No One Left Behind : Rural Poverty in Indonesia
Indonesia has sustained robust growth over a long period, and this has enabled millions of citizens to move out of poverty. Indonesia’s gross domestic product (GDP) has risen at an average 5 percent a year since 1990 and 5.3 percent a year after th...
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| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/289991593339788378/No-One-Left-Behind-Rural-Poverty-in-Indonesia http://hdl.handle.net/10986/34163 |
| Summary: | Indonesia has sustained robust growth
over a long period, and this has enabled millions of
citizens to move out of poverty. Indonesia’s gross domestic
product (GDP) has risen at an average 5 percent a year since
1990 and 5.3 percent a year after the Asian financial crisis
at the end of the 1990s. This growth has been supported by
favorable international commodity markets, a large, young
population, and a solid macroeconomic policy framework.
Although the growth has moderated in the last few years as
commodity prices and global financing conditions that had
buoyed growth previously have become less favorable, annual
GDP growth has still averaged 5 percent since 2014. As a
result, GDP per capita is calculated to have grown six fold
between 1990 and 2018, while extreme poverty declined from
57 percent to slightly less than 6 percent. However, many
Indonesians remain vulnerable, and most of those who have
escaped poverty still lack the economic security and
well-being of the middle class. Despite the progress in
poverty reduction, around 30 percent of Indonesians still
risk falling back into poverty or become poor following a
financial or nonfinancial shock. In addition, although their
number is growing, fewer than a quarter of Indonesians are
today free from worry about monetary poverty and therefore
belong to the middle or upper class. Joining the middle
class is associated with people who have additional
disposable income for discretionary expenditures, such as on
health care, education, and housing, which directly affect
their well-being. While rural areas have also benefited from
this broad-based growth, an overwhelming majority of the
poor and vulnerable are living in rural areas. Making
continued progress in reducing poverty will require that the
challenges to improving the living conditions of the poor in
rural areas are addressed. Against this backdrop, the
objective of this report is to update the knowledge about
rural poverty in Indonesia. The report analyzes the trends
in rural poverty and inequality, the profile of the rural
poor, and drivers of observed poverty reduction. New
analysis is combined with syntheses of recent work,
especially the recent report on urbanization. The goal is to
consolidate relevant material on rural poverty. The final
section of the report offers some reflections on future
research to deepen the understanding of the challenges and
the opportunities involved in reducing rural poverty in Indonesia. |
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