1. Poverty
Poverty is hunger, lack of shelter, being sick and not being able to see a doctor. Poverty is not being able to go to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom.
The Republic of Indonesia is a country in Southeast Asia and Oceania. Indonesia comprises 17,508 islands with a population of around 230 million people; it is the world's fourth most populous country, with the world's largest population of Muslims.
In Indonesia, the “poverty line” refers to the daily minimum requirement of 2,100 kcal per capita plus the non-food minimum requirement, such as for living, clothing, schooling, transportation, household necessities, and other basic individual needs. The value of expenditure (in rupiahs) is needed for fulfilling the basic minimum requirement including food and non-food is called poverty line. A person who cannot afford to fulfill the basic minimum requirement is categorized as poor.
In 2007 23.6 million rural Indonesians were living below the national poverty line, 1 million less than in 1996. Poor people represent 20 per cent of the rural population and 11 per cent of the total population. But the overall national poverty rate masks the large number of ‘near-poor’ people who live just above the poverty line and are at risk of sliding below that line into poverty. In 2004 about 30 per cent of the population were living above the national poverty line, but they were subsisting on less than two dollars a day. For this reason poverty reduction strategies need to focus on increasing the incomes of both poor and near-poor people.
Increasingly, poverty is concentrated among rural households. The poorest people in rural areas tend to be farm labourers working on other people’s land, and smallholders farming on extremely small plots. There are a large proportion of women in the labour force, but they earn less than men. Poor women are often physically overworked because they have to attend to household work in addition to agricultural tasks. Often they are excluded from decisions that affect them.
The poorest areas of Indonesia are the remote eastern islands, where 95 per cent of people in rural communities are poor. Unsustainable livelihood systems and isolation make people vulnerable to external shocks and are the principal causes of poverty, mainly in the upland areas.
In many provinces in Eastern Indonesia farmers make their living by harvesting a single crop on dry land. They live in a subsistence economy and are not able to achieve food self-sufficiency through their farming activities. Many live in coastal areas that are environmentally degraded. Upland villages, which are the most disadvantaged, require development programmes adapted to their specific needs. Many of these remote areas are accessible only by boat, on foot or by small plane. The road network is in poor condition and requires major investment.
The eastern provinces are also home to many indigenous communities, which are often on the margins of development processes and programmes.
2.Poverty in Indonesia: The Economic Factor
Indonesia is still emerging from its devastating economic crisis of 1997-98. At the same time it must face the challenges posed by terrorism and areas of domestic insecurity as it continues its enormously challenging and fundamental transition to a decentralised, democratic and prosperous society.
Good progress is being made toward restoration of macroeconomic stability and fiscal sustainability, but at least half of the country's population remains affected by poverty. Since the key to growth and poverty reduction in Indonesia is increased investment in productive capacity, a key challenge for the Indonesian government is to improve the country's investment climate.
The tsunami which struck north-western Sumatra on 26 December 2004 illustrated dramatically and tragically Indonesia's vulnerability to natural disasters. Australia, a major donor of humanitarian assistance to Indonesia since the economic crisis of the late 1990s, responded immediately to this disaster including by agreeing with the government of Indonesia to form an Australia-Indonesia Partnership for Reconstruction and Development, a commitment of $1 billion over 5 years.
Poverty in Indonesia is heavily concentrated among those with little or no formal education. A major program in basic education is being implemented to assist the creation of a well-resourced mainstream education system.
An integrated approach to poverty reduction in eastern Indonesia is also being developed, with a focus in Nusa Tenggara Timur province. Initially this will include helping the Government of Indonesia develop new approaches to poverty reduction and better district level governance.
The geographic focus of the aid program remains eastern Indonesia, which includes some of Indonesia's poorest provinces. Various provincial indicators were analysed as the basis for selecting a group of eight provinces as the broad target for a substantial portion of the direct interventions at the sub-national level.
3. Social Factor (Health & education)
The effects the financial crisis on enrollment at the national level seems to have been limited. In the next year, all losses in enrollment were recovered. At the senior secondary level, enrollment has continued to rise steadily over the course of the crisis. There is, however, evidence of delayed enrollment as a result of the crisis. The average age of children by school type was decreasing up to 1997 and since then has risen continuously. The average age of children in primary school dropped from 9.75 to 9.59 from 1995 to 1997 and since then steadily increased to 9.60 in 1998 and to 9.61 in 1999. A similar trend can be observed for the transition from junior to senior secondary school. The average age of junior secondary students moved from 14.23 in 1995, to 14.18 in 1997, to 14.21 in 1998 to 14.27 in 1999.
