2023
Language:
English

Adaptive social protection in Indonesia: Stress-testing the effect of a natural disaster on poverty and vulnerability

Indonesia is among the countries with the highest exposureto natural disasters, and risks are expected to increase due toclimate change. Natural disasters and other shocks require well-developed social protection systems that can cushion the economic consequences for those most vulnerable tothese events. International stakeholders advocate for ‘Adaptive Social Protection’ which links social policy with strategies  on  disaster  risk  reduction  and  climate  changeadaptation. This article uses the tax-benefit micro simulation model INDOMOD to analyse the adaptiveness of the Indonesian social protection system by simulating an income shock caused by a natural disaster and testing reforms to the existing social protection system. We find that the existing system generally performs well in lifting people out of pov-erty in normal times but does not sufficiently help them to prepare for and cope with shocks. This is especially the case for large households, households with more than two children, people in their 20s and 80s and individuals with a disability. The tested hypothetical reforms reduce the impact of the shock and better target those identified as needing more support but require a substantial increase in social spending.