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Jurnal ISEI Jember, Volume 2 Nomor 1, April 2012

A DISCOURSE OF POVERTY IN INDONESIA


Ciplis Gema Qoriah Staf pengajar Jurusan IESP Fakultas Ekonomi - Universitas Jember Kampus Bumi Tegal Boto Jl.Kalimantan No 37 Jember Telp. 0331 337990/Fax. 332150 email: ciplis_qoriah@yahoo.com/HP.081249092172 Abstract The economic crisis caused a clear deterioration in the welfare of the Indonesian people. In this paper, we discuss and overview of poverty rates over time. In Indonesia economy poverty alleviation achieved a huge success in the period of 1970s until the mid 1990s. Due to the crisis in mid of 1997, the poverty rate increased from the lowest point of around 15 percent at the onset of the crisis in the mid of 1997 to the highest point of around 33 percent nearing the end of 1998. This maximum increase in poverty rate during the crisis of 18 percentage points implies that around 36 million additional people were pushed into absolute poverty due to the crisis. Given that the crisis is affecting the poor primarily through reduced employment and increased prices on critical commodities and services, the Governments strategy focuses on maintaining the real income of households while guaranteeing access to quality basic education and health services. The anticipation of the impact of the crises, Indonesia government establised the Social Safety Net Program (JPS an acronim of Jaring Pengaman Sosial) Key words: poverty, Indonesia economy, crisis economic. 1. Introduction Before economic crisis, Indonesia is one of the highest performing Asian economies, although it is starting a low base. The Gross Domestic Product (GDP) growth per person and figures for the reduction of poverty were impressive. The Word Bank judged that Indonesia moved from low to lower middle-income country status in 1993 (Gough, 1998). The economic performance of Indonesia statistically was miracle. The government of New Era had focused on achieving a higher growth via capital and technology-intensive strategies. Foreign investment and foreign loan have been a biggest role to operate the economic plant. Most approved investment during the last few years has been in manufacturing, especially in textile, pulp and paper, and chemical industrial. The investment climate has improved with privatisation moves. In early 1990s industrial a year and the contribution of the sector to the countrys GDP surged from 9.2 percent in 1969 to 22.3 percent in 1993. The economic crisis caused a clear deterioration in the welfare of the Indonesian people. In this paper, we discuss and overview of poverty rates over time. The reconciliation of these various estimates paints a very reasonable picture and neatly tracks events. The poverty rate increased from the lowest point of around 15 percent at the onset of the crisis in the mid of 1997 to the highest point of around 33 percent nearing the end of 1998. This maximum increase in poverty rate during the crisis of 18 percentage points 73

Ciplis Gema Qoriah, A Discourse Of Poverty In Indonesia

implies that around 36 million additional people were pushed into absolute poverty due to the crisis. After the peak point, the poverty rate started to decline again and reached the pre-crisis level of around 15 percents at the end of 1999, implying the lost time in poverty reduction due to the crisis was around two and a half years (Dharmawan, 2000). Moreover, the debate of the problem of poverty and inequality actually existed before the crisis in Indonesia, and has grown in magnitude since the onset of the financial crisis in 1997. This is structural poverty, a systematic process, which according to Sen, is a matter of capability depravation. Economic instability caused by a growth and distribution funded by foreign loans during the new order has created wide gaps in society (Pattimura, 2002). The foregoing success story has made Indonesia a very impressive developing country with regard to the modernization and development process. In fact, this economic success does not mean everything, because a great bulk of socio-economic problems remain out of the reach of public policies and are expected to become extremely difficult in the decades to come. Indonesia is tendentiously economic planning in growth, so in the other side the problem of equality is not so focusing. It has been well recognized that income disparity and premature growth of high consumption culture resulting from the urban -oriented growth development strategy have prompted not only a complex economic dilemma across regions and classes but also creating the overall socio-political setting in a serious distress. In fact, in 1997 the East Asia crisis make also finance crisis in Indonesia. The Indonesia currency unit Rupiah (IDR) deeply has fell up to more than 50 percent. The economic crisis has causes a clear deterioration in the welfare of Indonesia people. The historical data says that between 1997 and 1998 16 % of the rural population moved from being non-poor to poor (Suryahadi et al. 2001). And indicator economic macro, such inflation has dramatically rise up to 60 percent in the same fiscal year. At the same time, the economic growth was noted negative rates. The fact constituted the most severe impact to the economic crisis that Indonesia ever faced during New Era Government. This showed that Indonesia has not a good fundamental economic during 30 years. The effect of crisis economic has impact not only in economic, but also in political instability. Admittedly, not all regions were affected in the same way. By all means, the crisis brought attention back to the issue of poverty reduction (Sumarto et.al. 2004). This paper aims to analyze the problem and challenges of poverty in Indonesia. The specific objectives are to learn the problem of poverty in Indonesia during crisis of economic. These paper emphasis on relation of the various issues during economic crisis in Indonesia, which make use of conceptual analysis and study of literature as major approaches. 2 The Brief of Poverty Concepts: Definition and Specific Problem 2.1 Definition of Poverty. In many parts of the world, poverty is a pervasive problem. Until at the moment many development programs and projects focus on poverty reduction. What is poverty? If we try to answer this question. We think that it is very difficult. The simple answer may be that poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not being able to go to school, not knowing how to read, not being able to speak properly. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is powerlessness, lack of representation and freedom. Most often, poverty is a situation people want to escape. So poverty is a call to action -- for the poor and the wealthy alike -- a call to change the world so that many more may have enough to 74