Health indicators have been improving steadily during recent decades. Life expectancy at birth rose from 48 to 65 years over the same period. Despite these impressive achievements, Indonesia’s indicators still lag behind those of its neighbors. For example, life expectancy at birth in Malaysia stands at 72, 66 in the Philippines and 70 Thailand. The figures on child mortality tell a similar story. Infant mortality in 1996 was 11.4 in Malaysia, 37 in the Philippines and 34 in Thailand.
On the whole, health outcomes across Indonesia’s provinces track education outcomes fairly closely. Once again, the impression is of considerable geographic variation. While Indonesia as a whole has fairly encouraging education and health indicators, this hides the fact that there exist pockets of considerable hardship. In Sumatra, the provinces face high infant mortality, but surprisingly, not so much malnutrition (meas ured in terms of weight for height for children under 5). Malnutrition is a significant problem in Aceh, the most northern province. Almost 50 percent of the children in this province are malnourished. In rural West Java infant mortality is also quite high – 75 per 1000 live births. The malnutrition indicators are very similar across Java, with children in rural areas facing a slightly higher probability of being malnourished. Within the Eastern provinces, rural West Nusa Tengara is the only region in all of Indonesia with an infant mortality rate over 100. In these provinces, around 38 percent of the children in rural areas are malnourished. In Kalimantan, ,malnourishment is also quite high. Particularly striking is the high – 93 per 1000 births – infant mortality rate recorded in rural South Kalimantan. A similarly high infant mortality rate (84 per 1000) is observed in rural Central Sulawesi. In this region, other health indicators are similar to the national averages.
Improvement of education and health outcomes is sought because of their intrinsic value in raising capabilities and individual freedoms. They also have an instrumental value in contributing to higher incomes, and in reinforcing each other.
The main asset of the poor is their labor. Education and health are critical to preserving and enhancing the quality of this asset, and for this reason investment in health and education is especially important for the poor. The 1990 World Development Report (1990), as well as the forthcoming World Development 2000/1, conclude that investments in basic health and education are an important element of a poverty reduction strategy. In this section we review the empirical evidence for this claim for Indonesia. Increasingly it is recognized that health and education investments are choice variables and cannot be treated as exogenous. Recent articles dealt with this problem explicitly when estimating returns to education and health for Indonesia.
4. Poverty in Indonesia: The Environment Factor
Natural capital constitutes about one quarter of total wealth in Indonesia—an even higher share than produced capital. This underlines the importance of sustainable management of natural resources as well as the need to off set depletion of natural capital with increased savings of human and produced capital.
Climate change will result in a number of negative impacts on Indonesia, including reduced crop production, sea-level rise, greater risks of flooding, coral reef bleaching, and further spread of vector-borne diseases. The economic costs of these impacts are projected to reach 2.5-7.0 percent of GDP by 2100.
The major health, water, tourism and other welfare costs associated with poor sanitation have been estimated more than $6 billion in 2005, or more than 2 percent of GDP that year.
The health impacts of outdoor and indoor air pollution have been estimated to about $5.5 billion per annum. With respect to forestry, the rate of deforestation from 1990 to 2000 has been estimated to about 21 million ha, but with some 12 million ha as a balance by way of re-growth and plantations. Natural growth in standing forests contributes further to an increase in volume.
It is widely known that the poor suffer the greatest consequences from environmental degradation for a variety of reasons:
- Livelihoods of many rural poor are directly tied to the quality and productivity of natural resources (water, soil, forests, and fisheries)
- Poor families have the lowest rate of access to environmental services and benefits such as drinking water, sanitation and clean energy
- Low-income households are more vulnerable to natural and anthropogenic disasters because they are often located in higher-risk areas
- Poor people cannot afford to cope with environmental degradation as effectively as can wealthier segments of society.
For example, the livelihoods of 10 million of Indonesia’s 36 million poor are linked to the country’s forests; forest loss undermines these livelihoods, ecosystem services and the ability to meet poverty alleviation goals. As another example, the effects of climate change will be felt most by the poorest Indonesians who are more likely to be: living in marginal areas that are susceptible to drought, flooding and/or landslides; dependent on climate-sensitive agriculture or fisheries for their livelihoods; and have fewer assets to cope with the impacts of a changing climate. This will only cause the poor to remain in a state of poverty.
In many provinces in Eastern Indonesia farmers make their living by harvesting a single crop on dry land. They live in a subsistence economy and are not able to achieve food self-sufficiency through their farming activities. Many live in coastal areas that are environmentally degraded. Upland villages, which are the most disadvantaged, require development programmes adapted to their specific needs. Many of these remote areas are accessible only by boat, on foot or by small plane. The road network is in poor condition and requires major investment.
The eastern provinces are also home to many indigenous communities, which are often on the margins of development processes and programmes.
