By: Rahmat Arjuna
In the context of Indonesia’s socio-economic dynamics following the pandemic and global inflation, social assistance (bansos) has become a vital instrument in maintaining social stability and promoting the welfare of vulnerable communities. According to the World Bank in its Indonesia Poverty Assessment, social assistance is more effective and efficient in reducing poverty than energy subsidies—mainly because it directly targets the most in-need groups and is progressive in reducing economic inequality. Social assistance has also become a crucial instrument in Indonesia’s socio-economic policy, with the government actively translating social support into more productive and sustainable measures.
Dean of the Faculty of Economics and Business at the University of Indonesia (FEB UI), Teguh Dartanto, stated that social assistance is a right of the people and an obligation of the state to ensure social protection for vulnerable groups. He emphasized that the purpose of social assistance is not merely to boost household consumption, but to guide beneficiaries toward independence through productive support such as the Indonesia Smart Card (KIP) and Indonesia Health Card (KIS), as well as a gradual, needs-based poverty alleviation system (adaptive social protection).
A similar view was expressed by Abdul Fikri Faqih, Member of Commission VIII of the Indonesian House of Representatives (DPR RI), who appreciated the reforms in social assistance. He also highlighted the transformation of assistance from a cash-based scheme to one based on local potential and the unified DTKS (Integrated Social Welfare Data) as a step forward. Social assistance is now designed not only to meet basic needs but also to build community capacity through programs such as Sekolah Rakyat (People’s School) and the Free Nutritious Meals (MBG) initiative.
In practice, social assistance has been effective in reducing poverty and inequality in society. Muhammad Hanri, a member of LPEM University of Indonesia, showed that during the pandemic, social assistance successfully reduced poverty and inequality. When poverty levels almost reached double digits during COVID‑19, they fell back to single digits after effective distribution of social assistance. Moreover, research by the SMERU Institute indicated that without social assistance during fuel price hikes, poverty could have increased from 9.54% to 12.77%. However, with fuel-related cash assistance (BLT BBM), the rate only rose to around 10.3%–11.1%, and in reality, the Central Statistics Agency (BPS) reported an increase of merely 0.03 percentage points.
The transformation of social assistance distribution has shifted toward an empowerment-based, data-driven approach. The government has now changed the paradigm from consumptive subsidies to economic empowerment programs based on local potential. Minister of Social Affairs, Saifullah Yusuf, stated that social assistance is only temporary, while empowerment provides long-term preparation for recipients to become self-sufficient. Nationally, the government aims to allocate up to IDR 100 trillion for productive programs by 2025, focusing on aid that includes training, access to capital, and microenterprise development for low-income communities.
If sustained, these policies will help prevent a surge in poverty levels, as social assistance has proven effective during times of economic pressure, such as the pandemic or high inflation, keeping poverty rates stable. Furthermore, social assistance helps strengthen local economies, with the direct impact felt by MSMEs and local markets—thus accelerating economic circulation within communities. Social assistance that focuses on empowerment rather than dependency enables beneficiaries to participate in productive programs and eventually achieve self-reliance.
Economist and CORE (Center of Reform on Economics) researcher, Piter Abdullah, praised the shift in the social assistance paradigm toward protection and empowerment. He stressed the importance of mentoring for recipients, cross-institutional integration, and data quality to ensure that social assistance genuinely builds community capacity. He also emphasized that professional and transparent policies can be achieved through data-driven approaches, digitalization, and accountability—thus strengthening the legitimacy of assistance programs.
Overall, the Indonesian government’s social assistance strategy reflects a progressive shift. It is no longer merely a subsidy but has evolved into a tool for community empowerment. This approach has been implemented through digital technology in aid distribution, including recipient data integration via systems such as the DTSEN (National Unified Socioeconomic Data) and the Perlinsos Platform, aimed at ensuring that assistance is targeted and transparent. Furthermore, current social assistance programs are designed to include productive support based on local potential. This initiative equips communities with the skills and foundational capital necessary for economic self-sufficiency.
With accurate data supported by regular updates and rigorous verification, aid distribution becomes more efficient and equitable. This transformation ensures that social assistance serves as transformative social capital—acting as a starting point for improving citizens’ welfare, not merely a measure of consumption. In an integrated manner, this policy signals that social assistance has evolved from a mere safety net to a foundation for local economic resilience, guiding communities from dependency toward productive independence.
*) The author is an Economic Analyst
