Distinguishing Poverty Alleviation Program, Indonesia’s Outgoing Finance Minister Sri Mulyani Says Gov Demand Supporting Social Protection Programs Will Continue To End 2024, Tempo

By Vedro Imanuel G and Aisha Shaidra for Tempo.co, October 18, 2024

TEMPO.CO, Jakarta – Indonesia’s (possibly) outgoing Finance Minister Sri Mulyani said the Indonesian government through the national budget (APBN) would continue to roll out the social protection (Perlinsos) program for the rest of 2024, [despite the inauguration of the new government slated for October 20, 2024]. According to Minister Mulyani, the social protection program is important for maintaining and even increasing consumers’ purchasing power.

“Social protection programs which are the mainstay of economic activity will continue and be implemented through to the end of 2024,” she said at a press conference on the outcome of a periodic meeting of the national Financial System Stability Committee (KSSK) on Friday, October 18, 2024 at the offices of Indonesia’s central bank, Bank Indonesia (BI).

Some components of the social protection program, said Minister Mulyani, include the Basic Food Card program, the Family Hope Program (PKH), the Smart Indonesia Program (PIP), and energy subsidies. In addition, efforts are also being made to stabilize food prices and provide assistance for machinery and agricultural equipment. “We hope this will support consumers’ purchasing power,” he said.

According to Indonesia’s Finance Minister, the program is a measure to optimize the role of the national government expenditure as a shock absorber to maintain economic stability. Also, according to Minister Mulyani, the current global economic situation is filled with many uncertainties. She gave as an example the political escalation in the Middle East.

Earlier, the Coordinating Minister for Human Development and Culture (Menko PMK), Muhadjir Effendy, said that the allocation of social protection funds for 2024 was IDR 490 trillion ($32.7B) allocated by Mulyani’s Ministry of Finance (Kemenkeu). The social protection program, said Coordinating Minister Muhadjir, includes fuel subsidies, LPG subsidies, electricity subsidies, as well as fertilizer subsidies, and subsidies for interest payments on the community business finance program (KUR).

“The whole of the social protection (Perlinsos) program is encompassed within the IDR490 trillion scheme, and it is not entirely, in fact the majority of it is not aimed at the poor, this has to be emphasized,” said Coordinating Minister Effendy, as quoted by Tempo citing the government’s official new service Antara on Friday, October 18, 2024.

The social protection program itself is different from the controversial social assistance (Bansos) program, with the social protection programs (Perlinsos) not being required to be targeted at people experiencing poverty. Another difference is that the social assistance program is not allocated by the Ministry of Finance, but rather by the Ministry of Social Affairs (Kemensos).

Antara contributed to the writing of this article. This article is based on https://bisnis.tempo.co/read/1930371/bukan-bansos-sri-mulyani-pastikan-program-perlinsos-terus-berjalan and is not authorized.

In earlier news…

Op-Ed: Don’t Misuse Welfare For The Poor

By Robertus Robet, Sociologist, Jakarta State University, for Tempo.co, January 30, 2021

During two presidencies in Indonesia following the fall of President Soeharto’s New Order regime and the ascendance of the democracy reform movement in 1998 (known as Reformasi), three Ministers of Social Affairs (Mensos) have been imprisoned for corruption. The three are Bachtiar Chamsyah from the United Development Party (PPP) during the term of President Susilo Bambang Yudhoyono, as well as Idrus Marham from the Golkar Party, and Juliari Batubara from the Indonesian Democratic Party of Struggle (PDI-P) during the presidency of President Joko Widodo.

If we broaden the meaning of “social” to include fields such as healthcare, religion, youth and sports, education, and employment, the number of ministers or officials in the social sector involved in corruption is even higher. And this does not even include regional leaders.

These facts raise significant questions: why is corruption rampant in the social sector, which should be the backbone of state action in the service of the community? Why is social affairs in Indonesia synonymous with inefficiency, misuse, and corruption? To answer these questions, one only has to examine the contradictions in the cases of corruption related to social welfare support.

Social assistance (known as Bantuan Sosial, or Bansos) is essentially meant to be temporary. It is intended to provide aid to the poorest individuals most affected by a crisis. Social assistance is susceptible to corruption because of several factors. Firstly, structurally, the position of the poor is weak and powerless. Given this, social assistance is always seen as a “blessing”, or hand-me-down, that has to be accepted with gratitude.

