Review of Government’s Poverty Reduction Strategies, Policies, and Programs in Indonesia

Asep Suryahadi, Athia Yumna, Umbu Reku Raya, Deswanto Marbun
Economic Policy, Governance, Institutions, and Decentralization, Poverty & Inequality, Social Protection
Research Report, October, 2010, Draft



Poverty reduction has become a major policy initiative in Indonesia since the advent of the economic crisis in 1997/98. When the economic crisis hit Indonesia started in mid 1997, the government established the social safety net (JPS) program, covering food security, health, education, employment creation, and community empowerment. This JPS program becomes the initial undertaking of various poverty reduction and social protection programs implemented by successive governments in the post-crisis period. Currently the government strategy in poverty reduction is formulated through a clustering of poverty reduction programs into three clusters based on the objectives and targets of these programs. The first cluster is social assistance, with the objective of providing direct assistance to poor households to ease their burdens in meeting basic necessities. The second cluster is community empowerment, with the objective of providing social fund to poor communities that they can use to improve basic social and economic services according to their own priorities. The third cluster is microenterprise empowerment, with the objective of providing access to credits for microenterprises without being hindered by the requirement of having to provide collaterals. Evaluation of the effectiveness of these programs in achieving their stated objectives, have shown mixed results.Among the efforts to increase the effectiveness of poverty reduction program, the government has recently established a national team for accelerating poverty reduction, chaired by the Vice President. This shows the level of commitment of the government in achieving its target in poverty reduction.

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