Author: Citra Handayani Nasruddin, Jakarta
Inflation cuts across social and economic groups. But it leaves deeper wounds on those from disadvantaged backgrounds, potentially exacerbating the inequalities arising from the COVID-19 pandemic. As the Indonesian government attempts to cushion the impacts of rising fuel and food prices, incorporating a gendered lens in expanding social protection programs is necessary for long-term, sustainable poverty alleviation.
In September 2022, Indonesia’s inflation rate stood at 5.95 per cent, having more than doubled since the end of 2021 amid energy price shocks and surging food prices. In response to this upheaval, the Indonesian government has used its state budget as a shock absorber by strengthening social protection programs in an effort to ease the impact of soaring inflation.
Subsidy and compensation budgets for 2022 have been increased to Rp 504.4 trillion (US$32.4 trillion). Social protection and assistance programs such as the Family Hope Program, Staple Food (Sembako) Program, Pre-Employment Card (Kartu Prakerja) Program and Cash Assistance Program for Fishermen, valued at around Rp 153.36 trillion (US$8.7 trillion), have been complemented by Rp 24.17 trillion (US$1.6 trillion) in additional aid. This additional support is being delivered in the form of supplementary direct cash assistance, wage subsidies and support for local government schemes.
Cash transfers and assistance are the cornerstones of Indonesia’s social protection policy. Such instruments are used globally to tackle poverty and economic crises. Findings from the Overseas Development Institute, UNICEF and the World Bank all indicate that monetary aid can provide greater access to essential services such as education and healthcare, improve food security and shield families from shocks.
In 2020, the SMERU Research Institute published a study on two of Indonesia’s unconditional cash transfer programs — Bantuan Langsung Tunai or Direct Cash Transfer and Bantuan Langsung Sementara Masyarakat or Temporary Direct Cash Transfer. The studies did not find any undesired or adverse effects on the beneficiaries of this aid after the aid disbursement.
While Indonesia has expanded its cash assistance programs for economically vulnerable groups, more attention could be paid to socially disadvantaged communities including women. When designing and implementing social protection programs, gendered risks and vulnerabilities should be considered.
The impacts of rising costs are unevenly distributed among social groups, with women shouldering a heavier inflation burden. This is because women have lower average earnings, fewer economic opportunities and less wealth. Indonesia’s 2021 National Labour Force Survey showed that Indonesian women make just 78 per cent of men’s earnings. Women’s participation in the workforce has also been substantially worsened by the COVID-19 pandemic.
The pandemic-induced recession and high female unemployment led to the coining of the term ‘she-cession’ to describe the disproportionate impacts of the recession on women. The phenomenon of ‘she-flation’ — the disproportionate impact of inflation on women — continues to put a greater economic burden on women despite the pandemic recovery.
Due to social norms and traditional gender roles, women bear a disproportionate share of unpaid work and spend more time and energy on grocery shopping and running errands. According to the OECD, not only do women spend more time taking care of family members, but they also contribute more of their earnings to household goods. A study also found that in difficult economic circumstances, women tend to sacrifice their personal essentials for their families’ economic wellbeing.
Protection programs aimed at women are limited. One example of such a program is the Family Hope Program, a government assistance program where 90 per cent of recipients are women. This program transfers cash to 10 million households, mostly through mothers or other adult women in the family.
Although the program aims to empower women by promoting their household decision-making, similar schemes in other developing countries — including Brazil, Chile and Mexico — demonstrate that assigning women as cash recipients can increase their household responsibilities. Conditionalities imposed by the program, such as compulsory school attendance for children and obligatory routine medical exams, are generally tied to women’s social roles. This relegates women to child rearing activities and domestic work, and adds to women’s triple burdens of managing households, taking care of family members and generating income.
But focussing on women as beneficiaries of cash transfer programs can still be a way to incorporate gendered perspectives into the design of social protection programs. As shown by studies by from the EPPI-Centre and UNICEF, transfers handed out to women can stimulate low-income households’ saving and investment, especially in rural areas.
Acknowledging gendered risks and vulnerabilities in households must be part of designing and implementing such programs. This could involve embedding a simple design and disbursement mechanism, such as an unconditional transfer, that is less burdensome for women. Complementary gender-sensitive policies are also pivotal to ensure that gender barriers are addressed.
Cash transfer programs can provide support to economically deprived women and families. This would also help to reduce poverty in the long run. But it is important that such programs are designed carefully to prevent unintended burdens from being placed on women.
Citra Handayani Nasruddin is a Policy Analyst in the Fiscal Policy Agency at the Ministry of Finance, Republic of Indonesia.