TEMPO.CO, Jakarta - Rodrigo A. Chaves, World Bank chief for Indonesia, said poverty and wealth discrepancy is the biggest challenge the new government. Chavez said the rate of poverty reduction in Indonesia continues to decelerate, with the period of 2012-2013 noting the smallest decline rate in the last decade.
"The decline rate was only 0.7 percent," Chavez said in a written statement yesterday.
Chavez said wealth discrepancy, which has increased in recent years, also has the potential to create social conflicts. This will axe the benefits of Indonesia's high economic growth in recent years.
"Economic growth has reduced poverty levels. In 2014, poverty rate fell to 11.3 percent from 24 percent in 1999," he said.
Chavez said that about 68 million Indonesians are prone to becoming poor, since their income is only slightly higher than that of poor families. "Economic shocks such as illnesses, disasters, or job loss can easily put them under the poverty line," he said.
The rise in discrepancy, he said, makes it harder for the poor to crawl out of poverty. The Gini coefficient (a measure of distribution inequality) has increased from 0.30 in 2000 to 0.41 in 2013.
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