Dealing with Poverty Seriously

Kompas/Wisnu Widiantoro

Mina Jit, 5, lies weak on her mother’s lap while awaiting treatment from the Integrated Measles and Malnutrition KLB Countermeasure Team in Atat village, Pulau Tiga district, Asmat regency, Papua, on Saturday.

The Central Statistics Agency (BPS) stated that as of September 2017 the number of poor people in Indonesia stood at 26.58 million, or 10.12 percent of the total population. Compared to September 2016, the number of poor people declined 1.18 million. The decline was spectacular considering the drop in previous years had been around 500,000 per year on average. Yet such an achievement has not fulfilled the targeted decline mentioned in the 2015-2019 Medium Term National Development Plan. In 2017, the government’s optimistic target was 8.5 percent and the moderate target was 9.5 percent.

The poverty alleviation program in Indonesia was slow if not stagnant, especially compared to the poverty alleviation budget, which was more than Rp 100 trillion. There are more than 10 ministries or institutions dealing with poverty directly, as well as special agencies, such as the National Poverty Mitigation Acceleration Team and the State Logistics Agency (Bulog) on rice social assistance (Rastra).

Several programs were launched, starting from the Smart Indonesia Card, the Healthy Indonesia Card, the Prosperous Indonesia Card, Rastra, noncash assistance and the Family Hope Program. Ironically, as the poverty alleviation budget increased, so did the poverty severity index.

The poverty severity index climbed from 0.44 in September 2016 to 0.46 in September 2017. The poverty gap index also climbed from 1.74 in September 2016 to 1.79 in September 2017. The poverty gap index indicates that poor people are becoming poorer, and are falling below the poverty line. In fact, the poverty line increased from (US$27) Rp 361,990 per capita per month in September 2016 to Rp 387,160 per capita per month in September 2017.

Data explicitly shows various direct assistance disbursements from the government have missed the target, especially for the group in the lowest 10 percent, which was unable to access the various disbursements. Poor people usually have very little assets, sometimes not even a house, so in many cases their population data has not been properly registered.

Thus, there must be pattern mapping and more concrete poverty alleviation programs that are appropriate to the problems in society. The poorest 10 percent normally faced structural poverty that they needed a social protection program by receiving direct integrated social assistance from the government. Meanwhile, for the poor grouped in dataset 20, the best program may be not social assistance but equal access to basic services. For the poor grouped in datasets 30 and 40, what they need is equal access to productive economic resources and fair access to economic structure.

Poverty has a strong tendency to occur in rural areas. Of 26.58 million poor people in Indonesia, 16.31 million people (13.37 percent) are in rural areas and 10.27 million people (7.26 percent) are in urban areas. The proportion of poor people in rural areas is 6.21 percent higher than in urban areas. In fact, there is much economic potential in rural areas, from vast farming lands and plantations to abundant maritime resources. In reality, however, the biggest share at the poverty line is staple foods at 73.35 percent. Ironically, rural areas as food production centers are hit harder by the effects of poverty.

Thus, alleviation of poverty must reach the roots and cannot use haphazard programs. Such programs are not always in the form of social assistance. The government’s facilitation in order to build partnerships between large-scale business and microbusinesses could bring significant impact to rural economy empowerment.

At the very least, the productivity improvement program and rural commodity added-value improvement program are more than enough to bring people out of the poverty trap. Practically, the people\'s economy empowerment policies will be an effective instrument to cut the rural poverty circle, not the policies that put pressure on the farmers.

Kompas/Totok Wijayanto

Enny Sri Hartati

Principally, the poverty alleviation program must become a sustainable program and be able to have a long-term impact. If it is only a short-term program, poverty will only be passed on to the next generation. It gets worse if the program is only project-oriented as it will only sustain poverty.

Therefore, the presidential instruction to make use of the village funds through labor-intensive programs must be fully understood. The labor-intensive programs do not simply create infrastructure projects to absorb manpower in rural areas, but also create added value in the village so that it will lift up the people’s productive economy.

ENNY SRI HARTATI

Executive Director of the Institute for Development of Economics and Finance