The Concerning Situation of Poverty in Indonesia

Indonesia is the world’s third most populous democracy, and its people are spread out among thousands of islands in the Indian ocean. The country’s unique geography and turbulent history have made poverty reduction a challenge.

Nearly 40 percent of Indonesians live just above the national poverty line. These ‘near poor’ households are vulnerable to shocks such as food price increases, environmental hazards and ill health, which can easily drive them into poverty. High rates of child malnutrition, maternal mortality, and inadequate access to education, safe water and sanitation are persistent problems among poor communities. Three out of five Indonesians live in rural areas with farming as their main source of income. 13.8% of rural population whereas 8.2% urban population is classified as poor in 2014.

Households working in informal agriculture are 2.1 times more likely to be poor than those working in other sectors. The poorest in rural areas tend to be farm laborer’s working on other people’s land or smallholders with extremely small plots. Ethnic minority groups and women are also more likely to experience poverty. Indonesia comprises about 300 ethnic groups speaking a wide variety of languages, most of whom live on the larger islands.

These communities are often not fully integrated into mainstream economic activities. They may also experience lack of access to education, poor health, absent or limited basic social services and facilities. Women, too, tend to have less access to education, earn less than men, and are subject to discrimination and exclusion from decision-making processes within households and communities.

Civil unrest has created many women-headed households who tend to be among the poorest and most vulnerable. Also affected are those who have been displaced from their land because of the unrest and have lost farm tools and fishing equipment.

According to Central Statistics Agency (BPS) figures, the total number of people in absolute poverty is 28.2 million, an increase of 2.8 percent over the same period. Major provinces in Sumatra, have worsening poverty. North Sumatra, Riau and Jambi registered a double-digit increase in the number of their poor people.

Major commodity producing provinces were either hit by falling prices or forest fires and smoky haze that rampaged through those provinces for several months in 2015. Political will by the heads of local governments could play an important role in reducing poverty, in the form of their determination to build infrastructure a high priority in their budget, to spend more on health and education and to improve the access for the poor to water and better sanitation.

However, so far, the leadership has failed to take adequate poverty alleviation measures, which is why it is now up to the private sector NGO’s and charity organizations to step forward. They have the potential of making a huge difference with the help of generous donors.

The us-Sunnah Foundation with the help of donors and volunteers has been involved in immediate relief and charity work especially in the Tangerang Region of Jakarta. With the help of generous donors we provide monthly food supplies to hundreds of deserving and poor families comprising of orphans and widows.

We are also striving to establish a Dawah and Charity Center and a Waqf that would provide a more sustainable and long-term solution in countering poverty crisis in this particular part of Jakarta.  

Causes of Rising Poverty in Indonesia

1. Since most provinces lack the resources and determination to alleviate poverty, the general trend has been an increase in poverty.

2. Slowing economic growth in Indonesia is the chief contributor to the rise of poverty. Because of it, many companies have shredded their workforces, economic activities shrunk and many have lost their jobs. Between the span of September 2014 and September 2015 around 1.1 million fell below the poverty line.

3. While real wages of construction workers stagnated FY 2015-16, real wages of farm workers shrank by 2 percent. As most farm workers are poor, the decline in their real wages has significant impact on the poverty increase.

4. In Indonesia, the key to protect the poor and keep poverty low, is to stabilize the prices of rice, but the government has largely failed in this regard. There has been a steep rise in rice prices. Given that rice is the staple food source for millions, a small increase in rice prices leads to a substantial increase in the incidence of poverty. This is because income of the poor is mostly used for buying rice, but last year the increase in rice prices was not low.

According to the BPS, the price of inferior quality rice that is mostly consumed by the low-income population rose by 9.5 percent between December 2015 and December 2016. The poor, especially farm workers, were badly hurt by the rice price increase because it happened when their real wages went down 2 percent.

5. It is estimated that 7.9 million Indonesian fishers are engaged in small-scale fisheries and account for 92 percent of overall fisheries production. But they face an increasing struggle to achieve a good return owing to the difficulty in accessing markets and – in some areas – declining catch levels. Limited access to capital and equipment, rising operational costs are some of the additional problems faced by these communities.

6. With its vast and abundant fertile soils, Indonesia offers many opportunities to smallholder producers. Yet, millions of smallholder farmers, farm workers and fishers are materially and financially unable to tap into these resources. They are often geographically isolated and lack access to agricultural extension services, markets and financial services – another reason for the vicious poverty trap that they are in.  

Here are a few quick facts pertaining to the poverty looming in Indonesia:  

  1. Poverty in Indonesia is a widespread issue and in recent years the official numbers show an inclining trend.
  2. Due to the dense rural nature of parts of the Java, Bali, Lombok, and parts of Sumatra, poverty can be classified into rural and urban poverty which makes reduction efforts by the government and international groups a uniquely challenging problem. Furthermore, due to Indonesia’s geography, natural disasters are a much costlier threat than in other nations, and they disproportionally affect poor people.
  3. Indonesia has a high population of people who are “near poor,” or in danger of falling into extreme poverty in an economic downturn.

Join hands with us-Sunnah Foundation and help us put an end to the cycle of poverty by donating generously and regularly.

You can donate through our website to any of the causes you like. We have a 100% donation policy that means every single penny of your donation goes to charity without deductions of any kind. The causes are Zakat eligible.


—us-Sunnah Team

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