You are on page 1of 29

POVERTY AND INEQUALITY IN INDONESIA :

TRENDS AND PROGRAMS*)

By
Prijono Tjiptoherijanto**)
Sutyastie Soemitro Remi ***)
*)

Paper presented at International Conference on the


Chinese Economy Achieving Growth with Equity,
Beijing, 4-6 July 2001.

**)

Professor at the Faculty of Economics, University of


Indonesia

***)

Senior

Lecturer

at

the

University of Padjadjaran

Faculty

of

Economics,

D:\My Documents\Yanruis Conference\ aces_ppk.doc

POVERTY AND INEQUALITY IN INDONESIA :


TRENDS AND PROGRAMS

By

Prijono Tjiptoherijanto
Sutyastie Soemitro Remi

Abstract
During the period prior to the crisis (1993-1996)

income inequality indicated by Gini Ratio tended to increase in


Indonesia as a whole, from 0.34 to 0.36. The inequality

scemed to be more apparent in urban Indonesia reaching a


level 0.36 in 1996, than in rural Indonesia with a level of 0.27
or less inequality. Declines in equality during the period
(1996-1998) were also indicated by other indexs the Theil
Index and L-Index.

1.

Introduction

The main objective of this paper is to give an


insight of the extent to which the crisis has affected the
D:\My Documents\Yanruis Conference\ aces_ppk.doc

incidence of poverty in Indonesia. In doing so, a trend


data analysis on poverty estimates and indicator/indices

will be performed. The analysis compares the incidence


of poverty prior to the crisis (using the 1993 and 1996

data ) with the incidence during the on-going crisis


(1999). This paper also addresses some inequality
issues related to the changes in expenditure distribution
during the period of 1993 to 1999. Moreover, attempt

are also made to examine some socio-economic


dimensions of poverty, by examining the changing
characteristics of poor households as compared to nonpoor households, both in urban and rural areas.
Considering the poverty profile it is expected the

policy being formed in alleviating poverty can be more


directed. Likewise, it can be evaluated whether the
governments policies being carried out have or have
not succeeded in reducing the number of poor
population and inequality rate

2.

Trends in Poverty and Inequality


Prior to 1997, Indonesia recorded a relatively

remarkable decline in poverty level as compared to


achivement in order less-developed countries. The success
of poverty alleviation, in term of monetary measure of
welfare, was consistently coupled with the improvement in
non-monetary measures of welfare and poverty, such as
D:\My Documents\Yanruis Conference\ aces_ppk.doc

education and health indices. The improved people's welfare


was subject to almost three decades of sustained economic

growth resulting from a series of developmental strategies,


including green revolution since the late 1970s, trade

liberalization in the early 1980s and the establishment of


export-oriented growth economy starting in the early 1990s
(Irawan and Sutanto, 1999).

However the crisis squeezing the Indonesian economy

in the mid 1997, following the long drought during the year,
has been adversely affecting the overall macroeconomic
condition, and most importantly people's welfare. The number
of people living in poverty is believed to increase drastically.

The readily available contemporary data from the result of the

1998 SUSENAS-type suggests a substantial increase in poverty


incidence from the pre-crisis period (1996) to the end of
1999.

Table 1 presents the number and percentage of

population living below the designated poverty lines


(head -count ratio) in both urban and rural areas from
1976 to 1999. The magnitude of poverty as measured
by poverty incidence in 1999 is 18.20% (37.5 million).
Out of this number, around 12.4 million lived in urban area
(15.10%), and 25.10 million (20.20%) lived in rural area.

