Vulnerable Groups Still at Risk due to COVID-19 and Looming Economic Uncertainty - Household Survey

Jakarta, 16 December 2022 – Indonesia’s most vulnerable communities, including households with children and persons with disabilities, remain at risk of slipping further into poverty following the COVID-19 pandemic and looming economic uncertainty, according to a report released yesterday by the United Nations Children's Fund (UNICEF), United Nations Development Program (UNDP), the Australia-Indonesia Partnership for Economic Development (PROSPERA) and SMERU Research.

The report notes although the poverty rate fell to 9.54 percent in March 2022 from 10.14 percent in March 2021, there is still an urgent need to address the welfare of vulnerable groups who suffered the most from the impact of COVID-19 for Indonesia to achieve inclusive recovery.

The survey report also highlights the importance of COVID-19 vaccine access for households with children and vulnerable groups. High vaccination rates and compliance with the national policy on mobility restrictions (PPKM) are seen as essential elements in driving economic recovery.

The report is informed by the second phase of a survey covering 10,922 households throughout Indonesia that was conducted in February-March 2022, at a time when the pandemic showed signs of abating. The survey followed an initial interview of the same respondents from 2021. It intended to compare the economic impact on households in Indonesia from 2020-2022 and determine if vulnerable groups had recovered from the pandemic or not.

"In 2021, the government disbursed financial aid amounting to IDR 153,4 trillion (around USD 10.3 billion) as one of the steps of the National Economic Recovery Program (PEN) to overcome the impacts of the weakening economy and social welfare, including at the household level. Evidently, the domestic economy in the third quarter of this year experienced a boost, in which household consumption is estimated to be one of the primary contributors. We must maintain purchasing power of the household sector in 2023, due to the uncertain pandemic situation and the world crisis," said Made Arya Wijaya, Assistant to the Minister of Finance for Government Expenditure., speaking at the report launch.

James Gilbert, acting Counsellor, Infrastructure and Economic Governance at the Australian Embassy, highlighted the vulnerability of Indonesian households. "Apart from the healthcare sector, the Australian government as a partner of the Indonesian government supports all household economic and social recovery efforts, especially for families headed by women and consisting of children, people with disabilities and the elderly. Lost income and insufficient access to healthcare still persist as a result of the prolonged pandemic and global economic slowdown," he said.

According to the survey, as many as 6 out of 10 household-based Micro, Small and Medium Enterprises (MSME) have started to transition back into business activities. Mental health issues are slowly being resolved, as the survey indicates that complaints related to depression and anxiety have decreased by 1.4 times compared to the previous phase. However, women are still experiencing a setback in terms of growth in labour force participation as a result of the dual burden of domestic affairs and care giving responsibilities. As a result, many women instead turn to low-skilled jobs in the informal sector.

In the education sector, as many as 75 percent of children from the households surveyed experienced learning disruptions due to uneven access to internet networks and devices throughout the country. Two-thirds of the children surveyed continue to study from home, while one-third have returned to face-to-face learning.

“COVID-19 created unprecedented challenges for children and their caregivers across Indonesia,” said Maniza Zaman, UNICEF Indonesia’s Representative. “This report underscores how critical it is to enhance the social protection system, address the learning crisis and ensure children with disabilities are not left behind as the country recovers from COVID-19 and copes with the impacts of global crises. Tackling these issues will be key for Indonesia to achieve its long-term vision of becoming one of the world’s 10 largest economies by 2030, achieving high-income status and reducing all types of poverty to nearly zero.”

The report also revealed that 82 percent of the surveyed households’ incomes have remained unchanged since 2020 with some even experiencing declines, especially in families headed by women and those with children.

“The survey validates our concerns about the most vulnerable households in Indonesia, which remain in a precarious condition and require support, particularly in the face of rising food prices. We are hopeful that the findings and recommendations from this survey will help decision-makers consider the most appropriate way forward. This is necessary not only to recover from the pandemic, but also to leap ahead on other development indicators, while ensuring that no one is left behind,” said Sujala Pant, UNDP Indonesia Deputy Resident Representative.

Athia Yumna, Deputy Director of Research and Outreach at the SMERU Research Institute, revealed that recent government social protection programmes were effective in supporting households to overcome food shortages, decreased income and constraints in the teaching and learning processes.

“Nevertheless, social protection programmes need to be expanded and enhanced to reach more of the population. This call to action is in line with the survey findings from the field which discovered that one in four households experienced delays in receiving aid, did not get allocated aid in the appropriate amount, experienced difficulty when attempting to get the cash assistance disbursement or other technical issues such as occurrences of mismatches in the names of the aid beneficiaries,” Athia concluded.

David Nellor, Director of Prospera closed the discussion by highlighting the importance of using data as a basis for policymaking and providing assistance to communities. In addition, collaboration with various stakeholders needs to be encouraged in order to create new perspectives for inclusive development.

"Besides the COVID-19 pandemic, we are currently facing a larger global crisis. The government must plan efforts to form policies that need to be socially inclusive with a comprehensive approach, such as climate change mitigation and renewable energy transition," he concluded.

The collaboration between the Indonesian government and its partners in compiling this report is hoped to provide insights into the situation of households over the past two years that have been living side-by-side with the impacts of COVID-19, as well as become a basis for future policymaking.