BPS mentioned several reasons that explain rising poverty in Indonesia, Southeast Asia’s largest economy. Inflation has been high over the past two years (particularly due to several adjustments made in Indonesia’s subsidized fuel policy over the past two years). Between September 2014 and March 2015 Indonesia’s inflation rate accumulated to 4.03 percent. Over this period, the average rice price rose 14.5 percent. This is problematic as Indonesia’s poor people use a significant portion of their disposable income to purchase rice. As such, higher rice prices can have a severe negative impact and push part of the large group of Indonesians who live just above the poverty line into full poverty. Per March 2015, Indonesia’s national poverty line was set at IDR 330,776 (approx. USD $23) per person, per month.

Meanwhile, in real terms, farm workers’ wages declined by 1.34 percent to IDR 39,045 per day in March 2015 compared to September 2014 (IDR 38,522 per day).

Traditionally, the regions in eastern Indonesia (located further away from the main economic centers) continue to have a higher poverty rate, in relative terms. The relative poverty rate is highest in Maluku & Papua at 22.04 percent of the local population. Meanwhile, in absolute terms, poverty is highest on Java, Indonesia’s most populous island, with 15.5 million poor people. It is also interesting to note that both relative and absolute poverty is nearly twice as high in rural regions than in the urban regions.

Indonesian Poverty and Inequality Statistics:

   2007  2008  2009  2010  2011  2012  2013  2014  2015
Relative Poverty
(% of population)
 16.6  15.4  14.2  13.3  12.5  11.7  11.5  11.0  11.2
Absolute Poverty
(in millions)
   37    35    33    31    30    29    29    28    29
Gini Coefficient/
Gini Ratio
 0.35  0.35  0.37  0.38  0.41  0.41  0.41     -     -

Source: Statistics Indonesia

Further Reading:

Poverty in Indonesia
Population of Indonesia
Employment in Indonesia