World Bank Suggests Indonesia’s Poverty Limit Increase, Economist: It Must Be Admittedly There Are Very Many Poor People

Armfalcon.com, JAKARTA — The Center of Economic and Law Studies (Celios) assesses that the poverty line standard used by the government is low. This causes the poor to not be covered by government programs such as social assistance.

Celios Executive Director Bhima Yudhistira said that the World Bank’s poverty line measurement is more rational. The poverty line that Indonesia uses is too low.

In launching the report Indonesia Poverty Assessment: Pathways Towards Economic Security, the World Bank suggested that Indonesia change the size of the poverty line from the standard US$1.9 per day to US$3.2 per day.

“That means, let alone aiming for zero percent extreme poverty in 2024 to prevent the addition of the post-pandemic population from being poor, it’s rather difficult,” said Bhima when contacted. RepublikaWednesday (10/5/2023).

Bhima said that the calculation of the poverty line measure by the World Bank could change the perspective of the Indonesian government regarding the distribution of social assistance. According to Bhima, the Government of Indonesia must acknowledge that the number of poor people is not just 26 million, but much larger.

“Now if you look at this size and compare the number of vulnerable middle classes in Indonesia (115 million people), you can be categorized as a new poor community. There is an increase in the poverty rate there,” said Bhima.

He continued, on the one hand, there is a consideration of whether the current government budget with social assistance is able to sustain if the poverty line changes. “Should be able to but have to shift many other budgets that are not a priority,” said Bhima.

Bhima also alluded to political pressure in Indonesia. According to him, if the government uses the new poverty line standard (World Bank recommendation), it will be considered a sharp increase in the poverty rate.

“Actually, the problem with the poverty line methodology is most important that the government is able to allocate more social assistance and recognizes that the number of poor people in Indonesia is very large, so it requires cross-sectoral policies to reduce poverty as quickly as possible,” he explained.