Indonesia - More needs to be done to help the poor in Indonesia

When it comes to poverty, even the poor turn a blind eye. In Medan last week, my young companions, the offspring of some of the poorest families in North Sumatra, blithely ignored the shanties that lined the narrow lane as we travelled to and from their residence at the local Salvation Army children's home.

I was there to deliver musical instruments, teach the home's brass band and distribute goodies donated by well-wishers in Singapore. But the barefoot, half-naked young children who played in the street outside the building may well have been just as deserving.

Indonesian politicians talk about the poverty issue incessantly, particularly when they see an opportunity to use it against their political opponents. In August, for example, when President Susilo Bambang Yudhoyono trumpeted the economic achievements of his government in a speech to the House of Representatives, there was an outcry.

Former president Megawati Sukarnoputri, chairman of the opposition Indonesian Democratic Party - Struggle (PDI-P) acknowledged that the Yudhoyono administration had helped accelerate economic development. The problem, she said, was that it had failed to bring social justice. "Social justice is an inclusive part of our independence," she declared at a party event on Aug 17.

Mr Aburizal Bakrie, chairman of the Golkar Party and a nominal ally of the President, had a similar critique. "The nation's independence is felt and enjoyed only by those in power," he said, "but not by the marginalised in society." Mr Bakrie, one of the wealthiest men in the country, is widely regarded as a possible candidate in the 2014 presidential election.

As in most countries, measuring poverty in Indonesia is a controversial business, full of methodological traps.

Using basic needs as a yardstick, the Central Statistics Bureau (BPS) estimates that there were 37 million Indonesians living in poverty in 2007, a figure that it says has fallen to around 30 million currently.

The Asian Development Bank (ADB), on the other hand, focuses on purchasing power. And by this measure, the situation looks very different.

Indonesia, the ADB reports, was the only country in South-east Asia where the number of people living on less than US$2 a day actually increased from 2008 to last year. The strong economic growth the nation experienced throughout this period, it seems, was of little help.

These statistics can be found in Poverty In Asia And The Pacific, a report written by ADB economists Guanghua Wan and Iva Sebastian, and released in August.

Following the definition adopted by these researchers, there were about 117 million Indonesians living in poverty last year, up from 102 million in 2008. The current figure represents about 48 per cent of the total population.

Indonesia's rich, meanwhile, have been doing very well. According to the Indonesian Deposit Insurance Corporation, the number of citizens holding bank accounts with more than one billion rupiah (US$114,000) surged by 19.5 per cent in August compared with the same month last year. This is three times the rate of economic growth during the same period.

How can this situation be changed? Some commentators focus on the need to place greater emphasis on education. They note that despite official efforts, about 5 per cent of the population remains illiterate. Others argue that anti-poverty programmes fail because of the corruption and general incompetence of the officials involved.

These are undoubtedly contributing factors, but they cannot account for everything. After all, while illiteracy is almost a guarantee of continued poverty, it is a curse that plagues only a minority.

Corruption is endemic in countries such as the Philippines and Thailand as well. Yet despite negative gross domestic product (GDP) growth in 2009, these two nations had more success than Indonesia tackling poverty during the 2008-2010 period. ADB data shows that the absolute number of poor in the Philippines held steady despite continued population expansion, while Thailand experienced a slight decrease.

Anti-poverty programmes may fail because they lack focus. One suggestion is to make better use of the expertise developed by some of the thousands of non-governmental organisations that have sprung up across Indonesia in recent years. NGOs that focus on assisting farmers, fishermen, urban slum dwellers and the educationally deprived, for example, could prove invaluable in formulating policies that take account of the differences between economic sectors and geographical regions. They could also perform a vital monitoring function, ensuring that government programmes retain their effectiveness.

Whatever definition of poverty you accept, the fact remains that millions of people in Indonesia earn barely enough to feed their families. Their children also have little or no access to clean drinking water, much less health care and proper basic education.

Indonesia's politicians need to do more than just talk.

Bruce Gale

The Straits Times

Business & Investment Opportunities

YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Consulting, Investment and Management, focusing three main economic sectors: International PR; Healthcare & Wellness;and Tourism & Hospitality. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programs. Sign up with twitter to get news updates with @SaigonBusinessC. Thanks.