D:\My Documents\Yanruis Conference\ aces_ppk.doc

Table 1
Number and Percentage of People in Indonesia
by Urban-Rural Areas, 1976-1999
Year

(1)

% Poor People (Headcount

Number of Poor People (in

Index)

million)

Urba
n

Rural

Urban+ Rural

Urban

Rural

Urban+Rur
al

(2)

(3)

(4)

(5)

(6)

(7)

D:\My Documents\Yanruis Conference\ aces_ppk.doc

197
6

38.7
9

40.3
7

40.08

10.00

44.2

54.2

197

30.8

33.3

33.31

8.30

38.9

47.2

28.56

9.50

32.8

42.3

29.0

28.4

26.85

9.30

31.3

40.6

21.64

9.30

25.7

35.0

28.0

26.4

17.42

9.70

20.3

30.0

15.08

9.40

17.8

27.2

23.1

21.1

13.67

8.70

17.2

25.9

11.34

7.20

15.3

22.5

20.1

16.1

17.86

11.6

24.9

36.5

18.20

12.40

25.1

37.5

16.7

14.3

13.4

13.7

9.71

12.3
0

8
198
0
198
1
198
4
198
7
199
0
199
3
199
6
199

14.4
3

15.1

20.2
0

199
9

20.0

Source : BPS, 2000

During 1976 - 1996 the overall number of the poor

in Indonesia sharply decreased from 54.2 million people


(40.08% to total population) to 22.5 million people (11.34%).
However, the comparable figure in 1998 was estimated to
rise to 36.5 million (17.86%), or an absolute change in the
D:\My Documents\Yanruis Conference\ aces_ppk.doc

number of the poor by around 14 million as compared to


the 1996 figure. The 14 million-increase did not necessarily
indicate the real impact of crisis on poverty incidence from
the mid-1997 to the end of 1998. To really measure the

crisis impact, one should compared the 1997 (estimate)


figure with that of 1998. As the 1997 figure was believed to
be lower than the 1996 poverty level, the crisis impact
would be higher than 14 million. Provided the 1997 poverty

level was presumably 21.5 million (assuming the same


annual rate of decline in the absolute poverty as happened

from 1993 to 1996), there might have appeared around 51


million additional poor people, which likely measures the
crisis impact on poverty.

Table 2 also suggests that during 1996 - 1998 the


number of the poor in urban areas has increased at almost a
similar extent to those in rural areas i.e. by 61.1% (4.40
million) for urban and 62.7% (9.60 million) for rural. The

change in poverty incidence (percentage of the poor to total


population) was larger in rural than in urban areas (7.78%
compare to 4.72%). However, if consistency were ignored,
the absolute number of the poor grew by around 140% (10.4
million) during the last two year in urban areas (from 7.2 to
17.6 million people), where as the figure in rural areas was

around 105% or 16.6 million (from 15.3 to 31.9 million


people). If the inter-temporal analysis uses the 1998
standard, poverty incidence appeared to get worse in urban
area than in rural area during the period of 1996 - 1998.
D:\My Documents\Yanruis Conference\ aces_ppk.doc

Table 2 indicates that there were around an additional 8


million poor people in urban area during that period, while
the increment was around 7 million in rural area.
Table 2
Change in Number and Percentage of Poor People in Indonesia
by Urban-Rural Areas, 1976-1998
Change in Percentage
Year

(1)

Absolute Change (milion


People)

Urban

Rural

Urban+Rur
al

Urba
n

Rural

Urban+Rural

(2)

(3)

(4)

(5)

(6)

(7)

D:\My Documents\Yanruis Conference\ aces_ppk.doc

197
6
197
8
198
0
198
1
198
4

-7.95

-6.77

1.70

5.30

-7.00

-1.80
-0.98
-4.92
-3.00
-3.39
-3.30
-3.74

198
7
199
0
199
3
199
6
199
8

6.99
-

-4.75

+1.2

6.10

0.20

1.50

0.00

5.60

+0.4

5.04

5.40

1.81

0.30

2.50

0.54

0.70

0.60

1.49

1.50

1.90

+4.4

+9.6

4.96
1.93
5.31
-

+4.7

+7.7

-1.71
-5.21
-4.22
-2.34
-1.41
-2.33

+6.52

-4.90
-1.70
-5.60
-5.00
-2.80
-1.30
-3.40

+14.0

Source : BPS, 2000.

