29 October 2011

Indonesia 'should be ashamed of failure to reduce poverty'

Jakarta Globe - October 27, 2011

Aguis Triyono -- The combined wealth of Indonesia's 40 richest people is equivalent to that of about 60 million of its poorest citizens, a nongovernmental organization said on Wednesday.

"In 2010, we noted that the wealth of these 40 people had reached Rp 680 trillion [$76.8 billion]," said Setyo Budiantoro, the executive director of the Center for Welfare Studies (Prakarsa). "This is about 10.3 percent of Indonesia's entire gross domestic product."

That Rp 680 trillion, Setyo said, also represented the wealth of about 15 million of the country's poorest families, or about 60 million people. "The economy is now dominated by a group of super-rich people who number very few," he said.

The percentage of Indonesia's GDP made up by the net worth of Indonesia's super-rich is far larger than that of countries like the United States, Germany, China and Japan, Setyo added.

Even though the combined value of the country's 100 million bank accounts stood at Rp 2,400 trillion, he said, about 40,000 bank account holders accounted for close to Rp 1,000 trillion of the total amount.

"These various facts show how high the wealth disparity and the poverty level is in Indonesia," Setyo said.

Citing research conducted by the Asian Development Bank, Setyo said that within just three years the number of poor Indonesians had risen by about 6.7 percent to 43.1 million in 2011.

The country's performance in eradicating poverty was even worse than Southeast Asian neighbors Cambodia and Laos, which during the same period each managed to lower the number of their poor.

"Based on the ADB data, in the past three years Cambodia has been able to reduce poverty from 4.1 million people in 2009 to 4.09 million in 2011 while Laos cut poverty from 2.18 million in 2009 to 2.04 million in 2011," he said.

"In Southeast Asia, Indonesia is the only country in which poverty is on the rise. Compare that to Laos and Cambodia, which have few natural resources and bad government. This shows that the government has failed in its battle against poverty."

Setyo also accused the government of manipulating its poverty line for political purposes. The Central Statistics Agency (BPS), he said, put the number of Indonesia's poor at just 30.2 million, which is much lower than the ADB's 43.12 million. While the ADB marks the country's poverty line at an earning level of $1.25 per day, the government has set it at $1.13.

Setyo said that if Indonesia did as many other countries and set its poverty line at $2 per day, the statistic for the number of poor here would further increase to reach at least 117 million, or about half the population.

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