Economists Fear Poverty Rate will Jump
18 November 2013 16:30 WIB
TEMPO.CO, Jakarta - A number of economists are worried that poverty rate in Indonesia will increase, along with the 2014 projection that the economy will remain weakened; growing in the range of 5.6 to 5.8 percent. These economists ask the government to take anticipative measures.
Hendri Saparini, executive director for the Centre of Reform on Economics, said the government should take a new approach in solving poverty issues. In 2011, the number of people living below the poverty reached 30.02 million people, accounting for 12.5 percent of the population.
In a data released in July this year, the Central Statistics Agency (BPS) stated that the poverty decline rate in Indonesia was running slow. As of March 2013, the number of people living below the poverty line in Indonesia reaches more than 28 million, edging down from 29.13 million in the same period of 2012.
An economist from Standard Chartered Bank, Fauzi Icksan, said the government cannot keep focusing on pushing up the economic growth without increasing the growth quality. He said that creating policies to boost growth without improving the quality of the growth itself would have minimum effect on the poverty rate.
"The quality of growth can be seen from the GDP per capita. If the growth is high but the people's income remains low, then poverty rate and economic gap will remain wide," he said.
Meanwhile, National Development Planning Deputy Minister Lukita Dinarsyah Tuwo remains optimistic that by 2014 the poverty rate next year will drop to 9.0 million to 10.5 million people.
"There would be an election next year. If the process is well-maintained, the impact will be good for the economic growth and poverty rate," Lukita said last weekend.
Earlier, Deputy Finance Minister Bambang Brodjonegoro said that the economic slowdown was in accordance to the government's effort to reduce unemployment and poverty rates. Monetary policies, balanced with fiscal policies, are expected to push down poverty rate. As of today, 11 percent of Indonesia's 240 million population is living below the poverty line, with an open unemployment rate of 6 percent.
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