This finding seems to confirm the earlier estimates

that in agregate the urban population was suffered more


severely by the crisis than their rural counterparts. As

argued by Daimon and Thorbecke (1999), there are two


possible explanations for the more rapid increase in the

number of the urban poor. First, the crisis tends to most


adversely affect some major economic sectors in urban

D:\My Documents\Yanruis Conference\ aces_ppk.doc

areas, such as construction, trade and banking leading to a


negative impact on urban unemployment (also see in
Panggabean, 1999). Second, while rural people could fulfill
subsistence level from their own production, the increased
food prices negatively affected the net purchasers more than
it affected the net producers of food, that brought about a
more suffering among urban households than among rural
households. In their survey-based study of 295 companies

mostly in urban areas, Irawan and Sutanto (1999) also found


that the number of displaced workers increased between
1997 and 1998, and the majority of laid off workers were
those of lower socio -economic status, indicating an intense
pressure on employment and welfare of urban poor people
presumably due to the crisis.

A substantial increase in absolute poverty in fact was

resulted from a drastic change in the designated poverty


lines in both urban and rural areas (see Table 3). As
compared to 1996, the poverty lines n 1998 increased by
around 154 and 165% in urban and rural areas respectively.

The adjusted 1998 poverty line, as compared to 1996,


increased by around 123.60% and 147.09% for urban and
rural, respectively. This indicates that the nominal value of
expenditure spent by an individual per month to fulfill their

basic needs in December 1998 has multiplied by more than


two times of the value in February 1996. The extent of the

increase in poverty line was apparently consistent to the


skyrocketing prices, especially food commodities, during the
D:\My Documents\Yanruis Conference\ aces_ppk.doc

same period and partly, due to the redefinition of the food


and non-food bundle. From February 1996 to December
1998, the inflation rate for food was recorded at around
148.6% (BPS, monthly series of Economic Indicators).

Table 3
Poverty Line and Their Changes in Indonesia, by Urban-Rural
Areas,
1976-1998 (Rupiah/capita/month)
Year

Change in
Percentage

Poverty Line

Absolute Change
(milion People)

Urban

Rural

Urban

Rural

Urban

Rural

(1)

(1)

(2)

(3)

(4)

(6)

(7)

1976

4 522

2 849

1978

4 969

2 981

447

132

9.88

4.63

1980

6 831

4 449

1 862

1 468

37.47

49.25

1981

9 777

5 877

2 946

1 428

43.13

32.10

1984

13 731

7 746

3 954

1 869

40.44

31.80

1987

17 381

10 294

3 650

2 548

26.58

32.89

1990

20 614

13 295

3 233

3 001

18.60

29.15

1993

27 905

18 244

7 291

4 949

35.37

37.22

1996

38 246

27 413

10 521

9 169

37.70

50.26

1998

85 518

67 734

47 272

40 321

123.60

147.0

D:\My Documents\Yanruis Conference\ aces_ppk.doc

10

Source : BPS, 2000.

Table 4 shows that during the period prior to the


crisis (1993 - 1996) income (proxied by expenditure)

inequality as indicated by Gini ratio tended to increase


in Indonesia as a whole, from 0.34 tp 0.36. The

inequality seemed to be more apparent in urban


Indonesia, reaching a level of 0.36 in 1996 (categorized

as "medium inequality" with a coefficient ranging


between 0.35 and 0.50), than in rural Indonesia with a
level of 0,27 or "less inequality" (less than 0.35).
However, in 1998 there were declines in gini ratios,
reaching 0.33 in urban areas and 0.26 in rural areas. It

means that the inequality has decreased by 8.3% in


urban and by 3.7% in rural areas during period of 1996
- 1998. Declines in inequality during the period or 1996
- 1998 were also indicated by other indices - the Theil
Index and L-Index.
This

finding

was

at

glance

confusing

and

inconsistent, given the previous evidence concerning the


worsening inequality among those living below the
poverty line (see Table 4). Whether the improvement in
inequality during the crisis was simply methodologicalrelated issues, especially non-sampling error in probing
questions on expenditure or merely a real fact is hardly
known. However, it is posible to speculate that the crisis
may have affected more severely the total expenditure
D:\My Documents\Yanruis Conference\ aces_ppk.doc

