Social Protection Floor Assessment in Indonesia

To date, the implementation of the social security system in Indonesia covers the social security for employees, social security for public health, social security in education, and social security for poor people.

In 2002 the President of Indonesia established a team for the National Social Security System (Sistem Jaminan Sosial Nasional or SJSN) through the Presidential Decree No. 20 of 2002. The team aims are to draw up a SJSN Act. The SJSN coverage includes social security insurance scheme approach, which requires workers to follow the formal social security in the aspect of health insurance, work accident insurance, termination, pension, retirement and death. The law of Social Security System the then established in 2004 (UU no 40/2004). However, the informal workers and the poor have not been integrated in the SJSN act and law No 40/2004. 

Indonesia is looking for a right scheme for its social safety net policy. The goal is clearly stated in the National Medium Term Development Plan (Rencana Pembangunan Jangka Menengah or RPJM) of Indonesia for 2010-2014: “Decrease poverty incidence and unemployment rate through quality economic growth accompanied by improvement and progression of social protection institution”. The social safety net will not only enhance human capital in Indonesia. From macroeconomic perspectives, it is also believed that social safety net can solve the structural poverty, breaking the intergenerational poverty chain, and become a national economic defense from the global financial shocks.

Recently, the ILO proposed a SPF blueprint to the government of Indonesia which intends to support the implementation of the national strategy for social protection through policy work, piloting, capacity building, and increasing coordination (e.g. establishing a social protection floor). However, there are some issues related with financial (how the government or citizens are going to pay the service?) and distribution (what is the best mechanism for social protection distribution?). 

With the existing options, the government of Indonesia needs to think further how the adoption of a new framework could change the structure of the welfare state and network governance between local, national and global. Therefore, assessments toward available options need to be done based on Indonesia’s perspective on the national priority and the availability of national resources.

From April 2011 to November 2012, the ILO, in close collaboration with Bappenas (Ministry of National Development Planning) conducted an assessment of the social protection situation in Indonesia with an aim to know whether the social protection floor is a reality for the whole population. The assessment exercise was based on a number of consultations with all relevant ministries, institutions, workers' and employers' representatives at both the provincial and national levels, and United Nations agencies participating in Indonesia's UN sub-working group on the SPF. Despite the already advanced development of social protection in Indonesia, which includes both contributory and non-contributory schemes for workers and their families in the formal and informal sectors, a number of policy gaps and implementation issues were identified and some specific policy recommendations were formulated for the achievement of a comprehensive social protection floor in Indonesia.

This policy dialogue – called the assessment based national dialogue (ABND) exercise – consisted of the following steps:

STEP 1 – Development of the assessment matrix: the assessment matrix describes existing social security schemes that provide access to health care and guarantee income security for children, the working age, the elderly and people with disabilities. The inventory identifies policy gaps, implementation issues and potential policy recommendations for social protection provisions with a goal of closing gaps in the social protection floor.

STEP 2 – Costing using ILO Rapid Assessment Protocol (RAP): specific social protection provisions that need to be introduced or further expanded identified during the assessment process are then translated into "costable" scenarios. The costs of these provisions are calculated and projected over the 2012-2020 period. This cost is expressed as a percentage of Gross Domestic Product (GDP) and government expenditures in order to provide preliminary indications of the affordability of the proposed social protection provisions.

STEP 3 – Finalization and endorsement: the results of the costing exercise and the next steps, including the identification of possible measures to increase the fiscal space for social protection, are discussed with all stakeholders in the framework of workshops. A report detailing the costing results and policy recommendations is produced and shared with the Government of Indonesia.

DOWNLOAD the Report "Social Protection Assessement Based National Dialogue: Towards a Nationally Defined Social Protection Floor in Indonesia" in BAHASA INDONESIA or ENGLISH

 
Assessment Indonesia
01.12.2023
1245
982 Assessment Matrix
1278 Consultations and Workshops
983 Consultations in Maluku, NTT...
984 Consultative workshop in Jakarta
985 Costing
987 Finalization
806 home
981 Objectives-Process-Methodology
1287 Policy Gaps/Implementation Issue
1290 Recommendations
986 Validation workshop in Jakarta