How poor is the Indonesian population?

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Anthony Budiawan Managing Director of Political Economy and Policy Studies (PEPS)

IO – Many Indonesian officials are very proud of Indonesia’s economic position, which ranks 16th in the world. According to the Statistics Indonesia (BPS), Indonesia’s 2017 Gross Domestic Product (GDP) reached IDR13,892 trillion. With a population of 259.17 million people, the average per capita income in 2017 reached IDR 53.6 million, or around 3,840 US dollars. With this income figure, Indonesia is categorized as a middle-income country: between the lower middle and upper-middle. 

According to international criteria, countries with per capita incomes below 1,005 US dollars are low-income or poor countries. Per capita income between US $ 1,006 to US $ 3,955 are low middle-income or almost poor countries. And per capita income between 3,956 US dollars to 12,235 are middle-income countries. And the rest are high-income or rich countries. 

Amid the euphoria of Indonesia becoming a middle-income country, suddenly we were shocked by bad news from the international agency Asian Development Bank (ADB). Not long ago, the ADB released reports that around 22 million Indonesians were suffering from hunger during the 2016-2018 period. This news is very shocking, like lightning in the middle of the day. It is also a shame: how can a country like Indonesia, with the world’s 16th largest economy, have 22 million people suffering from hunger? This number is very large, reaching around 8.5 percent of the total population. 

The ADB news work all of us from a dream – and wonder, is Indonesia so poor that 8.5 percent of the population suffers from hunger? And how poor are the people of Indonesia? 

 The Indonesian economy is built and is accumulated from the economy in the regions, namely the economy of the districts and cities, which totals 514. The economy in the district is represented by PRDB, which is Gross Domestic Regional Revenue. Divided by the total population in the district, we get the district’s average income per capita. The amount varies drastically, ranging from USD 329 to 45,823. Or 139 times different. The difference or gap in per capita income between districts is very large. 

The Arfak Mountains District in West Papua is the poorest district in Indonesia, with a per capita income of US $ 329, whereas Central Jakarta Administrative City is the richest region in Indonesia, with per capita income reaching 45,823 US dollars, far greater than South Korea’s per capita income which only reached 28,380 US dollars in 2017. Also, greater than Germany’s per capita income of 43,710 US dollars. 

Even sadder, residents of the Arfak Mountains district are counted as the second-poorest people in the world, one level above Burundi, which is the poorest country in the world with a per capita income of only US $ 280. And still below Malawi, which is the second-poorest country in the world with a per capita income of 340 US dollars. 

The poverty profile in Indonesia is indeed worrying. There are 6.56 million Indonesians spread across 29 districts who can be grouped as “very poor residents” with per capita income below US $ 1,000. They are generally in Eastern Indonesia: 10 Regencies in Papua Province, 13 Regencies in East Nusa Tenggara Province, 2 Regencies in West Papua Province, 1 Regency in West Sulawesi Province, 1 Regency in Maluku Province, 1 Regency in South Sumatra Province, and 1 Regency in West Nusa Tenggara Province. They are all equal and could be poorer than residents of the 20 poorest countries in the world. 

Then, there are 99.48 million “almost poor” people spread across 176 districts, or around 38.6 percent of the total population, who have a per capita income of under US $ 2,000. That is, they are poorer than the average Vietnamese population, with a per capita income of US $ 2,190 in 2017. 

With a poverty profile like this, it’s no wonder that 22 million Indonesians are suffering from hunger. It turns out that there are indeed still many Indonesians who fall into the category of poor and very poor, even equivalent to the poverty seen in the 20 poorest countries in the world. 

Hopefully, the above facts can make Indonesian officials become introspective and not arrogant about Indonesia’s economic position, which is ranked 16th in the world – because this economic position does not mean much. It is time for Indonesian officials to work earnestly to lift the lives of the Indonesian people from the abyss of poverty.