Reducing Poverty Through Indonesia's National Medium Term Development Plan
The government of Indonesia targets economic growth rates in the range of six to eight percent per year in the period 2015 to 2019. By the end of this period, the country's gross domestic product (GDP) per capita should reach around USD $7,000. According to Minister of National Development Planning (Bappenas) Armida Alisjahbana, if these targets are met then Indonesia can escape from the middle income trap by 2019. The middle income trap occurs when growth stagnates after reaching middle income levels.
Bappenas is presently busy preparing the National Medium Term Development Plan (RPJMN 2015-2019), which is the third phase of implementation of Indonesia's National Long Term Development Plan (RPJPN 2005-2025) promulgated through Law 17/2007. Important issues in the RPJMN 2015-2019 are Indonesia's food self-sufficiency and energy security (particularly by increasing the portion of renewable energy from 4 percent in 2010 to 6.7 percent in 2019 and enhancing installed power generation capacity to 92.9 gigawatt).
Bappenas also prepares three strategies in the RPJMN 2015-2019 to eradicate poverty in Indonesia. First, it provides Social Protection Assistance (Bantuan Perlindungan Sosial) through the government-financed health coverage program for the poor and near-poor (Jamkesmas) and Poor Students Assistance (Bantuan Siswa Miskin). Bank Pembangunan Daerah will play a large role in distributing these social funds.
Secondly, the government will enhance the National Program for Community Empowerment (Program Nasional Pemberdayaan Masyarakat Mandiri). This program is the main government's community-driven development program and is supported by the World Bank.
Thirdly, the government will increase the allocation of funds for Public Credit (Kredit Usaha Rakyat). Through this program six banks provide loans to micro-enterprises and cooperatives with a guarantee scheme which is to a large extent subsidized by the government. The program was launched in November 2007.
These three strategies aim to reduce Indonesia's poverty rate and Gini ratio (income distribution inequality).
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Relative Poverty (percentage of population) |
17.8 | 16.6 | 15.4 | 14.2 | 13.3 | 12.5 | 11.7 | 11.5 |
| Absolute Poverty (in millions) |
39 | 37 | 35 | 33 | 31 | 30 | 29 | 29 |
Sources: World Bank and Statistics Indonesia
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