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Why we have to continuously update the poverty line
According to the World Bank’s "Poverty & Equity Brief East Asia & Pacific" released in October 2023, under the global standard, 60.5 percent of Indonesia's population, around 166.6 million people, were living below the poverty line in 2022.
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Tight quarters: People watch a commuter train pass their makeshift houses built along a railway in Tanah Abang, Central Jakarta, on Oct. 20, 2023. The government has allocated Rp 493 trillion (US$31 billion) for social safety net spending next year. (Antara/Sulthony Hasanuddin)
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radicating poverty has always been a national priority under every administration. The government of Prabowo Subianto-Gibran Rakabuming Raka has even set a target of establishing unified poverty data within its first 100 days in office.
This effort aims to ensure that policies can be accurately targeted, speeding up the reduction of Indonesia’s poverty rate. However, when discussing poverty data, one crucial issue remains a point of ongoing debate.
Currently, the poverty line used to determine whether someone is considered poor continues to face widespread criticism and is often seen as inadequate. According to the World Bank (2024), Indonesia’s poverty line is now close to the average poverty threshold of low-income countries, while Indonesia itself has already attained upper-middle-income status.
Statistics Indonesia (BPS) is the official agency responsible for issuing poverty statistics in the country. In calculating poverty, BPS has traditionally used the basic needs approach, a method that aligns with the Handbook on Poverty and Inequality published by the World Bank. This method is also used by other developing countries.
Calculating poverty requires setting a poverty line, which reflects the minimum monthly expenditure in rupiah that an individual needs to meet basic living needs, including both food and non-food essentials.
The poverty line consists of two components: The food poverty line (the minimum expenditure needed for food, equivalent to 2,100 kilocalories per capita per day) and the non-food poverty line (the minimum expenditure needed for essential non-food items). Individuals whose average per capita monthly expenditure falls below this poverty line are then categorized as poor.
Since 1984, BPS has been calculating poverty rates, first published in the report "The Number and Percentage of Poor Population in Indonesia 1976-1981". Essentially, the method used has remained the same up to now.