11

of those involved in modern-formal sector than those in


traditional-informal sector, representing for middle and

high income classes for the former and low income class
for the latter. This impact was believed to get through

large shifts in relative prices that may have had


benefited those engaged in the rural economy, rather
than for those in the modern-formal economy (Caille,
et.al; 1999). As a consequence, presumably, the crisis

has caused a more drastic drop in the averaged


expenditure of the midlle and the high classes than the
expenditure of the low class that has already been at a
low level. Frankenberg, et.al, suggests that the averaged

nominal expenditure among the upper deciles of sample

population of 2,000 households decreased more rapidly


than those in the lower deciles. Such a pattern of
decline in expenditure may have reflected the drop in
total income. Meanwhile, the expenditure level of the

low class has already been at a level which was hardly


possible to go down further to fulfill their basic

consumption at a subsistent level. These two factors


might best explain the "improvement" in gini ratio and other
inequality indices during the crisis.

Daimon and Thorbecke (1999) argued that decline in

inequality was not consistent with increase in poverty


incidence unless there were two aspects underlying this in-

consistence, First, variation in income distributions of the


lowest classes increased drastically resulting from the crisis.
D:\My Documents\Yanruis Conference\ aces_ppk.doc

12

Second, there was a flawed methodological-related


drawback in measuring poverty and inequality indicators.
Looking at different extent of shifts in inequality between
those below and above the designated poverty, Table 4
confirms the above argument that inequality has increased
within the lower tail of the income distribution, in couple
with a drop in inequality among the better-off.
Table 4

Gini Ratio in the Theil Index and L-Index Urban and Rural
Indonesia,
1993 1998

Gini Ratio

Area/Group

The Theil Index

of Population

1993

1996

1998

(1)

(2)

(3)

(4)

0.33

0.362

Urban
Below the

0.078

PL

0.341

Above the
PL
Rural
Below the
PL
Above the
PL

The L-Index

1996

1998

1996

1998

0.33

0.264

0.2169

0.2238

0.183

0.09
5
0.29
1

0.26

0.274
0.073
0.251

0.25

0.150

0.1274

0.1333

0.114
4

0.09
6
0.21
6

D:\My Documents\Yanruis Conference\ aces_ppk.doc

13

Uban + Rural

0.34

0.356

0.31
9

0.260
9

0.2042

0.2159

0.171
9

Source : Irawan P.B (1999).

The above argument seems to be in line with the

changing patterns of expenditure distribution by population


groups, as reported in Table 5. During the period of 1993 -

1996, the share of total expenditure spent or enjoyed by the


lowest 40% of population has decreased both in urban and
rural areas, while in the same time the share for the highest
20% of population increased in both areas. It indicates that a
few years prior to the crisis inequality in income tended to
widen, yet according to the World Bank's criterion, it was
categorized as "low level of inequality". By 1998, however,

there was a decline in the expenditure share enjoyed by the


highest 20% of population, coupled with an increased in the

share for the lowest 40% of population, as compared to a


share composition in 1996. This evidence may not necessarily

indicate improvement in income inequality during the crisis,


because as mentioned above, such improvements in Gini Ratio
and the World Bank's criterion may have to do with the level of
expenditures which are less flexible for downward adjustment
in the case of lower class than of higher class.

Table 5
Expenditure Distribution of Population in Urban and Rural Indonesia,
1993 1998
D:\My Documents\Yanruis Conference\ aces_ppk.doc

14

1993

1996

1998

(1)

(2)

(3)

(4)

The lowest 40%

20.47

19.03

20.63

The middle 40%

37.29

36.93

36.84

The highest 20%

42.24

44.04

42.52

The lowest 40%

25.13

23.18

24.39

The middle 40%

38.42

38.99

39.38

The highest 20%

36.45

37.83

36.23

The lowest 40%

20.34

20.25

21.53

The middle 40%

36.90

35.05

36.94

The highest 20%

44.76

44.70

41.53

Area/Population
Groups

Urban :

Rural :

Urban + Rural

Source : BPS, 2000.

3.

Programs Related to Poverty Alleviation

The crisis looming over Indonesias poor is huge.


Once growth resumes, of course,
employment

opportunities and income gains will reduce their misery.


