By: Eka Afrina Djamhari (The PRAKARSA) & Bintang Aulia Lutfi (The PRAKARSA)
Indonesia sets the pace joining the membership of the Organization for Economic Co-operation and Development (OECD) in order to pursue the jargon "Advanced Indonesia". Unfortunately, this step does not reflect the welfare conditions of society amidst poverty which is still stagnant.
The government of President Joko "Jokowi" Widodo has set a target to reduce the poverty rate to level 7-8% in his first period and level 6-7% in his second period. However, until the end of his leadership period, this target was real not achieved.
During almost 10 years of Jokowi's leadership, poverty only reduced by 1,89 basis points 11,25% in March 2014 it became 9,36% in March 2023.
The government also has a target of reducing extreme poverty from 1,5% in March 2022 to 0% in 2024. Unfortunately, as of March 2023, the extreme poverty rate is still at an all-time high 1,12%
So far, standard poverty line calculations based on individual expenditure aspects alone are not enough. This is because poverty alleviation that is only based on monetary calculations or the circulation of money actually dwarfs the definition and scale of poverty itself. This makes the focus of government policies and programs tend to be short term and less targeted.
This article evaluates poverty alleviation programs during the Jokowi era, and outlines the importance of targeting multidimensional poverty instead of monetary as a recommendation for the next government.
Jokowi's poverty alleviation focus: distributing social assistance
Monetary poverty is approach to identifying and measuring the world's most common poverty by identifying poverty from a lack of consumption (or income) from a set poverty line.
In Indonesia, the Central Statistics Agency (BPS) uses the concept of the ability to fulfill basic needs (basic needs approach) both food and non-food. Resident fall into the poor category if the average per capita expenditure per month is below the poverty line.
During the Jokowi era, poverty alleviation efforts focused on programs providing assistance in the form of direct cash assistance (BLT), non-cash food assistance (BPNT)/Sembako Program, fuel oil (BBM) subsidies, assistance with education costs such as the Smart Indonesia program (PIP) , the Family Hope Program (PKH), as well as the National Health Insurance Program and Employment Guarantee.
This can be seen from the significant increase in the social assistance budget for poverty alleviation during the Jokowi era. The social assistance allocation in 2014 was approx IDR 11,92 trillion. In the second period of his administration, Jokowi budgeted IDR 19,79 trillion. In his senior year, he allocated up to IDR 22,5 trillion or almost double compared to the beginning of his leadership.
However, this fantastic social assistance allocation is in fact not comparable to the reduction in poverty in Indonesia over the last 10 years.
If poverty is viewed through a monetary lens, these policies can answer the problem logically. However, if it were true that poverty was only a matter of income, social assistance should have been able to solve poverty a long time ago.
Economic acceleration programs such as providing social assistance are aimed at increasing the purchasing power of poor people and meeting their daily needs. Thus, the provision of social assistance is only short-term because it is used for consumption and cannot answer long-term economic problems.
Not to mention, a number of problems overshadow the distribution of social assistance, including the emergence of dependency of the poor with government assistance, data collection is not yet optimal, and there is moral hazard (ethical violation for one's own sake) in data collection when the beneficiary does not match the criteria for those who are worthy of receiving assistance.
Multidimensional poverty: notes for the next government
Seeing or measuring poverty from just one side of income will result in the loss of our ability to see complex poverty factors.
Oxford Poverty and Human Initiative (OPHI) introduced multidimensional poverty in 2010, which was later adopted by the United Nations Development Program (UNDP). Measuring poverty using this method includes aspects of education, health and quality of life which are reduced to several indicators called the Multidimensional Poverty Index (MPI).
Multidimensional poverty measurement is not intended to replace monetary poverty, but rather provides a broader and more measurable view in analyzing the characteristics of poverty. This method looks at the different characteristics and causes of poverty so that it can provide more comprehensive information for formulating policies for alleviation.
Report Poverty and Shared Prosperity in 2022, for example, shows that almost 4 in 10 multidimensionally poor individuals (39%) do not fall into the monetary poor category, because they are deprived in non-monetary dimensions only. Deprivation here is interpreted as the limitations experienced by individuals in meeting their daily living needs.
Actually, The calculation PRAKARSA shows that the multidimensional poverty index in Indonesia dropped drastically from 49% in 2012 to 14,3% in 2021. The PRAKARSA adjusting the measurement of Indonesian SMEs into five dimensions, namely health, education, housing, basic facilities and social protection and participation. These dimensions are reduced to: 11 indicators based on National Socioeconomic Survey (Susenas) data, namely toddler nutrition, morbidity (health problems), school participation, length of school, roof, floor, wall, density in housing, adequate drinking water, cooking fuel, sanitation, birth certificates and internet.
However, The calculation PRAKARSA shows that indicators of adequate housing, adequate drinking water and morbidity are consistently the three indicators that contribute to the highest deprivation in Indonesia in the 2019-2021 period.
The Calculation PRAKARSA shows that in 2021, almost 39 million individuals in Indonesia will be multidimensionally poor. As many as 86,4% or 33,7 million of them live in houses that are uninhabitable. In the indicator of access to adequate drinking water, 57% or 22,2 million poor people live in households that do not have a source of adequate drinking water. Meanwhile, in the morbidity aspect, 52,5% or 20,4 household members had health complaints.
Each region has its own problems. For example, in Central Kalimantan, around 98,03% of the poor live in uninhabitable houses. In West Kalimantan, around 85,12% of poor residents have problems with adequate drinking water. DKI Jakarta has around 73,89% poor residents with health complaints.
In order to truly eradicate poverty, the government needs to restructure the poverty reduction budget. The government, for example, needs to allocate funds to address contributors to poverty in Indonesia instead of focusing only on social assistance.
Policies and programs for handling poverty need to be made more comprehensive and respond in real terms to the needs of poor people in each region. In this way, the design and implementation of intervention policies or poverty management programs can be more targeted and more inclusive and sensitive to communities vulnerable to poverty.
***
This article was previously published on theconversation.com by title "Jokowi's poverty reduction target was not met. What should the next administration do?”. Click to read: theconversation.com