Outcomes in the provision of institutional childcare

176 Poverty reduction efforts in Indonesia cannot be separated from efforts to achieve the Millennium Development Goals MDGs. The eradication of poverty is the first MDG. The indicators for this are: 1 the proportion of people whose income is less than 1 PPP a day with an aim of reducing this proportion by 30 per cent by 2015 from 20.6 per cent in 1990; and 2 reducing the poverty gap index. 2 As a commitment to achieving the MDGs, the Government of Indonesia GoI has mainstreamed the MDGs in development planning and implementation, including the relevant goals and indicators in the National Medium-Term Development Plans RPJMN, which run for five years each. According to the RPJMN 2010–2014, sustainable economic development requires a solid and equal distribution of national governance. The process of economic growth, which incorporates all layers of society, can only be realized if the government’s budget allocation is truly designed to assist people in their efforts to get out of the poverty trap. Social security must be provided not only as a constitutional obligation but as a strategic consideration to enhance the quality of Indonesia’s human resources; making workers more educated, skilled and healthy making them potentially more productive. According to the current RPJMN, the priority for poverty reduction is to reduce absolute poverty from 14.1 per cent in 2009 to between 8 and 10 per cent in 2014, and to improve income distribution through household-based social protection, community development, and expansion of economic opportunities for members of society with low-incomes. The implementation of targeted poverty reduction programmes in Indonesia has significantly improved since 1997–1998 after Indonesia was hit by the Asian financial crisis. At that time, poverty reduction was conducted through Social Safety Net programmes SSN. The SSN programmes were intended to reduce the impact of the crisis on target communities through the provision of food, health services, education, revolving funds dana bergulir and intensive labour. All of these poverty reduction programmes were still being implemented at the time this report was written, but the names of the programmes and their implementation approaches have changed. Since 2009,poverty reduction programmes have been classified into three clusters Figure 6.1. The first cluster, ‘Social Assistance’, aims to reduce cost burdens through the programmes known as Rice for the Poor Raskin, Direct Unconditional Cash Transfers BLT, Family Hope Programme PKH, School Operational Assistance BOS and Community Health Insurance Jamkesmas. The second cluster is ‘Community Empowerment’ which aims to improve the income and buying power of communities and is conducted through the National Programme for Community Empowerment, known as ‘PNPM Mandiri’. PNPM Mandiri is divided into two main categories, PNPM-Inti ‘core’ and PNPM-Penguatan ‘strengthening’. PNPM-Inti includes the PNPM Rural PNPM Perdesaan, the PNPM Urban PNPM Perkotaan, the Rural Infrastructure Development Programme PPIP, the Regional Socio-economic Infrastructure Development Programme PISEW and the Development Acceleration Programme for Disadvantaged and Special Regions P2DTK. PNPM- Penguatan consists of PNPM Healthy and Smart Generation PNPM Generasi, PNPM Green PNPM Hijau, Development of Rural Agribusiness PUAP, Community-based Sanitation and Drinking Water Provision PAMSIMAS and Direct Community Financial Assistance for Agricultural Investment BLM-KIP. The third cluster, ‘Micro-Enterprise Empowerment’ aims to aid micro and small and enterprises through the provision of loans Kredit฀Usaha฀Rakyat, KUR. In 2011, the GoI added a new fourth cluster, namely, ‘Pro-Poor Programmes for Accelerating Poverty Reduction’. This new cluster consists of six programmes including: 1 low-priced housing; 2 low-priced public transportation; 3 clean water; 4 economical and low-priced 2 The poverty gap index measures how far the income or consumption of an individual is from the poverty line. It represents the financial amount needed to bring all poor individuals up to the poverty line. 177 electricity; 5 fisheries improved livelihood; and 6 urban community livelihood improvement. It also added three others programmes in Jakarta, including job creation, rice surplus and transportation. Up to the time of the writing of this paper late 2011, the programmes in cluster IV had not yet been implemented at the national level. However, the Jakarta Provincial Government has started to implement the programmes on job creation and transportation. 