But it will take several years. During the economic crisis,

D:\My Documents\Yanruis Conference\ aces_ppk.doc

15

the Government of Indone sia and other donors fully


recognised that there was a need to establish social
safety net programs to meet the decline of purchasing
power of the majority. Substantial funding for this

purpose has been allocated since mid-1998 (see Table


6). Thus was embedded in the Community Recovery
Program (CRP) and the Social Protection Sector
Development Program (SPSDP), which aimed to directly
help people in need. The program assumes that civil
society can lead and coordinate the CRP and act as the

channel for distribution of resources. Short-term


assistance is given to people who are unable to continue
their daily social and economic activities. This would be

implemented by proactively plugging gaps in the social


safety net, giving intermediate response to poor
communities
establishing

most affected by
the crisis and
synergy between the civil society,

government, and the private sector, together with the


international community for improved response to the
need. The design called for
resources and decision-making

decentralisation of
processes, strong

involvement of civil society, and transparency. The CRP


and SPSDP programs can be classified as emergency or

ad-hoc programs for poverty alleviation during the


economic crisis. The programs are estabilished
according to the need. Once economic performance
improves, these programs will be terminated.

D:\My Documents\Yanruis Conference\ aces_ppk.doc

16

The purposes of social safety net programs are:


to provide which can accessed by poor people
to provided productive labour opportunities that can
improve purchasing power of poor people;
to improve the welfare of poor peole;
to recover social and economic services for poor people; and
to recover economic activities for poor people (Bappenas, 1999)

Table 6
Budget Allocated for Social Safety Net Program

Programs
Component/Activities
Food Security
Special Market
Operation
National Food Reliance

Budget
(in billion rupiah)
1998/199

1999/20

00

PM

PM

633.1

119.5

D:\My Documents\Yanruis Conference\ aces_ppk.doc

Sources of Funding and


Institutions which are
responsible for
implementation
BULOG/Menpangan
Ministry of Agriculture

17

Social Protection
Education
- Scholarships and

4975.0
2704.8
1259.1

3719.0
2033.6
1188.7

Ministry of Education and

operational financial
aids
- Rehabilitation of Primary

850.7

308.5

Presidential Instruction for

school buildings
- Construction of new

594.9

536.4

Regency
Presidential Instruction for

2270.2
1042.7

1685.3
880.0

48.0

92.0

105.0

Ministry of Socail Welfare

15.7

Presidedential Instruction
for Health

720.9

85.7

Presidential Instruction for


Health

- Food Supplement for


School Children

414.4

550.0

Employment Creation
Sector Labour Intensive
- Labour Intensive of

3768.6
2067.1
578.8

1800.0
1000.0
1000.0

598.5

Ministry of Manpower

399.1

Ministry of Manpower

490.5

Ministry of Forestry

1701.4

800.0

peimary school buildings


Health
- Basic Health Services

Culture

Regency
Ministry of Health

in community Health
Centre
- Basic Health Service in
Hospital
- Social Weafare
- Revitalisation of
Emergency Food Relief
(SKPG)
- Health Infrastructure

Public Works Sector


- Crisis Impact and
Employment Problems
Solving (PDKMK)
- Skilled Unemployment
Problem Solving (P3T)
- Labour Intensiv of
Forestry Sector
- Regional Labour
Intensive (PDM-DKE)

D:\My Documents\Yanruis Conference\ aces_ppk.doc

Ministry of Health

Supplement for School


Children

Ministry of Public Works

Presidential Instruction for


Regency and Bappenas

18

Total

9376.7

5638.6

Source : Bappenas, 1999

D:\My Documents\Yanruis Conference\ aces_ppk.doc

19

The programs cover four activities, which are as follow:

Food Security Program;

Social Protection of Education Program;

Social Protection of Health Program; and

Labour Intensive Public Works Program

The food security program is established so poor


families have better access to food in terms of price and
readiness. The program covers two main activities; first,
food aids through special market operations (Operasi Pasar

Khusus/OPK). In OPK, poor families can by rice at one


thousand rupiah per kilogram. Each family can buy 20
kilogram rice per month. In the 1998-1999 fiscal year, OPK

had been implemented to 7354 million families according to


the number of poor families collected by National Family
Registration. Besides rice, through the OPK activity, poor
families have the possibility of receiving, free of charge,
cooking oil, milk powder, and soybean. However, the
availability of these commodities depends on international

communities or donor agency grants. The second aim is to


improve national food reliance through empowering
farmers. During the 1998-1999 fiscal year, the activity had
been implemented in 27 provinces. In the fiscal year 19992000, the national food reliance activity has changed to
fishery and poultry breeding activity.

