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In 2010, when President Susilo Bambang Yudhoyono saw that despite rapid GDP growth, over 30 million Indonesian’s still remained in poverty, he instigated a series of institutional and strategic reforms to improve wellbeing in Indonesia. Indonesia’s National Medium-Term Development Plan (NMTD) 2010-2014 outlined that the ultimate aim of development must be an improvement in the quality of life for all Indonesian citizens. One of the priority policy goals was to reduce the poverty rate to 8% by the end of the 5-year period.

In order to achieve this poverty target, the President issued a decree for greater institutional alignment and coordination. To accelerate poverty reduction, he called for

1) well-designed, systematic, and comprehensive steps and approaches;

2) coordination amongst all stakeholders (government, private sector, and communities) in policy formulation and implementation;

3) improved targeting, policy harmonization, monitoring and evaluation; and

4) strengthened institutions at the national, regional, and local levels.

In order to achieve these aims, the Government established a National Team for Acceleration of Poverty Reduction (Tim Nasional Percepatan Penanggulangan Kemiskinan, or TNP2K) with the mandate to harmonise all poverty reduction programs and activities across ministries and institutions and to guide and support their implementation.

The TNP2K reported directly to the President and consisted of ministers, community representatives, businesses, and other civil society stakeholders. Given the country’s drive towards decentralisation and greater local autonomy, the government also created coordinating teams for poverty reduction (TKPK) at the provincial, district, and city levels who would manage and support coordination of poverty reduction efforts in their areas.

In order to harmonise and coordinate poverty reduction efforts across ministries and agencies, the TNP2K identified 4 major intervention areas in the economy that were critical for poverty reduction and grouped all programs into the following clusters:

I: Social assistance programs for households and families. Improve the wellbeing of poor families by increasing their access to basic services such as health, education, clean water, and sanitation.

II: Poverty reduction through community empowerment. Increase living standards in communities, build capacities, and develop opportunities for the poor.

III: Poverty reduction through empowerment of micro-enterprises. Provide financing and support to informal and micro-enterprises that are a vital source of employment and income in poor communities.

IV: Poverty reduction through government provision of basic services and/or through price interventions. This was a new area identified for policy action and included six major policy intervention areas in the economy for wellbeing: inexpensive housing; affordable public transportation; clean water; availability of electricity; improving welfare of fishermen; and improving welfare of urban poor communities.

The National Medium Term Development Plan (RPJMN, 2010‐2014) is its second phase of implementation through Indonesia’s National Long Term Development Plan (RPJPN 2005‐2025)

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