Social Assistance Predicted to Reduce Poverty by up to 16.9%

The COVID-19 pandemic increased poverty rates in Indonesia. Therefore, the government provided social protection to reduce poverty levels.

Indonesia's poverty rate was recorded at 9.22% in March 2019. This figure then rose above one digit when the pandemic hit Indonesia, reaching 10.19% in September 2020.

Based on this, the government allocated social protection (perlinsos) within the National Economic Recovery (PEN) program as assistance for vulnerable groups. A total of Rp 216.6 trillion was allocated in 2020. The social protection budget was continued this year with an allocation of Rp 408.8 trillion.

A report titled "The Impact of Government Stimulus on the Economy" states that this social protection budget helped reduce poverty in Indonesia. According to calculations by the Asian Development Bank (ADB), social assistance reduced poverty rates by up to 16.9%. This percentage is the second highest in the Asia Pacific region. The highest impact of social assistance was felt in Mongolia, which reduced poverty rates by up to 34.7%.

For information, Indonesia's poverty rate slightly decreased over the following six months to 10.14% in March 2021. However, the number of impoverished people remained relatively stagnant from September 2020, at approximately 27.5 million.