POVERTY FOCUS:POVERTY FOCUS:INDONESIA’S EXPERIENCEINDONESIA’S EXPERIENCE

IN MAINSTREAMING POVERTY INTO IN MAINSTREAMING POVERTY INTO NATIONAL PLANNATIONAL PLAN

Dr. Bambang Widianto, MA.Dr. Bambang Widianto, MA.

Deputy Minister for Poverty, Labor, and Small Medium EnterprisesDeputy Minister for Poverty, Labor, and Small Medium EnterprisesNational Development Planning AgencyNational Development Planning Agency

(BAPPENAS)(BAPPENAS) IndonesiaIndonesia

Forum on National Plans and PRSPs in East Asia Forum on National Plans and PRSPs in East Asia Vientiane, Lao PDR, Vientiane, Lao PDR,

April 4-6, 2006 April 4-6, 2006

FIGURE 1FIGURE 1MAP OF SOUTHEAST ASIAMAP OF SOUTHEAST ASIA

54.2

43.2

35

3027.2 25.9

22.5

49.5 48

38.7 37.8 38.436.1

18.8

37.334.5

17.418.419.1

23.424.2

11.313.715.117.4

21.6

28.6

40.1

17.7 18.2 16.6

8.2

0

10

20

30

40

50

60

1976 1980 1984 1987 1990 1993 1996 1996 1998 1999 2000 2001 2002 2003 2004 2009

Number of Poor People % of Poor People

FIGURE 2FIGURE 2

POVERTY TRENDSPOVERTY TRENDS

Using 1998 Methods

Target

0.2

.4.6

.8P

opul

atio

n D

ensi

ty

12 14 16 18 20log Per Capita Expenditure

Source: SUSENAS 2002 Core and Module and WB staff estimates

Kernel Density graphsLog Annual Expenditure Distribution

15.1% below National Poverty Line

7.3 % below $1/day

53% of population below $2/day

FIGURE 3FIGURE 3

Poverty and Inequality 1978-2004

0

5

10

15

20

25

30

35

1978 1980 1981 1984 1987 1990 1993 1996 1999 2002 2003 2004

Year

Per

cent

0

0,05

0,1

0,15

0,2

0,25

0,3

0,35

0,4

Inde

x G

ini

Poverty Gini Ratio

FIGURE 4

GrafikIndeks Kemiskinan Manusia 2000-2005

27,7

5

21,3

2

18,8

0

17,9

0

18,9

4

18,1

9

26,0

0

24,0

0

24,0

0

22,0

0

22,0

0

22,0

0

12,3

0

12,8

0

12,8

0

10,8

0

10,2

3

9,6

9

57,0

0

32,0

0

33,0

0

33,0

0

29,0

0

25,4

8

14,3

0

13,7

0

13,1

0

12,7

0

12,1

0

11,5

3

34,0

0

31,0

0

26,0

0

26,0

0

26,0

0

26,0

0

0,00

10,00

20,00

30,00

40,00

50,00

60,00

2000 2001 2002 2003 2004 2005

Indeks Kemiskinan Manusia (Human Poverty Index, HPI)

Persentase Penduduk Tanpa Akses Air Bersih

Persentase Penduduk Hidup Sampai Umur 40 Tahun

Persentase Penduduk Tanpa Akses Pelayanan Kesehatan

Persentase Penduduk Dewasa Buta Huruf

Persentase Anak-anak Berberat Badan Parah dan Sedang

Human Poverty Index

Percentage of people without access to safe water

Percentage of people not living beyond 40

Percentage of people lack of health access

Percentage of adult illiteracy

Percentage of child malnutrition

FIGURE 5FIGURE 5

HUMAN POVERTY INDEX, 2000-2005

FIGURE 6FIGURE 6SOCIAL INDICATORS, 1970-2002SOCIAL INDICATORS, 1970-2002

0

20

40

60

80

100

120

Live expectancy (yrs) Infant mortality (per thousand livebirth)

