THE INDONESIAN EXPERIENCES IN DEVELOPING POVERTY REDUCTION STRATEGIES

1. THE INDONESIAN EXPERIENCES IN DEVELOPING POVERTY REDUCTION STRATEGIES By Djoharis Lubis Deputy Coordinating Minister of People’s Welfare Republic of Indonesia

2. Los Angeles London Jakarta New York Ankara Bali

3. CONSTITUTION PREAMBULE PEOPLE WELFARE REDUCING THE INSIDENCE OF POVERTY • INCREASING INCOME : • Employment Opportunities • Business Opportunities • REDUCING EXPENDITURES : • Education • Health • Infrastructure

4. SOCIAL WELFARE & ECONOMIC GROWTH POLITICS SECURITY • Social welfare can be improved by reducing poverty • Poverty can be reduced through economic growth • Economic growth depends on political and social stability • Political and social stability depends on economic growth

5. POPULATION UNDER POVERTY LINE 41,8% Population under poverty line : < 5 % (Jakarta) 5 - 9 % (Bali, South Kalimantan, Banten) 10 - 14 % (West Sumatra, Riau, Jambi, Bangka Belitung, West Java, East Kalimantan Central Kalimantan, North Sumatra, North Maluku) 15 - 19 % (North Sumatra, West Kalimantan, South Sulawesi) 20 - 24 % (South Sumatra, Bengkulu, Lampung, Central Java, Yogyakarta, West Java, Central Sulawesi, North Sulawesi) 25 - 29 % (Aceh, NTB) Sources : CBS 30 - 34 % (NTT, Gorontalo, Maluku) > 35 % (Papua)

6. Figure: Proportion of The Indonesia Population Below Poverty Line (PO) Resources : Central Statistical Bureau National Summary data for monitoring MDG : Indonesia 1990 - 2002

7. Figure: Indonesia Poverty Gap Ratio Resources : Central Statistical Bureau National Summary data for monitoring MDG : Indonesia 1990 - 2002

8. The Past Poverty Reduction Approach • Trickle Down Effect • Centralistic • Uniformity • Less Consideration on Socio-Cultural Diversities • Top-down Approach

9. The New Paradigm of Poverty Reduction • The Definition of Poverty Needs to be Broadened Beyond The Traditional Expenditure • The Poor are The Main Actors in The Fight Against Poverty • The Role of The Government, Donors, NGO’s Society Should Facilitate The Poor to Overcome Their Problems But Not Attempt to Solve The Poverty Problem For Them • Centralistic to Decentralization • Trickle down effect Approach to be Regional Approach • Government as facilitator and mediator • Government more rowing rather than steering

10. Indonesia has committed to place Poverty Eradication as a priority

11. TWO GRAND STRATEGIES 1. Increasing income of the poor. 2. Reducing expense of the poor.

12. FOUR STRATEGIC PILLARS • Promoting and creating opportunities. • Community empowerment. • Capacity building & human resources development. • Social protection.

13. CREATING OPPORTUNITY MAPPING OF POVERTY PROBLEMS COMMUNITY EMPOWERMENT POLICY REVIEW CAPACITY BUILDING POLICY FORMULATION SOCIAL PROTECTION MONITORING AND EVALUATION FORMULATION FRAME WORK FORLONG TERM POVERTY REDUCTION STRATEGY INCREASING INCOME GOAL REDUCTION OF >50% NUMBER OF POOR PEOPLE, 2015 REDUCING EXPENSES

14. MECHANISM IN FORMULATING PRSP NATIONAL REGIONAL

15. STEPS OF STRATEGY FORMULATION Participatory Poverty Assessment Developing Data Base Condition, Problem and Model Of Poverty Reduction Mapping of Poverty Conditions and Characteristics Inventing Models of Poverty Reduction Poverty Reduction Strategy Formulating Alternative Action Formulating Performance Indicator Poverty Reduction Policy and Program Identifying related Poverty Reduction Policy and Program Policy and Program Review Criteria/Guideline of Policy/ Program Review Evaluating Poverty Reduction Policy/Program P R S P DOCUMENT Other Supporting Activity/ Priority Policy Research Region Facilitation INPUT/ACTIVITY PROCESS OUTPUT Interim Poverty Reduction Strategy Paper (I-PRSP)

16. The most significant challenges have encountered in preparing PRSs • Population about 210 million • Multi ethnics and diversity • The prolonged of the Multi dimension impact of crisis • The tendency of heating political situation interring the period of General Election. • Euphoria of reformation • Ethnocentrism /Local centrism

17. The role of local government • Local Policy and regulation • Direct role on combating poverty and delivery services to the poor. • Facilitating and supporting wider participation in the combating poverty effort • Implementing common principles in dealing poverty eradication.

