Other Poverty Study
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Publication
Indonesia Poverty Assessment - Pathways towards Economic Security
(Washington, DC, 2023-05-10)Indonesia can build on its impressive track-record of poverty reduction to tackle more ambitious poverty reduction targets. Indonesia has made impressive gains in reducing poverty, with previously lagging regions catching up, and the Government’s goal to eliminate extreme poverty by 2024 practically met. As an aspiring upper middle-income country, however, Indonesia may want to widen its focus beyond extreme poverty by moving from the US$ 1.90 2011 PPP poverty line to higher lines for middle-income countries. The focus should also include economically insecure households susceptible to falling back into poverty. Is Indonesia’s current effort ready for this challenge Human capital outcomes are disappointing and worrying geographic disparities remain. Low productivity still prevents households from becoming economically secure. Shocks, including from climate change, continue to threaten reversal in poverty gains. In this report the authors identify several major pathways to tackle these challenges in a comprehensive and sustainable manner. -
Publication
No One Left Behind: Rural Poverty in Indonesia
(World Bank, Washington, DC, 2020-05)Indonesia has sustained robust growth over a long period, and this has enabled millions of citizens to move out of poverty. Indonesia’s gross domestic product (GDP) has risen at an average 5 percent a year since 1990 and 5.3 percent a year after the Asian financial crisis at the end of the 1990s. This growth has been supported by favorable international commodity markets, a large, young population, and a solid macroeconomic policy framework. Although the growth has moderated in the last few years as commodity prices and global financing conditions that had buoyed growth previously have become less favorable, annual GDP growth has still averaged 5 percent since 2014. As a result, GDP per capita is calculated to have grown six fold between 1990 and 2018, while extreme poverty declined from 57 percent to slightly less than 6 percent. However, many Indonesians remain vulnerable, and most of those who have escaped poverty still lack the economic security and well-being of the middle class. Despite the progress in poverty reduction, around 30 percent of Indonesians still risk falling back into poverty or become poor following a financial or nonfinancial shock. In addition, although their number is growing, fewer than a quarter of Indonesians are today free from worry about monetary poverty and therefore belong to the middle or upper class. Joining the middle class is associated with people who have additional disposable income for discretionary expenditures, such as on health care, education, and housing, which directly affect their well-being. While rural areas have also benefited from this broad-based growth, an overwhelming majority of the poor and vulnerable are living in rural areas. Making continued progress in reducing poverty will require that the challenges to improving the living conditions of the poor in rural areas are addressed. Against this backdrop, the objective of this report is to update the knowledge about rural poverty in Indonesia. The report analyzes the trends in rural poverty and inequality, the profile of the rural poor, and drivers of observed poverty reduction. New analysis is combined with syntheses of recent work, especially the recent report on urbanization. The goal is to consolidate relevant material on rural poverty. The final section of the report offers some reflections on future research to deepen the understanding of the challenges and the opportunities involved in reducing rural poverty in Indonesia. -
Publication
September 2019 PovcalNet Update: What's New
(World Bank, Washington, DC, 2019-09)The September 2019 global poverty update from the World Bank includes revised survey data which lead to minor changes in the most recent global poverty estimates. The update includes revisions to 18 surveys from four countries. As a result of the revised data, the estimate of the global 1.90 US Dollars headcount ratio for 2015 increases slightly from 9.94 percent to 9.98 percent, whereas the number of poor increases from 731.0 million to 734.5 million people. -
Publication
Aspiring Indonesia—Expanding the Middle Class
(World Bank, Washington, DC, 2019-09)Indonesia has seen tremendous progress in poverty reduction over the past couple of decades and, as a result, has made a successful transition from low-income to middle-income country status. As millions have moved out of poverty and extreme poverty, we have also witnessed the rise of Indonesia’s middle class, which now accounts for 20 percent of the total population, or 52 million Indonesians. This group important for Indonesia’s upward trajectory, but it still too small for the ambitions of Indonesia. Expanding the middle class will boost economic growth, strengthen an influential constituency for better governance, and widen and deepen the tax base. An expansion of the middle class, if accompanied by continued growth in the incomes of the poor and vulnerable, will also help to decrease inequality and prevent polarization of the country. One of the key development questions that Indonesia faces is how to expand the middle class. What will be required to bring the 115 million people who are no longer in poverty and vulnerability into the middle class? The future of Indonesia lies partly in the fate of this aspiring middle class, 45 percent of the population, so that they can both share in and help to drive the country’s growing prosperity. Government policy can play an instrumental role in expanding the middle class. This can be done by increasing the level and quality of education, and the skills of the population, and making sure there are well-paid jobs waiting for those in the aspiring middle class. It also means ensuring access to social protection to help lift these aspirers into the middle class and keep them there once they arrive, as well as improving the quality of the public services upon which they currently depend. Resolve to expand the middle class will place greater stress on government budgets. The government will need increasingly rely on the middle class, whose income taxes will finance much of the investment that a growing Indonesia will need. This will require a new social contract with the current – and future – middle class so that they will embrace the policies that both benefit themselves while also helping to expand their ranks, rather than closing off opportunities for others, and creating political polarization—as has occurred in some countries in the region in recent years. -
