Background of the social safety net program

By Sri Pamoedjo Rahardjo

This is the first of two articles on the social safety net.

JAKARTA (JP): The social safety net strategy (known by its local acronym as JPS) was first introduced in Indonesia as a response to safeguard the most affected segment of the population from the socioeconomic crisis in 1998. In order to ensure implementation of the strategy, multilateral agencies stipulated in their assistance scheme, covenants and a time frame for the government to comply with this requirement.

Current public bickering on the social safety net scheme could have been avoided had all parties concerned understood the background to the scheme. On the one hand, government officials are accused of indirectly misappropriating funds. On the other hand, officials are apprehensive in accepting funds and disclaim any wrong doings.

The social safety net had become a target for disagreement. The current debates have developed because of confusion in the meaning of the scheme. The concept is mixed up with that of poverty alleviation. Although both concepts have the same target groups -- the poor -- the underlying visions and mechanisms differ from one another. In reality, the social safety net and poverty alleviation are two sides of the same coin, but mixing these two, results in confusion in the program's implementation.

Poverty is a phenomenon of social institutions. Society organizes itself by creating social stratifications and roles. The stratification suggests social differentiation and the division of labor, creating cooperation, competition and conflict to obtain limited resources. In other words, the poor are a social fact; those who failed in the competition for resources. Poverty does not become a social problem until some segments of society reach a certain level of affluence.

Similarly, in Indonesia the issue of poverty came into the limelight as some people's welfare improved because of rapid economic growth in the late 1980s. As the social gap widened, the government introduced various social development programs under the auspices of the concerned ministries.

During the crisis, as the government began to lose the capacity to control its development plans, the International Monetary Fund (IMF) recommended that the government introduce social safety net measures in its development schemes. According to its mission, social safety net schemes are a device to help save communities from a crisis-induced destitution. The process to identify, select and assist the target groups has to be administered in a speedy and focused manner. According to its vision, the scheme is an approach to reach the most vulnerable groups, whose capacity to meet challenges is affected by the crisis. Within a period of time, the plan aims to help the groups concerned to move on to more sustainable means of development.

As a strategy in social development, poverty alleviation aims to deal with transformation of family structures. It is a long- term activity. In poverty alleviation, the family as an institution is the target. The family is stimulated to achieve sustainable long-term changes. On the contrary, in social safety nets, the community institution is the target. The aim is to rescue some members of the community and stimulate them to recover their capacity to survive in the short-term. While both approaches have the same target groups and impact on poverty levels, over a period of time, the management of poverty alleviation and social safety net schemes is not similar.

The contrast between these approaches suggests that the government should avoid using these two strategies interchangeably. Failure to recognize the difference will only result in confusing the target groups for poverty alleviation and the social safety net.

In the past, the government always reinforced its development programs with social development strategies for the poor. Programs like income generation, mother and child health care, nutrition, immunization, cooperatives and assisting women in development activities are some notable examples. These were usually designed as support infrastructures to create demand.

In the early 1980s, the government increased community participation in its expanded program activities. This was reflected in the structure of government agencies dealing with community development issues, including increased human resources and operational budgets. At the time, the objective was mainly to obtain program sustainability; the policy was to employ appropriate field workers from all sectors (penyuluh lapangan) to work with village volunteers. All the donors supported, if not demanded, that these workers be fielded in each different project.

Early in the 1990s, hostile attitudes toward centrally supported field workers emerged. These reactions were a result of confusion at the village level. Village leaders and the community were confronted with a great many sectoral interests. The performance criteria of village, sub-district, district and provincial leaders was based on their success in accommodating these overlapping and, in some cases, conflicting activities.

When the crisis hit the country in 1998, the number of the poor increased drastically. Strategies to deal with the poor in the community were re-conceptualized as social safety net actions. Despite the good intention, the move seems to have resulted in another misunderstanding at the central and lower administrative levels. The lower echelons were apparently not clear on the change of visions and missions. The requirements to maintain clarity, transparency and accountability -- which were not demanded as urgently before -- were regarded as additional burdens. In the past, the funds were directed toward the service providers. Now, funds are directly disbursed to the target groups.

Public groups have recently accused the government of mishandling the social safety net funds. Most of the Rp 17.8 trillion allocated is thought not to have reached the appropriate targets. Some ministry officials are confused about social safety net funds in their budget items. They appeared unaware that their budget items were labeled as social safety net funds. As a result, the ministry concerned released the funds as usual, with the possible outcome of mishandling of the funds. This could be the reason why many fingers now are pointing at the non-compliant nature of the administrative and disbursement scheme of social safety net funds.

The writer is a social and economic observer, and former regional development bank officer in Manila.