Indonesia's Multidimensional Poverty Index 2012-2021

The government has targeted the extreme poverty rate to reach zero percent by 2024. President Joko Widodo confirmed this target on November 18, 2021. The target of 0% extreme poverty in 2024 is of course very ambitious. Even so, this target must be supported by all parties because extreme poverty should not be experienced by Indonesian citizens.

The government must take various steps to achieve this target, including mobilizing adequate funding, increasing program effectiveness and budget accountability, and strengthening a multi-stakeholder participatory approach.

The challenges faced are quite complex. The impact of the Covid-19 pandemic has caused the poverty rate to increase nationally from 9,54% in March 2022 to 9,57% in September 2022 based on BPS data. Efforts to restore socio-economic-health conditions after the Covid-19 pandemic also still require substantial funding. In 2024 there will be simultaneous General Elections, of course since 2023 there will be political contestation so that it can affect the work focus of the central and regional governments. The government must anticipate these challenges by maintaining a focus on pursuing development targets and taking a multi-stakeholder and multidimensional approach so that the target of 0% extreme poverty can be achieved.

It is believed that a multi-stakeholder and multidimensional approach will have a greater impact on increasing the effectiveness of reducing poverty and improving the quality of welfare. Seeing or measuring poverty from just one income side will result in losing our ability to see the complex factors of poverty. The global Multidimensional Poverty Index report released by the United Nations Development Program (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) University of Oxford in October 2022 shows that 50% of the world's poor experience poverty due to difficulty accessing electricity and clean fuels for cooking. By incorporating “new poverty profiles” in viewing poverty, breakthroughs in approaches to reducing poverty can be made, the aspects of which are interrelated.

This multidimensional poverty measurement is carried out to provide an alternative offer in solving the problem of poverty in Indonesia. So that this measurement can complement the results of the monetary poverty measurement that is still used by the Indonesian government today. Measurement of monetary and non-monetary poverty is also needed to provide more comprehensive information in influencing policy formulation to address the deprivation and needs faced by the poor in Indonesia. Especially to deal with extreme poverty from 2,4% in 2022 to 0% in 2024.

Policies and programs for dealing with extreme poverty need to be made more comprehensive and address the real needs of the extreme poor in each region. This is in line with the non-income dimension in the IKM approach which is tailored or can be developed based on the circumstances and conditions of the people in their respective regions. So that when the government designs and implements intervention policies or poverty alleviation programs it becomes more targeted and reduces exclusion errors that may occur.

Since 2012 PRAKARSA has already calculated the multidimensional poverty index (IKM) using data from the National Socioeconomic Survey (SUSENAS). Two research reports on IKM 2012-2014 and IKM 2015-2018 have been published. In 2022 PRAKARSA initiated to re-calculate the 2019-2021 IKM and backcast a decade of IKM in Indonesia (2012-2021). The IKM calculation was carried out using the IKM method developed by Alkire (2013) from Oxford Poverty and Human Initiative (OPHI) University of Oxford.

Hopefully this report can be useful for all parties and can be used as a reference in scientific development activities and policy formulation to achieve poverty alleviation targets in Indonesia. We hope that the policy recommendations that have been compiled can be used and implemented by the government and all other development actors. In the current era, collaboration to provide answers to more targeted poverty reduction is certainly very much needed. PRAKARSA as a research institute and civil society organization, we are very open to various opportunities for collaboration in achieving sustainable development goals that place "alleviating poverty in all its dimensions" as the main agenda.

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