Indonesia has made impressive progress in reducing income inequality and improving living standards since the Asian Financial Crisis but the decline in poverty has slowed in recent years while inequality has risen and a large part of the population remains vulnerable. The Government of Indonesia has recognised the potential of social protection to address these challenges and to underpin a long-term development strategy based on more inclusive economic growth. As a consequence, social assistance programmes have grown significantly in recent years while social insurance has undergone major reforms. The Government is gradually realising its vision of a system of social protection, based on comprehensive and coherent coverage for all age groups.The Social Protection System Review of Indonesia charts the evolution of social protection. It explores the current context for social protection and how this is likely to evolve in the future, analyses the extent to which existing programmes are aligned to those needs and how effective these programmes are at reducing poverty. It also examines the financing of social protection. Finally, it proposes policies to enhance the social protection system across a number of dimensions, including programmes, institutions, financing and information architecture.

Social protection systems are often still designed for the archetypical full-time dependent employee. Work patterns deviating from this model – be it self-employment or online "gig work" – can lead to gaps in social protection coverage. Globalisation and digitalisation are likely to exacerbate ...

Indonesia has made impressive progress in reducing income inequality and improving living standards since the Asian Financial Crisis but the decline in poverty has slowed in recent years while inequality has risen and a large part of the population remains vulnerable.

Since 2010, the Government of Indonesia (GoI) has set official poverty reduction targets and emphasized the importance of a well-functioning social assistance system in continued poverty reduction. However, despite the efforts in expanding coverage of the social protection system, the pace of poverty reduction in Indonesia has slowed significantly in recent years, while both chronic poverty and vulnerability have persisted. Moreover, income inequality is on the rise, while access to opportunities remain unequal. This report reassesses the strengths and weaknesses of Indonesia's main social assistance programs, and proposes feasible reform options, both program-by-program and for the social assistance system as a whole. This 2017 updated report seeks to provide evidence of the progress made between 2011 and 2017, together with relevant benchmarks for future reforms and policy planning. The review presents analytical evidence on salient program features and issues, and proposes additional efforts and options toward a truly integrated system.