POVERTY ALLEVIATION AND POVERTY REDUCTION PROGRAMMES: CHANGING STRATEGIES
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70 The SMERU Research Institute 2006 ‘Pelaksanaan program Bantuan Operasional Sekolah BOS’, The SMERU Research Institute Newsletter No. 19, July-September, Jakarta
71 Ibid.; Suharyo, W. 2005 ‘A rapid appraisal of the PKPS-BBM Education Sector School Operational Assistance BOS’, the SMERU Research Institute: Jakarta
72 The SMERU Research Institute 2006 Pelaksanaan program Bantuan Operasional Sekolah BOS 73 Suharyo, W. 2005 A rapid appraisal of the PKPS-BBM Education Sector School Operational Assistance BOS
74 Ministry of National Education Departemen Pendidikan Nasional 2005 Buku Petunjuk Pelaksanaan BOS 75 Ibid.
76 Sparrow, R., Suryahadi, A. and Widyanti, W. 2010 Social health insurance for the poor: Targeting and impact of Indonesia’s Askeskin program
, The International Institute of Social Studies of Erasmus University Rotterdam and The SMERU Research Institute: Jakarta 77 Ibid.
78 Ibid. 79 Ibid.
80 Ibid.
the BKM programme was allocated to approximately 20 per cent of students at the primary, junior and senior secondary school levels. Despite this allocation, research has shown that
the percentage of poor households whose children were receiving scholarships was smaller, that is, less than 15 per cent.
70
The BOS programme Following the large reduction in the fuel subsidy in March and October 2005, commencing
in the 200506 academic year, the government made fundamental changes to the PKPS- BBM Education Sector Program concept and design for primary and junior high schools.
This BKM programme for primary and junior secondary schools was replaced by the School Operational Assistance programme BOS, Bantuan Operasional Sekolah. In contrast to the
BKM programme, which provided money directly to poor students who were selected by schools in accordance with the allocations they had received, BOS funds were provided to
schools to be managed in accordance with the requirements that had been determined by the central government. The size of the fund for each school was determined on the basis of
the number of students in accordance with the requirements that had been determined by the central government.
71
BOS was available for all primary and junior high schools, including Sekolah Dasar Primary School, MI Madrasah Ibtidaiya, Islamic-based primary school, Sekolah Dasar Luar Biasa
Primary School for Children With Special Needs, Sekolah Menengah Pertama Junior
Secondary School, MT Madrasah Tsanawiyah , Islamic-based Junior High School, and
Sekolah Menegah Pertama Luar Biasa Junior Secondary School for Children with Special
Needs. Both public and private schools running the compulsory education programme at primary and junior high schools or equivalent were entitled to receive BOS. Schools
that considered themselves as well-off were, however, allowed to opt out of the BOS programme.
72
The introduction of the BOS programme was expected to reduce the cost of education borne by students’ parents. Under the programme, poor students should receive free education.
Although the objectives of the programme as stated in the Operational Guidelines for BOS 2005 did not specify free education for poor students, this has been emphasised in the
implementation and regulation of the programme. The programme regulations require the elimination of school tuition for schools that, prior to receiving BOS, had smaller school
tuition fees schedules than the BOS funding. Schools that, prior to receiving BOS, had school tuition fees schedules greater than the BOS funding were permitted to collect school tuition
fees, but had to exempt poor students from tuition fees and reduce the tuition for other students. In addition to the regulations on school tuition fees, the regulations also allow
schools to use the funds to provide transportation allowances as special assistance for poor students deemed to be in need.
73
The objective of the BOS programme “The BOS Program aims to provide assistance to schools in order that they can exempt
students from their school tuition. This exemption, however, will not result in decreased quality of the education services provided for the community…The BOS Program is aimed
at releasing poor students from education cost and reducing the costs for other students, so they obtain a better quality basic education until the completion of nine years of
basic education in order to achieve the goal of the nine year compulsory basic education programme.”
74
Because recipient schools used most BOS funds for operational activities that supported teaching and learning activities, the BOS funds were of benefit to all students, including
those from both well-off families and poor families. Most schools also decided to give the same treatment to all students in the school charges that were levied on students.
75
Health insurance Indonesia introduced the first phase of its plan to achieve universal health coverage through
a mandatory public health insurance scheme in 2004. Asuransi Kesehatan Masyarakat Miskin, or Askeskin, was targeted to the poor. The key objective of Askeskin was to improve
access to healthcare and provide financial protection against health shocks and illnesses for poor households that lack access to formal insurance.
76
It initially targeted the poorest 60 million people.
77
In 2008, Askeskin evolved into Jaminan Kesehatan Masyarakat, or Jamkesmas
, a Ministry of Health ‘insurance’ programme that now covers over 76.4 million poor Indonesians.
