PART II: POLICY MEANINGS: SCENE-SETTING AND STORY LINES IN
Chapter 8: The ‘pro-reform’ story line (iii): escalating costs
8.1 Findings from the field
8.1.1 Views from national government. A theme that emerged in the course of several interviews with senior national government officials, NGO leaders and academics was that, by the early 2000s, national government officials began to be concerned about a rapid increase in the amount of financial subsidisation being provided by the national government to panti asuhan at a time of overall budgetary stringency sparked by the Asian financial crisis. A senior Ministry of Social Affairs official who was directly involved in policymaking on panti asuhan after the Asian financial crisis through to the mid-2000s (GA-13) stated bluntly how economic pressures weighed heavily on the minds of national government officials. Of particular relevance to the argument made elsewhere in this study, he signalled that panti asuhan would continue to be used as the principal mechanism for the delivery of support services to families under the new policy and that the new policy did not originate in revelations about panti asuhan after the 2004 tsunami, thus:
The general economic situation was a major factor. Starting in 2002, the costs to the government of supporting orphanages were increasing a lot due to the financial crisis. The number of neglected children also increased significantly at that time…
We had a limited State budget. In Indonesia, 5.4 million children are neglected.
There was not enough budget to build new institutions so we asked why do we not empower families to look after their children?
We have to have a welfare society to empower families and communities, but not a welfare state like in the West. We used to promote subsidies to institutions but now we are providing assistance on a community basis, mainly through family support provided by orphanages. (emphasis added).
[When asked about the role played by the national government’s fuel subsidy reduction compensation scheme in supporting panti asuhan] Yes, you are right!
[the interviewee leaned forward to emphasise the point]. They were very expensive. Many children’s homes relied on the fuel subsidy [reduction compensation scheme] for things like buildings and repairs…
If we moved to a community basis [for the care of children], we can care for more children and do not need to have money for buildings and maintenance. It was not Save the Children that made us change our policy [the interviewee stressed this point]…
We [in national government] were shocked to learn that there were 5.4 million neglected children in Indonesia at that time [the early 2000s], and that this number was increasing. Up to the 1990s, Indonesia got a lot of revenue from oil but this declined in the early 2000s and then there was the financial crisis.
Because of the decline, government had to use fuel subsidies to support orphanages, but this caused the number of orphanages to grow.
(Interviewee GA-13)
Another senior Ministry of Social Affairs official, GB-13, was emphatic that, by the mid-2000s, the cost of subsidising panti asuhan had become a matter of serious concern within national government:
The problem was that, between 1979 and 1997, the number of panti asuhan did not grow much. However, after the financial crisis of 1997 until the 2004 tsunami, the number of pantis grew a lot because of fuel subsidies…
The fuel subsidy [reduction compensation scheme] continued into the 2000s and was important because the people could see that the government supported children. Then the government conducted the PKH program [Program Keluarga Harapan or ‘Hope for families’ scheme] which gave conditional cash transfers to poor people. This was a return to the child welfare law of 1979 which mentioned that children need family support.
(Interviewee GB-13)
Similar concerns about cost were put by another senior Ministry of Social Affairs official (GK-13):
If government did not change its policy the number of children in institutions would increase and that would have meant higher costs for government. If government did not provide more family-based care, there would be a higher social cost in the future…
The cost of providing education and health care through orphanages is actually higher than providing it through the family so government will have to pay more to maintain institutions…
Pantis are the last resort for children. Having the child in the family makes the family more economically active compared with a family that has a child in a panti. Parents think that institutions will look after their children and so they do not have to work hard…
Keeping a child in a panti is a high cost for government. For government, a panti costs US$1,000 per child per year. If there are five million neglected children in Indonesia, we cannot afford to have them coming into pantis at this cost.
But, if we use more family-based care, the cost will be lower and the number of children the government can reach for better health and education will be
greater. That means the government will no longer have to fund infrastructure in pantis as it did in the past.
(Interviewee GK-13)
A senior Ministry of National Development Planning official, GI-13, also spoke about the rising cost to government of subsidising panti asuhan:
For pantis simply to rely on the government budget is not sustainable. As early as 2001, the Ministry of Social Affairs proposed increases in government funding for pantis, but there were other pressures on the central budget, such as for infrastructure and food security…
One of the reasons behind greater government support to families raising children was that government was wary of increasing its funding to run pantis.
For pantis simply to rely on the government budget was not sustainable.
(Interviewee GI-13)
8.1.2 A non-government perspective. From outside national government, the head of a national child welfare NGO (NC-13) observed that costs of supporting panti asuhan had increasingly concerned the national government after the Asian financial crisis:
There have been orphanages since Dutch colonial times, but the problem for government since the financial crisis was a lack of funds and a lack of monitoring how government funds were distributed to panti asuhan…
Orphanages just said [to the Ministry of Social Affairs] how many children they cared for, but we really didn’t know if the money went to the children or was used for other purposes. Because of this, the government moved to establish a family-based approach and moved away from using panti asuhan [the
interviewee stressed this point].
(Interviewee NC-13)