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Fuel, ineffective programs lead to higher poverty
Jakarta Globe - January 3, 2014
The figure rose by 480,000 during that period to some 28.55 million people, 10.63 million of whom live in urban areas while another 17.92 reportedly live in rural areas or villages, the BPS reported.
"There has been a slight increase compared to the 28,05 million people in March 2013, when 10.33 million lived in the cities and another 17.74 million lived in rural areas," Suryamin, the BPS chief, said in Jakarta on Thursday.
Contributing factors
In its report, the BPS found at least four key contributing factors to the growing poverty rate, the main one being high inflation caused by a hike in the price of subsidized fuels in June.
"Our inflation rate by the end of the year was 8.38 percent, while the March to September period itself contributed 5.02 percent to that total because of the fuel price hike," Suryamin said.
An increase in rice prices from Rp 10,748 (88 cents) per kilogram in March to Rp 10,969 a kilogram in September also took a toll on the poverty rate, alongside increases in retail prices of several other staple commodities such as chickens, eggs and chili peppers, which rose by 21.8 percent, 8.2 percent and 15.1 percent, respectively, during that period.
Making matters worse was the growth in the unemployment rate as of August 2013, which the BPS report showed reached 6.25 percent, a rise from 5.92 percent in February and 6.14 percent in August 2012.
Suryamin said prices of consumable goods contributed the most to Indonesia's poverty rate compared to other goods. Such commodities include rice, which impacted the poverty rate in urban areas by 24.81 percent and in rural areas by 32.72 percent.
Coming second as the biggest consumable commodity contributing to widespread poverty last year was cigarettes, contributing to poverty in the cities by 10 percent and 8.31 percent to those living in rural areas.
"The money used to purchase cigarettes is categorized in the [food] consumption category," Suryamin said. "[It is very surprising because] cigarettes contain no calories but have a very big impact."
Aside from food, other elements that also fueled Indonesia's growing poverty rate were the electricity price, education expenses, fuel costs, clothing, transportation costs and firewood.
Poverty across regions
In its report, the BPS found that the biggest growth of poverty was found in urban areas, with an additional 300,000 people falling into poverty, while the number in rural areas grew by 180,000 people.
Jakarta was rated as having the highest living cost in the country, with an average of Rp 7.5 million per month for the median household of 4.1 individuals, far above the national average of Rp 5.6 million.
The living cost in the capital was up 48.49 percent from the level of Rp 5.1 million recorded in 2007, the BPS said.
Next after Jakarta is Jayapura, the capital of Papua province, where the living cost was Rp 6.9 million for the median household of 4.5 individuals, followed by Ternate, North Maluku, at Rp 6.4 million, and Depok, West Java, at Rp 6.3 million.
Despite the high cost, however, Jakarta was not included in the top 10 cities for the highest increase in living cost, a list topped by Purwokerto in Central Java, with a 96.35 percent increase in living cost within the same 2007-2012 period.
The island of Java was the region with the highest number of people living in poverty, with 4.87 million in East Java, 4.7 million in Central Java and 4.38 million in West Java.
Hit-or-miss programs
According to the BPS report, some of the government's poverty alleviation programs, mainly its distribution of rice for the poor, or raskin, have failed to make a dent in the poverty rate.
In a survey it carried out in 61 cities, five categories of households were found to be as recipients of the government scheme targeted specifically for household within only two categories.
"The program missed its target. Families in categories that were not eligible also received raskin," Suryamin said. He called on the government to re-evaluate its programs to ensure they were being targeted at the right groups.
Armida Alisjahbana, the head of the National Development Planning Board (Bappenas), said on Thursday that a cash handout program initiated by the government to ease the impact of June's fuel price hike had not been effective in containing the poverty rate.
"The implementation of the program was not optimal because it did not help the poor in compensating for the significant rise of commodity prices caused by the increase in the fuel price," Armida said.
Under the handout program, each eligible household was entitled to Rp 600,000 in cash over the first four months after the implementation of the higher fuel prices.
"There was very little time to prepare for the social protection program after the fuel price was increased, especially in terms of coordination and promotion by regional officials," Armida said.
Vivi Yulaswati, the director for social protection and welfare at Bappenas, added that the distribution of the money had also been marred by various problems.
She said that to date, 3 percent of the Rp 9.3 trillion fund allocated for the scheme had not yet been distributed. Vivi said the main hitch stemmed from the distribution of cards that eligible citizens could use to claim the money.
Erik Satrya, an official from the People's Conscience Party (Hanura), echoed Armida's sentiments.
"The government's poverty programs, such as raskin and the cash handouts, offered no significant impact in lowering the poverty rate," he said. "With the poverty rate now above 11 percent, little improved from the 11.96 percent in 2012, the government has failed in reducing poverty."
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