social welfare policies under president sby

social welfare policies under president sby

SOCIAL WELFARE POLICIES
UNDER PRESIDENT SBY
Dinna Wisnu
Faisal Basri
Gatot A. Putra
Canberra, 19 September 2014
Rhetoric versus reality
 Slogan (SBY in 2005): pro-growth, pro-poor, projob, (2007) pro-environment.
 Realities:
8
7
60
6.8
6.4 6.5 6.5 6.5
6.3
5.9
6
5.6
5.8
6.3 6.4
50
6.2 6.1
6.0
5.8
5.6
5.7
40
5.2
5
60,0
5.1
30
24,2
4.5
4.1
4.3
20
17,8
11,4 11,3
11,3
4
2013*
2014**
2011*
2012*
2009
2010
2007
2008
2005
2006
2003
2004
2001
2002
1999
2000
1997
1998
1993
1996
1987
1990
1981
1984
1978
1980
0
1970
3
1976
10
The main targets of RPJMN are not achieved
Indicators
National Medium-Term
Development Plan
(RPJMN) 2010-2014
Economic growth
Average of 6.3 - 6.8 percent per year 5.98%
Poverty rate
Growth of 7 percent before 2014
2013 = 5.78%
8 - 10 percent at the end of 2014
11.25% in March 2014
Open unemployment 5 - 6 percent at the end of 2014
Source: Bappenas
Actual
5.70% in February 2014
Poverty, unemployment, and growth
20 19,1 18,4
18,2
Unemployment (LHS)
7,0
17,4
16,7
17,8
16,6
16,0
15,4
14,2
15
11,5
10
8,1
GDP growth (RHS)
9,9
9,1
11,2
10,3
9,3
8,5
8,1
6,1
13,3
6,0
12,4
11,8 11,4 11,3
5,0
7,4
6,8
6,3
5,9
5,7
Source: BPS.
2014
2013
2012
2011
2009
2008
2007
2006
2005
2004
2003
3,0
2002
0
2001
4,0
2000
5
Percent
Poverty (LHS)
2010
Percent
Sometimes open unemployment rate and poverty rate fell more sharply despite
slowing GDP growth. The quality of job creation is stiil poorly
Distribution of workers by sector (%)
Sector
2004
2009*
2014**
Agriculture
44.5
41.1
34.6
1.1
1.1
1.4
11.2
11.8
13.0
Electricity, gas, and water supply
0.2
0.2
0.3
Construction
4.7
4.7
6.1
20.2
20.7
21.8
Transport and communication
5.7
5.7
4.5
Financial, ownership and business services
1.2
1.4
2.7
11.1
100.0
97.0
13.2
100.0
106.6
15.6
100.0
118.2
70.6
29.4
69.9
30.1
59.8
40.2
Mining and quarrying
Manufacturing industry
Trade, hotel, and restaurant
Social services
Total
(million)
Memo:
Informal workers
Formal workers
* Simple average of February and August
Source: BPS-Statistics Indonesia.
** February.
Labor productivity differences across sectors
remain significant
(Sector labor productivity (real terms) compared with labor productivity in agriculture)
Sector
2000-03 2005-08 2009-12
Agriculture
1.0
1.0
1.0
Low-end services
2.4
2.5
2.2
Manufacturing industries
5.7
5.8
5.0
Transport & communication
2.8
3.5
5.5
Financial services
21.5
20.5
14.6
Mining and quarrying
46.8
26.7
18.0
Source: World Bank, Indonesia: Avoiding The Trap, Development Policy Review 2014, p. 6.
Allocation of national state budget by function
(Percent of GDP)
Public
Security &
Social
Memo:
service Economy Health
Order
protection Education energy subsidy
2005 9.23
0.86
0.22
0.58
0.07
1.04
3.75
2006 8.48
1.17
0.36
0.72
0.06
1.35
2.84
2007
8.00
1.11
0.40
0.71
0.08
1.29
2.96
2008 10.79
1.05
0.28
0.14
0.06
1.11
4.50
2009
7.46
1.07
0.28
0.14
0.05
1.52
1.68
2010
7.32
0.81
0.29
0.22
0.05
1.41
2.17
2011
7.70
1.23
0.19
0.30
0.05
1.32
3.45
2012
7.87
1.31
0.18
0.35
0.06
1.28
3.72
2013
7.77
1.21
0.20
0.40
0.19*
1.26
3.41
* Significant increase from Rp 5 trillion in 2012 to Rp 17 trillion in 2013. However, in 2014 (budget/APBN 2014) and 2015 (draft
budget/RAPBN 2015) fell sharply to Rp 8 trillion, respectively.
Source: Ministry of Finance and BPS-Statistics Indonesia, calculated by authors.
