Tuesday, September 26, 2023 | 12:11 WIB

Wealth Inequality a Stumbling Block in Indonesia’s March to Prosperity

Jakarta, IO – Inequality from the Dutch colonial era to Jokowi regime 

In 1900, during the Dutch colonial rule, the top 10 percent of families held 43 percent of the total wealth, while the bottom 50 percent of families held just 18 percent. Before Indonesia gained its independence, during the second World War in early 1940s, income inequality was getting sharper. 

In that period, the richest 10 percent held 49 percent while the poorest 50 percent’s share was down to 16 percent. In the post-Independence era, after 20 years of Sukarno’s Old Order regime (1945-1965), the average income gap narrowed to the same level as in 1900. During the first 16 years of Suharto’s New Order regime (1966-82), the income gap was more or less the same as during Sukarno’s presidency, but in the second half (1982-98) the 10/50 ratio widened to 50 percent:13 percent. 

In the post-Reformasi era, especially during the Abdurrahman “Gus Dur” Wahid administration, it narrowed to 40 percent:18 percent. This was a noteworthy achievement. 

During Megawati Soekarnoputri administration, the wealth divide went back up. It even jumped sharply during Susilo Bambang Yudhoyono’s (SBY) first term (2004- 10), at 49 percent:13 percent. But SBY managed to rectify this in his second term (2010-14), albeit not too significantly (44 percent:16 percent). 

Unfortunately, during Joko “Jokowi” Widodo administration, the disparity worsened again. While the share of the top 10 percent was lower than SBY and Suharto eras, at 48 percent in 2021, the bottom 50’s share was down to a paltry 12.4 percent, lower than during the few years before the Independence and even during the Dutch colonial rule. 


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