18. POVERTY REDUCTION PROGRAMS • Provision of basic needs for the poor to help them with food, basic services in health, education and shelters. • Development entrepreneurship and skills of the poor. • Development of Social Security System. • Partnership.

19. The first program includes activities for : • Provision and sustainable stocking of basic needs; • Control of the prices of basic items; • Provision of basic services, especially in health and education; 4. Expansion of distribution networks for basic needs, and 5. Improvement of residential environments including supply of save water.

20. The second program includes activities on : • Development of business education and training; • Advocacy through guidance and consultations; • Development of business collaboration networks supported by local community organizations, local government, private sector and universities; • Opening of accesses to resources; • Provision on infrastructure and facilities for business of the poor, and • Establishment of new transmigration location for farmers and agricultural laborers (non-land farmers).

21. The third program includes activities on : • Development of effective Social Security System suitable with local customs; • Consolidation of the existing social security system, and • Strengthening of regional government capacity and population in social security management.

22. REGIONAL COOPERATION • Exchange of information and experiences. • Joint efforts on : - research - anti-poverty campaign • Study visits • Establishment of Regional Financial Institute for Poverty Eradication.

23. Thank You Dhanyabaad Sjukria Salamat Po Terima Kasih

24. Thank You Innge abougga Xie Xie Mazvita Cam On Namaste Dhanyawad

28. Introduction Indonesia: A Country of Many Splendoured Thing • Many islands. The largest archipelago on earth;

29. Socio-Cultural Structure • Many religions: Islam, Christian (Catholics & Protestants), Hinduism, Buddhism. Constitutional guarantee; • Many differences and similarities “Unity in Diversity”; • Many changes, big and small. Impact of National Development, Global Interchange of ‘Culture’ in may aspects of life.

30. INTRODUCTION • Indonesia is the world’s largest archipelago, comprising more than 17,000 islands with a total coastline of 81,000 km. It extends across a land mass of 741,101m square miles, has territorial water of 3.17 million sq.km.; • Indonesia’s population 215 million people makes it the Worlds Fourth most populous after China, India, USA. Its growth rate is less than 2%; • People living in poverty: • July 1997  76,4 million, December 1998 : 49.5 million • August 1999  37,5 million, February 2000 : 33,2 million.

31. TO IMPROVE PEOPLE’S WELFARE POVERTY REDUCTION - TO SYNCHRONIZE MACRO AND MICRO POLICY STRATEGY - TO SYNCHRONIZE MACRO AND MICRO OPERATIONAL PILICY INCREASING INCOME EXPENCE REDUCTION C R E A T I N G O P P O R T U N I T Y C O M M U N I T Y E M P O W E R M E N T C A P A C I T Y B U I L D I N G S O C I A L P R O T E C T I O N Mean streaming Poverty Reduction as an effort to place a right perspective And inter-policies consistency, Inter progames, budgeting, targeting and delivery system

32. BUDGET ALLOCATION FOR POVERTY ERADICATION 2002 • Sectoral institution : Rp. 16 trilliun. • Oil subsidy compensation : Rp. 2.85 trilliun. • Logistic Agency : Rp. 4.7 trilliun. • Dept. of Kimpraswil : Rp. 3.1 trilliun. • Family Planning : Rp. 1.4 trilliun. • Dept. of Health : Rp. 1.2 trilliun. • Dept. of Home Affairs : Rp. 1.1 trilliun. • Dept. of Social Affairs : Rp. 1.1 trilliun.

33. SOCIAL WELFARE & ECONOMIC GROWTH POLITICS SECURITY • Social welfare can be improved by reducing poverty • Poverty can be reduced through economic growth • Economic growth depends on political and social stability • Political and social stability depends on economic growth

34. Los Angeles London Jakarta New York Ankara Bali

35. Thank You ORKUN Dhanyabaad Sjukria Salamat Po Terima Kasih

36. Thank You Innge abougga Xie Xie Mazvita Cam On Namaste Dhanyawad