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Poverty Isn't Decreasing, Indonesia's Official Poverty Line Is Just Too Low

The government says you're not "poor" if you can afford to spend more than $0.76.

by Adi Renaldi
23 July 2018, 11:30am

A slum near one of Jakarta's business districts. Photo by Beawihrta/ Reuters

The Indonesian government wasn't lying when it said that there are fewer people living below the poverty line today than ever. Last week, the Central Statistics Agency (BPS) revealed that as of March, the country's poverty rate is lower than 10 percent for the first time in history. Today, the study says, "only" 9.82 percent or close to 26 millions of Indonesians are considered poor. But so many more people are not accounted for here when you realize that the poverty line is too damn low.

In Indonesia, people live below the poverty line when their average spending is Rp 401,220 ($27.72 USD) a month, or around Rp 11,000 ($0.76 USD) a day. In the capital of Jakarta, the numbers are slightly higher: people are poor when they spend Rp 578,000 per month ($39.93 USD) or Rp 19,000 ($1.31 USD) a day. In other words, if you live in Jakarta and you can only afford to spend Rp 20,000—the price of a single bowl of meatball soup—a day, you're not poor in the eye of the government. Instead, you're "almost poor". And since the BPS data doesn't include the average income of Indonesia's poor, you could be a middle class university student with little money in your pocket before your next month's allowance from your parents hits your back account and be technically "poor" according to the government.

The government's ridiculously low standards of poverty is baffling in this economy where no one can fulfill their basic needs with Rp 20,000. With only that much, you can't even afford a kilogram of eggs at Rp 30,000. And prices of food staples and other goods can potentially go up as Rupiah continues to weaken against the US Dollar. Bhima Yudhistira, a researcher at the Institute for Development of Economics and Finance (INDEF), said the assumed poverty line is out of touch from reality.

“The poverty data is inadequate, because it measures people's spending, not income,” Bhima told VICE Indonesia.

To prove just how impossible it is to survive on Rp 20,000 a day, I made some calculations. Let's say a person's monthly income is Rp 800,000 and they live in Jakarta. Their monthly expense should look like this:

One-bedroom rent in the outskirts of Jakarta: Rp 300,000
Electricity: Rp 50,000
Food (Rp 10,000 x 30 days): Rp 300,000
Transportation (bus, Rp7,000 x 20 days): Rp 140,000
Total: Rp 790,000

But even this calculation isn’t very realistic. When I went to Citayam, a suburb about 40 kilometers away from the heart of Jakarta, I learned that the average rent for kost is Rp 500,000 a month. And it’s a very humble space—the room is 2x3 meter, with plywood walls and a shared, mossy bathroom with a squat toilet. Ventilation not included. And we're only talking about shelter.

No matter how lucky you are or how low your hygiene standards are for food, a plate of rice and vegetables at a warteg in Jakarta will cost you more than Rp 5,000. Okay, say you cook your own meals. Spinach from a traditional market costs around Rp 2,000. Rice? The cheapest is Rp 6,000 per liter. What about the cooking oil? Gas? How can someone with a budget of Rp 20,000 a day going to afford this?

With Rp 20,000 a day, a person cannot possibly cover other basic needs like healthcare. If the government thinks this doesn't qualify someone as poor, then they must have lost their mind.

It seems like when the Central Statistics Agency officials came up with the magic number of Rp 20,000 a day, they have forgotten about the harsh realities of the country's poor people. For starters, there are millions more of them than they think.

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