78
The Askeskin programme reimbursed providers in two ways: 1 a payment provided to community health centres puskesmas based on the number of registered poor; and 2
fee-for-service payments covering third-class hospital beds reimbursed through P.T. Askes a state-owned insurer. All public hospitals were automatically qualified as providers, while
Askes contracted with private mostly non-profit hospitals individually.
Changes to Askeskin implemented in 2005 resulted in differences in two major areas. First, rather than being a purely government-run programme, it provided a block grant
to P.T. Askes, which then targeted the poor with Askeskin cards and reimbursed hospital claims. Second, the beneficiary cards in Askeskin were individually targeted rather than the
household cards used in previous programmes. By 2008 Askeskin had expanded to cover over 70 million people.
79
Then in 2008, Askeskin evolved into Jamkesmas. Many district governments have followed the lead of Jamkesmas and established district-
based insurance schemes typically called Jamkesda that cover the near-poor or those not covered under Jamkesmas. These schemes take different forms. Some Jamkesda are
designed as extensions of Jamkesmas, with the goal of covering an additional population of near-poor, on top of those covered by Jamkesmas; other schemes focus on specific services,
such as in Yogyakarta, where maternal and child health services for 104,500 children and pregnant women are covered under a district-led scheme.
80
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81 World Bank 2008 Conditional cash transfer in Indonesia: Program Keluarga Harapan and PNPM Generasi baseline survey report, World Bank: Jakarta
82 ILO 2008 Social security in Indonesia: Advancing the development agenda, ILO: Jakarta 83 World Bank 2008 Conditional cash transfer in Indonesia
There are several important differences between the prior Askeskin programme and the Jamkesmas programme. Jamkesmas
is managed by the Ministry of Health and P.T. Askes is no longer involved, except in managing the enrolment of members and the distribution of
Jamkesmas cards. In addition, district health ofices now directly manage contracting and claims processing. And Jamkesmas now contracts with many private hospitals whereas
Askeskin utilised mainly public providers. A report from the SMERU Research Institute finds that the programme is “indeed targeted on the poor and those most vulnerable to
catastrophic out-of-pocket health payments. Askesin has improved access to healthcare in that it increases utilization of public outpatient care. We do not find evidence of substitution
effects from private to public care.” As of January 2010, the Jamkesmas programme is being implemented throughout the country and will serve as one of the key building blocks
of the government’s proposed universal coverage agenda.
Unconditional cash transfers Unconditional cash transfers BLT, Bantuan Langsung Tunai, as a form of compensation
to poor households for domestic fuel price increases, started to be made by the GoI in August 2005. The programme was implemented against a background of high price inflation
accentuated by major fuel price increases, which were increasing the financial stress on low income households. The programme ended in September 2006. The amount of funds
allocated per family was approximately US120 in four instalments over the course of one year.
81
Conditional cash transfers In 2007, the unconditional cash transfer programme was replaced by a household
conditional cash transfer programme Program Keluarga Harapan ; the Family Hope
Program. Conditional cash transfers under this programme have two aims: short- term poverty alleviation and investment in long-term human capital.
82
In July 2007 the government launched pilot programmes in seven provinces West Java, East Java, West
Sumatera, North Sulawesi, Gorontalo, East Nusa Tenggara, and Jakarta. The target groups to receive conditional cash transfers have been poor households with pregnant
women and children up to 15 years of age. Eligible households must be classified as very poor rumah tangga sangat miskin, with children aged 1-6 years with lactating mothers.
These households receive cash for a maximum period of six years. Unlike the previous programme, the receipt of the cash benefits is payable as long as certain conditions
regarding health and education are met.
83
There are 12 health and education conditions for the continuation of conditional cash transfers:
Health indicators: 1 Four prenatal care visits for pregnant women; 2 Taking iron tablets during pregnancy;
3 Delivery assisted by a trained professional; 4 Two postnatal care visits; 5 Complete childhood immunizations; 6 Ensuring monthly weight increases for infants; 7 Monthly
weighing for children under three and biannually for under-ives; 8 Vitamin A twice a year for under-fives
84 Government of Indonesia, Tim Penyusun Pedoman Umum PKH, Lintas Kementrian dan Lembaga 2007 Pedoman Umum Program Keluarga Harapan PKH, Tim Penyusun Pedoman Umum PKH: Jakarta
85 Ibid. 86 World Bank 2008 Conditional cash transfer in Indonesia
87 Ibid.
Education indicators: 9 Primary school enrolment of all children 6-12 years old; 10 Minimum attendance rate
of 85 per cent for all primary school aged children; 11 Junior secondary school enrolment of all children 13-15 years old; 12 Minimum attendance rate of 85 per cent for all junior
secondary school aged children.
