The Jakarta Post
Economic inequality in Indonesia has slightly narrowed as the contribution of income earners in the middle-income segment increased amid the government's effort to boost labor-intensive infrastructure projects, the Central Statistics Agency’s (BPS) latest report indicates.
Indonesia's Gini ratio -- a measure of inequality where zero represents complete equality and one represents complete inequality -- fell to 0.39 in March 2016 from 0.40 during the same period in the previous year, meaning an “improvement in wealth equality" as BPS head Suryamin said in Jakarta on Friday.
He mentioned six factors that reduce inequality, including wage improvement in agriculture and construction sectors, spending improvement of the bottom 40 percent of the population of income earners, the government's social assistance program and improvement in civil servants’ salary.
The agency uses the World Bank's spending distribution formula to measure disparity, with particular attention to the low-income segment. The bottom 40 percent of the population contributed 17.02 percent in March 2016 spending, a slight decrease from 17.1 during the same period in the previous year.
The top 20 percent of the population contributed 46.89 percent of spending, down from 48.25 in March 2015, while the middle 40 percent of the population provided 36.09 percent in spending distribution, rising from 34.65 percent in March 2015.
“The improvement in [the middle-income segment] spending also indicates that the 12 economic policy packages have taken effect,” Suryamin said. (ags)
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