Growth to Overcome Poverty

Kompas/Ferganata Indra Riatmoko

Residents pass by a poor kampong area on the banks of the Winongo River in Pakuncen subdistrict, Wirobrajan district, Yogyakarta, on Thursday (2/2). Based on data from the Central Statistics Agency (BPS) released in Jakarta on Wednesday, the Gini ratio in Yogyakarta in September 2016 was the highest in Indonesia, namely 0.425.

The number of poor people recorded is expected to increase in 2020. Quality growth must be encouraged in addition to government assistance to overcome the impact of Covid-19.

Statistics Indonesia (BPS) announced that the number of poor people in September 2020 had increased by 0.97 percent or 2.76 million people on an annual basis. The total number of people classified as poor was 10.79 percent of the population or 27.55 million people. Meanwhile, the Gini ratio, which measures prosperity inequality, did not move significantly, from 0.380 to 0.385.

Also read: Social Assistance not Enough, Creates more Jobs!

The increase in the number of poor people had previously been suspected because the Covid-19 pandemic has disrupted economic activity. However, the increase in the number of poor people was not as big as estimated by several institutions. The government\'s nine social protection programs has succeeded in reducing the number of poor people.

Nevertheless, the record must still be given on the poverty line, namely Rp 458,957 per capita per month or around Rp 15,000 per day, which is still far from the sustainable development target of US$2 per person per day.

The Poverty Severity Index describes the expenditure inequality among the poor.

Moreover, the poverty depth level also increased from 1.61 in March 2020 to 1.75 in September. The depth of poverty describes the average distance between the expenditure of the poor and the poverty line. Meanwhile, the Poverty Severity Index increased from 0.38 to 0.47. The Poverty Severity Index describes the expenditure inequality among the poor.

Kompas/Totok Wijayanto

Crowded area in Muara Angke, Penjaringan, Jakarta, on Saturday (3/2). Based on Central Statistics Agency data, from the total 26.58 million poor people in Indonesia, about 10.27 million lived in urban areas.

The cause of the increasing number of poor people cannot be attributed to a single factor but the pandemic has played a role. BPS data shows that the number of open unemployed people has increased, the working age population affected by Covid-19 being 29.12 million people or 14.28 percent.

In 2021, we not only want to achieve the economic growth target of 4.5-5.3 percent, but also to reduce the number of poor people. To enable the two to work together, growth needs to be qualified.

Also read: Growth Map

This year\'s exports are expected to improve in line with improvements in state of health in trading partner countries. Small and medium enterprises that absorb about 40 percent of the workforce must be facilitated to export, including plantation SMEs that produce CPO, coffee, pepper and fisheries.

Through the Digital Market, MSMEs have access to participate in the procurement of government goods and services, especially the state-owned enterprises.

Investment should become easier, especially for new business fields with new entrepreneurs. The use of local content is expanded and deepened, as has been done by the State-Owned Enterprises Ministry. Through the Digital Market, MSMEs have access to participate in the procurement of government goods and services, especially the state-owned enterprises.

Also read: Politics of MSME Development

The manufacturing industry is the foundation for creating jobs that will generate public consumption. However, creative industries, such as film, music, food, should also get attention; all the three become basic needs as a result of people doing more activities from home.

KOMPAS/AGUS SUSANTO

An ojol (ride-hailing motorcycle taxi) driver takes a packaged drink from a free lunch stand on Jl. Raya Jatiwaringin in East Jakarta, Thursday (2/4/2020). The residents of Waringin Permai housing complex have arranged the stand to provide free meals to ojol drivers and the poor from 26 March to 7 April 2020. The community initiative, which distributes 200 meals every day, is a show of solidarity to support the vulnerable during the Covid-19 outbreak in the capital.

All of this must be supported by strong institutions that resist corruption, nepotism and collusion. Corruption of social assistance or baby lobster export licenses reminds us that we need an institution that is not extractive.

(This article was translated by Hyginus Hardoyo)