Evaluation of the poverty line measurement methodology is targeted to be completed this year. In addition to reviewing the multidimensional approach, the government will update the measurement standards with the monetary approach that has been in effect so far.
JAKARTA, KOMPAS — The government is currently evaluating measurement standards line of poverty that have been implemented for the last 25 years. Going forward, not only referring to the cost approach of basic food and non-food needs, poverty in Indonesia will be measured more broadly through a multidimensional approach with non-monetary dimensions.
So far, the Central Statistics Agency (BPS) has measured poverty with one dimension, namely the average per capita expenditure per month. The approach used is cost of basic needs approach or costs incurred by a person to meet basic food and non-food needs. This approach is also known as the measurement of the monetary dimension.
Minister of National Development Planning/Head of National Development Planning Agency (Bappenas) Suharso Monoarfa, Tuesday (16/5/2023), said, there needs to be a more detailed poverty measurement to reflect the real condition of poverty through the Multidimensional Poverty Index (IKM) approach or Multidimensional Poverty Index (MPI).
This is because poverty is not solely related to one's ability to consume or spend to fulfill basic needs economically. However, it also includes a person's lack of access to basic infrastructure such as access to education, health, housing, clean water, sanitation, and others.
The SME approach has become one of the indicators in the Sustainable Development Goals (SDGs) targets. Through IKM, poverty is believed to be more in line with real conditions, because it also measures various dimensions that contribute to poverty.
"There is already a new, more multi-indicator way that is used to calculate whether someone is capable or not. This is what we are doing exerciseMoreover, this method of measurement has become a world reference," said Suharso on the sidelines of the 2045 Indonesia Gold event at the Jakarta Convention Center (JCC), Senayan, Jakarta.
Bappenas has conducted studies related to the application of this new poverty line measurement methodology. Although there is no detailed data yet, Suharso said this new approach would not necessarily increase the national poverty rate in Indonesia.
There needs to be a more detailed poverty measurement to reflect the real condition of poverty through the Multidimensional Poverty Index (IKM) approach.
“There are areas that will increase, there are also areas that actually decrease. However, for now, we cannot see what the impact will be nationally, because this is still in our study," he said.
According to Suharso, the evaluation of the poverty line measurement methodology can be completed this year. In addition to evaluating the poverty line based on the MPI, Bappenas will also update the current measurement standard which uses a monetary approach or the cost of basic needs.
Bappenas is also reviewing the World Bank's proposal to raise the line extreme poverty from the standard purchasing power parity (purchasing power parity/PPP) of 1,9 US dollars per capita per day to 2,15 US dollars per capita per day according to the new standard in force.
Children singing with ondel-ondel on Jalan RS Soekanto, East Jakarta, Sunday (9/8/2020). Based on data from the Central Statistics Agency (BPS), the last time Indonesia's economy grew negatively was in the first quarter of 1999, namely minus 6,13 percent, while in the second quarter of 2020, the Indonesian economy grew minus 5,32 percent on an annual basis. In March 2020, there were 26,42 million poor people in Indonesia.
“We will end the government period next year. Later we will convey the results of this study (to the new government), we will convey it objectively, if you use IKM this is the impact, if it is based on purchasing power parity of US$2,15 this is the impact," he said.
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The impact of using the SMI approach on the poverty rate has been studied by the Association PRAKARSA in his report titled Multidimensional Poverty Index: Photographing the Faces of Poverty in Indonesia in 2019.
Calculation results PRAKARSA shows, with a multidimensional approach, the number of poor people will increase compared to the monetary approach. However, the rate of reduction in the poverty rate with a multidimensional approach can actually be more significant.
As an illustration, the multidimensional poor population in 2015 reached more than 34 million people (13,53 percent), decreased to 30 million people (12 percent) in 2016, became 24,9 million people (9,56 percent) in 2017, and became 21,5 million people (8,17 percent) in 2018.
Lanting houses are lined up along the Kahayan River, Palangkaraya City, Central Kalimantan, Tuesday (27/3/2018). Most of the poor in Central Kalimantan live by the river with lanting houses or houses that float on the water.
Meanwhile, based on BPS data, the monetary poor population in 2015 was 28,51 million people (11,13 percent), decreased to 27,76 million people (10,7 percent) in 2016, to 26,58 million people (10,12 percent). percent) in 2017, and to 25,6 million people (9,66 percent) in 2018.
The Director of Poverty Reduction and Community Empowerment at Bappenas, Maliki, said that a multidimensional approach could provide more precise policies. Currently, data collection through Social Economic Registration (Regsosek) has also used a multidimensional data collection approach.
“Say, it turns out that someone is poor due to lack of access to education or health, so we know what the right policy is to deal with it. This data already exists through the National Socioeconomic Survey (Susenas) which is macro in nature, and Research and Development which is of a macro nature by name by address," he said.
The rate of poverty reduction with a multidimensional approach can actually be more significant.
Apart from SMEs, the government will continue to use the old approach, namely the cost of basic needs according to food and non-food components. The calculation methodology will be perfected and updated according to the latest public consumption patterns, because the standard of measurement is still using the standard 25 years ago. The government last conducted a field survey in 1998.
Improvements to the monetary approach were carried out by also taking into account differences in consumption patterns in each region. Poor areas in East Nusa Tenggara and East Java, for example, will have different calculation methods, because food commodities and non-food needs consumed are different.
The government will also revise the reference population used to measure the poverty line so far. "In the near future, this methodological improvement can be final and we will implement it as soon as possible. The IKM approach is the next stage after we fix the current standards," he said.
Main Researcher of The SMERU Research Institute Asep Suryahadi, Wednesday (17/5/2023), welcomed the government's initiative to evaluate the poverty line which is currently irrelevant to the reality of society. In his view, IKM can complement the monetary approach that has been used by the government, not replace it.
"So, as a complement. Other countries that use the SMI approach also usually carry out monetary poverty calculations. If the monetary approach is removed, later we will find it difficult to compare poverty rates with other countries," said Asep.
Sumber: COMPASS
