Improving Villages’ Prosperity

KOMPAS/ADI SUCIPTO

Salt farmers in Manyar area, Gresik regency, East Java, transport their produce in plastic bags to a nearby storage warehouse on Tuesday (11/9/2018). The price of salt at the level of farmers is currently around Rp 1,300-1,500 per kilogram, down from Rp 1,600-2,000 per kg in July and August.

The government continues to strive to improve villagers’ prosperity and help them catch up with urban dwellers. However, a number of problems persist.

Central Statistics Agency (BPS) data shows that the number of people living in villages in Indonesia continues to decline. Some 53.3 percent of the national population lived in cities in 2015. The figure is expected to rise to 56.7 percent in 2020.

Nationwide, the number of poor people in Indonesia is also steadily declining. However, the BPS data still shows that more poor people live in villages than in cities. In March 2018, villages’ poverty depth and severity indices were bigger than cities’, despite their general trend of decline. The poverty depth index reflects the average gap of poor people’s expenses relative to the poverty line. Meanwhile, the poverty severity index reflects the distribution of expenses among poor people.

The BPS data convinced us that villages still require special attention. This led Kompas to publish a report on villages earlier this week. The government’s continuous efforts to improve villagers’ prosperity, include the village fund scheme distributed directly to villages. Its results are visible in the absolute decline of the number of poor people in villages, as well as the level of poverty depth and severity.

These statistical figures showing improving prosperity across villages should trigger continuous improvement of villagers’ prosperity. This is highly important as villages are the nation’s stronghold. Our food production highly depends on villages.

If farmers get good prices above the production cost and their basic necessities and welfare are covered, they will be willing to innovate in order to increase production. High food production will strengthen national economic resilience. Therefore, farmers – a majority of villagers in Indonesia – must be involved in post-harvest production as this process involves the creation of added values much higher than that of farming activities.

Other than improving villages’ physical infrastructure, including roads, sanitary facilities and clean water and electricity services, economic and social infrastructure must also be developed.

One way to develop villages’ economic infrastructure is by establishing village-owned enterprises. Village cooperatives must be fostered and strengthened so that all villagers are involved in the local economy and can gain benefits from it. A proper business climate fostered by supporting village credit programs through banks and non-bank financial institutions can help farmers obtain funding to develop their businesses.

Social infrastructure is fostered by ensuring the availability of quality health care and education services in line with local potentials. It will be easier to encourage prosperous and happy villagers to participate in development.