Adaptive policy, sustainable economic activity is the key to ending poverty

JAKARTA (ANTARA) – According to Statistics Indonesia (BPS), 26.36 million Indonesian citizens, 9.57 percent of the country’s total population, are classified as poor as of September 2022.

Compared to the number recorded in March 2022, the number of poor people in Indonesia increased by 0.20 million in September.

BPS head Marco Uono said the rise in the number of poor is tracking the increase in fuel oil prices, which will increase the poverty line by 5.95 percent in September 2022 from Rp505,468 (about US$33.69) to Rp535,547 (about US$35.70) in March. That year.

Apart from the increase in fuel prices, several job shutdowns during the March-September 2022 period also contributed to the increase in poverty.

„From March to September 2022, labor-intensive sectors such as textiles, footwear and technology industries will experience a strike,” he said some time ago.

In 2022, in fact, Indonesia’s economy faced many challenges, the national economy has not yet fully recovered from the impact of the pandemic, and inflation increased due to rising global commodity prices, especially energy and food prices. to the Russia-Ukraine war.

Nevertheless, the number of poor was lower in September 2022 compared to September 2020, the first year of the pandemic.

As of September 2020, the number of poor was 27.55 million or 10.19 percent of the total population.

Febrio Kacaribu, head of the Ministry of Finance’s Fiscal Policy Agency (BKF), said the government’s decision to increase energy subsidies and compensation was a key factor in preventing an increase in the poverty rate in September 2022.

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In 2022, energy subsidies and compensations reached Rp551.2 trillion (about US$36.73 billion), while the figure predicted in the State Budget (APBN) is only Rp192.7 trillion (about US$12.84 billion).

The realization also exceeded the budget for energy subsidies and compensations, which the government increased to Rp502.3 trillion (about US$33.47 billion) through Presidential Regulation No. 98 of 2022.

Continued poverty alleviation

In 2022, the government issued Presidential Instruction No. 4 of 2022 on Accelerating Extreme Poverty Alleviation, which set a target of ending extreme poverty in Indonesia by 2024.

According to President Joko Widodo, the acceleration of serious poverty reduction should be properly targeted through policies that include reducing the cost burden of society, increasing society’s income and reducing pockets of poverty.

With 5.5 million people living in extreme poverty, Social Affairs Minister Thiri Rizmaharini has expressed hope that the extreme poverty rate can be reduced to zero by 2024 from the current 1.74 percent.

The government is currently updating data on poor people through coordination between the Coordinating Ministry for Human Development and Culture and the Coordinating Ministry for Economic Affairs.

It is hoped that the 'name by address’ data of poor people, coordinated between ministries and agencies, will support the government’s ambitious poverty reduction goal by making efforts to end poverty more precisely.

The government has developed three policy programs aimed directly at the poor: first, the provision of basic commodities; Second, development of social security system through National Health and Social Security Agency (BPJS Kesehatan) and Micro, Small and Medium Enterprise (MSME) empowerment; and thirdly, Small Business Credit (KUR).

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Poverty alleviation

The government aims to end extreme poverty and reduce the poverty rate from 7.5 to 6.5 percent by 2024.

Yusuf Rendy Manilet, an economist at Indonesia’s Center for Economic Reform (CORE), said the number of poor people is likely to decrease in 2024. However, the government needs to make more efforts to achieve the target. Name of address of poor people in the country’ data.

A poverty alleviation program should be implemented in each region by adjusting the poverty rate, which means that the program carried out in each region does not have to be the same.

„The role of regional governments will become significant, especially in the context of assisting in the collection of updated data, which will help the central government in mapping the distribution of social assistance this year and especially in 2024,” Manilet said.

Although it has decreased compared to 2020, the poverty rate recorded in September 2022 did not reach the rate before the COVID-19 pandemic, which was 9.22 percent or 24.78 million.

This is because the economy has not yet recovered to pre-pandemic levels, as reflected by the unemployment rate.

In August 2022, the open unemployment rate in Indonesia was 5.86 percent, or higher than the open unemployment rate of 5.28 percent recorded in August 2019 before the Covid-19 pandemic.

To this end, he said, by 2024, the government should maintain the rate of national economic activities and growth so that poor people can find employment and improve their lives.

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Poverty alleviation policies should be coordinated between various ministries and government agencies to achieve the extreme poverty target.

„We know that in 2024, the government will allocate social assistance funds (in 2024) which will be relatively higher than in 2023. So, this will become a subsidiary factor in reducing the number of poor,” he added.

Implementation of government policies is expected to help reduce the poverty rate in the country.

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Translated by: Sanya Dinda, Raga Adji
Author: Sri Haryati
Copyright © ANTARA 2023

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