Indonesia: Targeted social protection with international financial support
Mulyadi Sumarto (Universitas Gadjah Mada) and Fery Ferdiansyah (National Social Security Council, Indonesia) wrote the 28th part of the CRC 1342 Covid-19 Social Policy Response Series.
In response to rising unemployment and poverty, the authors write in their report, the government allocated approximately USD 46.4 billion of the national budget to Covid-19 response measures, mainly in the health sector, to foster economic recovery and to fund the social safety net.
The social safety net response comprises of 11 programmes, of which only three (top of the list below) existed before the pandemic.
Despite number of programmes, the government "has not been able to cover all the poor and provide a sufficient safety net for them", the authors write. Limited data on poor hourseholds was one of the reasons mentioned, scarcity of financial resources was another: The national government had to issue a 50-year bond (USD 4.3 billion) and borrow from the World Bank (USD 700 million) to cover the additional expenses caused by the pandemic.
As the financial means were limited, the government opted for providing "social assistance that can stimulate economic activity in the labor market rather than healthcare for the elderly", the authors conclude. "[T]he Indonesian government retains the safety net programs to support economic productivism."
The governmental programmes were supplemented by informal assistance to the poor provided by communities.
"Community support for the poor and the participation of global agencies in welfare provision underline the limitations of state social policy during times of socio-economic adversity, particularly due to budget constraints", Mulyadi Sumarto and Fery Ferdiansyah conclude.
Read Mulyadi Sumarto's and Fery Ferdiansyah's full report: Indonesia’s Social Policy Response to Covid-19: Targeted Social Protection under Budget Constraints
See the other parts of the series: CRC 1342 Covid-19 Social Policy Response Series