BCA's chief economist, David Sumual, highlighted the relative nature of Indonesia's poverty metric, emphasizing its sensitivity to economic fluctuations. While the World Bank's standard places Indonesia's poverty rate higher at around 16% in 2022, the government's figure of 9.57% reflects a national perspective based on its own criteria.
Despite ongoing efforts and substantial social assistance expenditure amounting to over Rp 2.7 quadrillion from 2015 to 2022, Esther Sri Astuti of Indef critiques the modest 2.03 percentage point decline in poverty during President Joko "Jokowi" Widodo's tenure. She argues that social aid alone is insufficient to address structural issues contributing to persistent poverty.
In parallel, inequality, as measured by the Gini coefficient, has also reached a record low of 0.379 points, indicating a narrowing wealth gap. The government's target range of 0.374-0.377 for 2024 underscores efforts to promote economic inclusivity. However, disparities persist between urban and rural areas, highlighting regional and demographic discrepancies that require targeted fiscal strategies for redistribution.
David emphasizes the importance of enhancing economic growth through exports and labor-intensive investments to sustain poverty reduction efforts. He advocates for a strategy focused on skills development and job creation to empower individuals economically, moving beyond reliance on social assistance alone. Esther echoes this sentiment, emphasizing the role of education and vocational training in breaking the cycle of poverty.
Both experts caution against over-reliance on social aid, advocating instead for sustainable economic policies that foster long-term prosperity. Esther stresses that investing in human capital is pivotal, drawing comparisons to developed nations where skills enhancement has led to higher-paying jobs and economic advancement.
While Indonesia celebrates historic lows in poverty and improved inequality metrics, the journey towards sustained economic equity requires comprehensive strategies that address structural challenges through education, skills development, and targeted economic policies. Achieving these goals will not only uplift vulnerable populations but also pave the way for inclusive growth and prosperity across the nation.
