and enrolls older children in school (verified through school records). The amount of the transfer varies depending on the number of dependents in the household, and ranges from Rp 600 thousand to Rp 2.2 million disbursed four times a year. The target for 2010 was to reach 816 thousand households, and in 2011 the program achieved nationwide scale with a goal of 1.17 million households by 2014.

We noted in Section III.7 that members of particularly vulnerable groups will likely be helped by the overall expansion of these flagship programs that target the very poor generally. At the same time, some of the smaller programs listed above have been recently adopted to serve special needs of specific groups. For instance, the Indonesian government has launched the National Action Committee against Child Labor with the announced aim of eradicating child labor by 2022. Under this initiative, the government has recently introduced innovative programs such as mobile classes for street children and student drop-outs. In 2009, the Ministry of Social Affairs introduced the PKSA (Program Kesejahteraan Sosial Anak or Child Social Welfare Service Program) to help children at greatest risk, including street children. PKSA combines conditional cash transfers with service provision. Other currently-small but potentially important components of the overall safety net are JSLU, which provides cash and services to the vulnerable elderly, and JSPACA, which assists the disabled.