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Inequality between rich and poor deepens in Jakarta

Jakarta Post - May 12, 2016

Rich spend less, poor spend more amid difficult economy – Jakarta Post. April 19, 2016
World Bank warns of Indonesia's rising inequality – Jakarta Post. December 8, 2015
NGO calls on Indonesia to reject upcoming WTO meeting – Jakarta Post. October 15, 2015
Mercedes-Benz sales up 20% as Indonesian economy sags – Jakarta Globe. August 17, 2015
Indonesia still a long way from closing wealth gap – Inter Press Service. May 29, 2015

Corry Elyda, Jakarta – For train commuters in Greater Jakarta, dozens of makeshift huts and tiny houses huddled along the railway are a common sight. Most of them are separated only by plywood sheets and use tarpaulins as roofs. They are set against a background of the gleaming glass of luxurious apartment and mall buildings.

On one side, people are struggling to make ends meet doing almost anything from scavenging to busking. On the opposite, people are easily spending millions just to buy foreign branded bags.

Such opposite poles of view and lifestyle are nothing new in the capital, but the recent finding of the Jakarta office of the Central Statistics Agency (BPS) shows that such inequality would likely prevail as the income gap between the rich and poor in the capital is sharpening.

Jakarta BPS head Syech Suhaimi said recently that the income gap, measured by the Gini ratio, in Jakarta increased from 0.43 last year to 0.46 in 2016. "When the Gini ratio is closer to 1, it means that the economic gap has worsened," he said.

Syech explained that the income of the rich, who are 20 percent of the population, increases while middle- and low-income residents suffer from declining incomes. "Jakarta has the highest Gini ratio among other provinces and the national average," he said, adding that the national Gini ratio was 0.41.

Eko Listiyanto, a researcher at the Institute for Development Economics and Finance (INDEF), said that the reason for the increasing Gini ratio was that the administration's programs did not directly affect the poor. "The realization of the city budget is low, so many social programs are not conducted," he said.

As of April 22, the city administration had spent 13.86 percent of its Rp 66.37 trillion (US$5.03 billion) budget this year, according to data from the Jakarta Financial and Asset Management Board (BPKAD).

The board revealed further that the administration had disbursed Rp 8.03 trillion from the budget. Rp 5.56 trillion was for routine expenditures, like employee salaries, and the remainder was for city expenditures.

Eko said that all social levels were affected by the economic slowdown, but upper-income people could still survive. "The lower-income people do not have that cushion. The administration's programs should have become their cushion," he said.

Syech explained that the city administration's evictions and forced relocations to low-cost apartments would definitely affect the ratio but the agency could not yet see it.

"It takes months to years to see the effect, just like the educational and health financial aid programs," he said, referring to the Jakarta Smart Card (KJP) and the Jakarta Health Card (KJS).

Since last year, the city administration has been forcefully evicting residents who live on state land and relocating those with Jakarta IDs to low-cost apartments on various justifications, ranging from the need to mitigate flooding, to suppressing prostitution and encouraging tourism.

Source: http://www.thejakartapost.com/news/2016/05/12/inequality-between-rich-and-poor-deepens-jakarta.html.