The total budget for the Ministry of Social Affairs is proposed to be raised 44 percent year-on-year (y/y) from IDR 41.3 trillion in the 2018 State Budget to IDR 59.43 trillion (approx. USD $4.1 billion) in the 2019 State Budget. It is assumed that a significant portion of these additional funds are to be used for social assistance programs as well as for the integration of the "cheap rice assistance program" (in Indonesian: Beras Sejahtera, or Rastra) and the non-cash food assistance program called BPNT.

Under the BPNT program eligible households receive eggs and rice worth IDR 110,000 (approx. USD $8) per month. Meanwhile, the Rastra program provides up to 10 kilograms of rice per month to eligible households.

Another social assistance program that is planned to be expanded in 2019 is the Family Hope Program (in Indonesian: Program Keluarga Harapan, or PKH), a cash transfer program for the nation's poorest households. Each household currently receives IDR 1.89 million (approx. USD $130) per year under the program. The distribution of the money occurs in four phases (IDR 500,000 in February, May and August, each, and IDR 390,000 in November) to the household's bank account. Members of the Association of State-Owned Banks (Himbara), which include Bank Rakyat Indonesia (BRI), Bank Mandiri, Bank Negara Indonesia (BNI), and Bank Tabungan Negara (BTN), play an important role in the distribution of the funds in the Family Hope Program.

For 2019, the Indonesian government proposes to pump more funds into the Family Hope Program. The budget is proposed to be raised from IDR 17 trillion (approx. USD $1.2 billion), currently, to IDR 31 trillion (approx. USD $2.1 billion) in 2019. Eligible households will then be able to collect between IDR 2 million and IDR 3.4 million per year.

But not only will the amount of money per eligible household rise, also the number of eligible households are planned to be widened, from 10 million currently to 15 million.

Bambang Brodjonegoro, Head of the National Development Planning Agency (Bappenas), denied that there is a link between the planned rising social assistance funds and the upcoming elections in 2019. He attributes the rising budget of the Ministry of Social Affairs to the fact that funds from other ministries will be transferred to the Social Affairs Ministry. Moreover, the social assistance funds are in line with the government's target to push the country's poverty rate down to 9 percent.

Government Budget for Social Assistance Programs:

2014 2015
2016 2017 2018
Funds
(in IDR trillion)
  92   85   59   60   81

Source: Bisnis Indonesia

-

Poll Indonesia Investments:

Who would you vote for in Indonesia's 2019 presidential election?

Voting possible:  -

Your vote

----------------------------------------------------------------------------

• Indonesia Investments' Research Report (edition July 2018) will be out on Monday 6 August 2018

----------------------------------------------------------------------------

Discuss