Adult literacy (%)

1970 1980 1990 2002

0102030405060708090

100

7-12 th 13-15 th 16-18 th

Kelompok Umur

Angka Partisipasi Sekolah, 2004

Quintile 1Quintile 2Quintile 3Quintile 4Quintile 5

FIGURE 7SCHOOL ENROLLMENT BY AGE GROUP AND QUINTILE

2004

Years age

Years age

Years age

7-12 13-15 16-187-12 13-15 16-18

0

20

40

60

80

100

Angka Partisipasi SekolahPerkotaan & Perdesaan, 2004

Quintile 1

Quintile 5Perkotaan

Perdesaan

FIGURE 8SCHOOL ENROLLMENT BY URBAN AND RURAL

2004

UrbanUrbanRural

29,30%29,30%

52,32%52,32%

21,21%21,21%

43,86%43,86%

7,86%7,86%

20,76%20,76%

9,29%9,29%

27,89%27,89%

Noon PoorNoon Poor PoorPoor

Household without access to safe waterHousehold without access to safe water

Household without access to sanitationHousehold without access to sanitation

Household with children aged 12-15 not Household with children aged 12-15 not enolled in junior high schoolenolled in junior high school

Household with birth attended by Household with birth attended by traditional paramedicstraditional paramedics

FIGURE 9FIGURE 9MULTIDIMENSIONAL POVERTY REMAINS A SERIOUS PROBLEMMULTIDIMENSIONAL POVERTY REMAINS A SERIOUS PROBLEM

0,00%0,00% 10,00%10,00% 20,00%20,00% 30,00%30,00% 40,00%40,00% 50,00%50,00% 60,00%60,00%

Source: SUSENAS 2002, BPSSource: SUSENAS 2002, BPS

FIGURE 10FIGURE 10

HUMAN DEVELOPMENT INDEX TRENDSHUMAN DEVELOPMENT INDEX TRENDSSOME COUNTRIES’ COMPARISONSOME COUNTRIES’ COMPARISON

0.4

0.45

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.85

1975 1980 1985 1990 1995 2000 2003

Malaysia

Thailand

Philipines

China

Vietnam

Indonesia

India

Myanmar

Cambodia

Lao PDR

Timor Leste

Percentage of Poor in Each Region, 2004

Java Island

FIGURE 11

FIGURE 12FIGURE 12

HUMAN DEVELOPMENT INDEX BY PROVINCEHUMAN DEVELOPMENT INDEX BY PROVINCE2002 2002

55 60 65 70 75

NTBPapua

NTTKalbar

GorontaloJatimSultraKalsel

SultengSulselBabelJabar

LampungMalutNAD

SumselBengkulu

JatengMalukuBantenJambi

BaliSumbar

SumutKalteng

RiauKaltim

DIYSulut

Jakarta

INTERNALIZING PRIORITY INTO PLANNING INTERNALIZING PRIORITY INTO PLANNING DOCUMENTSDOCUMENTS

• Poverty reduction is integrated into the 3 priority agendas and several of the development programs

• Includes the MDGs: 8 development goals used to frame our medium targets as part of our international commitments, to be achieved by 2015

• Includes the Poverty Reduction Strategy (SNPK), developed through a multi-stakeholder process, with targets for reducing multi-dimensional poverty by addressing 10 basic rights

RPJM

• Government’s annual development plan (RKP)

• The Government sets development priorities each year. Poverty reduction has always been on the top priority

• The priorities provide guidance to ministries’ work plans and subsequently expenditure budgets

RKP

1. Prosperous Indonesia

2. Just and Democratic Indonesia

3. Safe and Peaceful Indonesia

Elected President Vision/Mission

These development priorities are binding on both central and These development priorities are binding on both central and regional governmentsregional governments

TABLE 1. Aiming at Results Alignment of Key Government Priorities with MDGs

Indicator/Target (%) 2002 RPJM 2009 MDGs 2015

Actual Target Target

Poverty

Population below US$ 1 a day 7.2 10.3

Poverty head-count ratio 18.2 8.2 7.5

Health

Under 5 mortality rate (per 1,000 live births) 60 26 (<1 mortality)

