SOCIAL WELFARE POLICIES UNDER PRESIDENT SBY. Dinna Wisnu Faisal Basri Gatot A. Putra
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1 SOCIAL WELFARE POLICIES UNDER PRESIDENT SBY Dinna Wisnu Faisal Basri Gatot A. Putra Canberra, 19 September 2014
2 Rhetoric versus reality Slogan (SBY in 2005): pro-growth, pro-poor, projob, (2007) pro-environment. Realities: , ,3 24,2 17,8 11,4 11, * 2012* 2013* 2014**
3 The main targets of RPJMN are not achieved Indicators National Medium-Term Development Plan (RPJMN) Actual Economic growth Average of percent per year 5.98% Growth of 7 percent before = 5.78% Poverty rate 8-10 percent at the end of % in March 2014 Open unemployment 5-6 percent at the end of % in February 2014 Source: Bappenas
4 Percent Percent Poverty, unemployment, and growth Sometimes open unemployment rate and poverty rate fell more sharply despite slowing GDP growth. The quality of job creation is stiil poorly Poverty (LHS) Unemployment (LHS) GDP growth (RHS) ,1 18,4 18,2 17,4 16,7 16,0 17,8 16,6 15,4 7,0 6,0 10 6,1 8,1 9,1 11,5 9,9 11,2 10,3 9,3 14,2 13,3 12,4 8,5 8,1 7,4 6,8 11,8 11,4 11,3 6,3 5,9 5,7 5,0 5 4,0 0 3,0 Source: BPS.
5 Distribution of workers by sector (%) Sector * 2014** Agriculture Mining and quarrying Manufacturing industry Electricity, gas, and water supply Construction Trade, hotel, and restaurant Transport and communication Financial, ownership and business services Social services Total (million) Memo: Informal workers Formal workers * Simple average of February and August ** February. Source: BPS-Statistics Indonesia.
6 Labor productivity differences across sectors remain significant (Sector labor productivity (real terms) compared with labor productivity in agriculture) Sector Agriculture Low-end services Manufacturing industries Transport & communication Financial services Mining and quarrying Source: World Bank, Indonesia: Avoiding The Trap, Development Policy Review 2014, p. 6.
7 Allocation of national state budget by function (Percent of GDP) Public service Economy Health Security & Order Social protection Education Memo: energy subsidy * * Significant increase from Rp 5 trillion in 2012 to Rp 17 trillion in 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.
8 Social protection index (n=35) and SP expenditure as % of GDP Social Protection Index SP expenditure as % of GDP 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) 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) ( ) Rank. Sources: Asian Development Bank, The Social Protection Index: Assessing Results for Asia and the Pacific, 2013.
9 Knowledge & skills performance of the world s 15-year-olds students based on PISA surveys 2012 Rank Mathematics Reading Science (n=65) Country/Economy Shanghai-China Singapore Hong Kong-China Chinese Taipei Korea Japan Viet Nam n.a. 511 n.a. 508 n.a Thailand Malaysia n.a. 421 n.a. 441 n.a Indonesia Peru Source: OECD, PISA (The Programme for International Student Assessment) database.
10 Indonesia: deceleration in mathematics performance Rate of acceleration or deceleration in performance (quadratic term) on mean mathematics performance in PISA 2003 through 2012 Coef. S.E. Hong Kong-China 0.3 (0.21) Indonesia -0.7 (0.26) Jordan -0.2 (0.51) Kazakhstan m m Latvia 0.1 (0.20) Liechtenstein 0.3 (0.25) Lithuania 0.7 (0.37) Macao-China 0.4 (0.14) Malaysia m m Montenegro 0.2 (0.31) Peru m m Qatar -2.3 (0.21) Romania 0.3 (0.54) Russian Federation 0.1 (0.23) Serbia 0.0 (0.45) Shanghai-China m m Singapore m m Chinese Taipei 1.3 (0.52) Thailand 0.2 (0.17) Tunisia 0.3 (0.20) United Arab Emirates - Ex. Dubai m m Uruguay -0.6 (0.18) Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - OECD 2013
