The Role of Social Protection Programs in Reducing the Impact of the Global Financial Crisis 2008/2009




SMERU Researchers:
Syaikhu Usman, M. Sulton Mawardi, Justin Sodo, Deswanto Marbun

Regional Researchers:
Ruhmaniyati, Faisal Fuad Seiff, Firdaus Komar

Widjajanti Isdijoso, Asep Suryahadi

Chris Stewart

Budhi Adrianto



The global financial crisis (GFC) 2008/09 has impacted on Indonesia’s economy. In order to minimize the impact of the GFC, the Government of Indonesia issues several monetary and fiscal policies, besides continuing various social protection programs. This report is the outcome of research on the implementation of various social protection programs and their role in alleviating the impact of the crisis. The research is part of the activities under the Monitoring the Socioeconomic Impact of the GFC 2008/09 research that has been undertaken by SMERU since July 2009. This is a qualitative research project to draw a general picture of the impact of the crisis, the implementation of various social protection programs, and the role and benefit of these programs in overcoming the impact of the crisis as well as for community livelihoods. In general, the outcome of this research shows that the impact of the crisis is still continuing although the intensity is declining. Many government authorities, however, do not sufficiently understand conditions at the community level due to the absence of a tiered, periodic, and systematic information system on the socioeconomic condition of the community. One of the consequences is that the government has not taken any special measures for communities that have been affected by the crisis and has only maintained existing social protection programs with a standard regulatory mechanism or previous implementation mechanisms. In general, the role of various social protection programs in responding to the impact of the crisis has been relatively poor and varies across programs. Nevertheless, in the effort to reduce poverty, although it has been limited, the presence of social protection programs has had a positive benefit on communities, especially in fulfilling basic needs such as food, health, education, business costs, and the provision of infrastructure.

Keywords: global financial crisis, social protection program

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