Four years under Jokowi: Indonesia lags behind in human development

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Independent Observer
Abdurrahman Syebubakar
Chairman of the Managing Board of the Institute for Democracy Education (IDe), a Jakarta-based Think Tank promoting human development and democracy

IO – The latest global Human Development Report (HDR) released by the United Nations Development Program (UNDP) was the 2016 HDR, providing selected themes, analyses and policy recommendations. The Report also presented the 2015 human development index (HDI) values and ranks. For the 2017 HDI values and ranks, UNDP only published “Human Development Indices and Indicators: 2018 Statistical Update”.

To put the human development story into perspective, let me first touch on the latest HDR of 2016, devoted to the theme of “human development for everyone”. As the title implies, the Report argues that universalism is key to human development and human development for everyone is attainable.

The Report raises the fundamental questions of who has been left behind in progress in human development, and how and why. It then seeks to ascertain how human development can be ensured for everyone, now and in the future.

Human development progress has been impressive on many fronts, but not universally, notes the Report. Gains in human development are uneven across countries; socio-economic, ethnic and racial groups; urban and rural areas; and women and men. While some enjoy the fruits and affluence of development, millions of people from various groups suffer basic and multiple deprivations, preventing them from reaching their full potential in life.

Humanity is facing a yawning gap in global wealth possession. The richest 1 percent of the global population holds no less than 46 percent of the world’s wealth. Around 1.5 billion people in the world are reported to still live in multidimensional poverty. In 2013, approximately 766 million people were estimated to live in extreme poverty, with income equivalent to just $1.90 a day. The Report furthermore reveals that, worldwide, one person in nine is hungry, one in three is malnourished, 18,000 people a day die from air pollution, HIV infects 2 million people a year and an average of 24 people are displaced from their homes every minute. It is also noted that “more than a billion people live with some form of disability and are among the most marginalized in most societies. They face stigma, discrimination and inaccessible physical and virtual environments” (HDR 2016)

The Report discloses many more issues and challenges of today’s humanity, issues which may persist in the future unless comprehensive strategies to address them commence from the present.

To address the above challenges, the Report forcefully argues for a four-pronged policy strategy at the national level. This includes reaching those left out, using universal policies such as inclusive growth, not mere growth; pursuing measures for groups with special needs: for instance, persons with disabilities; making human development resilient; and empowering those left out by employing multiple measures.

Now, let me turn into to the global HDI values and ranks and the state of Indonesia’s human development, among that of other countries. Before proceeding, it should be noted that HDI is a measure for assessing progress in three basic dimensions of human development, namely, a long and healthy life, access to knowledge, and access to a decent standard of living.

Since the first HDR was released in 1990, the global HDI value has increased by about 22 percent, from 0.598 to 0.728, meaning about 0.78 percentage point increase per year. While rising across all regions, the HDI rates of growth vary significantly.  South Asia recorded the strongest growth over 1990–2017, at 45.3 percent, followed by East Asia and the Pacific at 41.8 percent and Sub-Saharan Africa at 34.9 percent.

Indonesia is in 116th position out of 189 countries and territories ranked in the 2018 human development statistical update, declining by six positions from 110th place in 2014.

Among ASEAN member countries, Indonesia is in fifth place behind Singapore (9), Brunei Darussalam (39), Malaysia (57) and Thailand (83), all of which figure in “very high” and “high” human development categories.

Indonesia’s HDI value of 0.694 places the country in the “medium human development” category, alongside other ASEAN member countries such as the Philippines (0.699), Vietnam (0.694), Laos PDR (0.601), Cambodia (0.582) and Myanmar (0.578).

Between 1990 and 2018, Indonesia’s HDI value increased from 0.528 to 0.694, a rise of 31 percent, about 10 and 14 percentage points lower than those of East Asia and the Pacific and South Asia regions, respectively. In 2016, other countries in Asia, like Nepal, Myanmar and Pakistan, improved their HDI status from “low Human Development” to “medium Human Development”, whereas Indonesia has slipped ranks since then.

This mixed situation demonstrates that despite a consistent increase of Indonesia’s HDI value, the pace of increase is slower than that of other countries. Moreover, when discounted for inequality, Indonesia’s HDI value falls from 0.694 to 0.563, a loss of 18.8 percent, higher than the average loss of East Asia and the Pacific region at 15.6 percent. In terms of the sex disaggregated HDI, Indonesia’s GDI value is 0.932, lower than that of China and Philippines at 0.955 and 1.000, respectively.

The sluggish rise of Indonesia’s HDI and its derivative indices such as the GDI relative to other countries is coupled with the painfully slow reduction in the rate of poverty. For the last four years, the rate has only reached 0.29 percent annually, less than half of the annual reduction rate of 0.64 percent for the period of 2009-2014. By March 2018, almost 26 million people still live in poverty, decreasing annually by 445,000 people from 27.73 million poor in 2014.

This is not to mention the high number of the vulnerable, no less than 70 million people, living just slightly above the poverty line.

Income distribution, measured by gini ratio, has remained stagnant at a worrying level for the last four years. It was declining negligently by 0.025 points, from 0.414 in September 2014 to 0.389 in March 2018.

To make matters worse, Indonesia is the fourth most unequal country in the world, after Russia, India and Thailand, according to the Swiss Global Wealth Report 2016. The top 1 percent holds nearly 50 percent of Indonesia’s wealth. Furthermore, based on the Oxfam and INFID 2017Report, the wealth of the richest 4 individuals in Indonesia is equal to that of the poorest 100 million people in accumulation.

What has the government done?
The government has launched multiple interventions in the field of social protection, basic services and sustainable livelihood, anchored in two main interrelated strategies, as stipulated in the mid-term development plan (RPJMN), namely reducing the burden of the poor and increasing the poor’s income.

During the past four years, some 1,400 trillion rupiah has been spent for social protection, education and health sectors. Yet, poverty and inequality remain stubborn, if not getting worse, and Indonesia’s human development outcomes lag behind those of other countries. All this is explained rather by political than technocratic and macroeconomic reasons.

Borrowing the analysis of Joseph E Stiglitz in “The Great Divide” (2015), too much of the wealth at the top of the ladder of the society – the rich and the super-rich – stems from exploitation, whether from the exercise of oligarchy or from the absolute devotion to a predatory economic system and practices. Too much of the poverty at the bottom of the income spectrum is due to economic discrimination, combined with the failure to provide adequate education and health care for the poor and vulnerable.

Indeed, present-day Indonesia applies an economic model that doesn’t serve a majority of its citizens and political practices that result in deprivation for little people. Physical infrastructure has been the hardcore orientation of development, whereby a small state intervention recipe, as prescribed by neoliberalism (including that in social services) has become the policy norm. In the terms used by Daron Acemoglu and James A. Robinson in “Why Nations Fail” (2012), these are extractive economic and political institutions. They lead to twin economic and political inequalities, as coined by Amartya Sen (1998) which negatively reinforce each other. It is a vicious circle!

Unless political courage and vision arise from the country’s top leadership to revisit the current oligarchic system and neoliberal dogma in the realm of Indonesia’s political economy, one cannot expect to see positive changes. No matter how many programmatic interventions are put in place and how much money is spent, similar issues will arise and revert or even worse, “just like salting the ocean”.

Hence, a paradigm shift from oligarchic power and super-neoliberalism to substantive democracy and human development which places people at the center of development is an absolute necessity.