Social protection index (n=35) and SP
expenditure as % of GDP
Social Protection Index
Japan (1)
Korea (4)
Singapore (6)
Malaysia (8)
Timor-Leste (11)
China (12)
Vietnam (13)
Sri Lanka (15)
Thailand (16)
Philippines (17)
India (23)
Pakistan (24)
Indonesia (27)
Bangladesh (28)
Papua New Guinea (35)
SP expenditure as % of GDP
0.416
0.200
0.169
0.155
0.140
0.139
0.137
0.121
0.119
0.085
0.051
0.047
0.044
0.043
0.005
Japan (1)
Korea (5)
Timor-Leste (8)
China (9)
Vietnam (11)
Malaysia (13)
Thailand (14)
Singapore (15)
Sri Lanka (16)
Philippines (18)
India (24)
Bangladesh (25)
Pakistan (27)
Indonesia (28)
Papua New Guinea (35)
19.2
7.9
5.9
5.4
4.7
3.7
3.6
3.5
3.2
2.5
1.7
1.4
1.3
1.2
0.1
( ) Rank.
Sources: Asian Development Bank, The Social Protection Index: Assessing Results for Asia and the Pacific, 2013.
Knowledge & skills performance of the world’s
15-year-olds students based on PISA surveys
2012
Rank
Mathematics
Reading
Science
Country/Economy
2009
2012
2009
2012
2009
2012
1
Shanghai-China
600
613
556
570
575
580
2
Singapore
562
573
526
542
542
551
3
Hong Kong-China
555
561
533
545
549
555
4
Chinese Taipei
543
560
495
523
520
523
5
Korea
546
554
539
536
538
538
7
Japan
529
536
520
538
539
547
17
Viet Nam
n.a.
511
n.a.
508
n.a.
528
50
Thailand
419
427
421
441
425
444
52
Malaysia
n.a.
421
n.a.
441
n.a.
420
64
Indonesia
371
375
402
396
383
382
65
Peru
365
368
370
384
369
373
(n=65)
Source: OECD, PISA (The Programme for International Student Assessment) database.
Indonesia: deceleration in mathematics
performance
Rate of acceleration or deceleration in performance (quadratic term) on mean
mathematics performance in PISA 2003 through 2012
Coef.
Hong Kong-China
Indonesia
Jordan
Kazakhstan
Latvia
Liechtenstein
Lithuania
Macao-China
Malaysia
Montenegro
Peru
Qatar
Romania
Russian Federation
Serbia
Shanghai-China
Singapore
Chinese Taipei
Thailand
Tunisia
United Arab Emirates - Ex. Dubai
Uruguay
Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - © OECD 2013
0.3
-0.7
-0.2
m
0.1
0.3
0.7
0.4
m
0.2
m
-2.3
0.3
0.1
0.0
m
m
1.3
0.2
0.3
m
-0.6
S.E.
(0.21)
(0.26)
(0.51)
m
(0.20)
(0.25)
(0.37)
(0.14)
m
(0.31)
m
(0.21)
(0.54)
(0.23)
(0.45)
m
m
(0.52)
(0.17)
(0.20)
m
(0.18)
Indonesia: deceleration in reading
performance
Rate of acceleration or deceleration in performance (quadratic term) on mean
reading performance in PISA 2003 through 2012
Hong Kong-China
Indonesia
Jordan
Kazakhstan
Latvia
Liechtenstein
Lithuania
Macao-China
Malaysia
Montenegro
Peru
Qatar
Romania
Russian Federation
Serbia
Shanghai-China
Singapore
Chinese Taipei
Thailand
Tunisia
United Arab Emirates - Ex. Dubai
Uruguay
Coef.
0.1
-0.4
-0.6
m
-0.4
-0.4
0.6
0.8
m
-0.1
0.0
-2.4
1.2
0.8
-2.0
m
m
1.6
0.7
-0.1
m
0.2
Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - © OECD 2013
S.E.
(0.19)
(0.25)
(0.65)
m
(0.18)
(0.18)
(0.55)
(0.23)
m
(0.51)
(0.31)
(0.47)
(0.28)
(0.19)
(0.59)
m
m
(0.60)
(0.20)
(0.30)
m
(0.28)
Indonesia: performance in science
Mean science performance in PISA 2006 through 2012
Change between
2006 and 2012
(PISA 2012 - PISA
2006)
Hong Kong-China
Indonesia
Jordan
Kazakhstan
Latvia
Liechtenstein
Lithuania
Macao-China
Malaysia
Montenegro
Peru
Qatar
Romania
Russian Federation
Serbia
Shanghai-China
Singapore
Chinese Taipei
Thailand
Tunisia
United Arab Emirates - Ex.
Dubai
Uruguay
Score dif.
13
-12
-13
m
13
3
8
10
m
-2
m
34
20
7
9
m
m
-9
23
13
m
-12
Change between
2009 and 2012
(PISA 2012 - PISA
2009)
S.E.
Score dif.
