Don\'t Get Stuck on Numbers

KOMPAS/Lasti Kurnia

Workers install aluminum panels to the facade of a multi-storey building on Wednesday (15/1/2020) in Senayan, Jakarta. Statistics Indonesia (BPS) reported that wages had increased for laborers, especially in the construction and agriculture sectors, but laborers’ wages had actually decreased by 0.14-0.24 percent in December.

JAKARTA, KOMPAS – Real conditions and the people’s aspirations should be considered to prevent the government from becoming trapped in figures in its poverty reduction efforts. The poverty rate should not decrease quantitatively while the people continue to struggle, or even become even poorer.

The poverty rate should also be analyzed in terms of a variety of socioeconomic factors employing advanced methodologies. According to economics professor Ahmad Erani Yustika of Brawijaya University in Malang, the government must also review its poverty alleviation programs.

"An evaluation is necessary to determine the contributions of such programs to poverty reduction. We can learn about the possibility of innovating from the evaluations," Erani said in Jakarta on Wednesday, at the "Towards Indonesia 2045" Kompas panel discussion.

An evaluation is necessary to determine the contributions of such programs to poverty reduction.

The programs he referred to included social aid programs such as the government’s Family Hope and non-cash food aid program. According to the latest poverty data Statistic Indonesia (BPS) released on Wednesday, Indonesia poor population stood at 24.79 million in September 2019, or 9.22 percent of the national population.

The number of poor people had declined by 888,700 people year-on-year, while 12.6 percent of the poor population lived in rural areas and 6.56 percent in urban areas.

Meanwhile, Indonesia’s income inequality had declined as reflected in the Gini ratio. According to BPS, the Gini ratio declined slightly to 0.380 in September 2019 from 0.384 in September 2018.

KOMPAS/P RADITYA MAHENDRA YASA

A farm worker carries rice seedlings for planting on Monday (13/1/2020) in Kuaron village of Gubug district, Grobogan regency, Central Java.

The Gini ratio ranges from 0 (0 percent) to 1 (100 percent), with the greater ratio representing wider inequality.

BPS data shows that the Gini ratio for urban areas (0.391) is worse than for rural areas (0.315).

However, BPS head Suhariyanto stressed that the rural poverty rate was still higher. "Efforts are needed to reduce poverty in villages where the majority of people work in the agriculture sector," he said.

Coordination

According to economics lecturer Lana Soelistianingsih at the University of Indonesia, the poverty alleviation programs cannot be the responsibility of merely one ministry. All ministries/government agencies needed to coordinate on the potential natural resources in local communities and the possibility of providing employment.

On the other hand, the nominal increase in labor wages was not reflected in the real condition of living standards. While BPS data showed that the average wage of farm laborers was Rp 54,723 (US$4) per day in December 2019, a 0.13 percent month-on-month (MOM) increase, the real wage had fallen 0.14 percent.

The daily wage of construction workers was Rp 89,179 the same month, or up 0.11 percent MOM, but the real wage was down 0.23 percent.

BPS social statistics deputy Margo Yuwono said that the increase in nominal wages did not offset inflation in December 2019, which was 0.34 percent according to BPS data.