Jurnal ISEI Jember, Volume 2 Nomor 1, April 2012

eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities. So far Witt (1998) pointed out that the poverty of a large part of the worlds population is one of the biggest problems in our time. Nowadays, the concept of poverty come from multidimensional phenomenon and aspect and has widely been integrated into the studies of economics, social science, politics, government administrations, etc. The study of poverty needs to involve a broad range of assumptions when it is used to understand a particular group of poor people living in specific region. This is due to the fact that poverty is a locally specific phenomenon and it may be a complex problem faced by certain community. Poverty can be view in absolute and relative term. Absolute poverty refers to subsistence below minimum, socially acceptable living conditions, usually established based on nutritional requirement and other essential goods. Relative poverty compares the lowest segments of a population with upper segments, usually measured in income quintiles or deciles. Boltvinik (1999) recommended for other perspective of poverty. He said that the term of poverty implies a comparison between the condition of a person, family or human group, and the perception (judgment) of the one who defines what is necessary to sustain life. The other concepts of poverty, Alcock (1997) said that it is also instrumental to understanding the situation of being poor, are primary poverty and secondary poverty. Primary poverty refers to those who did not have access to the resources to meet their subsistence needs. Meanwhile, secondary poverty refers to those who seemingly did have the resources but were still unable to utilize these to raise themselves above the subsistence level. Maxwell (1999) incorporated the concepts of actual and potential poverty which refer to current poverty and the possibility of suffering from poverty in relation to peoples capacity of forming short-term and long-term adaptation and programs oriented toward reducing the number of poor people (absolute poverty). To know what helps to alleviate poverty, what works and what does not, what changes over time, poverty has to be defined, measured, and studied and even lived. As poverty has many dimensions, it has to be looked at through a variety of indicators -levels of income and consumption, social indicators, and now increasingly indicators of vulnerability to risks and of socio/political access. Nowadays, in many developing countries, the problem of poverty is not just an economic issues, but has many interwoven dimensions including vulnerability and risk, inequality, social gap, gender problem, ethnicity, regional unbalance, etc. 2.2 Measurement of Poverty There is a enormous literature on the problems of measuring development (see Bigsten, A and Jrgen L, 2000; White, 1999: Dercon, 2000). Moreover, many attempts have been made to find a suitable way of measuring poverty. The traditional approaches usually assess the poverty status of an individual by resorting to a unique indicator of resources, such income or expenditure. So the poor are generally regarded as those individuals or households whose incomes or expenditures fall below a certain amount of money, called the poverty line. However, this procedure contains some drawbacks. In fact, each indicator reflects only a special aspect of poverty (Miceli. D, 1998). Other perception pointed out by Ravallion (1992) that one the reason for poverty measurement can be poverty comparison, either in qualitative and quantitative aspects.

In the Indonesia the poverty figure was published for the first time in 1984 by the Badan (former Biro) Pusat Statistik (BPS, the Central Statistic Agency). So far, the various 75

Ciplis Gema Qoriah, A Discourse Of Poverty In Indonesia

of measurement of poverty were issued by the BPS. For instance, BPS used the cost of calories method, a variation of the food energy intake method that is heavily dependent upon unit price of calories. This method allows different patterns in calories consumption before 1993. This (food) poverty line referred to the total expenditures needed to satisfy a daily energy requirement of 2,100 calories per capita. The total expenditures were an anticipated value, which was used for the computation and it was assumed that all expenditures were spent on calories. The data used to compute the poverty line was taken from the SUSENAS (Survei Sosial Ekonomi Nasional) survey, which is conducted every time in about 65,000 households (Asra 2000 in Edig 2005). After 1993 the BPS started to use another method to obtain the poverty line, which was the basic needs approach. This approach was used for the calculation of a food bundle as well as for non-food items. For the food bundle 52 food items were chosen for both rural and urban areas. The quantities selected were those who meet the 2,100 calorie requirement. The prices for deriving the poverty lines were taken from the SUSENAS survey. For the non-food goods, 46 items representing housing, clothing, education, health, transportation, durable goods and other essential goods, were considered (Edig 2005). In 1998 there was an urgent demand for poverty monitoring after the economic crisis, so a smaller survey with a sample size from about 10,000 households was conducted. This survey did not allow the computation of poverty lines by provinces. Other measurement also was developed, for instance, the headcount index (P0) which measures the proportion of the population that is poor. It is popular because it is easy to understand and measure. But it does not indicate how poor the poor are. Moreover, also the pointed out of the poverty gap index (P1) measures the extent to which individuals fall below the poverty line (the poverty gaps) as a proportion of the poverty line. The sum of these poverty gaps gives the minimum cost of eliminating poverty, if transfers were perfectly targeted. The measure does not reflect changes in inequality among the poor. Moreover, there are also other additive poverty measures that are distribution sensitive. Following Atkinson (1987), one can characterize a general class of additive measures, the FGT (Foster, Greer and Thorbecke) class of measures, and some other measures (such as the second measure proposed by Clark, Hemming and Ulph, 1981) (for detail see: http://siteresources.worldbank.org/PGLP/Resources/ povertymanual_ch4.pdf). The following table summarizes some additional advantages and disadvantages of various techniques in poverty measurement.

