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Indonesia's poorest see little benefit from economic growth

Rapidly rising population, low wages and high unemployment are hampering efforts to reduce inequality

Indonesia's poorest see little benefit from economic growth

Slum dwellers in the Tanah Tinggi area of Indonesian capital Jakarta, seen in this 2015 file picture, often work as scavengers. (Photo by Ryan Dagur/ucanews.com)

Published: April 24, 2018 05:14 AM GMT

Updated: April 24, 2018 05:24 AM GMT

Since his wife's death last year from kidney failure, Udin's life has been rough and melancholy. He prefers sleeping in public places to going home.

Udin says he has no reason to stay at a temporary shelter in East Jakarta where other scavengers, including one of his own children, live.

The 60-year-old is a member of the Betawi ethnic group native to the Jakarta region. The term derives from the old name for the city, Batavia, during Dutch colonial rule.

The Betawi are increasingly marginalized as people from throughout the sprawling archipelago drift to the capital.

Several plots of land owned by Udin's father were sold to newcomers when he was a child.

Uneducated Udin now does not have enough money to rent a house, let alone buy one. His only possession is a wooden cart for collecting recyclable metal, plastic and glass.

"Even to meet daily needs, I have to struggle and rely on other people," he said.

In another case, Abdul Rahman lacked farmland and employment in Central Java, so three years ago he left his wife and five children to relocate to Jakarta.

"I have to support my family," said Rahman, 50, whose first child studies at a university.

Finding work proved difficult but early last year he got a job selling porridge in a business district. Now he has a very small but at least steady income.

"Most of it I send to my wife," said Rahman, who only goes home following the Ramadan month of Muslim fasting.

Udin and Rahman are among millions of Indonesians whose lives have not been uplifted by the nation's economic development.

According to official Indonesian statistics more than 26 million, or 10.2 percent of the population, live in poverty. However, international agency Oxfam believes the real figure is much higher.

The number of Indonesians falling below the US$3.10 per day World Bank "moderate" poverty line is about 93 million or 36 percent of the population.

Indonesia's economic growth last year of 5.1 percent is predicted to rise to 5.3 percent this year.

However, Enny Sri Hartati, executive director of the Institute for Development of Economics and Finance, said this paled in comparison to rapid population growth. Indonesia already has more than 260 million inhabitants.

If significant corrective action is not taken, inequality will deepen, Hartati told ucanews.com.

The high birth rate has undermined efforts to reduce unemployment of about 5.5 percent or 7 million of the 128 million workforce.

The Tanah Tinggi slum is very close to fancy shopping centers, upmarket hotels and government offices. (Photo by Ryan Dagur/ucanews.com)


Under shadow of wealth inequality

Prabowo Subianto, chairman of the Great Indonesia Movement Party known as Gerindra, complained that 80 percent of the country's resources are controlled by a handful of people.

Inequality is the sixth highest in the world and has been growing fastest among Southeast Asian nations.

Oxfam states that low wages as well as unequal access to education and infrastructure, such as electricity and decent roads, threaten social cohesion. 

There were 10 Indonesians on the 2018 Forbes business magazine list of the world's 2,208 richest people. Those Indonesians had combined wealth of US$596 billion.

Cigarette tycoon Robert Budi Hartono and his banker brother Michael Bambang Hartono were ranked 69th and 75th respectively.

Oxfam states that the wealth of the four richest men in Indonesia exceeds that of 100 million Indonesians combined.

Syarkawai Rauf, chairman of the Indonesian Business Competition Supervisory Commission, contrary to other assessments, asserts that inequality is gradually declining.

However, he said government policies should be more oriented towards narrowing the gap between rich and poor.

Rauf believes there is too much focus on further developing the most populous island, Java.


Building from periphery

According to Hartati, import-dependent Indonesia has lost much of its sovereignty.

Debt as of February 2018, mostly from public sector borrowing, stood at US$352.2 billion or 34 percent of gross domestic product.

About 50 percent of strategic sectors of the economy, including mining and water resources, are controlled by foreign investors, she said.

The government needed to focus on industries that could boost people's productivity and creativity.

Hamong Santono, a senior officer at the International NGO Forum on Indonesian Development, called for greater government cooperation with civil society groups to tackle inequities.

He noted that the Millennium Development Goals set by world leaders in 2015 included eradicating all forms of poverty and hunger

Specific aims related to access to clean water, sanitation, education and gender equality as well as inclusive economic growth and action to combat climate change.

Santono said it was important that these key issues were reflected in policy choices for Indonesians voting in regional elections in June and a presidential election next year.

Local government, regional and national planning measures should be harmonized, he added.

President Joko Widodo has vowed to fight inequality.

The central government has increased education funding for poor regions, including the Christian-majority provinces of East Nusa Tenggara and Papua.

The government has also provided land certificates to millions of farmers and built dams to boost their productivity.  

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