8 - Improving Indonesia’s Targeting System to Address the COVID-19 Impact

Summary

Abstract

In an increasingly complex environment of COVID-19, improving Indonesia's targeting system is needed more than ever. Both the poor and the bottom middle class need support during the current crisis. However, improving Indonesia's targeting system is technically and politically challenging. Support is needed from different stakeholders, and we need to ensure the system will improve the accuracy of targeting. Targeting accuracy could be improved by better collecting poor household data and better selecting the beneficiaries from those data. Better collection of data relies on ensuring the right households are surveyed. Accurately identifying the poor and the bottom half of the population from among those surveyed will lead to better selection of beneficiary households. Improving the selection method without improving the data collection will not improve the exclusion error. Improving data collection without improving the selection method will not address the changing environment. There are several choices in improving data collection and selection methods, each with different advantages. Because there is no best method for all situations, a mixed-method approach is recommended.

Introduction

COVID-19 is a double malady that creates not only health shocks but also economic shocks. In Indonesia, with businesses closed and largescale mobility restrictions imposed after the COVID-19 outbreak, the World Bank estimated 24 per cent of households’ breadwinners had stopped working by early May 2020 (Purnamasari and Ali 2020). Among household breadwinners who continued working, 64 per cent experienced reduced income and 32 per cent experienced food shortages. There was a significant improvement from May to August 2020, with only 10 per cent of breadwinners not working. Those experiencing food shortages also decreased, from 32 per cent to 24 per cent. Wealthier and female-headed households experienced faster improvement than others. However, 13 per cent of households are experiencing worsening food shortages, mostly in the poorest 40 per cent of the population and outside Java.

It is not only the poor who need help. Households in the bottom middle class are also experiencing hardship. Indonesia's major household social assistance programs are critical in providing a safety net for affected households. Via Presidential Regulation No. 72/2020, the Indonesian government has allocated Rp 203.9 trillion for various programs (Table 8.1).