SEATTLE, Washington — The Asian Financial Crisis of 1997-98 shook nearly every economy in the Eastern hemisphere. Indonesia became one of the hardest-hit countries by the financial crisis. Following the financial crisis, Indonesia has made an incredible recovery, taking full advantage of strong economic tendencies to implement Program Keluarga Harapan (PKH) or the Family Hopes Program. The poverty reduction program has not only been extremely helpful in providing important resources to families in need. There are many people who believe that economic stimulus leads directly to environmental degradation. The implementation of The Family Hopes Program in Indonesia has demonstrated that a poverty reduction program can actually help to reduce forest degradation.
While the overall footprint of Indonesia may be rather small, accounting for just 1.3% of the global landmass. Conservation International included Indonesia on a list of the “17 ‘megadiverse’ countries.” In fact, Indonisia has two of the 25 global biodiversity “hotspots” and 10% of the globe’s flowering plant species. Indonesia is also home to 728 species that are currently facing extinction. Unfortunately, due to the rapid expansion of palm oil development and production across the country, much of the vitally important life-supporting forests, rainforests and wetlands are in danger of being converted into palm oil production fields.
The Family Hopes Program in Indonesia
The Family Hopes Program utilizes Conditional Cash Transfers (CCTs) in order to help families and households in need. On average a household in need received roughly 15-20% of the income of the household, ranging from IDR 600,000 (US$60) up to IDR 2,200,000 (US$220). A Conditional Cash Transfer requires that any household that is receiving financial support meet certain health and educational requirements at home. Government officials make regular visits to homes receiving financial support in order to ensure that the investments don’t fall by the wayside.
Unexpectedly, a short number of years after the PKH was introduced, the country of Indonesia there was a decrease of 30% decrease in the total percentage of cover trees lost due to deforestation. Furthermore, there was a decrease in the number of local forests and ecological systems suffering from severe degradation and recession.
A recent study examining the effect that PKH has on local communities showed that, in the long term, communities exposed to the PKH have higher enrollment rates. In fact, it cut the number of children not in school in half. These communities also have a higher percentage of households that go to see a trained medical professional when needed. This has reduced maternal mortality and stunting rates in Indonesia.
Indonesia has shown the world that one of the most common misconceptions about the fight to end global poverty, the idea that economic stimulation often leads to environmental degradation, isn’t always true. Since the inception of the PKH, not only has Indonesia seen a decrease in the overall number of impoverished households but the country has also seen a 30% decrease in the total number of cover trees lost every year to deforestation.
Conditional Cash Transfers have made a huge impact in Indonesia, helping countless families who live on the edge of the poverty line and who could fall below it with any change of circumstances. The Family Hopes Program in Indonesia encourages the families receiving assistance to keep up with regular doctor visits and to continue to enroll their children in school. It also provides these families the resources necessary to avoid resorting to harvesting local natural resources.
– Craig Bahnsen