The government escalated the attack on absolute poverty last week by launching a refurbished direct cash aid program called Hopeful Family Program (PKH) across almost 350 sub-districts in seven provinces.
The program has been designed as a frontal attack on absolute poverty to reduce maternal and child mortality rates and to increase the rate of progression from primary to junior secondary schooling.
Therefore the Rp 1 million-2.2 million direct cash aid available annually for every family under PKH will be given only to destitute households with a monthly income of less than Rp 152,000 (US$16.88) and which have expectant mothers or have children aged up to 15 years.
The PKH itself is an improved version of the unconditional cash transfer program launched in late 2005 immediately after the doubling of domestic fuel prices to cushion poor families from the devastating impact of the strong inflationary pressures.
Experiences in most other countries have proven that adequate access to social services – notably health, sanitation and education – targeting public spending directly to those in need, as well as high, broad-based growth are the best pathways out of poverty.
PKH embodies the first two pathways. With a total budget allocation of Rp 1 trillion for this year, PKH will cover around 500,000 families in need. These families have been identified and verified by the Central Statistics Agency to ensure cash transfers through postal offices in the 350 sub-districts will reach targeted households.
By examining the conditions attached to PKH targets and by looking at the design of the program, which was made by the National Development Planning Board, we are confident this effort will be more effective in attacking poverty pockets in the seven selected provinces in Jakarta, Java, Nusa Tenggara, Sumatra and Sulawesi.
The ministries of social, education and health affairs in charge of executing the PKH have learned valuable lessons from the two-year implementation of the unconditional cash transfer program.
We rest convinced by Social Services Minister Bachtiar Chamsyah's assurance at the launch of the PKH program in Gorontalo province in Sulawesi last Wednesday. He said the system of cash aid disbursement, based on the data compiled through a complex survey by the Central Statistics Agency, had been fully computerized.
The Central Statistics Agency has significantly improved its national data on the characteristics and locations of families in need across the country. National surveys by the agency last September identified almost 40 million people living below the poverty line and almost 100 million on the verge of absolute poverty with daily expenditures of between $1 and $2 (Rp 4,600-Rp 9,200) based on purchasing power parity).
The studies also concluded 69 percent of these families live in rural areas, 64 percent work in agriculture, 75 percent work in the informal sector and 55 percent have less than primary education. Even more burdensome is that 48 percent of families living in need have more than five dependents.
We expect the KPH, which will be expanded to 22 provinces next year, will produce impressive results in terms of reduced poverty, a higher rate of school enrollment and attendance, increased use of preventive health services and improved nutritional conditions.
This conditional cash-aid (PKH) is supplementary to the national Community Empowerment Program (CEP). The CEOP was launched earlier this year in the same seven provinces selected for the KPH.
CEP gives block grants to selected communities directly involved in planning and conceiving their poverty-alleviation programs according to their needs.
While CEP aims to increase opportunities available to families in need, reducing their vulnerability to unfavorable external events and empowering them to address their own specific problems, PKH is targeted at families in desperate conditions. PKH aims to empower these families to make use of the opportunities created by CEP and economic growth in general.