Poverty in Indonesia increased during the pandemic by 27.4 million people. Data from Statistics Indonesia shows an increase in the poverty rate from 9.99 percent in 2020 to 10.14 percent in March 2021 out of a population of 270.2 million.
According to Faisal Basri, an economist at the University of Indonesia, there are many more people at risk of falling into poverty. According to him, the majority of Indonesia’s population is currently classified as ‘insecure’ or ‘near-poor’.
“It is most likely that in 2021 the number of poor people will increase further. Many people above the poverty line are still very close to that line and classified as ‘near-poor’. They are very vulnerable and if something happens they will become poor,” Basri said to Global Ground Media.
The World Bank’s global extreme poverty line identifies poverty as living on less than US$ 1.90 a day.
Barriers to Assistance for Street Vendors
The Indonesia government combats poverty through its National Economic Recovery (PEN) program. The program reached 579.8 trillion Indonesian Rupiah (around US$ 40.6 billion) by the end of 2020 according to Bank Indonesia. The program finances six main sectors including healthcare, social protection, and Micro, Small and Medium enterprises.
The social protection budget of IDR 234.33 trillion (about US$ 16.5 billion) includes the Family Hope Program consisting of conditional cash assistance, food assistance, the Pre-Employment Card program providing access to subsidised skills training and direct cash assistance.
According to the Executive Director of the Institute for Development of Economics and Finance (INDEF) Tauhid Ahmad, the poor working in the urban informal sector struggle to get out of poverty in the short term. Ahmad said many small businesses did not have access to funding during the pandemic.
“The Presidential Assistance Program for Productive Micro Enterprises (BPUM) through the Ministry of Cooperatives and SMEs in Phase I amounted to 9.8 million, and Phase II amounted to 3 million, a total of 12.8 million enterprises. One Micro Business received IDR 1.2 million (about US$ 83.7),” Ahmad stated. In 2019, the ministry counted more than 65 million Micro, Small and Medium Enterprises. Assuming similar numbers for 2021, that would translate to less than 20 percent receiving governmental support.
Haryanto, alias Eko (38), a street vendor on Cikini Raya street in Jakarta, was forced to sell his cart during the pandemic to survive. Now he borrows his brother’s two-wheeled cart to sell coffee, instant noodles and mineral water. He says he works every day from 5 pm until 2 am without taking a day off.
Since the pandemic, Eko’s income has fallen drastically. “Before the pandemic, my average income was IDR 400,000 to IDR 800,000 (about US$ 28 to US$ 56) per day. Since the pandemic, I make at most IDR 100,000 (about US$ 7) after expenses,” he said.
Eko’s says his income fluctuates in line with the lockdown measures. During tight social restrictions in early July, his income fell to IDR 50,000 or no customers at all.
During the pandemic, Eko did not receive any government assistance out of several available programs, because his identity card identifies him as a resident of Tegal, a town 275 miles east of Jakarta.
Basri also says civil registration data needs to be improved by the government. “The pandemic has shown the need for an integrated social security system,” he said. Basri advocates for uniformity of registered data for identity cards, driver’s licenses, passports, health social Security numbers, and population identification numbers. Repeated requests for comment to the Ministry for Social Affairs went unanswered.
Basri also recommends social programs in the form of flexible cash gifts so people can spend aid according to their needs. Around 15 percent of aid is not flexible and might not be in line with the major needs of the recipient he states.
As Indonesia prepares to return to normalcy and learn to live with the virus, millions more have now entered poverty with many more at risk.
Article by Arpan Rachman.
Editing by Anrike Visser.
Copyright © 2021, rights reserved as set forth in the copyright notice.
Global Ground is investigative, independent journalism. We’re ad-free and don’t sell your personal data, so we mainly depend on donations to survive.
If you like our stories or think press freedom is important, please donate. Press freedom in Asia is under threat, so any support is appreciated.
Thanks in advance,
The Global Ground Team