33

Maternal mortality ratio (per 100,000 live births)

307 226 105

Education

Net enrollment rate in primary education 92.7 99.6 100

Gross and net enrollment rate at junior level 79.5 98

Literacy rate of 15-24 y.o. 98.7 100

Water & Sanitation

% of population that has access to improved water 78 80

Rural Development

Agricultural sector growth 3.5

POVERTY-RELATED DIAGNOSTICS POVERTY-RELATED DIAGNOSTICS (1)(1)

• Increase gross and net enrollment for students from poor families in 2009

• Reduce drop-out rate at the SD/MI/Package A to 2.06% and at the SMP/MT/Package B to 1.95% in 2009

• Increase the continuation and completion rate

• Increase life expectancy from 66.2 years to 70.6 years

• Reduce prevalence of infant nutritional deficiency from 25.8% to 20% (RPJM)

• Increase the number of infant <1 year old to be immunized against measles to 90% in 2009

• Increase the percentage of deliveries assisted by skilled health workers to 90% in 2009

• Decrease the number of HIV/AIDS cases to 0.9 in 2009

• High cost of education for poor families

• Lack of access to junior secondary schools

• Limited education facilities (i.e. secondary schools, libraries and books in rural, left-behind and remote areas)

• Lack of access to health services and skilled medical/health workers

• High cost of services in remote areas and low quality of health services nationwide

• Low priority budget allocation for the delivery of health services to the poor

• High incidence rate of communicable diseases, i.e. HIV/AIDS, TBC, malaria

TargetsTargets

DiagnosticsDiagnostics

EducationEducation HealthHealth

Reducing number of poor to 8.2 percent in 2009 is primary target. Reducing number of poor to 8.2 percent in 2009 is primary target. Other targets are:Other targets are:

POVERTY-RELATED DIAGNOSTICS POVERTY-RELATED DIAGNOSTICS (2)(2)

• Increase the percentage of poor families with access to clean and safe water to 80% in 2009 (SNPK)

• Reduce the percentage of the population without access to basic sanitation to 50% in 2009 (SNPK)

• Lack of access by the poor to water and sanitation facilities in rural, less developed and remote areas

• Lack of information dissemination on the importance sanitation

TargetsTargets

DiagnosticsDiagnostics

Water and Sanitation

• Increase quantity and quality of infrastructure in rural areas including access to facilities such as roads, sea ports, irrigation network, electricity, clean water, etc

• Increase role and contribution of rural areas to national economy, including increase growth of the agricultural sector at an average rate of 3.52% in the 2004-2009 period

• Lack of access to rural infrastructure such as roads, bridges, irrigation network, electricity, and business centers

• Lack of access to secure land tenure • Limited access to credit• Limited number of micro-finance

institutions• Dependency on rice as staple food

and commodity

Rural Development

Linking Medium Term Priorities, Targets, and Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and BudgetDiagnostics into Annual Plan and Budget

POVERTY REDUCTION FOCUS:POVERTY REDUCTION FOCUS:

I.I. Promoting Quality GrowthPromoting Quality Growth-- Labor intensive industriesLabor intensive industries-- Trade and exportsTrade and exports-- Micro and SMEsMicro and SMEs

II.II. Increasing opportunity for the poor to access basic Increasing opportunity for the poor to access basic needsneeds-- EducationEducation-- HealthHealth-- Basic infrastructureBasic infrastructure-- Food and NutritionFood and Nutrition

Linking Medium Term Priorities, Targets, and Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and BudgetDiagnostics into Annual Plan and Budget

POVERTY REDUCTION FOCUS:POVERTY REDUCTION FOCUS:

