Indonesia’s rise to middle-income status could prove difficult without a comprehensive and integrated social protection program. But to create such programs successfully, key reforms in existing safety net initiatives are needed.
Improving current safety protection programs was one of the recommendations the World Bank made in two reports about the country’s social assistance system. The reports note that while some existing programs are effective, half of all Indonesians remain highly vulnerable to shocks that could drive them to poverty.
The two reports, launched March 1 in Jakarta, urges Indonesian policymakers to take the following steps:
Improve key safety net programs such as the Raskin subsidized rice initiative, Jamkesmas health fee waivers project and Keluarga Harapan conditional cash transfer program.
Improve coordination of different programs.
Build a National Targeting System to be applied to all safety net programs.
Consider lessons from countries that have successfully transitioned to middle-income status.
The World Bank argues Indonesia has the capacity and the resources to scale up its social system. But the bank warns the country not to focus solely on improving social protection programs. These are just part of a broader poverty reduction strategy alongside job creation and community development, among others, the bank says.
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