13 - Distributional Politics and Social Protection in Indonesia: Dilemma of Layering, Nesting and Social Fit in Jokowi's Poverty Policy

Summary

INTRODUCTION

Since 1990, rates of extreme poverty have fallen by more than half. With rapid income growth, a global middle class has arisen in emergent middle-income countries such as Indonesia. However, the majority of the global poor also reside in these middle-income countries (Sumner 2012), as sustained growth has not worked evenly to alleviate persistent poverty. In this context, social protection policies (SPPs) have emerged as the key response. Social protection encompasses all interventions from public, private, voluntary organizations and informal networks, to support communities, households and individuals in their efforts to prevent, manage and overcome a defined set of risks and vulnerabilities (Barrientos and Hulme 2008). In many respects, the turn to social protection represents a laudable move in social policy. With the state embracing the need to provide for its most vulnerable as a moral duty, we can see social protection as an effort to expand progressive social contracts to marginal groups (Hickey 2012).

In the case of Indonesia, rising inequality emerged as a critical political concern after the Gini coefficient increased from 0.33 in 2002 to 0.41 in 2016. After reducing the multibillion U.S. dollar fuel subsidy as soon as he stepped into office, President Joko “Jokowi” Widodo has overseen a rapid expansion of SPPs — publically distributing an Indonesia Health Card (KIS) that provides free healthcare services and the Prosperous Family Saving Card (KKS) in public events. Likewise, the health programme (Program Jaminan Kesehatan Nasional or JKN) is being expanded to cover 36 million families, the rice for welfare — Beras untuk Keluarga Sejahtera (Rastra) — programme will include 15.7 million families, while the Family Hope Programme (Program Keluarga Harapan, PKH) will provide cash transfer benefits to 10 million families. As depicted in Figure 13.1, the national expenditure for social protection programmes has increased more than ten times between 2005 and 2017. However, this does not represent aggregate growth in terms of GDP, as contributions have fallen from 0.9 per cent of GDP to 0.7 per cent of GDP over the same period (World Bank 2017). This is still far below the World Bank target for social spending and as a percentage of GDP is among the lowest worldwide (Samboh 2017).