Introducing innovative approaches for Indonesia’s social protection reform

Context

Since 1999, Indonesia’s poverty level has halved, reaching 10.7 per cent or 27.76 million individuals in 2016. However, an additional 24 per cent is estimated to be at risk of poverty. Inequality has grown rapidly in the last ten years due to geography and social concentration.

The high poverty risk is due to extreme weather events and natural disasters exacerbated by climate change. Poor households are often unable to take measures which means that, when disaster hits, they often face existential threats. To date, social protection does not cover these risks.

There is also a lack of economic opportunities to escape poverty. Providing access to productive employment remains a daunting challenge, especially for people with disabilities. The social protection system therefore requires effective reforms.

Objective

Reforms to Indonesia’s existing social protection system are increasing resilience among the poor and vulnerable.

Approach

The project provides technical expertise, develops capabilities, facilitates processes and creates opportunities through:

1. adaptive social protection,
2. financial inclusion of the poor and vulnerable,
3. promotion of employment for people with disabilities, and
4. actuarial technical reforms to redesign the social benefits and coverage and improve the programme’s effectiveness and efficiency.

The following activities aim to improve risk coverage and promote independent livelihoods for the poor and vulnerable:

1. providing policy advice on adaptive social protection
2. supporting organisational development for key actors,
3. designing inclusive employment promotion instruments and reform plans for vocational education and training.

Collaboration with the Ministry of National Development Planning and PT Pos Indonesia underpins efforts to improve access to basic financial services for poor and vulnerable households, increases their participation in social-protection systems, reduces transaction costs and promotes graduation from social assistance.

Last update: July 2023