Indonesia Faced with Income Gap, INDEF Says



Petir Garda Bhwana

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  • TEMPO.CO, JakartaInstitute for Development of Economics and Finance (Indef) senior economist Aviliani said that Indonesia is facing an income gap causing a concentration of capitals leading into certain groups. This problem is feared to increase the economy by oligarchs. 

    “This sense of oligarchy must be overcome,” said Aviliani at the Indonesia Stock Exchange on Monday, October 7.

    Aviliani said the government has managed to detect this problem through the policy to specifically strengthen its human resources. However, she reminds that the aforementioned policy is not enough if not followed by ideal income certainty that prevents social jealousy. 

    “The expenses in the middle to a lower level is seeing a decline, however, the upper level is increasing. This is dangerous as it could cause a significant social gap,” said Aviliani. 

    Not only its human resources, she argues that SMEs need to be backed through policy-making where SMEs are one as a value chain.

    Meanwhile, the Chairman of the National Economy and Industry Committee (KEIN), Arif Budimanta acknowledges that Indonesia is facing two types of social gaps that comprise gaps between intersocial groups and interregional.

    Arif argues that the two gaps can be overcome if the government produces accommodating policies that accommodate SMEs.