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View all search resultsGovt plans to raise poverty line despite risky optics
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A woman walks on a railroad track running by a low-income housing area in Kampung Bandan, Central Jakarta, on Oct. 14, 2022. (Antara/Aditya Pradana Putra)
T
he government plans to push up the poverty line in a move that would bring Indonesia’s measure closer to that of the World Bank, even though that could be politically risky, as it would categorize more people as poor.
National Economic Council (DEN) head Luhut Pandjaitan told reporters on Thursday that a revision had been on the cards for some time as “changes had to be made.” He suggested the revision might take place this year “if the President agrees.”
DEN member Arief Anshory Yusuf, whom Luhut described as an expert in the field, said on Monday that the redefinition was being worked on by his office alongside Statistics Indonesia (BPS), the National Development Planning Agency (Bappenas) and the Statistics Society Forum.
Indonesia currently measures poverty based on monthly expenditure, defining as poor individuals who spend less than Rp 595,243 (US$37). The DEN proposes lifting that to at least Rp 765,000, which Arief said was not too far off from the World Bank’s standard.
The World Bank made some changes to its poverty measurement earlier this month, the most important being the use of 2021 purchasing power parity (PPP) as opposed to the one from 2017 used previously.
The WB raised the international poverty line to $3 per individual per day from previously 2.15 dollars, meaning a person consuming less than $3 worth of goods and services a day is considered extremely poor.
The WB’s specific poverty line for lower-middle-income countries was lifted to 4.20 dollars from 3.65 dollars and that for upper-middle-income countries, such as Indonesia, was upgraded to 8.30 dollars from previously 6.85.
