World Bank on Poverty

Dec 10th, 2006, in Business & Economy, by

The World Bank says almost one in five people live in poverty.

In a series of comprehensive reports on the poverty situation in Indonesia the World Bank says, among many other things, that 17.8% of people are regarded as living in poverty currently, this being measured by those who have less than $1.55 in purchasing power parity terms per day.

However, the long term trend is good. In 1976 the poverty head-count was at 40%, declining to about 11% in 1996. The economic crisis which began in late 1997 saw the poverty rate jump up to 23% in 1999 but it began falling after that, and reached 16% in 2005. This year, 2006, has bucked the downward trend though, up to 17.8%.

Why did poverty increase from 2005 to 2006, by around 4 million people? The World Bank lays the blame squarely on the refusal of Indonesia to import rice. Rice prices went up and imports of the staple food would have calmed the market and kept the price steady or the increases smaller. The fuel price increases did not have an impact because the government’s unconditional cash transfer (UCT) program to 19 million poor people more than offset the fuel price hike.

42% of Indonesian households earn between $1 and $2 a day, putting them at the mercy of economic shocks and in danger of falling into “technical” poverty. There is a high level of movement in and out of poverty. While only 16.7% of Indonesians surveyed were poor in 2004, more than 59% had been poor at some time during the year preceding the survey. Over 38% of poor households in 2004 were not poor in 2003.

Other key bits of data from the report:

  • a quarter of children under five years old are malnourished, with malnutrition rates stagnating in recent years despite reductions in poverty.
  • Indonesia’s maternal mortality rate (307 deaths in 100,000 births) is three times that of Vietnam and six times that of China and Malaysia; only about 72% of births are accompanied by skilled personnel.
  • among 16 to 18 year olds from the poorest quintile, only 55% completed junior high school, compared with 89% from the richest quintile.
  • Only 48% of the lowest quintile have access to safe water in rural areas, as against 78% in urban areas.
  • 80% of the rural poor and 59% of the urban poor do not have access to septic tanks, while less than 1% of all Indonesians have access to piped sewerage services.

Areas with the highest rates of poverty are Papua, Maluku, NTT, NTB, Central Java, Aceh, South Sumatra, Lampung, Bengkulu, Central Sulawesi, South East Sulawesi, and Gorontalo.

Provinces with the lowest poverty are Jakarta, Bali, Riau, Banten, North Sulawesi, Central Kalimantan, and South Kalimantan. worldbank

March 23rd 2007.

Professor Tresna P. Soemardi of the Management Faculty of the University of Indonesia says if the standard of less than one dollar per day earnings is used then 49% of Indonesians live in poverty.

In cities he says the level of poverty is at 39% while in rural areas it is 53%. antara

4 Comments on “World Bank on Poverty”

  1. John Orford says:

    Rice, rice, rice.

    That’s the answer.

  2. JKS says:

    The world bank is only able to talk about poverty but not helping the poor, it exists as bank who make money not as a poverty distinguisher in Indonesia,…nothing is free in this world, the poor is increasing…this is the fact.

  3. Bayo says:

    Yes I agree with you JKS. They lend money to poor countries not to poor people directly but to government and then government takes the money for them (corrupted) and poor people still remain. They do not care about it, for them the more money they lend the more interest they get.

  4. Anyone will not see the real crux when aggregating all the poor people. Between the line there are typical differences with many are close to death.

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