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325 17 Ambitious but inadequate: social welfare policies under Yudhoyono Dinna Wisnu, Faisal Basri and Gatot Arya Putra* During his ten years in office, President Susilo Bambang Yudhoyono spoke on many occasions about his commitment to improving the social welfare of Indonesian citizens. In a speech delivered in Bali in December 2012, he described four key priorities: eradicating poverty; providing access to decent jobs and economic opportunities (which he called ‘inclusive growth … through financial inclusion’); making basic needs available to and affordable for the poor; and providing a social safety net for people living below the poverty line (Yudhoyono 2012). These goals echoed the three pillars of socio-economic development that Yudhoyono had announced at the start of his tenure in 2005: economic growth, jobs growth and poverty reduction, to which he added environmental protection in 2007. This chapter analyses the approaches and programs that Yudhoyono initiated during his ten years in power to advance these goals. We focus on education, health and social assistance, looking at the targets Yudhoyono set for his government, the strategies he implemented to achieve his goals and whether he met his targets. We conclude that the outcomes fell far short of expectations because the president’s approach became ensnared in three sets of challenges that he never managed to resolve satisfactorily. * Dinna Wisnu would like to thank the Indonesia Project, Australian National University, Canberra, for hosting her as a visiting researcher in January– February 2014, during which time part of this article was developed. Update book 2014-15.indb 325 19/04/2015 11:39 am 326   The Yudhoyono Presidency: Indonesia’s Decade of Stability and Stagnation The first challenge was to reconcile the competing demands on the budget of massive subsidies and an expanding number of poverty alleviation programs. The president maintained numerous subsidies, notably fuel subsidies, that ate away at the fiscal space for other agendas, including social welfare. At the same time, he initiated various poverty alleviation and social protection programs for individuals, households and communities. Unfortunately, these programs were rolled out unevenly across Indonesia, and the ad hoc nature of many of them limited their long-term impact. In the end, Yudhoyono’s strategy to alleviate poverty was mainly limited to disbursing social assistance, neglecting long-term strategies to free poor people from poverty and strengthen the competitiveness of the economy. The second challenge was to lay down a coherent, strategic plan for social welfare and implement it across Indonesia’s many competing ministries and government agencies. Under Yudhoyono the government produced ambitious plans for national development, economic growth and poverty reduction. However, these grand frameworks rarely overcame a basic lack of coordination between the many separate social welfare policies initiated by ministries and agencies. The government did not set clear targets to achieve its plans and rarely used benchmarking; there were serious failures even to coordinate basic data on the poor. The third major challenge was to manage social welfare policy within the framework of decentralisation. Over the course of Yudhoyono’s tenure , there was obvious and repeated confusion about the policy-making, budgeting, implementation and monitoring responsibilities of the different levels of government and how to coordinate the programs offered by them. For example, the new national health insurance system introduced in 2014 continued to operate alongside, rather than replacing, the numerous regional health-care programs introduced by provincial and district governments in earlier years. Although district and provincial governments were required to allocate funds to support the national scheme, and national social welfare programs in general, the regions continually expressed concerns about aspects of national policy, the lack of good national data on local-level poverty and interference by national agencies. Similar problems were evident in the delineation of budget responsibilities and implementation of national programs in the education sector. We begin our assessment by reviewing the policy context when Yudhoyono took office in October 2004. As we shall see, he inherited a legislative framework that mandated significant action on social welfare, particularly education and health. We then provide a short overview of Yudhoyono’s approach to social welfare, which we believe was characterised above all by a tension between his desire to maintain expendUpdate book 2014-15.indb 326 19/04/2015 11:39 am Ambitious but inadequate: social welfare policies under Yudhoyono   327 iture on fuel subsidies on the one hand and, on the other, to provide social assistance programs for underprivileged groups. This approach placed considerable strains on the budget and stalled efforts to...


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