Executive Summary Report: The Social and Economic Impacts of COVID-19 on Households and Strategic Policy Recommendations for Indonesia


Executive Summary

The arrival of COVID-19 has created unprecedented challenges for the world. In Indonesia, the coronavirus has infected more than 1.3 million people since the first confirmed cases in March 2020. At least 35,000 people have died. Coronavirus curbs on the economy and society continue to have a shocking impact on human development. After years of progress, poverty is rising again. One in ten people in Indonesia today are living below the national poverty line. Child poverty may increase significantly. The social impact would have been far worse had it not been for government assistance.

In response to the crisis, the government of Indonesia has introduced a massive fiscal stimulus package through the National Economic Recovery (PEN) program. In terms of the total amount devoted to combatting COVID-19, Indonesia ranks among the top five countries in the Asia Pacific region (ADB 2021). In 2020, the Government of Indonesia allocated IDR 695.2 trillion (approximately US$ 49 billion) to the program. With the crisis still unfolding, the Government announced a budget of IDR 699.43 trillion (approximately US$ 49.3 billion) in February 2021 for the continuation of the PEN program this year (Kemenkeu, 2021).

Indonesia has continued to invest in strengthening its social protection programs to respond to the crisis. These have been expanded to protect today’s poor against major shocks as well as a growing number of lower-middle-income earners who have become vulnerable and at risk of becoming tomorrow’s poor. Small businesses, too, are receiving assistance as they continue to contend with a contracting economy and publichealth restrictions.

To assess the impact of COVID-19 on Indonesia’s households and to inform government policies, UNICEF, UNDP, Prospera and the SMERU Research Institute collaborated on a ground-breaking survey in late 2020.

The survey included 12,216 nationally representative households across all 34 provinces in October and November 2020. It was the largest survey of COVID-19 impacts so far and focused on children and vulnerable groups. It was based on face-to-face interviews with households interviewed by Statistics Indonesia (BPS) as part of its National Socio-Economic Survey 2019 (SUSENAS). The survey was undertaken in close collaboration with the Indonesian government.

The impact of COVID-19 will reverberate throughout 2021. However, the pace of support must continue to boost child and family wellbeing. Indonesia’s development partners stand ready to assist in this endeavour.


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