Secondly, social assistance in Indonesia has never been entirely “social.” In many cases, especially when policymakers come from political parties, and are active before regional elections, social assistance easily transforms into “political assistance.” This means that social assistance can easily be manipulated in claims that are client-patron in nature. It is used as a “gift” from politicians and rulers to communities in order to gain votes and political support. In this practice, social assistance is co-opted into the service of client-patron relations, and has a detrimental impact on democracy.

Furthermore, the tradition of corruption in the social affairs sector also demonstrates the irony in the relationship between morality, the ruling class, and the poor. When corruption in social assistance programs is exposed, many people express regret, saying, “How cruel, to steal from the poor who are suffering?”

The notion that stealing from the poor is morally wrong is based on a concept of compassion that applies in powerless interpersonal relationships. In the context where the poor are abstracted as numbers, and policymakers become the arbiters of life and death for those below, compassion is buried and power relations come to the forefront. In this relationship, the poor serve as an opportunity and a mechanism for the powerful to express their authority. Thus, the weaker the poor, the greater the risk they face of being exploited. The poorer someone is, the weaker their bargaining power, and the easier it is for their rights to be violated.

Many studies have found a correlation between poverty and the level of corruption: the more poor people there are, the more corruption occurs in their name. At the international level, a similar irony occurs in the general fact that countries led by corrupt regimes often receive a lot of international aid. Why? Because in countries where the rulers are corrupt, there are many poor people (David de la Croix and Clara Delavallade, Oxford Economic Paper 66, 2009). This irony emphasizes that power relations are inversely related to ethics and compassion.

Moreover, all forms of assistance essentially operate under the logic of “I help you to make you realize that I am more powerful than you.” This logic functions to maintain social distance and partitioning: the poor ≠ the rich/rulers. In other words, the social affairs sector is vulnerable to corruption primarily because its existence is based on unequal power relations from the outset, with the state and its elites positioned as “patrons,” while the people are “clients.”

In this relationship, for political elites, state resources are always positioned as blessings to be distributed at will to generate support and lubricate their political machinery. What is the worst consequence of the vulnerability of the social affairs sector to corruption?

The collapse of the reputation of “the social” has long-term structural consequences that are ideological in nature, namely the decline in trust in the state and its bureaucracy as providers of social affairs policies. As a result, the dogma that market mechanisms and capitalism are considered more efficient, transparent, and reliable in promoting prosperity than the social (welfare) state becomes validated and reinforced.

In other words, the state’s failure to promote welfare, and the decline of “the social” due to inherent corruption within it, will justify a type of society referred to by John Rawls as a brute luck society, i.e., a state without state intervention in the distribution of justice, where society lives in the economic law of the jungle: the rich are lucky, the poor are unlucky.

In its founding history, Indonesia was formed with a strong aspiration for collectivism, and the idea of a social welfare state. The question is, why has Indonesia consistently failed to establish a social welfare-minded state?

Currently, Indonesia does have a statutory social security system, namely the Agency for Employment Social Welfare Administration (BPJS Employment) and the Agency for Health Social Welfare Administration (BPJS Health). However, in many respects, neither has been reliable enough to form a “social service state.” Recently, there have even been allegations of corruption in BPJS Employment.

If clear policies mandated by law like BPJS can easily fall into misuse and abuse, what about incidental policies like the canned sardines social assistance program? This reality further worsens the state’s reputation for providing social welfare.

Is there a fundamental difference between social assistance and social security? Social security has a stronger institutional basis, and is rooted in the concept of the state, while social assistance (Bansos) has been more of an incidental and temporary activity. Social assistance can in some ways be part of a type of social security. Social security assumes the state as a social service state, a state that serves and whose existence is usually statutory or mandated by law.

In history, social security is based on the cumulative reflection of social movements by intellectuals until it becomes the basis of economic-political policies, especially in post-war industrial countries such as Germany, England, and Scandinavia. The idea of social security is based on a historical awareness of the structural weaknesses of capitalism and market mechanisms in providing welfare and employment. Thus, state intervention to protect society must be institutionalized.

