Indonesia’s Extreme Poverty Down To 0.8%

Friday, 25 Oct 2024

By deriz@insightinnews.com

Extreme poverty rate in Indonesia has experienced a remarkable decline over the last ten years, dropping from 7.9% of the total population in 2014 to a mere 0.8% in 2024.

Extreme poverty is utilized as a measure to evaluate individuals' inability to fulfill fundamental needs, such as food, clean water, adequate sanitation, healthcare, housing, education, and access to information regarding income and social services, as outlined by the Ministry of Coordinating Human Development and Culture.

Data from the Central Statistics Agency indicates that the extreme poverty rate steadily decreased from 7.9% in 2014 to 3.7% in 2019.

In 2020, due to the challenges posed by the COVID-19 pandemic, the rate saw a temporary increase to 4.2%. Nevertheless, it reverted to 3.7% in 2021 and continued its downward trend, achieving 0.8% of the population by 2024. As of March 2024, the extreme poverty rate in Indonesia stands at 0.83%, a decrease from 1.12% in March 2023.

To facilitate this reduction in extreme poverty, the government adopted three main strategies: alleviating the financial strain on citizens through enhanced access to social protection, diminishing the number of poverty-stricken areas, and boosting income through the economic empowerment of those living in extreme poverty.

Furthermore, three policy innovations were introduced, including improving targeting precision via the Extreme Poverty Eradication Acceleration Targeting Data (P3KE) to accurately identify program beneficiaries, ensuring convergence by coordinating cross-sectoral and multi-layered government initiatives to reach impoverished regions and extreme poor populations, and enhancing the quality of the programs.

In particular, to expedite poverty alleviation and the implementation of the PPKE, the government has earmarked a social protection budget of IDR 493.5 trillion for 2024, alongside the budget ceiling for economic empowerment initiatives in the same year.

The government, through the National Team for the Acceleration of Poverty Reduction (TNP2K), believes that the policies implemented by the central government alone will not be sufficient to eradicate extreme poverty in Indonesia.

Therefore, it is essential to have a commitment and financial support from local governments at the provincial, district, and village levels, which should be more optimal. This can be achieved through the affirmative allocation of regional and village budgets to effectively implement strategies aimed at reducing expenditure burdens, increasing income, and alleviating poverty pockets at the village level.

In detail, the government has issued a Guide to Extreme Poverty Alleviation through the Ministry of National Development Planning/National Development Planning Agency (PPN/Bappenas). This guide outlines the specifics of the extreme poverty eradication program starting this year.

From the perspective of policies aimed at reducing the expenditure burden on the community, strategies are being implemented through social assistance and social security programs, including regular social assistance such as the Family Hope Program and the Food Card; special social assistance like the Direct Cash Assistance from Village Funds (BLT DD), Cash Social Assistance, Presidential Social Assistance, and top-ups for regular social assistance; provision of contributions for the National Health Insurance; and social assistance and rehabilitation for vulnerable groups such as the elderly, children, and persons with disabilities.

Regarding policies aimed at increasing community income, strategies are being pursued through productivity enhancement and community empowerment, including: improving access to employment through labor-intensive programs, individual/group assistance, and the provision of infrastructure; enhancing human resource capacity through vocational programs and training; increasing access to productive assets, capital loans, and land use; providing support and strengthening entrepreneurship through improved access to financing and markets; and developing and ensuring the sustainability of ultra-micro enterprises.

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