Poverty eradication programs in Indonesia: Progress, challenges and reforms

Abstract This study explores the progress of and the challenges to poverty eradication programs in Indonesia by analyzing various social assistance programs and subsidies. Earlier poverty eradication programs such as food-based assistance and energy subsidies were only designed to increase households’ purchasing power. Later, the government also developed more advanced programs, such as conditional cash transfer, school assistance, and health insurance contribution assistance, to address long-run poverty by improving human capital quality. Common challenges of the existing programs remain, including inaccurate target the poor and lack of complementarity between programs. An exercise using a dynamic Computable General Equilibrium model shows that integrating programs into the conditional cash transfer reduces poverty further in rural and urban areas.