84
If a mother is pregnant andor has children aged 0-6 years, she will receive IDR 1,000,000 per year or IDR 250,000 per quarter regardless of the number of children aged under five that
she has. If a mother has two primary school aged children 6-12 years and one secondary school aged child 13-14 years and these children are attending school, she will receive IDR
1,800,000 per year or IDR 450,000 per quarter. A mother with children aged 0-6 years and three primary school aged children will receive IDR 2,200,000 per year.
The government has also launched Community Conditional Cash Transfer, namely PNPM Generasi Sehat dan Cerdas also known as PNPM Generasi. PNPM Generasi builds on the
project infrastructure and capacities developed through the experiences of the Kecamatan Development Program PPK. PNPM Generasi is implemented as part of the government’s
new flagship programme, PNPM Mandiri.
85
PNPM Generasi differs from household conditional cash transfers in that cash transfers are allotted to communities and not to households. The condition for participating in
community conditional cash transfers is community commitment to increasing health and education standards. PNPM Generasi places strong emphasis on lagging health and
education outcomes. In order to get funding, communities have to submit a proposal for certain activities and investments, such as:
- Transportation costs for midwives and nurses to provide outreach services - Increase services of integrated health service units posyandu, pos pelayanan terpadu
or village health posts pustu, pukesmas pembantu to ensure timely delivery of immunization, vitamin A and weighing
- Procurement of scale and height measurement tools - Build infrastructure for health posts
- Contracting private providers or NGOs to provide health services in villages - Contracting nurses and midwives to deliver health services in villages
- Increase access to education and health services through building or improving the
quality of roads and bridges.
86
The size of block grants provided to communities in conditional cash transfers in sub- districts are pre-determined by the population size of sub-districts and poverty levels.
The average grant amount during the 2007 programme was US8,400 equivalent to IDR 76,440,000, using exchange rate US1 = IDR 9,100 per village. All participating villages also
receive technical assistance in the form of facilitators and training.
87
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However, despite the improvements in poverty levels overall, urbanrural disparities remain. Based on the poverty head-count index, Figure 2.2.4 shows that while poverty levels are falling in
both rural and urban areas, they remain significantly higher in rural areas.
Figure 2.2.4: Percentage of poor population based on head-count Index by area, Indonesia 1999-2008
Source: Welfare Indicators, processed by BPS - Statistics Indonesia, based on National Socio-Economic Surveys 1999-2008
It is also evident that the severity of poverty is higher in rural areas, and that rural areas were more likely to be affected by both the impacts of the financial crisis for which interventions seem
to have reduced poverty levels in urban but not rural areas and the impacts of increasing rice prices in 2006. The poverty severity index increased by 0.29 points in urban areas between 2005
and 2006, but by 0.45 points in rural areas. The trends in the poverty severity index indicate that only in 2009 did the situation in rural areas return to the level prior to the increase in the price of
rice. The poverty severity index is basically a measure of the gap between the poverty line and the average income of poor people.
Figure 2.2.5: Poverty severity index by area, Indonesia 1999-2009
Source: BPS - Statistics Indonesia, Statistical Year-Book of Indonesia 2009
Table 2.2.2 below also demonstrates, using 2007 National Socio-Economic Survey data, that much of Indonesia’s poverty is concentrated in rural areas and the features of households living
in poverty. The table shows that most poor households remain in rural areas although the share of urban poverty is on the rise. Poor households tend to be concentrated in the agricultural sector
and poverty is highly associated with working in the informal sector. Poor people tend to have less education and poor households are larger in terms of household members. Poor people in
1.60 1.40
1.20
0.80 1.00
0.60 0.40
0.20 0.00
1999 2000
2001 2002
2003 2004
2005 2006
2007 2008
2009 Urban
1.39 1.39
1.36 0.85
0.93 0.90
0.89 1.22
1.09 0.95
0.82
Rural
Year Index
0.98 0.51
0.45 0.71
0.74 0.58
0.60 0.77
0.57 0.56
0.52 25
30 20
15 10
5 1999
2002 2003
2004 Urban
2005 2006
2007 2008
19.41 26.03
14.46 21.
1 13.57
20.23 12.13
20.11 11.68
19.98 13.47
21.81 12.52
20.37 11.65
18.93
Rural Year
Per cent
rural areas are less likely to have access to health services in which more poor pregnant women are less likely to be helped by skilled health professionals and after birth many babies in poor
households are not breastfed.
Table 2.2.2: Number of poor people by social indicators, 2007
Source: National Socio Economic Survey 2007 unweighted data for national averages, poverty line calculated by BPS - Statistics Indonesia based on minimum expenditure for consumption of 2,100 calories per day.
Percentages calculated by the Gajah Mada University.