(5.0)
6
(7.7)
-1
(5.5)
-6
m
24
(5.4)
8
(6.5)
5
(5.1)
4
(3.8)
10
m
-3
(3.8)
9
m
4
(3.7)
4
(6.4)
11
(5.8)
8
(5.8)
2
m
6
m
10
(5.5)
3
(5.1)
19
(5.7)
-3
m
(5.2)
10
-11
S.E.
(4.3)
(5.7)
(5.1)
(4.8)
(4.6)
(5.3)
(4.4)
(2.4)
(4.5)
(3.0)
(5.4)
(2.3)
(5.1)
(4.8)
(4.6)
(4.3)
(2.9)
(4.0)
(4.6)
(4.8)
(5.4)
(4.3)
Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - © OECD 2013
Annualised change
in science across
PISA assessments
Annual
change
S.E.
2.1
(0.85)
-1.9
(1.33)
-2.1
(0.91)
8.1
(1.56)
2.0
(0.90)
0.4
(1.03)
1.3
(0.94)
1.6
(0.64)
-1.4
(1.96)
-0.3
(0.64)
1.3
(1.94)
5.4
(0.61)
3.4
(1.08)
1.0
(1.00)
1.5
(1.03)
1.8
(1.50)
3.3
(0.93)
-1.5
(0.92)
3.9
(0.82)
2.2
(1.03)
5.1
-2.1
(2.75)
(0.91)
Indonesia: performance in science: 2006,
2009, 2012
Mean science performance in PISA 2006 through 2012
OECD average 2006
OECD average 2009
Hong Kong-China
Indonesia
Jordan
Kazakhstan
Latvia
Liechtenstein
Lithuania
Macao-China
Malaysia
Montenegro
Peru
Qatar
Romania
Russian Federation
Shanghai-China
Singapore
Chinese Taipei
Thailand
Tunisia
United Arab Emirates - Ex. Dubai
Uruguay
PISA 2006
Mean
score
S.E.
498
(0.5)
m
m
542
(2.5)
393
(5.7)
422
(2.8)
m
m
490
(3.0)
522
(4.1)
488
(2.8)
511
(1.1)
m
m
412
(1.1)
m
m
349
(0.9)
418
(4.2)
479
(3.7)
m
m
m
m
532
(3.6)
421
(2.1)
386
(3.0)
m
m
428
(2.7)
PISA 2009
Mean
score
S.E.
501
(0.5)
501
(0.5)
549
(2.8)
383
(3.8)
415
(3.5)
400
(3.1)
494
(3.1)
520
(3.4)
491
(2.9)
511
(1.0)
422
(2.7)
401
(2.0)
369
(3.5)
379
(0.9)
428
(3.4)
478
(3.3)
575
(2.3)
542
(1.4)
520
(2.6)
425
(3.0)
401
(2.7)
429
(3.3)
427
(2.6)
Source: OECD. PISA 2012 Results: What Students Know and Can Do (Volume I) - © OECD 2013
PISA 2012
Mean
score
S.E.
501
(0.5)
501
(0.5)
555
(2.6)
382
(3.8)
409
(3.1)
425
(3.0)
502
(2.8)
525
(3.5)
496
(2.6)
521
(0.8)
420
(3.0)
410
(1.1)
373
(3.6)
384
(0.7)
439
(3.3)
486
(2.9)
580
(3.0)
551
(1.5)
523
(2.3)
444
(2.9)
398
(3.5)
439
(3.8)
416
(2.8)
Missing elements
1. The evidence from the tenure period of President SBY
suggests that the correlation between economic growth
and social welfare is not a linear one.
2. Contrary to Amartya Sen, SBY’s views on social
development is second only to economic growth:


It is very obvious that RPJM 2010-2014, also MP3EI 2011-2025
focused more on lengthening the bureaucracy for poverty
alleviation with no clear target (or benchmarking!) on healthcare
and education.
MP3KI was issued later
3. The mismatch of President SBY’s desire to improve
welfare and alleviate poverty with the budgeting
4. Lack of long-term vision
Achievements in health




The performances of Indonesia under SBY in indicators of
health were below the world’s and East Asia’s average.
Low health expenditure and inefficiency have created
underperformance on supply side of health services 
deterioration of services after implementation of
universal healthcare.
Rates of growth in quadratic function are different
between SBY era and non SBY era for immunization of
DPT and Measles. There is acceleration in both
immunization of DPT and Measles at SBY era but
accelerations are lower than accelerations in non SBY’s
era. In SBY’s era, both accelerations are about 50 percent
lower compared to non SBY’s era.
Health expenditure per capita: no significant differences
between SBY era and non SBY era.
Why outcomes far from expectation
1. The challenge of using the paradigm of subsidy in
social welfare and his desire to align this with
poverty alleviation  missed the long-term strategy
for freeing people from poverty and strengthen the
competitiveness of Indonesia’s economy.
2. The challenge of putting down coherent strategic
planning on social welfare policies and implementing
it across ministries and government agencies  lack
of coordination, no benchmarking, no clear targets.
3. The challenge of managing social welfare policy
within the frame of decentralization.