Overcoming Disparities

ADITYA DIVERANTA UNTUK KOMPAS

Duri Selatan Village, Tambora, West Jakarta, one of the densely populated areas that occupies the banks of Kali Duri, Monday (25/2/2019).

A warning that we have to be aware of widening economic inequality amid the uncertainty resulting from the COVID-19 pandemic has again been given.

This newspaper on Wednesday (1/9/2021) raised the issue that we have to be cautious about the occurrence of a K-shaped economic growth curve. This curve has two branches going in different directions. For one group, there is rapid growth, but for the other group, things get worse. As a result, the economic gap in society widens.

Concerns that economic inequality will worsen between countries and within countries due to the pandemic have been voiced since last year by the World Bank and the International Monetary Fund (IMF), among other institutions.

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Economist Joseph Stiglitz wrote in the Fall 2020 edition of the IMF\'s bulletin that there were a number of reasons that inequality might worsen. The handling of the pandemic was crucial. Some of them included the condition of health services and health inequality; the readiness and resilience of the country\'s economy; the community response, including trust in science and experts; public trust in government directives; and the behavior of the community in balancing personal freedom against responsibility toward those around them.

Inequality has many dimensions, not just economics or consumption. Inequality also has dimensions of gender, education, age, occupation and region.

KOMPAS/TOTOK WIJAYANTO

Building construction project activities in the Cikini area, Central Jakarta, Thursday (20/5/2021).

Economists Abhijit V Banarjee and Esther Duflo noted that inequality also concerned welfare (Good Economics for Hard Times, 2019). This includes education; access to health services, including basic vaccinations as a child; maternal safety during childbirth; chronic malnutrition in children; and low access to nutritious food despite the availability of a variety of cheap local foods.

Inequality can also be caused by a lack of urban infrastructure, rural and inter-regional roads, electricity, clean water, toilets or communication infrastructure and the ability of the community to utilize digital technology and the internet to increase productivity.

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Types of work and wages contribute to the gap. The presence of companies, especially those that are based on digital technology and have successfully entered the world of digital business, create a need for new skilled workers with higher wages.

The role of local administrations is very important, so that the national strategy can be implemented in policies in accordance with the conditions of the local community.

The pandemic is exacerbating the inequality that existed before. The government has proposed that the 2022 State Budget (APBN) be used to overcome poverty and create jobs. The emphasis is on improving the quality of human resources and the country’s economic transformation. The role of local administrations is very important, so that the national strategy can be implemented in policies in accordance with the conditions of the local community.

Inequality will hinder growth and cause social problems. The development strategy to overcome the pandemic must respond to the changes it has caused.

(This article was translated by Kurniawan Siswoko).