11 Indonesia: deceleration in reading performance Rate of acceleration or deceleration in performance (quadratic term) on mean reading performance in PISA 2003 through 2012 Coef. S.E. Hong Kong-China 0.1 (0.19) Indonesia -0.4 (0.25) Jordan -0.6 (0.65) Kazakhstan m m Latvia -0.4 (0.18) Liechtenstein -0.4 (0.18) Lithuania 0.6 (0.55) Macao-China 0.8 (0.23) Malaysia m m Montenegro -0.1 (0.51) Peru 0.0 (0.31) Qatar -2.4 (0.47) Romania 1.2 (0.28) Russian Federation 0.8 (0.19) Serbia -2.0 (0.59) Shanghai-China m m Singapore m m Chinese Taipei 1.6 (0.60) Thailand 0.7 (0.20) Tunisia -0.1 (0.30) United Arab Emirates - Ex. Dubai m m Uruguay 0.2 (0.28) Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - OECD 2013
12 Indonesia: performance in science Mean science performance in PISA 2006 through 2012 Change between Change between 2006 and and 2012 Annualised change in science across (PISA PISA (PISA PISA PISA assessments 2006) 2009) Annual Score dif. S.E. Score dif. S.E. change S.E. Hong Kong-China 13 (5.0) 6 (4.3) 2.1 (0.85) Indonesia -12 (7.7) -1 (5.7) -1.9 (1.33) Jordan -13 (5.5) -6 (5.1) -2.1 (0.91) Kazakhstan m m 24 (4.8) 8.1 (1.56) Latvia 13 (5.4) 8 (4.6) 2.0 (0.90) Liechtenstein 3 (6.5) 5 (5.3) 0.4 (1.03) Lithuania 8 (5.1) 4 (4.4) 1.3 (0.94) Macao-China 10 (3.8) 10 (2.4) 1.6 (0.64) Malaysia m m -3 (4.5) -1.4 (1.96) Montenegro -2 (3.8) 9 (3.0) -0.3 (0.64) Peru m m 4 (5.4) 1.3 (1.94) Qatar 34 (3.7) 4 (2.3) 5.4 (0.61) Romania 20 (6.4) 11 (5.1) 3.4 (1.08) Russian Federation 7 (5.8) 8 (4.8) 1.0 (1.00) Serbia 9 (5.8) 2 (4.6) 1.5 (1.03) Shanghai-China m m 6 (4.3) 1.8 (1.50) Singapore m m 10 (2.9) 3.3 (0.93) Chinese Taipei -9 (5.5) 3 (4.0) -1.5 (0.92) Thailand 23 (5.1) 19 (4.6) 3.9 (0.82) Tunisia 13 (5.7) -3 (4.8) 2.2 (1.03) United Arab Emirates - Ex. Dubai m m 10 (5.4) 5.1 (2.75) Uruguay -12 (5.2) -11 (4.3) -2.1 (0.91) Source: OECD, PISA 2012 Results: What Students Know and Can Do (Volume I) - OECD 2013
13 Indonesia: performance in science: 2006, 2009, 2012 Mean science performance in PISA 2006 through 2012 PISA 2006 PISA 2009 PISA 2012 Mean Mean Mean score S.E. score S.E. score S.E. OECD average (0.5) 501 (0.5) 501 (0.5) OECD average 2009 m m 501 (0.5) 501 (0.5) Hong Kong-China 542 (2.5) 549 (2.8) 555 (2.6) Indonesia 393 (5.7) 383 (3.8) 382 (3.8) Jordan 422 (2.8) 415 (3.5) 409 (3.1) Kazakhstan m m 400 (3.1) 425 (3.0) Latvia 490 (3.0) 494 (3.1) 502 (2.8) Liechtenstein 522 (4.1) 520 (3.4) 525 (3.5) Lithuania 488 (2.8) 491 (2.9) 496 (2.6) Macao-China 511 (1.1) 511 (1.0) 521 (0.8) Malaysia m m 422 (2.7) 420 (3.0) Montenegro 412 (1.1) 401 (2.0) 410 (1.1) Peru m m 369 (3.5) 373 (3.6) Qatar 349 (0.9) 379 (0.9) 384 (0.7) Romania 418 (4.2) 428 (3.4) 439 (3.3) Russian Federation 479 (3.7) 478 (3.3) 486 (2.9) Shanghai-China m m 575 (2.3) 580 (3.0) Singapore m m 542 (1.4) 551 (1.5) Chinese Taipei 532 (3.6) 520 (2.6) 523 (2.3) Thailand 421 (2.1) 425 (3.0) 444 (2.9) Tunisia 386 (3.0) 401 (2.7) 398 (3.5) United Arab Emirates - Ex. Dubai m m 429 (3.3) 439 (3.8) Uruguay 428 (2.7) 427 (2.6) 416 (2.8) Source: OECD. PISA 2012 Results: What Students Know and Can Do (Volume I) - OECD 2013
14 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 , also MP3EI 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
15 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.
16 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.
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