17 - Ambitious but inadequate: social welfare policies under Yudhoyono

Summary

During his ten years in office, President Susilo Bambang Yudhoyono spoke on many occasions about his commitment to improving the social welfare of Indonesian citizens. In a speech delivered in Bali in December 2012, he described four key priorities: eradicating poverty; providing access to decent jobs and economic opportunities (which he called ‘inclusive growth … through financial inclusion’); making basic needs available to and affordable for the poor; and providing a social safety net for people living below the poverty line (Yudhoyono 2012). These goals echoed the three pillars of socio-economic development that Yudhoyono had announced at the start of his tenure in 2005: economic growth, jobs growth and poverty reduction, to which he added environmental protection in 2007.

This chapter analyses the approaches and programs that Yudhoyono initiated during his ten years in power to advance these goals. We focus on education, health and social assistance, looking at the targets Yudhoyono set for his government, the strategies he implemented to achieve his goals and whether he met his targets. We conclude that the outcomes fell far short of expectations because the president's approach became ensnared in three sets of challenges that he never managed to resolve satisfactorily.

The first challenge was to reconcile the competing demands on the budget of massive subsidies and an expanding number of poverty alleviation programs. The president maintained numerous subsidies, notably fuel subsidies, that ate away at the fiscal space for other agendas, including social welfare. At the same time, he initiated various poverty alleviation and social protection programs for individuals, households and communities. Unfortunately, these programs were rolled out unevenly across Indonesia, and the ad hoc nature of many of them limited their long-term impact. In the end, Yudhoyono's strategy to alleviate poverty was mainly limited to disbursing social assistance, neglecting long-term strategies to free poor people from poverty and strengthen the competitiveness of the economy.

The second challenge was to lay down a coherent, strategic plan for social welfare and implement it across Indonesia's many competing ministries and government agencies. Under Yudhoyono the government produced ambitious plans for national development, economic growth and poverty reduction.