POVERTY FOCUS: INDONESIA’S EXPERIENCE IN MAINSTREAMING POVERTY INTO NATIONAL PLAN

1. POVERTY FOCUS:INDONESIA’S EXPERIENCEIN MAINSTREAMING POVERTY INTO NATIONAL PLAN Dr. Bambang Widianto, MA. Deputy Minister for Poverty, Labor, and Small Medium Enterprises National Development Planning Agency (BAPPENAS) Indonesia Forum on National Plans and PRSPs in East Asia Vientiane, Lao PDR, April 4-6, 2006

2. FIGURE 1 MAP OF SOUTHEAST ASIA

3. FIGURE 2POVERTY TRENDS Using 1998 Methods Target

4. 53% of population below $2/day 15.1% below National Poverty Line 7.3 % below $1/day FIGURE 3

5. FIGURE 4

6. FIGURE 5 HUMAN POVERTY INDEX, 2000-2005 Human Poverty Index Percentage of people without access to safe water Percentage of people not living beyond 40 Percentage of people lack of health access Percentage of adult illiteracy Percentage of child malnutrition

7. FIGURE 6SOCIAL INDICATORS, 1970-2002

8. FIGURE 7 SCHOOL ENROLLMENT BY AGE GROUP AND QUINTILE 2004 Years age Years age Years age

9. FIGURE 8 SCHOOL ENROLLMENT BY URBAN AND RURAL 2004 Urban Rural

10. FIGURE 9 MULTIDIMENSIONAL POVERTY REMAINS A SERIOUS PROBLEM 29,30% Household without access to safe water 52,32% 21,21% Household without access to sanitation 43,86% 7,86% Household with children aged 12-15 not enolled in junior high school 20,76% 9,29% Household with birth attended by traditional paramedics 27,89% 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% Source: SUSENAS 2002, BPS Noon Poor Poor

11. FIGURE 10HUMAN DEVELOPMENT INDEX TRENDSSOME COUNTRIES’ COMPARISON

12. FIGURE 11 Java Island Percentage of Poor in Each Region, 2004

13. FIGURE 12HUMAN DEVELOPMENT INDEX BY PROVINCE2002

14. INTERNALIZING PRIORITY INTO PLANNING DOCUMENTS Elected President Vision/Mission RPJM RKP • Prosperous Indonesia • Just and Democratic Indonesia • Safe and Peaceful Indonesia • Poverty reduction is integrated into the 3 priority agendas and several of the development programs • Includes the MDGs: 8 development goals used to frame our medium targets as part of our international commitments, to be achieved by 2015 • Includes the Poverty Reduction Strategy (SNPK), developed through a multi-stakeholder process, with targets for reducing multi-dimensional poverty by addressing 10 basic rights • Government’s annual development plan (RKP) • The Government sets development priorities each year. Poverty reduction has always been on the top priority • The priorities provide guidance to ministries’ work plans and subsequently expenditure budgets These development priorities are binding on both central and regional governments

15. TABLE 1. Aiming at Results Alignment of Key Government Priorities with MDGs

16. POVERTY-RELATED DIAGNOSTICS (1) Reducing number of poor to 8.2 percent in 2009 is primary target. Other targets are: Education Health Diagnostics • High cost of education for poor families • Lack of access to junior secondary schools • Limited education facilities (i.e. secondary schools, libraries and books in rural, left-behind and remote areas) • Lack of access to health services and skilled medical/health workers • High cost of services in remote areas and low quality of health services nationwide • Low priority budget allocation for the delivery of health services to the poor • High incidence rate of communicable diseases, i.e. HIV/AIDS, TBC, malaria • Increase life expectancy from 66.2 years to 70.6 years • Reduce prevalence of infant nutritional deficiency from 25.8% to 20% (RPJM) • Increase the number of infant <1 year old to be immunized against measles to 90% in 2009 • Increase the percentage of deliveries assisted by skilled health workers to 90% in 2009 • Decrease the number of HIV/AIDS cases to 0.9 in 2009 Targets • Increase gross and net enrollment for students from poor families in 2009 • Reduce drop-out rate at the SD/MI/Package A to 2.06% and at the SMP/MT/Package B to 1.95% in 2009 • Increase the continuation and completion rate

17. POVERTY-RELATED DIAGNOSTICS (2) Water and Sanitation Rural Development Diagnostics • Lack of access to rural infrastructure such as roads, bridges, irrigation network, electricity, and business centers • Lack of access to secure land tenure • Limited access to credit • Limited number of micro-finance institutions • Dependency on rice as staple food and commodity • Lack of access by the poor to water and sanitation facilities in rural, less developed and remote areas • Lack of information dissemination on the importance sanitation Targets • Increase the percentage of poor families with access to clean and safe water to 80% in 2009 (SNPK) • Reduce the percentage of the population without access to basic sanitation to 50% in 2009 (SNPK) • Increase quantity and quality of infrastructure in rural areas including access to facilities such as roads, sea ports, irrigation network, electricity, clean water, etc • Increase role and contribution of rural areas to national economy, including increase growth of the agricultural sector at an average rate of 3.52% in the 2004-2009 period

18. Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and Budget POVERTY REDUCTION FOCUS: • Promoting Quality Growth - Labor intensive industries - Trade and exports - Micro and SMEs II. Increasing opportunity for the poor to access basic needs - Education - Health - Basic infrastructure - Food and Nutrition

19. Linking Medium Term Priorities, Targets, and Diagnostics into Annual Plan and Budget POVERTY REDUCTION FOCUS: III. Empowering the poor - Community based development Economy, social, environment  Change our views toward the poor from liability into assets IV. Improving social protection system - Social assistance - Social Insurance - Exploring conditional cash transfers

20. POVERTY AND FUEL SUBSIDY In 2005, Government reduced regressive fuel subsidies & reallocated savings to four programs that benefit the poor: Social Protection  Unconditional Cash transfer Education  Operational aid to schools and scholarships to allow free tuition Health  Basic health care through district health centers (PUSKESMAS) & third class hospital through insurance Infrastructure  village infrastructure Government committed to assessing these four programs before 2007 budget established

21. FIGURE 13Linking National Poverty Priorities to Regional Poverty Priorities and Budgets Ministries’ Budget Strategic Plans Ministries’ Annual Work Plan Central Government National Medium Term Plan Gov’t Annual Work Plan National Budget Regional Medium Term Plan Regional Annual Work Plan Regional Budget Local Government Strategic Plans Regional Sectoral Unit Annual Work Plan Regional Office’s Budget Law No.25/2004: National Development Planning System Law No. 17/2003: State Finance

22. Enhancing Poverty Focus of Plans and Budgets • Better Use of Poverty Diagnostics • Deepen poverty diagnostics, for example, to better understand regional disparities • Make better use of poverty maps • Increase use of poverty diagnostics in (i) setting sectoral priorities, and (ii) designing and assessing programs • Reduce regressive subsidies to free up resources for implementing more pro-poor programs • Reducing subsidies, such as the fuel subsidy reduction, presents challenges in terms of protecting the poor, but also opportunities for budgetary reallocation to better achieve the Government’s poverty reduction targets • Use poverty program assessments in the annual planning and budgeting process • Use findings from qualitative and quantitative poverty program assessments to improve programs and/or activities, and/or revise budget allocations • Intra-governmental Coordination • Continue collaboration and coordination between the National Development Planning Ministry and the Finance Ministry --- at policy and technical level • Enhance coordination within sector ministries between planning and budgeting units • Broaden consultation by government in plan and program development • Synergize approaches and base of information for programs relevant to reducing poverty

23. THANK YOU