D:\My Documents\Yanruis Conference\ aces_ppk.doc

20

The OPK activity is coordinated by the State Ministry


for Food and Horticulture and the main implementors are

the Ministry of Agriculture and BULOG. Meanwhile the


national Food Reliance activity is coordinated and
implemented by the Ministry of Agriculture.

The purpose of the Social Protection of Education

Program is to maintain education service to poor families.


The program covers three activities, which are: scholarships

and operational financial aids; rehabilitation of primary


school buildings; and contruction of new primary school
buildings. Under the Social Protection of
Education
program, children from poor families are free from tuition
fees and other

financial obligations related to study

purposes. During the 1998-1999 fiscal year, scholarships


have been given to around 4.1 million students including

321 thousand college students throughout the country.


Operational financial aids have been given to around 131

thousand schools and 1200 universitas in Indonesia. The


Social Protection of Education Program is implemented by
the Ministry of Education and Culture, and the Ministry of
Religion and Local Government.

In the health sector, the social safety net program


covers four main activities, namely:
providing basic health services for poor families;
providing pregnancy and delivery as well as child-rearing
services for poor families;

D:\My Documents\Yanruis Conference\ aces_ppk.doc

21

providing food supplements for infants (six to 11 months)


and children (12 to 23 months) of poor families; and
providing food supplements for school children.
All family members or poor families receive, free of
charge, health services at the Community Health Centre.

They also receive a nutrition supplement especially for


mothers and children (including infants). Food supple ments
are also provided in schools and orphanages. Therefore, the
government has allocated a special budget for essential
drugs, vaccines, and primary health care. The communicable
disease and community health programs get special
attention.

The Labour Intensive Public Works Program is


designed to help poor households maintain purchasing

power. In fact, the Government has a long history of using a


labour intensive public works program, called padat karya.
In the beginning, the program was implemented in the areas
that suffered greatly from the crisis, such as urban areas

and drought areas. Three main programs have been


developed in the program. These first, Sector Labour

Intensive, is mainly to redesign current projects to become


labour intensive projects. For example, infrastructure
projects at the Ministry of Public Works were redesigned in
order to absorb more manpower. The key is to redesign the

current project. The second, Special Labour intensive, is


D:\My Documents\Yanruis Conference\ aces_ppk.doc

22

mainly to create a special project in order to absord people


who have been laid-off from their current job. The Special
Labour Intensive program consists of projects ot face the
employment problem due to economic crisis, called PDKMK

program, labour intensive projects to face unemployment of


skilled workers (P3T), and labour intensive projects in the

forestry sector. The approaches of the two above programs


are top-down and departemental. Government has been
much criticised on the this matter.
Therefore in November

1998, the government

launched the third program called Local Empowerment in


Facing the Impact of Economic Crisis (Pemberdayaan Daerah
dalam mengatasi Dampak Krisis Ekonomi : PDM-DKE). The

program has been launched in all villages throughout the


country. Under this scheme, the central government
provided budgets directly to communities via local
governments accourding to the number of poor households
and the amount of unemployment in their villages. In this
case, NFPCB and CBS are responsible for providing the data.
Indeed, under this scheme, economic activities as well as
target groups are selected by local community people. The

government hopes that the PDM-DKE program will run


smoothly since the program is monitored actively by the
community.

