Linking Social Protection to Sustainable Livelihoods: A Way Forward for Indonesia

Abstraksi

Social protection schemes -namely cash transfers – play a critical role in protecting citizens against risk and promoting human capital development. There is also a strong body of evidence suggesting that cash transfer schemes can also positively impact productivity and foster access to employment opportunities . However, evidence also reflects that, on their own, cash transfers may not be enough to systematically overcome structural barriers to employment and livelihoods. As such, cash transfers are not sufficient to lift beneficiaries out of poverty on a sustained basis. Many countries around the world link social protection schemes, particularly conditional cash transfers, with a range of livelihood support services to provide economic strengthening opportunities to the poor and vulnerable. Such livelihood support services can include capital for micro-enterprises, linkages to markets and/or jobs, capacity building to strengthen livelihood skills and knowledge, vocational training and job placement, etc. Cash transfers supported with such complementary services are more likely to enable working age members within poor and vulnerable households to overcome social and economic barriers to labour supply and demand , provide them with an enabling environment to productively engage, and augment income more than cash transfers alone. There is a wide body of international evidence highlighting that such interventions have proven to increase household income, savings, accumulation of productive and non-productive assets, and instill an ability to ‘aspire for the future’ . Economic strengthening support through social protection interventions also predominantly help women as they are the main beneficiaries of conditional cash transfer programs. There is a critical need to strengthen economic opportunities for beneficiaries of Indonesia’s flagship conditional cash transfer scheme Program Keluarga Harapan. Indonesia has a robust social protection system and Program Keluarga Harapan is now reaching 10 million families. Indonesia also implements a myriad of employment, enterprise and training programs designed for the poor. Given this context, there is considerable potential to formalise linkages between the two and ensure that social protection beneficiaries have access to livelihood support services that are suited to their preferences and needs. Despite the potential, such linkages have been limited in Indonesia. Although there are several government-led employment and training programs that exist at the local and national level, there is a knowledge gap on whether such schemes respond to the employment needs of the poorest families receiving social protection programs. Furthermore, there are no coordination mechanisms between ministries implementing social protection and those implementing enterprise/employment programs for the poor. Creating access to sustainable livelihood opportunities for the poor is a current priority for BAPPENAS for the next five-year medium-term development plan. Providing Program Keluarga Harapan families with suitable livelihood opportunities so that they progress towards graduating out of extreme poverty is a priority for the Ministry of Social Affairs. Through Australian Government support, MAHKOTA and SMERU are therefore working in close coordination with both ministries to conduct a research study that seeks to understand the income-generating landscape for Program Keluarga Harapan families and provide recommendations for how to strengthen their access to effective productive inclusion opportunities that meet their needs. The study utilizes robust qualitative and quantitative instruments to answer the following key research questions: • What is the income-generating landscape for Program Keluarga Harapan families? What livelihood activities are they currently engaged in? What would they like to engage in (preferences), and what would they like to avoid (aversions)? • What is the spectrum of livelihood opportunities (government schemes, formal employment opportunities, loans for micro-enterprise, etc.) that are offered for the poor and vulnerable in the study areas ? Which ones are beneficiary families accessing, and which ones are working? • What skills and products are traders and formal employers demanding? Can working age members within beneficiary households meet these requirements? • Through what mechanisms can GoI strengthen the productive inclusion strategies offered to social protection beneficiaries? Can this be achieved through simple ‘value-add’ innovations (e.g. technological inputs; market linkages; improving product quality, etc), and what would the delivery mechanisms look like? What opportunities exist for intersectoral coordination between social protection sectors and employment/enterprise sectors? • What are the key recommendations for making a productive inclusion strategy ‘work’ for the poorest in Indonesia? What can we learn from successful districts? What can we adapt from best practices internationally? Findings from this study will be disseminated at a learning event in May co-hosted with BAPPENAS. The conference will bring together actors across ministries of social affairs, planning, small-medium enterprises, trade, and other relevant agencies to discuss how to build an effective productive inclusion strategy for Indonesia’s most vulnerable groups. International governments that have successfully linked productive inclusion strategies with large scale conditional cash transfers (e.g. Philippines, Chile, and Colombia) will also be invited to share their experiences and evidence from their programs. If given the opportunity, key learning from the study and the conference will feed into a final paper and presentation prepared for the Indonesian Development Forum.