by youthscholars

A new research report by BIEN’s UBI Youth Scholars’ researchers examines the strengths and limitations of Indonesia’s flagship social protection program, Program Keluarga Harapan (PKH), and assesses whether Universal Basic Income (UBI) could offer a more inclusive alternative. 

PKH, Indonesia’s long-running conditional cash transfer (CCT) program, has helped millions of low-income households improve access to education and healthcare. By requiring school attendance and regular health checkups, PKH is designed to break the intergenerational cycle of poverty. However, this report reveals persistent problems in its implementation, such as complicated targeting mechanisms, exclusion of eligible households, and the reinforcement of traditional gender roles. Despite targeting women as beneficiaries, studies show that many do not gain real decision-making power within the household. 

UBI, by contrast, offers a radically different approach. Instead of targeting the poor, UBI provides a fixed income to all citizens, regardless of their socioeconomic status. The team’s analysis highlights UBI’s potential to reduce poverty more efficiently, minimize bureaucratic hurdles, and empower recipients, especially those in the informal economy or who fall outside Indonesia’s welfare registries. UBI also shows promise in addressing gender inequity by granting women direct, unconditional access to resources. 

Yet, the report is clear-eyed about the challenges. A full-scale UBI in Indonesia would be expensive. It is estimated to cost 4–5% of GDP annually. It would also face political opposition from those concerned about the potential reduction of existing social programs. “UBI may seem utopian, but it has real potential when implemented carefully and incrementally,” said one of the lead researchers. 

Instead of choosing between PKH and UBI, the report proposes a hybrid pathway. This includes softening PKH’s strict conditionalities, integrating unconditional transfers for high-risk groups, and piloting localized UBI trials in areas with high poverty and poor welfare coverage. These pilots could provide much-needed evidence on UBI’s effects on education, employment, and community well-being. 

The researchers also recommend strengthening Indonesia’s welfare infrastructure, especially its social registry (DTKS), which is often outdated and incomplete. With better data, the government could design more adaptive and inclusive welfare schemes. They also urge a reallocation of inefficient fuel and electricity subsidies toward more direct forms of support. 

Ultimately, the report concludes that a universal, dignified income floor is both a moral and strategic imperative for Indonesia’s future. With rising urbanization, informal work, and demographic pressure, the current model may no longer be enough. 

As debates about poverty, inequality, and automation intensify, this report adds timely insight into how Indonesia can evolve its social protection system by attempting to reflect on what could work better.