Publication
Indonesia’s Global Workers: Juggling Opportunities and Risks
(World Bank, Jakarta, 2017-11)International labor migration is an important sector of the Indonesian economy in its own right, requiring commensurate efforts to improve its professionalism as a sector and instill modernization across its various components to maximize its potential for the benefit of all stakeholders.This report aims to point towards the best policy mix for Indonesia’s various international migrant worker groups who face widely differing risks and gain diverse economic benefits from migration. Following introduction, Section 2 of the report looks at the major profiles of Indonesian migrant workers and their reasons for migrating. Section 3 focuses on the discussion about female domestic workers. Section 4 delves into the issue of undocumented migration, including the government’s efforts to encourage documented migration. Section 5 then looks as how best to sustain the benefits of migration, with particular reference to a third profile of migrant workers, namely those who work in the more developed countries of East Asia and who generally earn the highest wages. Finally, Section 6 rounds off the report with broad policy recommendations -
Publication
Improving Service Levels and Impact on the Poor: A Diagnostic of Water Supply, Sanitation, Hygiene, and Poverty in Indonesia
(World Bank, Washington, DC, 2017-10-12)The objective of this report is to provide an empirical basis for more inclusive and equitable service delivery in the water and sanitation sector in Indonesia. Although the GoI has established a program and strategy for achieving universal access to water supply and sanitation and zero slums (the 100-0-100 program, which aims for 100 percent access to water supply, zero urban slums, and 100 percent access to sanitation), these targets will be achieved through different service level sub-targets. For water supply, the target is for 40 percent of the population to have access to piped water and 60 percent to non-piped (in urban areas, 60 percent piped and 40 percent non-piped), whereas for sanitation, universal access is defined as 15 percent of the population having access to basic sanitation (a toilet that ensures hygienic separation of human excreta from human contact), 12.5 percent to centralized and decentralized sewerage systems, and 72.5 percent to on-site sanitation with improved fecal waste management. A poor-inclusive approach to universal access—one that improves the ability of and opportunity for the poor and vulnerable to benefit from water and sanitation services—can help to ensure that Indonesia not only achieves its service delivery targets, but that water supply and sanitation become key drivers of a reduction in inequality, enhanced health and well-being, and economic growth and prosperity. Policy recommendations are prioritized based on their expected impact on these development goals, and the strength of the evidence base for the solution proposed. -
Publication
Improving Service Levels and Impact on the Poor: A Diagnostic of Water Supply, Sanitation, Hygiene, and Poverty in Indonesia
(World Bank, Washington, DC, 2017-10)The objective of this report is to provide an empirical basis for more inclusive and equitable service delivery in the water and sanitation sector in Indonesia. Despite recent gains, there are close to 100 million people without improved sanitation and 33 million without improved drinking water. These figures hide the persistent divides between urban and rural populations and among different income levels in access to services, and they mask underlying gaps in quality faced by all households, regardless of income or geographic location. Unequal access to services at the beginning of life is a key driver of inequality, placing children at a unfair disadvantage from the outset. The report shows that children living in communities where open defecation is practiced and where the quality of drinking water is poor are more likely to be stunted and suffer from cognitive deficits later in life. Improving the ability of and opportunity for the poor and vulnerable to benefit from water and sanitation services can help to ensure that Indonesia not only achieves its service delivery targets, but that water supply and sanitation become key drivers of a reduction in inequality, enhanced health and well-being, and economic growth and prosperity. -
Publication
Interwoven: How the Better Work Program Improves Job and Life Quality in the Apparel Sector
(Washington, DC, 2015-09-28)The Better Work Program has its roots in the Better Factories Cambodia (BFC) program, established in 2001 as a follow-on from the 1999 U.S.-Cambodia Bilateral Trade Agreement. The free trade agreement (FTA) was the first to link improved labor conditions with greater market access. The BFC program benefitted all the key stakeholders by improving work conditions, supporting the growth of the apparel sector in Cambodia (benefitting all local stakeholders), and boosting developed world buyers’ reputation by sourcing from ethical workplaces. BFC has also helped to cushion the negative effects of external changes to the trading environment in the apparel sector (the end of the Multi-Fibre Arrangement quota system in 2005 and the global financial crisis in 2008–09). The program has grown substantially; as of December 2014, BW has reached over a million workers in more than 1,000 factories across eight countries (Bangladesh, Cambodia, Haiti, Indonesia, Jordan, Lesotho, Nicaragua, and Vietnam).