Multidimensional poverty in Indonesia: trends, interventions and lesson learned

This paper describes the current state of multidimensional poverty in Indonesia and reviews the characteristics of major programs designed to address multidimensional poverty, their implementation problems and impacts. It also details the lessons from the Indonesian experience which can be applied to future targeted social protection programs to address human security in Indonesia

The paper notes that significant progress has been made on poverty reduction in Indonesia since the 1998 crisis. The government is increasingly willing to make program improvements based on rigorous and independent impact evaluation studies. More resources are allocated for poverty reduction programs, and poverty reduction strategy papers are now “produced” by involving civil society.

However, the state of poverty in Indonesia is still far from being resolved, as widespread vulnerability to poverty remains and there is uneven progress towards several Millennium Development Goals, particularly in maternal health. Poverty remains a crucial issue in Indonesia and our efforts must

The paper lists some important lessons emerging from the Indonesian poverty reduction programmes. They are:

• informal coping mechanisms complement formal social interventions but are independently insufficient to mitigate the worst effects of a major shock or crisis
• micro-credit programs are not suitable as social protection programs. Not only are new micro-enterprises unlikely to be successful during a crisis, but also the hurried expansion of credit can undermine the slow, patient, and painstaking groundwork that successful micro-credit programs require
• it may be worth exploring ways to increase community participation rather than having a top-down targeting system for poverty alleviation
• the rules and regulations of a program must be well-designed and the duties of each ministry should be made explicit to avoid confusion
• given that Indonesia now adheres to a decentralized government system, the central government should refrain from implementing large-scale programs, but rather play a more supporting role and let the local governments decide the best programs for their residents

The paper concludes that, poverty reduction programs should be more focused on human development and capacity building besides providing greater multiplier effects in the future. In a broader concept, efforts to reduce poverty should be inline with the concern of promoting human security that has been placed as international concern