UN WFP Indonesia: The Third Edition of COVID-19 Economic and Food Security Implications for Indonesia

• Social Protection Programmes - Fiscal Stimulus for Economic Recovery

In response to the pandemic, the Government of Indonesia (GoI) is supporting the most vulnerable groups through social protection programmes. As of August 2020, the Government allocated IDR 695 trillion (USD 47 billion) in stimulus spending to support the economy and fund the pandemic response.

• Government Food Assistance Schemes

The GoI has also rolled out a few food assistance schemes, which include the expansion of its regular non-cash food assistance scheme to cover an additional 5 million households to reach a total of 20 million households under the SEMBAKO Programme, and an ad-hoc food distribution to vulnerable households. However, supply chain challenges, coupled with food safety concerns, made durable food items with long shelf-lives the preferred choice for food packages—yet these are not always the most nutritious.

SOCIOECONOMIC IMPLICATIONS

• In the second quarter of 2020, the Indonesian GDP contracted by 5.32% year-on-year (Y-o-Y), the most significant decline since 1999.
• Meanwhile, in March 2020, the poverty rate increased to 9.78% from 9.22% in September 2019—this corresponds to an additional 1.63 million people falling into poverty between the two periods, primarily in urban areas.
• According to data validated by the Ministry of Manpower (MoM), between April and May 2020, at least 1.8 million formal and informal workers were directly impacted by the COVID-19 pandemic.
• The Ministry of Development Planning (BAPPENAS) estimates that the poverty rate may reach around 10.6% in 2020 with an estimated additional 4 million people falling below the poverty line, while the unemployment rate is expected to reach between 8.1% to 9.2% in August 2020, the highest in a decade.

FOOD SECURITY IMPLICATIONS

• National supplies for rice, the country’s main staple, are deemed sufficient to last beyond the end of the year with an expected end-year stock of 6 million tons; imports of selected other food commodities might be needed.
• Prices for major food items including rice have largely remained stable throughout the pandemic, with the exception of several items such as sugar and garlic which experienced price spikes earlier in the year due to delays in imports. Harvesting delays, supply chain challenges, and supply-demand mismatch have also led to fluctuations in shallot and poultry prices. The prices for these items have begun to stabilize as of August 2020.
• However, rising unemployment among formal and informal workers have been indicated to lead to reduced purchasing power, which may threaten economic access to food. A World Bank mobile survey in May 2020 reported that 38% of respondent households consumed less than previously due to lack of financial resources. Reduced income may push households to sacrifice the quality and quantity of food consumption, thus exacerbating pre-existing malnutrition.
• Closures of a number of traditional markets throughout the country may also limit physical access to food, particularly among low income households, although several surveys and reports have indicated a general increase in the use of online platforms to purchase food in the overall population.

UN WFP INDONESIA RECOMMENDATIONS:

• Targeted Social Protection Safety Nets

Rising unemployment continues to exert pressure on the quality and quantity of household food consumption. Targeted social protection safety nets remain critical to address the needs of those unemployed and reduce the risk of food insecurity among vulnerable groups. This includes those who fell into poverty as a result of COVID-19 but have not yet been captured in the national social registry for inclusion in social protection schemes.

• Social Safety Nets Should Maintain Quantity and Quality of Nutritious Diet

In the context of high malnutrition rates in Indonesia, attention should be given to designing social safety net programmes in a way that maintains quantity as well as quality of diet to prevent further deterioration in nutritional status. Food transfers with staples should include micronutrient-rich crops, while cash transfers or vouchers schemes should consider stimulation of household demand for fruits and vegetables, dairy, and other nutrient-rich foods.

• Long Term Economic Strategies for Future Crises

Attention should be given to developing long-term strategies for monitoring the pandemic and other possible crises in the future, as well as easing the economic impact through greater public support and relevant policies.

In addition to the bulletin, with support from the Joint SDGs Fund Programme and the COVID-19 MTPF, WFP Indonesia is currently collaborating with the Government of Indonesia to strengthen and create linkages between existing early warning systems, develop vulnerability criteria, as well as SOPs, thresholds and triggers to disburse social assistance, to better inform government response and the identification of vulnerable communities in the event of disasters and emergencies, in the context of Adaptive Social Protection.

WFP Indonesia is also currently working with the Government of Indonesia to explore the feasibility of remote data collection for food security and nutrition information, as well as strengthening the country’s Food Security and Nutrition Surveillance System (SKPG).

For more detail kindly refer to the COVID-19 Economic and Food Security Implications for Indonesia (3rd Edition)

Other publications by WFP Indonesia, including previous editions of the COVID-19 Economic and Food Security bulletins could be found here and https://www.wfp.org/countries/indonesia.

For inquiries please contact the WFP Indonesia Country Office - saidamon.bodamaev [at] wfp.org or alika.tuwo [at] wfp.org