Public Expenditure Review Summary : Social Assistance Program and Public Expenditure Review 1
Public expenditure on household-based social assistance (SA) in Indonesia has increased significantly since 2005. From a low base in the early 2000s, Indonesia's aggregate national public expenditures on SA permanently increased from 2005 afte...
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| Language: | English en_US |
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World Bank, Jakarta
2017
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| Online Access: | http://documents.worldbank.org/curated/en/146351468040728696/Public-expenditure-review-summary http://hdl.handle.net/10986/27424 |
| Summary: | Public expenditure on household-based
social assistance (SA) in Indonesia has increased
significantly since 2005. From a low base in the early
2000s, Indonesia's aggregate national public
expenditures on SA permanently increased from 2005 after the
central government allocated a portion of the savings from
fuel subsidy reforms to a number of SA initiatives. In 2010,
national expenditures on SA are estimated at Rp 29,709
billion (US$ 3.3 billion), equivalent to 2.6 percent of
total national expenditures and 0.5 percent of gross
domestic product (GDP). Indonesia's strong fiscal
position leaves Indonesia well placed to further increase SA
expenditures. Declining debt payments and subsidy reductions
have opened up fiscal space over the past decade and
supported a general increase in social sector and SA
spending. With debt-to-GDP of just 25 percent in 2010,
Indonesia could further increase expenditure on both items
without raising debt levels. Nonetheless, current
expenditures on SA are dwarfed by spending on regressive
energy subsidies which in some years consume over 20 percent
of total national expenditures. The increase in spending
after 2005 primarily reflects greater central government
investment in programs to protect poor households from fuel
and food shocks as well as large health and education
expenses. The central government is the dominant player in
the SA sector, accounting for almost 90 percent of total
expenditures. In years when the government has increased
regulated fuel prices (2005-06 and 2008-09), the largest
compensatory SA response has been an unconditional cash
transfer program (BLT) to vulnerable households to help
cushion them from the inflationary shock. |
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