III.III. Empowering the poorEmpowering the poor

-- Community based developmentCommunity based development

Economy, social, environmentEconomy, social, environment

Change our views toward the poorChange our views toward the poor

from liability into assetsfrom liability into assets

IV.IV. Improving social protection systemImproving social protection system

-- Social assistanceSocial assistance

-- Social InsuranceSocial Insurance

-- Exploring conditional cash transfersExploring conditional cash transfers

POVERTY AND FUEL SUBSIDYPOVERTY AND FUEL SUBSIDYIn 2005, Government reduced regressive fuel In 2005, Government reduced regressive fuel subsidies & reallocated savings to four programs subsidies & reallocated savings to four programs that benefit the poor:that benefit the poor:

Social Protection Social Protection Unconditional Cash transfer Unconditional Cash transferEducationEducation Operational aid to schools Operational aid to schools

and scholarships to allow and scholarships to allow free tuition free tuition

Health Health Basic health care through Basic health care through district health centers district health centers (PUSKESMAS) & third class (PUSKESMAS) & third class hospital through insurance hospital through insurance

Infrastructure Infrastructure village infrastructure village infrastructure

Government committed to assessing these four Government committed to assessing these four programs before 2007 budget establishedprograms before 2007 budget established

FIGURE 13FIGURE 13

Linking National Poverty Priorities to Regional Poverty Linking National Poverty Priorities to Regional Poverty Priorities and BudgetsPriorities and Budgets

RegionalMedium

Term Plan

Gov’t Annual Work Plan

NationalMedium

Term Plan

Regional Annual Work Plan

Strategic Plans

Ministries’ Annual Work Plan

Strategic Plans

Regional Sectoral Unit

Annual Work Plan

National Budget

Regional Budget

Ministries’ Budget

Regional Office’s Budget

Centra

l G

overn

ment

Loca

l G

overn

ment

Law No. 17/2003:Law No. 17/2003:State FinanceState Finance

Law No.25/2004: Law No.25/2004: National Development National Development

Planning SystemPlanning System

Enhancing Poverty Focus of Plans Enhancing Poverty Focus of Plans and Budgetsand Budgets

1.1. Better Use of Poverty DiagnosticsBetter Use of Poverty Diagnostics Deepen poverty diagnostics, for example, to better understand regional disparitiesDeepen poverty diagnostics, for example, to better understand regional disparities Make better use of poverty mapsMake better use of poverty maps Increase use of poverty diagnostics in (i) setting sectoral priorities, and (ii) Increase use of poverty diagnostics in (i) setting sectoral priorities, and (ii)

designing and assessing programsdesigning and assessing programs

2.2. Reduce regressive subsidies to free up resources for implementing Reduce regressive subsidies to free up resources for implementing more pro-poor programsmore pro-poor programs

Reducing subsidies, such as the fuel subsidy reduction, presents challenges in Reducing subsidies, such as the fuel subsidy reduction, presents challenges in terms of protecting the poor, but also opportunities for budgetary reallocation to terms of protecting the poor, but also opportunities for budgetary reallocation to better achieve the Government’s poverty reduction targetsbetter achieve the Government’s poverty reduction targets

3.3. Use poverty program assessments in the annual planning and Use poverty program assessments in the annual planning and budgeting processbudgeting process

Use findings from qualitative and quantitative poverty program assessments to Use findings from qualitative and quantitative poverty program assessments to improve programs and/or activities, and/or revise budget allocations improve programs and/or activities, and/or revise budget allocations

3.3. Intra-governmental CoordinationIntra-governmental Coordination Continue collaboration and coordination between the National Development Continue collaboration and coordination between the National Development

Planning Ministry and the Finance Ministry --- at policy and technical level Planning Ministry and the Finance Ministry --- at policy and technical level Enhance coordination within sector ministries between planning and budgeting Enhance coordination within sector ministries between planning and budgeting

unitsunits Broaden consultation by government in plan and program developmentBroaden consultation by government in plan and program development Synergize approaches and base of information for programs relevant to reducing Synergize approaches and base of information for programs relevant to reducing

poverty poverty

THANK YOUTHANK YOU