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Poverty rate drops in Indonesia but inequality does not
The domestic poverty rate has dropped to 9.54 percent of the population, or 26.16 million people, Statistics Indonesia (BPS) has reported, but income inequality remains high.
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Hanging on: The poverty rate in Indonesia dropped to 9.54 percent of the population, or 26.16 million people, in March 2022, Statistics Indonesia data show. That is still higher than before the COVID-19 pandemic, and inequality in the country remains stubbornly high. (JP/Dhoni Setiawan)
T
he easing of pandemic-related travel and activity restrictions since late last year has helped bring down the poverty rate in Indonesia, but that has done nothing to improve income inequality in Southeast Asia’s biggest economy.
Statistics Indonesia (BPS) reported on July 15 that the domestic poverty rate had dropped to 9.54 percent of the population, or 26.16 million people, in March.
While that marks a decrease of 0.17 percentage points from the last survey, which was conducted in September 2021, it hardly makes Indonesia a more equal society, as BPS reported on the same day that the Gini ratio had increased by 0.003 to 0.384.
The Gini ratio, also called the Gini coefficient, is an indicator of inequality, where zero represents complete equality and 1 represents total inequality.
“Poverty is indeed decreasing, and it is currently happening all over the islands [of Indonesia]. But the Gini ratio points in a different direction,” BPS head Margo Yuwono said at the biannual poverty rate press conference in Jakarta.
In September 2020, roughly half a year after COVID-19 hit the country, domestic poverty skyrocketed to 10.19 percent, setting back the archipelagic nation to a level last seen in 2017.
The government upped spending on subsidies and social security through the National Economic Recovery (PEN) program to soften the economic blow of the pandemic and the related activity restrictions and – more recently – the pain of rising inflation.
