W

hoever wins the presidential election in April will be expected to continue the country’s progress in poverty eradication, despite the poverty rate dropping to single digits in 2018 for the first time in Indonesia’s history.

The administration of President Joko “Jokowi” Widodo, who is seeking reelection, has vowed to continue offering assistance to the country’s poor through social assistance programs and physical infrastructure development.

Finance Minister Sri Mulyani Indrawati said the government must continue offering social assistance to the poor so they can move into the middle class.

“Without government intervention, the poor will not be able to rise into the middle class,” Sri Mulyani said during a discussion on Tuesday. “That is why we have to give them equal opportunities through programs like the PKH [Family Hope Program] and the BPNT [non-cash food assistance program].”

Most Indonesians lifted out of poverty, she said, were now part of what the World Bank has called the “aspiring middle class”, an in-between economic bracket that still requires government attention.

In 2017, the bank categorized 45 percent of Indonesia’s population as aspiring middle class, a gray area in which people remain economically vulnerable.

“Indonesia’s biggest engine of growth is its middle class [...] but some of them, who have been helped by government programs, are still prone to [falling back into] poverty,” Sri Mulyani said.

The government would also focus on bridging the wealth disparity between urban centers and rural or remote areas by continuing its infrastructure development program, said National Development Planning Agency (Bappenas) head Bambang Brodjonegoro.

Stakeholders have pointed to Jokowi’s ambitious, import-heavy infrastructure projects as a major cause of the record-breaking US$8.57 billion trade deficit seen in 2018.

However, Bambang insisted that physical infrastructure projects were vital to reducing inequality as they improved economic connectivity.

“Infrastructure is necessary as it boosts [economic] access and facilitate basic services like health and education,” he said on a separate occasion. “Social assistance that could bridge the gap could also reach people [in remote and rural areas] through infrastructure.”

He highlighted the government’s push for railway development, particularly in southern Sumatra and southern Sulawesi, as a way of accelerating business and economic development achieved through public-private partnership schemes.

In December, local business players involved in the Indonesian Employers Association said the railway networks should not be overlooked as businesses across the archipelago would need all available modes of transportation to help reduce high logistics costs.

Statistics Indonesia (BPS) announced earlier this month that the poverty rate had decreased to 9.66 percent in September 2018, with the number of poor people standing at 25.67 million.

The figure was a further decrease from 9.82 percent in March 2018, meaning that 280,000 people had been lifted out of poverty, inching closer to the government’s target of between 8.5 and 9.5 percent for 2019.

Within a decade, the percentage of poor citizens has decreased by 5.76 percent from 15.42 percent in 2008, BPS data shows. The rate hovered between 10 and 11 percent from 2012 to 2017 before dropping to single digits.

BPS head Suhariyanto said the progress was thanks to the overall increase in farmers’ wages, and a stable inflation rate of 0.94 percent between March and September, which was partly owed to the strict application of price ceilings on staple commodities.

With such efforts, the poverty rate was expected to drop to just 9 percent by the end of 2019, said Bambang, and possibly down to just 5 percent by 2024.

However, United Nations Development Program (UNDP) country director for Indonesia Cristophe Bahuet said the government should come up with newer, more revolutionary efforts to combat poverty, including through indirect efforts such as innovative financing.

“[...] to further reduce the remaining pockets of poverty, new approaches are required as well as significant effort,” Bahuet told The Jakarta Post on the sidelines of a UNDP event in Jakarta. “These projects have to be ambitious in reducing poverty and inequalities, leaving no one behind.”