Disparities are also evident in poverty levels when provinces are compared. Many of the provinces in eastern Indonesia, such as Papua, Maluku, East and West Nusa Tenggara, have the
highest poverty levels in the country, some ten times higher than in Jakarta, the capital. Figure 2.2.6: Percentage of population below the poverty line by province, Indonesia 2009
Source: BPS - Statistics Indonesia, Statistical Year-Book of Indonesia, based on National Socio-Economic Survey, 2009
Poverty is devastating for children and often results in lower performance at school, early leaving dropouts and lower standards of living. The case of Budi outlined in Box 2.2.2 below
demonstrates how poverty, together with the chance for independence and earnings, can result in children working from an early age in hazardous conditions.
Of every 100 Indonesians
64 live in a rural areas 42 do no have access to safe water
57 do not have access to decent sanitation 32 have households with more than 5 members
31 have less than primary education 10 are illiterate
49 work in agriculture 66 work in informal sector
23 work as a unpaid workers in the household 42 live in villages without secondary high school
61 live in villages without access to telephone Of those aged below five, 32 births were delivered by
unskilled midwife Of those aged below five, 5 are not breastfed
But for every 100 POOR Indonesians
72 live in a rural areas 52 do no have access to safe water
80 do not have access to decent sanitation 54 have households with more than 5 members
41 have less than primary education 17 are illiterate
69 work in agriculture 76 work in informal sector
31 work as unpaid workers in the household 55 live in villages without secondary high school
72 live in villages without access to telephone Of those aged below five, 49 births were delivered by
unskilled midwife Of those aged below five, 3 are not breastfed
0.00 5.00
10.00 15.00
20.00 25.00
30.00 35.00
40.00 45.00
50.00
Per cent
Papua W
est Papua W
est Sumatra W
est Kalimantan Jambi
Riau Riau Islands
East kalimantan Banten
Bangka Belitung Central Kalimantan
Bali W
est Java Maluku
Gorontal o
East Nusa T enggar
a
W est Nusa T
enggar a
Nangro Aceh Lampung
Central Sulawesi Southeast Sulawesi
Bengkul u
Central Java D.I. Y
ogyakarta East Java
South Sumatra South Kalimantan
D.K.I Jakarta North Sumatra
North Maluku North Sulawesi
South Sulawesi W
est Sulawesi Indonesi
a 37.53
23.31 21.80
17.72 14.15
3.62
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Box 2.2.2: Budi the scavenger
88
Budi is 15 years old. He is from a poor family who scavenge through rubbish for their livelihood in a poor rural village in Central Java. When other children are busy with school,
Budi spends his time picking through rubbish. He lives with his parents and six siblings in a room 5 by 6 meters with a bamboo wall, which is 30 meters from the river and frequently
floods in the wet season.
Budi is actually a smart boy. In his first and second years of primary school he was ranked irst. However, the school was closed due to low enrolment, so he had to attend a school
farther away and was often absent. He thought his parents wouldn’t notice and he preferred to hang out at the riverside with his friend, Andi. They just used to sit, have a chat, smoke
and sometimes go swimming until school was over. Budi said, “I couldn’t escape from the previous school, because it was close to home.”
Consequently, his school performance declined dramatically. His teachers noticed his absence and that he never did his homework, so it was reported to his parents, for which he
was “not only scolded but also beaten.”
Because of his absenteeism, Budi has had to repeat the class. Feeling embarrassed, he finally decided to drop out of school. Since his father and siblings only ever went to primary
school and some did not manage completion primary school, he too was reluctant to prioritise school. Instead he preferred to help his dad, and has been scavenging through
rubbish since Year 5 of primary school. After he dropped out, he started scavenging full-time on his own. He gets the shortest route to the rubbish site as he is the youngest scavenger in
his family. Their employer provided bicycles to reach their work areas easily.
Budi was excited the first time he earned his own money, so he encouraged his peers to work like him, and taught them how. Budi manages his money to cover his daily expenses
such as cigarettes and billiards. Budi’s parents use their wages to pay for food and school for his younger siblings. Budi seldom gives his money to his parents. Budi has been
smoking since before he was in kindergarten. When he was younger, his grandpa who is a smoker would roll cigarettes for his small crying grandson who was upset that his mother
was busy with his younger sibling. When he was in kindergarten, he stopped smoking because his teacher warned him to quit. The teacher said that if he didn’t quit his smoking,
he would not be able to study at the school. But when he quit school he took up smoking again, using much of his earnings for this. Budi usually gives his sister, Putri, pocket money
of IDR 10,000 US1 per week. He rarely saves his money, and has now started buying alcohol. An NGO offered to support him to go back to school, but he doesn’t want to - he
is reluctant and embarrassed to go to school since his peers would be much younger than him.
Source: Based on repeat interviews with Budi, rural Central Java, 2009
88 Name changed