Residents pass by a poor kampong area on the banks of the Winongo River in Pakuncen subdistrict, Wirobrajan district, Yogyakarta, on Thursday (2/2). Based on data from the Central Statistics Agency (BPS) released in Jakarta on Wednesday, the Gini ratio in Yogyakarta in September 2016 was the highest in Indonesia, namely 0.425.
The government has set three major policies to address wealth inequality amid the emergence of social anxiety.
Inequality has thus far been a problem with difficulties reducing it despite various efforts. The Gini ratio remains slightly below 0.4, the highest since our independence.
Central Statistics Agency data shows that from 2011 the Gini ratio had remained at 0.41, while as of March 2016 it had fallen slightly to 0.397, down 0.0003 from September 2015. However, the calculation of poverty in Indonesia is based on per capita income of Rp 354,000 per month, or around Rp 11,800 per day. This figure is too low, even for Indonesia’s level.
Meanwhile, data from the National Team for the Acceleration of Poverty Alleviation (TNP2K) shows Indonesia is ranked fourth most unequal country in the world. This can be seen, among other things, from 49.3 percent of national assets being controlled by only 1 percent of the population.
Wealth inequality does not happen only in Indonesia. The cause of this increasing gap is not because the situation of the poor has not been improving, rather the prosperity of the middle and upper groups has been increasing more rapidly.
There are many causes for the slow decline in the number of poor people. Education and health determine a person\'s ability to escape the trap of poverty. Poverty, therefore, can also be inherited.
Reports by the World Bank and TNP2K show that those who have escaped poverty over the last several years initially lived slightly below the poverty line. This means that in future it will increasingly difficult to reduce the number of poor because those who have yet to be reached are very poor.
Food prices and inflation greatly contribute to the number of poor people. However, the government is also focused on land distribution, human resource capacity and opportunities.
Free education does not necessarily mean an increase in participation because it deals with poor people’s perspective on the benefits of education. Opportunities can be provided through access to credits, but there should also be assistance so that the aid goes to the correct people.
The government will soon distribute land to reduce land inequality. However, this will only be a beginning. It is more important to ensure that the land does not change hands, but becomes capital for the poor and increases in value, as mentioned by Hernando de Soto in his concept of dead capital.
Reducing inequality is important because the Constitution requires a prosperous and fair society and it could become a social problem. To succeed, we must not simplify matters and should be able to manage their complexity.
