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UNDP urges govt to evaluate expenditure, improve social assistance programs
The issue is that complex economic mobility in Asian countries such as Indonesia makes it difficult for the government to keep track of its citizens who are living under or near the poverty line.
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Desperate times: Workers prepare government social assistance at a warehouse in Cipinang, East Jakarta on May 15, 2020. The packages contain staple food and basic commodities to be distributed to low-income families across the capital to mitigate the impact of COVID-19. (JP/Dhoni Setiawan)
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United Nations Development Program (UNDP) economist urges Indonesia to evaluate its social assistance program and eliminate ineffective programs amid rising need for social welfare to prevent further economic fallout from the pandemic.
The UNDP’s senior economic advisor for Asia Pacific Balazs Horvath on Friday said all governments needed to review their expenditure including social assistance programs to create fiscal space for additional welfare.
“It’s not feasible that every country goes out and borrows a huge amount of money. Governments need to have a clear-headed review of their expenditure and revenue policies, and get rid of inefficient policies to create fiscal space,” he said during an online discussion held by the agency.
Indonesia’s government has allocated Rp 695.2 trillion (US$47.6 billion) to a COVID-19 containment budget, focusing on strengthening the healthcare system and softening the economic impact of the coronavirus outbreak on the country.
The government announced on Aug. 28 that spending on the social safety net had reached Rp 95.57 trillion, or almost 47 percent of the Rp 203.94 trillion allocation. The cash assistance budget has been spent on schemes such as the Family Hope Program and the preemployment card program, as well as electricity subsidies for low-income households.
It also disbursed Rp 47.03 trillion, or 38 percent, of the Rp 123.46 trillion stimulus budget for micro, small and medium enterprises (MSMEs) in the form of debt restructuring, interest rate subsidies and the newly launched productive cash transfer.
Horvath pointed out full support for the cash transfer scheme as a temporary social safety net. This is because conventional protection schemes may not be able to cover new recipients, such as newly unemployed persons or informal workers who are losing their income.
