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PRESS RELEASE November 13, 2017

Indonesia: Social Assistance Reforms Can Help Reduce Poverty Faster - World Bank Report

Better Integration of Programs can lead to better results

Jakarta, November 13, 2017 – Better integration of social assistance programs can help reduce poverty and inequality, says a new World Bank report.

While significant reforms in social assistance have taken place since 2010, further improvements of existing interventions and development of a ‘one-system’ framework for social assistance is needed, says the public expenditure review, entitled  Towards a Comprehensive, Integrated, and Effective Social Assistance System in Indonesia.

Recent achievements in the sector include promoting financial inclusion through a single ‘combo’ card based cashless payment system; reallocation of fuel subsidies to direct assistance to poor and vulnerable families; expansion of the conditional cash transfer program or Program Keluarga Harapan to reach Indonesia’s 10 million poorest families; and scaling up of the non-cash food assistance program to transform the delivery of nutrition sensitive food assistance to 10 million families by the end of 2018.

“It is encouraging to see Indonesia’s efforts to intensify social assistance reforms will help the country continue to move forward on the path of poverty and inequality reduction. Continued reforms will ensure that the poorest families can receive more comprehensive coverage,” said Rodrigo A. Chaves, World Bank Country Director for Indonesia.

As only one fifth of the poorest 10 percent in Indonesia received all the social assistance programs that they were entitled to in 2014, further reforms are needed to reduce the fragmentation. There are also gaps at crucial junctures in an individual’s life and in coverage of social assistance transfers; these include the unavailability of early childhood education for families with younger than school-age children.

The report recommends a two-way updating system to improve targeting – from the targeting database to program-based beneficiary lists, and from program-based information to the targeting database –to facilitate integration across all major social assistance programs. The planning of programs can also be improved, to provide benefits at times when they are particularly needed. Improved monitoring and evaluation can also identify gaps in program design and promote more evidence-based implementation.

“Improvements within existing programs will lead to a more effective system. Reforms such as these require time and experimentation to fully evolve, but, given the achievements of recent years, we are confident of greater and lasting results in the near future,” said Pablo Acosta, Changqing Sun, and Juul Pinxten, lead authors of the report.

The World Bank’s support for Indonesia’s social assistance reform is a key component of the World Bank Group’s Country Partnership Program Framework for Indonesia, which focuses on government priorities that have transformational impact.

The Australian Department of Foreign Affairs and Trade supports the publication of the report.


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