TEMPO.CO, Jakarta - The World Bank reported that poverty reduction in Indonesia has slowed down.Over the past two years, poverty reduction has declined by 0.7 percent, a percentage which considered to be the smallest ever recorded within the last decade. Inequality has also increased in recent years, potentially disrupting social coercion and jeopardizing the gains from solid economic growth, which has helped reduce poverty rate to 11.3 percent in 2014, compared to 24 percent in 1999.
Around 68 million Indonesians remain vulnerable to falling below the poverty line, with incomes almost similar to families suffering from poverty. Economic shocks such as illness, natural disasters or severance can easily drive vulnerable households back into poverty. These challenges were the focus of a World Bank conference held at the Haji Usmar Ismail Film Center in Jakarta on September 23, 2014.
"Reducing poverty and inequality will be the most important challenge for Indonesia's new government. With effective implementation of good public policies by the central and local governments, as well as partnership with the private sector and civil society, the World Bank is confident that Indonesia will make substantial progress in achieving these objectives," said Rodrigo A. Chaves, World Bank Country Director for Indonesia. He added that eliminating poverty and sharing prosperity was the World Bank's goal.
In addition, Indonesia's Gini coefficient value, which is used to measure inequality, has increased from 0.30 in 2000, to approximately 0.41 in 2013. Meanwhile, economic development in the eastern part of Indonesia was lagging behind other parts of the country, notably Java. As a result, despite its progress in reducing poverty, Indonesia has one of the fastest rising rates of inequality in the East Asia region.
"The main strategy to alleviate poverty and reduce inequality is to assist the poor to help themselves by creating more jobs and better jobs. At the same time, we need to make sure that children across the country have equal access to quality services to give them a fair start in life," said Vivi Alatas, World Bank Lead Economist for Poverty.
Investing in public services and social security programs will help to provide better access to better nutrition, health care, and quality education for poor families. Indonesia spends only 0.7 percent of its total GDP on social assistance programs, compared to 1.5 percent in Brazil and other low middle-income countries. (*)