Labor & Social Protection in Indonesia

 

 

Overview

The poverty rate in Indonesia according to the national poverty line has decreased from 27 percent in 1999 to approximately 15 percent in 2004.

The economic growth rate, at around 6 percent, remains high, and the modernization of the economic structure of the country is ongoing, as the contribution of agriculture to GDP has decreased to 15 percent in the last years. However, still more than half of the total population lives in rural areas and is engaged in rural activities (see graph below).

The population is slowly becoming older, and the age dependency ratio has thus decreased in the last decade to almost 50 percent (see graph below).

While poverty may appear relatively low, vulnerability remains high. 

Tracking household income and consumption over recent consecutive years shows a very high degree of mobility in and out of poverty. Over 38 percent of the poor in 2004 were not poor in 2003, while 7 percent of the non-poor in 2003 became poor.  The Government of Indonesia has employed various coping mechanisms to assist with food security, employment creation, education and health access, as well as community empowerment. 

 Ongoing Projects
 Closed Projects
 Analytical and Advisory Activities

Ongoing Projects

None

Closed Projects

None

Analytical and Advisory Activities (AAA)Improving the Data Collection on Children with Disabilities (in progress)

For countries attempting to reach the last 10% to 15% of children not enrolled in primary education, addressing the needs of children with disabilities is particularly important, since they are often the last considered.   However, due to a lack of data, governments are unsure about how to identify and scale up best practices.  This project, part of the Netherlands partnership program, will help build local capacity for collecting real-time data on children with disabilities that can be used to monitor education services and evaluate the impact of interventions intended to improve them. Ongoing disability data collection that is built into countries’ own Education Management Information Systems (EMIS) is needed because survey data – which is usually scarce and of poor quality – is too expensive and generally not suitable for M&E in national programs for a relatively small, hard to identify group. 

Indonesia Social Protection AAA (under preparation)

This program is expected to look at the potential impact of the new Social Security Law, and will also provide key inputs into the ongoing poverty assessment.