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Minding the poverty gap in Indonesia with geography

Indonesia is facing a widening gap between the rich and the poor

Namira Samir (The Jakarta Post)
Jakarta
Mon, March 25, 2019

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Minding the poverty gap in Indonesia with geography

I

span>Indonesia is facing a widening gap between the rich and the poor. The Gini ratio in 2018 stood at 0.39 and welfare improvements for the richest group have been far more effective than improvements for the poorest group.

Rising inequality between regions will only make it more difficult for the government to eliminate poverty in all its forms.

Of Indonesia’s 34 provinces, 14 experienced negative progress in reducing its standing in the poverty gap index (P1) in rural areas in the period of March to September 2018. Meanwhile, only six provinces saw a P1 increase in urban areas in the same period, according to Statistics Indonesia (BPS).

Both inequality and poverty are aggravated not only by the wealth gap between the rich and the poor, spending levels and other economic factors, but also geographical conditions. It is striking how much attention is given to reducing the poverty level and the Gini ratio, but less attention is given to geography. Denial does not eliminate responsibility, nor does it negate obligations.

The risk of relative poverty in rural areas is almost double that of the risk in urban areas (13.1 and 6.89 percent respectively), BPS data in September 2018 revealed. This indicates that there are two different types of geographic areas where poverty issues differ.

Take for instance Jakarta and Gorontalo in Sulawesi.

Jakarta prides itself on being a megapolitan province with rising urbanization. Meanwhile, more than two-thirds of Gorontalo’s population still live in rural areas. Therefore, it is not a surprise that its rural poverty (23.86 percent) is higher than its urban poverty (4.45 percent).

Income inequality of Gorontalo province (0.417), as measured by the Gini Coefficient, is higher than the national average (0.39), which is the same as Jakarta’s level (0.39). The very high level of income inequality in Gorontalo province demands that its local government make a greater effort to alleviate poverty and narrow the gap between the rich and the poor.

The government, therefore, must differentiate between alleviating poverty in rural and urban areas, especially when tackling the three dimensions of poverty (education, health and living standards, which are all intertwined). For instance, rural areas are more prone to high levels of teacher absenteeism, low levels of educational attainment and health issues such as stunting; low education levels have been found to exacerbate these issues, as researchers have found. Consequently, this will negatively affect how much rural communities can improve their livelihoods, leading to a vicious cycle of poverty.

Unlike Gorontalo, Jakarta is dealing with more complexities in urban poverty. Rising urbanization has led to the steady increase of slum areas, which eventually contributes to a shortage of basic services that directly affects the livelihood of its population.

Rural areas in Gorontalo might be situated further from urban centers, with poor infrastructure that leads to difficulties in accessing resources that can upgrade its livelihood.

Conversely, rural areas in Jakarta might encounter fewer challenges in terms of transportation accessibility and support. These differences certainly affect their progress in alleviating poverty and, by neglecting these factors, there is no progress.

The comparisons reveal two different pictures of poverty in provinces with stark differences in regional characteristics and potential. Hence, policymakers sitting in local governments must not rely solely on centrally initiated programs. The “basic needs approach”, a strategy that is widely implemented at both the national and regional levels, is one that might lead us to nowhere.

Another mistake that one might make is referring to the headcount ratio as the sole indicator of measuring Indonesia’s progress in eliminating poverty. As shown by the poverty gap index, poverty might be reduced, but that does not guarantee the betterment of the livelihood of the poorest population.

When it comes to finding out the root causes of poverty, it is the local government and its society that knows best. By assessing the situation in the targeted area of intervention before determining what solutions can be tailored to address the root causes of deprivation in that area, our country’s progress in eliminating poverty in all its forms would be much accelerated and more efficient. Having knowledge on something, as they say, is a prerequisite to caring about it.

Thus, it is imperative for us to change the poverty alleviation agenda. It is not merely about reducing the number, but solving the root causes. We must therefore begin to incorporate geography into the poverty equation.

What happens in less developed regions such as Gorontalo might contradict what arises in more developed regions such as Jakarta. The underlying nature of life in a particular area and its socioeconomic and environmental issues must be referred to when designing programs and taking steps to intervene.

Consider the “Why did the chicken cross the road?” joke that appeared in a print edition of a New York City magazine called The Knickerbocker in 1847. Despite many arguments for the inessentiality of finding out why the chicken did cross the road, there is a lot to be learned from it.

The chicken could have chosen to walk until the end of the road where there is a U-turn, but it decided to directly cross the road instead. How does this relate to poverty alleviation?

The chicken in this story has geographical awareness. It knows it will reach its final destination much faster if it crosses the road instead of walking along a sidewalk that will lead it nowhere fast. Although this decision does bear a high risk, it is a more efficient and mindful solution to the problem at hand.

The government must be ready to take the leap. Instead of reducing poverty as a mere objective, it must set a bigger goal and solve the root causes of poverty, which will eventually improve the livelihoods of those who live below the poverty line by putting geographical awareness at the heart of the poverty alleviation strategy.

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The writer is a development economist with main interests in poverty alleviation, regional inequality and Islamic social finance.

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