Academic journal article Journal of Southeast Asian Economies

Social Protection in Indonesia and the Philippines: Work in Progress

Academic journal article Journal of Southeast Asian Economies

Social Protection in Indonesia and the Philippines: Work in Progress

Article excerpt

I. Introduction

Social protection is now accepted in policy circles as an integral part of development. Unlike as recently as the mid-1990s, when scepticism towards social protection was widespread, scholars and policy-makers acknowledge that it is a necessity in all countries, regardless of income level or political system. As a result of the shift, contemporary debates on the subject centre on the form and extent of social protection. Shifting trends are starkly evident in Indonesia and the Philippines, which offer opportunities not only for understanding developments in the two countries but also shed light on the broader debate on social protection.

The widespread agreement on the need for social protection conceals deep differences over details. Earlier definitions of social protection tended to be narrow and typically referred to public transfers to offset "stoppage or fall in income resulting from death, old age, sickness, employment-injury, maternity and temporary unemployment" (ILO 1984). Many recent definitions take a broader approach and use the term to describe an expansive range of functions: protective, preventive, promotive, and transformative (Guhan 1994, Sabates-Wheeler and Devereux 2007). The broader approach touches on the entire gamut of public policies because all public programmes entail promotive and transformative effects in some direct or indirect way. To keep the scope of the discussion manageable, this paper adopts a narrower approach and focuses only on protective and preventive programmes. For our purposes, the Asian Development Bank's (ADB 2001) definition of social protection--a "set of policies and programmes designed to reduce poverty and vulnerability ... against hazards and interruption/loss of income"--is sufficient for a focussed examination of the programmes in Indonesia and the Philippines. The ADB definition is consistent with other commonly used definitions, such as the Social Risk Management framework proposed by the World Bank (Holzmann, Sherbume-Benz and Tesliuc 2003) and the concept of "Pro-Poor Growth" associated with many international organizations (Brunori and O'Reilly 2010). While specific emphases vary, they all stress that social protection is about reducing poverty and vulnerability to it.

The range of social protection programmes is vast indeed and includes the following types:

* Social insurance--applicable largely to the formally employed.

* Cash or in-kind transfers, whether means-tested or categorical. The transfers may be unconditional or conditional.

* Labour-intensive public works programmes to create employment opportunities for the unemployed.

* Price subsidies (often for food or energy) or fee waivers for essential services (such as healthcare, education and utilities).

* Compulsory savings and microfinance. However, these measures play only a limited role in protecting the poor and, as such, may be excluded.

The different arrangements are in most instances functionally equivalent in assisting households in need but are very different in terms of how they work, how much they cost and whom they assist. Means-tested transfer programmes, for instance, may cost less overall but have the unintended effect of excluding many poor and including many non-poor due to targeting errors. Similarly, price subsides for food and energy, meant to provide relief to the poor, are disproportionately utilized by the rich, who tend to consume more of these commodities. No less significantly, programmes must take into account social and economic contexts and the individual circumstances of the beneficiaries. Public works programmes, for instance, do little for the aged, sick or disabled poor. Similarly, social insurance programmes are ill-suited for the informally employed because of difficulties in collecting premiums on a regular basis. In the same vein, conditional cash transfers (CCT) predicated on school attendance and healthcare make little sense in areas where there is a shortage of schools or healthcare facilities (Roelen, this issue). …

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