3 The budgets for all three main clusters of poverty reduction programmes decreased in 2010 compared to 2008. The budget allocation for the first cluster was IDR43 trillion in 2008, but declined to IDR39 and 37 trillion in 2009 and 2010, respectively, mostly due to a reduction in the BLT programme, followed by its elimination. The second cluster’s budget allocation in 2008 was IDR6 trillion, which increased by 57 per cent in 2009 and decreased in 2010 by 7 per cent to almost IDR13 trillion. The third cluster received Figure 6.1: Clusters of poverty reduction programmes Cluster I “Giving a fish” Cluster II “Teach how to fish” Cluster III “Provide fishing rod and boat” Social assistance Aim: to reduce burdens of cost on the poor Community empowerment Aim: to increase the income buying power of the poor Micro-enterprise empowerment Aim: to increase savings business sustainability of SMEs Source:฀Badan฀Pusat฀Statistik฀BPS฀–฀Statistics฀Indonesia,฀2010;฀฀PNPM฀Mandiri฀National฀Programme฀for฀Community฀ Empowerment,฀www.pnpm-mandiri.org,฀accessed฀13฀December฀2010;฀Kementerian฀Koperasi฀dan฀Usaha฀Kecil฀dan฀ Menengah฀Ministry฀of฀Cooperatives฀and฀Small฀and฀Medium-sized฀Businesses,฀www.depkop.go.id,฀accessed฀14฀December฀ 2011 Rice for the poor, health insurance, conditional and unconditional cash transfers, school fees, scholarships. 17.5 million of the near poor, poor, and very poor households Social assistance for disabled, elderly, children, etc. Main Instruments Main Instruments Main Instruments Targets in 2010 Targets in 2010 Targets in 2010 Other Instruments National Community Empowerment Programme PNPM Mandiri, including rural and urban programmes, infrastructure development PPIP, PISEW, etc. 6,408 kecamatan in 495 kabupatenkota Credit for the people KUR IDR13.1–18 trillion 3 Communication from Jakarta Provincial Board for Development Planning in a consultative meeting for poverty reduction 30 November 2011 the smallest budget allocation,but it increased significantly in 2010 Table 6.1. Government poverty alleviation programmes provided various types of basic household income support. The targeted households or beneficiaries received assistance in the form of cash or goods either directly or indirectly. Some programmes directly addressed the needs of children and others were aimed at households more broadly to enable them to meet the needs of their children. Programmes that directly targeted children include BOS and scholarships for poor students see Chapter 4, section 4.2. The implementation of all poverty reduction programmes and policies was coordinated by just one institution. Previously, based on Presidential Regulation No. 132009 on Poverty Reduction Coordination, policy coordination and implementation of poverty reduction programmes was implemented by the 178 4 This part was mostly taken from Hastuti et al.,‘The role of social protection programmes in reducing the impact of the global financial crisis 20082009’, SMERU Research Institute, 2010. Table 6.1: Budget allocation for clusters I, II and III of the poverty reduction programmes, 2008–2010 Cluster I 43,446 39,146 37,019 Cluster II 6,688 10,355 12,921 Cluster III 1,450 2,000 20,000 •฀ Raskin฀Rice฀for฀the฀poor •฀ BLT฀direct฀cash฀transfers •฀ Jamkesmas฀health฀insurance฀scheme •฀ Scholarships •฀ BOS฀School฀operational฀assistance 11,660 14,000 4,686 1,900 11,200 12,980 3,800 7,224 2,942 12,200 12,620 5,584 2,315 16,500 •฀ PNPM-Mandiri฀฀community฀empowerment 6,688 10,355 12,921 •฀ Loans฀for฀the฀people฀KUR 1,450 2,000 20,000 Source:฀Hastuti฀et฀al.,฀2010;฀Government฀Work-Plan฀RKP฀2008–2010 Note:฀PNPM-rural,฀PNPM-urban,฀PPIP,฀PISEW,฀P2DTK Budget IDR billion 2009 2010 2008 Coordinating Team for Poverty Reduction TKPK, which was chaired by the Coordinating Minister for People’s Welfare. Other team members included representatives from government, communities, businesses and other stakeholders in poverty reduction. In order to intensify the coordination of poverty eradication, Presidential Regulation No. 152010 on Accelerated Poverty Reduction was released and since 2010 the coordination and implementation of poverty reduction programmes has been conducted by the National Team for Accelerating Poverty Reduction TNP2K,chaired by the Vice President with similar membership to that of the TKPK.

