Poverty in Indonesia declined to 9.82 percent in March 2018 or the lowest level recorded since 1999 according to the Central Statistics Agency (BPS). Previously, in September 2017, Indonesia's poverty rate was 10.12 percent.
Finance Minister Sri Mulyani Indrawati responded to the that findings then compared the country’s current poverty level to the time Indonesia’s poverty rate was at 11 percent under President Soeharto during the New Order.
“It closed in to 10 percent and it was into the fifth Repelita (a five-year development program introduced by the New Order regime). But then the [1998] economic crisis hit and caused the poverty level to skyrocket to 24 percent,” said Sri Mulyani as quoted by Tempo.co (Jul 17).
BPS Chief Suhariyanto said the latest poverty statistics are the best in Indonesian history because for the first time ever the nation's relative poverty rate touched a single-digit figure. However, he added that there is no time for complacency because there remain 25.95 million people who live below the national poverty line. This is a large number.
Meanwhile, the percentage of people living in poverty in the eastern part of Indonesia in March 2018 was still higher than that of the western part. "It (the poverty rate) mostly fell, but it remains a big homework in the eastern part of Indonesia because the percentage of its poor people is far higher than that of the western part," he said as quoted by Antaranews.com.
By percentage, poor people make up 21.20 percent of the population of Maluku and Papua provinces compared to 14.02 percent in Bali and Nusa Tenggara provinces and 10.64 percent in Sulawesi provinces. However, by number, most of the poor people live in Java, reaching 13.34 million, compared to 5.97 million living in Sumatra and 2.06 million in Sulawesi.
Suhariyanto expressed hope that a number of infrastructure projects carried out in the eastern port of Indonesia will help reduce the number of people living in poverty there. "Therefore, the development activities in the eastern part of Indonesia will hopefully have a positive impact on the reduction of poverty rate there," he asserted.
Furthermore, there were two factors that blocked a faster rate of poverty reduction in March 2018 according to Suhariyanto. Firstly, the rising prices of rice. Rice is the key staple crop for Indonesians, hence a significant portion of poor peoples' disposable income goes to the purchase of rice. In times of rising rice prices, this group will feel growing financial pressures.
Therefore, it is important for the government to guard its rice social assistance program (called Rastra). Earlier there had been reports about the sluggish distribution of rice under this Rastra program.
Second, very modest growth in Farmers' Terms of Trade (FTT). The FTT is the ratio of prices received by local farmers to the price paid by farmers. This ratio simply reflects the purchasing power of farmers. According to the latest data, FTT rose by a very modest 0.37 percent month-on-month (m/m) to 101.99 in May 2018.
Nearly 25.95 million, or 9.82 percent, of the Indonesian population lived in poverty as of March 2018 compared to 27.77 million or 10.64 percent a year earlier. The 9.82 percent decline in the poverty rate is the first single-digit poverty rate that the country has achieved since 1999.
Overall, Indonesia`s poverty rate has declined since 2012, except in March 2016, September 2013, and March 2015, due to an increase in the prices of basic necessities as a result of the government`s policy to raise fuel prices.
Sources: Antaranews.com, Tempo.co, indonesia-investments.com