Not all Indonesians have benefitted from the robust economic expansion during President Susilo Bambang Yudhoyono'€™s decade-long leadership, as the rich and capital owners gained the most, while the poor saw incomes
rising only marginally, leading to widening inequality in the economy.

Indonesia'€™s economic growth averaged 5.9 percent from 2005 to 2013. However, the Gini coefficient ratio, a measurement of equality in the economy, rose from 0.35 to 0.41 in the corresponding period. A higher ratio means the wealth distribution in an economy is concentrated among fewer citizens.

'€œThe income growth of the rich has grown faster than that of the poor,'€ Deputy Finance Minister Bambang Brodjonegoro acknowledged. '€œI believe the new administration will have to prioritize policies to reduce inequality.'€

The lack of inclusiveness in Indonesia'€™s economic growth means that efforts to reduce poverty have been more difficult in recent years.

In his 2009 presidential campaign, Yudhoyono promised to trim down poverty levels to 8 percent from 14 percent at that time. As of March this year, there were still 28.6 million Indonesians living below the poverty line, or 11.3 percent of the total population.

Ikhsan Modjo, an economic advisor to Yudhoyono'€™s Democratic Party, noted that the growing inequality in the economy occurred because policymaking in Indonesia had been '€œvery elitist'€. Top government officials apparently failed to notice the problems facing low-income citizens, with poverty-reduction programs being irrelevant to poor people'€™s actual needs, he said.

During his visit to Indonesia this month, Nobel laureate in economics Joseph E. Stiglitz specifically highlighted the widening inequality occurring in the economy during Yudhoyono'€™s leadership.

A country with more equal distribution of wealth tends to have more sustainable economic growth in the long run, suggested Stiglitz, author of best-selling book The Price of Inequality.

'€œThe government needs to play a critical role, which is an idea called '€˜the development state'€™,'€ said the US-born economist. '€œIt is markedly different from the neoliberal model, whose policies by [and] large have been a failure.'€

Rising inequality in Indonesia is in stark contrast to what the country'€™s neighbors have experienced, according to the World Bank. It pointed to Thailand, Vietnam and the Philippines as examples of countries that have enjoyed periods of strong growth with stable or declining income inequality.

Worryingly, Yudhoyono may also leave behind the legacy of an economy that is becoming less efficient, as economic expansion creates less jobs today than in the past.

At the moment, every 1 percent of economic growth recorded in Indonesia could generate around 165,000 jobs, estimates from the Institute for Development and Finance (Indef) show.

That is a significant decline compared to two years ago, when the economy could generate 400,000 jobs for the same level of economic expansion, Indef noted, quoting the 2012 State Budget.

Capital-intensive industries prospered ahead of labor-intensive business during the term of Yudhoyono, a leader who has been seen as friendly in relation to foreign investments. Data from the Investment Coordinating Board
(BKPM) shows that investment realization in the first quarter of this year only generated 260,000 jobs, lower than 430,000 jobs a year earlier.

Between 2001 and 2011, there were at least 20 million new jobs created in Indonesia, 18 million of which were in urban areas, according to the World Bank.

However, most of the new jobs were in low-productivity and informal sectors where real earnings growth is sluggish.

- JP/Satria Sambijantoro