Social safety net programs have been criticised by

many parties, particularly by non-government organisations

D:\My Documents\Yanruis Conference\ aces_ppk.doc

23

(NGOs). Most of the criticisms are about the transparency of


the programs. According to them, the social safety net
programs funds are mostly not received by the target group.
They even argue that the government spends that budget

for political purposes. Therefore, they insist, government


and international donor agencies should terminate the

programs. In the last couple of months there have been hot


debates in the country on these matters. In this regard,
government is trying hard to improve the quality of the
programs implementation. NGOs and students are welcome

to participate actively in the programs implementation,


starting from the planning phase through to the monitoring
phase.

4.

C o n c lu d i n g R e m a r k s

There is no doubt that in the last twenty five years,


Indonesias economy has been improving remarkably.
The most powerful indicator of the success of Indonesias
development strategy and policy adjustment is the
degree of absolute and relative poverty reduction.
Considering the development process in the last twenty
five years, much progress has been made in reducing the
absolute poverty in Indonesia. Data shows that in 1999,
the number of poor people in Indonesia were around
37.5 million and it was much lower that in 1970 which
were 54.2 million people.

D:\My Documents\Yanruis Conference\ aces_ppk.doc

24

In line with the smaller number of poor people, the effort


to alleviate the poverty is becoming harder than before. There
are two reasons for above condition, (1) the target group is
harder to be found than before, and (2) the governments

concern on poverty alleviation is less than before since the


budget for alleviating them is getting more expensive. However,

since the National Ideology and the 1945 Indonesian


Constitution stated that all Indonesia people should benefit
from the development, no matter the cost and the effort, the
poverty alleviation has to be done.
Concerning the number and location of poor people at
the present time, government of Indonesia aware that policy

and program on poverty alleviation can not be depended only

on macro economic policy. Micro economic policy or even social


policy should be bring together with macro economic policy to

alleviate the poverty. One example of micro economic and


social approach in alleviating the poverty in Indonesia is the
development of prosperous family.

5.

REFERENCES

Daimon, T. and E. Thorbecke, Mitigating the Social Impacts

of the Indonesian Crisis: Lessons from the IDT


Experience, May 1999.

Haryono, Suyono. 1996 Poverty Alleviatio n Through the


Development of the Prosperous Family in Non-IDT

D:\My Documents\Yanruis Conference\ aces_ppk.doc

25

Villages. State Ministry


Jakarta, Indonesia.

for

Population/NFPCB,

Irawan, P.B. (1999), How to identify the poor: Some


Methodological Issues, paper presented at TwoDays Seminar on Dampak Krisis di Indonesia at
the Demographic Institute, Faculty of Economics,
University of Indonesia, Depok, 19-20 May 1999.

Jossi P. Moeis, Aziz, Faisal Basri, and Yando Zakaria. Profil

dan Penanggulangan Kemiskinan di Indonesia


(Profile and Alleviation of Poverty in Indonesia), in
Faisal Basri, Ekonomi Indonesia Menjelang Abad 21
(Indonesian Economic Towards XXI Century). PT.
Airlangga, Jakarta, Indoneisa.

Mubyarto, 1999, Poverty Reduction in Indonesia: Whats


New and Whats Different, Majalah Perencanaan
Pembangunan, No. 16, Juni/ Juli, 1999.

Prijono Tjiptoherijanto, Population Issues in the Economic


Development, Lembaga Penerbit FE-UI, 1999.

-----------,1997.

Pengentasan

Kemiskinan

(Poverty

Alleviation). Paper presented at the Seminar of the


Role of Private University on Poverty Alleviation in
Indonesia, Bandar Lampung, 26 September 1997.

Sutanto,

(1999) The December 1998 Poverty Estimate:

Methodological Issues, paper presented at the


Workshop on Poverty Number Computational Method

D:\My Documents\Yanruis Conference\ aces_ppk.doc

26

at BAPPENAS (National Development Planning Bord),


Jakarta, 25 June 1999.
Sutyastie Soemitro, Impact of Crisis on Poverty and Inequality
in Indonesia: Methodological Issues and Trends,
Economic Journal, Faculty of Economics Padjadjaran
University, Vol. XV No. 1, March 2000.

World Bank, 1998, Indonesia in Crisis: Macroeconomic


Update, The World Bank, Washington D.C., July 16,
1998.

D:\My Documents\Yanruis Conference\ aces_ppk.doc

27

You might also like