6.2 Major household income support programmes

4 Some of the household income support programmes in nutrition, health and education were already discussed in chapters 3 and 4. In this chapter the discussion of household income support will be limited to those few given directly to the target households, namely; Rice for Poor Households Raskin, the Family Hope Programme conditional cash transfers, known as PKH, and DirectUnconditional Cash Transfers BLT.

6.2.1 Rice for Poor Households Raskin

The Raskin programme Beras฀untuk฀Rumah฀ Tangga฀Miskin, formerly known as the Special Market Operation Operasi฀Pasar฀Khusus, OPK, is a poverty reduction programme initiated by the GoI in June 1998 and is a part of the JPS Jaring Pengaman Sosial or Social Safety Nets programme. Raskin aims to reduce the burden of food costs on poor households through the provision of rice as a basic food staple. Through this programme, the government provides a certain amount of rice at a subsidized price every month to targeted households. Until 2007 every household received between 10 and 20 kilograms of rice at a subsidized rate of IDR1,000 per kilogram at the distribution point; usually at the village or precinct kelurahan office. Since 2008 the rice quota per household has been increased to 15 kilograms with a target price at the distribution point of IDR1,600 per kilogram. The implementation of Raskin involves several ministries and institutions. The Coordinating Ministry for People’s Welfare acts as the coordinator for the programme’s implementation, the National Food Logistics Agency BULOG is responsible for the distribution of rice to distribution points at 179 the sub-district or village level, and local governments are responsible for distributing the rice to the local distribution points for collection by members of the target households. Raskin is for poor households. Until 2005, identification of the programme beneficiariesrelied on the data on ‘Pre- Prosperous Families’ and ‘Prosperous Families 1’ Keluarga฀Prasejahtera;฀Keluarga฀Sejahtera฀1 from the National Family Planning Coordination Board BKKBN. Since 2006, determining the target households has been based on BPS – Statistics Indonesia data identifying the ‘very poor’, ‘poor’ and ‘nearly poor’ households as beneficiaries. The number of Raskin targeted households increased up to2008 and declined in 2009, corresponding to the number of poor households in Indonesia. Meanwhile, the Raskin budget continued to increase in accordance with the increase in the price of rice Table 6.2.

6.2.2 Unconditional or direct cash transfers

This programme, known as BLT, was first initiated in October 2005 for 12 months to alleviate the impact on poor households of an increase in fuel prices BLT 20052006. The BLT programme aimed to help the poor continue to meet their basic needs in the face of the fuel price increase, thus preventing a welfare crisis. The GoI has implemented a BLT programme on three occasions. The next instance was BLT 2008, implemented over seven months, from June to December 2008. Finally, during BLT 2009, cash was only disbursed for two months in January and February 2009, again to reduce the impact of rising fuel prices. The target households for BLT were ‘poor’ and ‘nearly poor’ households, based on data Table 6.2: Rice for Poor Households; numbers of households, rice ceiling and budgets, 2005–2010 Information 2005 2006 2007 2009 2010 2008 Source:฀National฀Food฀Logistics฀Agency฀BULOG,฀2007–2010;฀Coordinating฀Ministry฀for฀People’s฀Welfare,฀2007–2010 Poor households Target households Recipient households Rice ceiling tons Budget IDR trillion 15,791,884 8,300,000 11,109,274 1,991,897 4.97 19,100,905 15,800,000 16,736,411 1,736,007 6.47 18,497,302 18,497,302 3,329,514 12.98 15,503,295 10,830,000 13,882,731 1,624,500 5.32 19,100,905 19,100,000 19,131,185 3,342,500 11.66 17,484,009 17,484,007 2,972,945 12.62 from BPS – Statistics Indonesia. The number of target households decreased slightly from 19.1 million in BLT 2005 to 19.02 million in BLT 2008, and to 18.5 million in BLT 2009. The reduction occurred because some previous beneficiaries had passed away, changed address or improved their welfare status, while the number of new beneficiaries was lower. Through BLT programmes, each targeted household received IDR100,000 per month every two to four months through the post office. In accordance with the implementation period and the number of target households, the budget allocation for BLT decreased. The budget allocations for BLT 2005 four periods of disbursement, BLT 2008 two periods of disbursement, and 2009 one period of disbursement were IDR23 trillion, IDR14.1 trillion and IDR3.7 trillion, respectively. The BLT programme was implemented with cross-sectoral coordination at all levels of government, working cooperatively based on the main functions and duties of the respective institutions. At the central level, the agency responsible for the programme was the Ministry of Social Affairs, which appointed PT Pos Indonesia the national postal service and Bank Rakyat Indonesia to undertake the task of disbursing funds to target households. Meanwhile, BPS – Statistics Indonesia was responsible for providing the necessary data.

6.2.3 Conditional cash transfers

Known as PKH, the Family Hope Programme is a conditional cash transfer programme that was started in 2007. The programme is designed to support increased demand for education and health services in poor households, assisting the children to escape the inter-generational poverty