A good social security system is based on the analysis of human “social risks and needs.” Asa Briggs used the term “social contingency” to explain what these social risks and needs are. Social risks or social contingency are based on certain scenarios in the life cycles of all individuals. For example, when a child is in the womb, there is a risk of illness, so there is a need to ensure the health of the mother and baby; when people grow up in school-age, there is a risk of dropping out, so there is a need for education; when people enter working age, there is a risk of unemployment, so the state must ensure employment opportunities; when entering old age, people face the risk of losing their jobs, so there is a need for retirement benefits. A service state will seriously build a social security system by considering the social risks and needs of its citizens.

The main principle of social security is the necessity to utilize organized power (through politics, and bureaucratic administration) to decide on forms of welfare services for the people. The elaboration of this idea usually begins by determining the welfare unit: individuals, families (Asa Briggs in Pierson and Castles, 2006).

Once this welfare unit is determined, politics and bureaucracy are deployed to implement policies. At this point, population data and administration become crucial requirements in every social security policy. Population data and administration reflect who the chosen social security units are. This ensures that social policies are effectively targeted.

The corruption of social assistance, or bansos, and the acute vulnerability of social security indicate that Indonesia has never been able to build a welfare regime. This inability stems from at least two things.

Firstly, the failure to formulate welfare units. This failure has been caused by various factors, such as the strength of client-patron relations (which turns citizens into clients) and primordialism (which complicates the political identification of welfare units).¹

Secondly, Indonesia has never seriously built a competent public administration as an instrument for implementing social policies. As a result, various social programs are susceptible to misdirection, if they do not end up in the accounts of corrupt officials.

What is the way out? In the experience of Germany, England, and Scandinavian countries, “the social” can grow and give birth to welfare regimes because they are preceded by at least two things: social movements, and political leadership. To strengthen a social service-oriented state, Indonesia needs these two ingredients.

Indonesia needs political leadership with a vision of a social service state. However, given the ruthlessness of client-patron relations, oligarchs, and political cartels, relying on the current political leadership alone is likely to breed disappointment. The last option remains to hope for the emergence of grassroots social movements.

This article is based on https://majalah.tempo.co/read/kolom/162423/kolom-robertus-robet-mengapa-program-sosial-rentan-dikorupsi

Footnotes

1. According to Clifford Geertz, primordialism relates to relationships between individuals and a community resulting from their birth into that community, as they inevitably acquire the community’s language and social practices. Individuals’ ties to certain groups are “natural” and do not result from social interaction. Furthermore, such spiritual bonds exist in all societies and accompany all individuals, although the strength of the primordial connections may vary at the individual level, from society to society, or across time. Per Eller, Jack David and Reed M. Coughlan. (1993). “The Poverty of Primordialism: The Demystification of Ethnic Attachments”. Ethnic and Racial Studies 16, no. 2: 183–202. https://en.wikipedia.org/wiki/Primordialism#cite_note-10 ↩︎

In related news:

• https://www.tempo.co/ekonomi/ini-penyebab-tren-kelas-menengah-melorot-menurut-sri-mulyani–1692
• https://tirto.id/zulhas-impor-indonesia-turun-september-2024-imbas-kontraksi-pmi-g4Uz
• https://asia.nikkei.com/Spotlight/DealStreetAsia/Funding-for-Southeast-Asian-startups-fell-below-1bn-in-Q3
• https://koran.tempo.co/read/ekonomi-dan-bisnis/487859/lonjakan-anggaran-bansos
• https://bisnis.tempo.co/read/1851093/dalami-kucuran-dana-bansos-sebelum-pilpres-timnas-amin-ingin-4-menteri-jadi-saksi-di-mk
• https://bisnis.tempo.co/read/1847093/sri-mulyani-ungkap-anggaran-bansos-2024-melambung-tajam-hingga-135-persen
• Profile of East Java Regional Secretary Adhy Karyono Searched by KPK and Flashdisk Confiscated, Person Close to Minister of Social Affairs https://makassar.tribunnews.com/2022/12/22/profil-adhy-karyono-sekda-jatim-digeledah-kpk-dan-flashdisk-disita-orang-dekat-menteri-sosial
• President Widodo Signs Off Exit of Governor Khofifah, Appoints Adhy Karyono Acting Governor of East Java https://nasional.tempo.co/read/1832937/jokowi-resmi-berhentikan-khofifah-tunjuk-adhy-karyono-sebagai-pj-gubernur-jawa-timur