01
November 2011

Poverty Rises, Inequality Gap Widens
Wealth of 40 richest Indonesians equivalent to 60 million people’s
Key Points:
• Poverty rate rises over the last three years, Indonesia is the worst country in Southeast Asia in combating poverty • Inequality gap widens, wealth and economic resources are concentrated in a small number of people only • Social and economic justice must be included as development target to prevent social explosion and maintain the sustainability of the development process
Managing Director: Setyo Budiantoro, MA
Perkumpulan Prakarsa Executive Director

ndonesia is the poorest performer on poverty reduction in Southeast Asia region. It is calculated that 2.7 million people become poorer in the country over the last three years. This increase of extreme poverty is, shamefully, the worst one in the region. Indonesia even lags behind its neighboring countries such as Cambodia and Laos in reducing poverty, -not to mention when it is compared to the better off neighbors such as Thailand or Malaysia. Moreover, it is not just that the poverty increases, the share of wealth has also been more disproportionate. The accumulation of 0.02 % richest Indonesians’ wealth is equivalent to 25% of the country’s total GDP (Gross Domestic Product), and the wealth owned by only these 43 thousand people is equal to the wealth accumulation of another 140 million people. If this situation persists, people will feel that their sense of social-economic justice is torn down and as a result, social explosion may take place.

threshold is actually only Rp 5,000 more than the current national poverty line. In Southeast Asian region itself, Malaysia and Thailand have even set up a higher threshold.3 If the US$2 per day poverty threshold is used in Indonesia, 117 million people or more than half (51%) of the population will be categorized as people