Indonesia Must Not Deny World Bank's Advise to Update Poverty Line: Observer
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15 May 2023 11:55 WIB
TEMPO.CO, Jakarta - A public policy observer from Jakarta Trisaksi University, Trubus Rahadiansyah, assessed that the government is reluctant to update its poverty line as recommended by the World Bank due to its image. He opined that the government will be embarrassed if the poverty rate turns out to be higher.
“Besides, the government must cover more social assistance,” Trubus told Tempo via a phone call on Sunday afternoon, May 14, 2023.
According to him, the government should not deny the reality. The World Bank standard is not misguided as it is the international standard created through studies.
“The government shouldn't neglect it. Don't deny it. It actually makes Indonesia's image worse, that we are poor but don't want to admit it,” said Trubus. “Indonesian standards have expired. The situation post-pandemic has also changed.”
Satu Kahkonen, Country Director of World Bank Indonesia, stated that during the last 20 years, Indonesia has made remarkable progress in the economic life of the people. The country’s extreme poverty reached 1.5 percent by 2022.
However, to achieve its ambitious target of being a high-income country, Kahkonen argued that Indonesia must broaden its policies to maintain poverty reduction progress and achieve higher incomes and economic resilience for the people.
In line with this ambition, Kahkonen opined that it is now the right time to broaden its definition of poverty by using the international poverty line of US$3.2 per day instead of the currently used US$1.9 per day.
“When we apply a broader definition of poverty, one in six Indonesians or around 40 million is poor,” Kahkonen said at the Indonesia Poverty Assessment report launch at The Energy Building, SCBD, Jakarta, on Tuesday, May 9, 2023.
Besides, nearly 120 million Indonesians are economically insecure. This means they could fall into poverty when exposed to shocks, such as the COVID-19 pandemic. “We are here to discuss what can be done to support these 160 million people to achieve economic security,” Kahkonen remarked.
In response, Coordinating Minister for the Economy Airlangga Hartarto stated that Indonesia does not have to follow World Bank’s poverty line. “As stated by the Finance Minister, we still adhere to [the poverty line] of US$ 2 per day. We can calculate it based on PPI (Poverty Probability Index),” he said in GBK Senayan on Sunday, May 14. “So, it can be different from World Bank standards.”
RIRI RAHAYU | ANTARA
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