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Poverty measurement - Different concepts and different approaches Consumption or income poverty-measures: The measurement of poverty is here based on consumption expenditure or income data from household surveys, usually large-scale, statistically representative surveys, mainly implemented by the Statistical Bureau or other official institution. Advantages: simple result, presentation, and interpretation; since it is based on monetary value, it is easily linked conceptually to GDP, so the link with the economy is seemingly straightforward; yields a statistically representative national picture. Disadvantages: for policy, slow, measurement error may be high; link between raw data and results not simple, limited transparency; in practice, linking data with the economy is not selfevident; distant from the poor, etc. Non-monetary measures of poverty: Typically, there are health indicators and education statistics. Data is from large household surveys, statistically representative. Implemented by the Statistical Bureau or other government agency. Advantage: yields direct measure of well-being, more easily understood than consumption. Disadvantages: health status is largely influenced by long-term factors such as health history, health endowments, etc.; child health is strongly influenced by the long-term health status of the mother; consequently, while health is also influenced by current services and income, the link is not easy or direct, so for short-term policy analysis at least, it is problematic. Qualitative studies on poverty: Often based on participatory techniques. Experiences, perceptions, livelihood issues, social conditions, political issues, etc. Quite often implemented by non-government organisation or research centres. Advantages: rich, direct, detailed, contextual findings; not necessarily cheaper, but faster results; ownership externalities are possible. Disadvantages: not representative, not straightforward to replicate or check, etc. Source: Dercon (2000) in Bigsten, A. and J. Levin. 2000

2.3 Strategies for offensive the Problem of Poverty 77

Ciplis Gema Qoriah, A Discourse Of Poverty In Indonesia

Simon Kuznets (1955) investigated the relationship between per capita incomes and inequality in a cross-section of countries. He found that there was an inverted-U pattern, that is, inequality first increased, and then decreased, as per capita income increased. The driving force was assumed to be structural change in a dual-economy setting, in which labour was shifted from a poor and relatively undifferentiated traditional sector, to a more productive and more differentiated, modern sector (Bigsten, A and J. Levin. 2000). Concerning these statements, additionally, the study of poverty is not only to understand about definition, demensions and measurement. The study of poverty need to involve a broad range of approach, for example Economic Approach, Structural Approach and Popular Development Approach, etc. We want to set these strategies as follows:
Strategies for Attacking the Problem of Poverty Neoclassical Marxian Economic Approach Structural Approach Root of Ideology Assumption Capitalism/GrowthOriented Economy Conflict Tradition or Marxian Popular Development Approach Populism (quasi neoMarxim) The poor people actually have an adequate capacity to help themselves and find out a solution of poverty problem. A support or power necessary to break up the structural constrains is needed - Promoting self driven collective actions. Advocacy and assistance Locally (micro) specific grass-root movements

The economic actors The problem of poverty act rationally and achieving maximum powerlessness are utility or profit direct result of an maximization. exploitative social relation structured between the poor and the capitalists

Real Action/Policies

To open up and market Deregulation (Macro policy approach) Blue-print model Structural Adjustment Program Approach Unexpected Side - Widening Income Effect Disparity - Top-down Policy - Project Mentality - Corription, Crony, Capitalism, Nepotism Source: Dharmawan, 2000. credit acdes

Class struggle approach Dismantling the ruling class Seizing means of production Micro and Macro Approach

Violence and non peaceful actions. Tyranny/oppresion from the rulling elite Social unrest

Public accountability remains unclear

3 78

Prescription of Poverty in Indonesia During Economic Crisis

Jurnal ISEI Jember, Volume 2 Nomor 1, April 2012

3.1 Economic Development and Poverty Reduction: Pre Crisis Indonesia is the worlds biggest archipelago and consists of over 17.500 islands .of which only 6000 are settled and a vast population of 2000 million. It is located between 6 degrees north and 11 degrees south latitude and spans from 9 degrees to 141 degrees east longitude. The total area of Indonesia is 1,919,440 square kilometres: 1,826,440 square kilometres land and 93,000 square kilometres water. It spans over a length of 5110 km, one eighth of the worlds girth (CIA 2005 in Edig 2005, Gough, 1998). A multiracial, multilingual society, Indonesia has political difficulties which will not go away. The goverment, domicated by President Soeharto, has operated a succession of five-year plans since 1970s to develop the economy. Furthermore, Indonesia ha a free-market economy but the goverment still plays a significant role through state-owned firms and the imposition of price controls in selected industries. Since President Soeharto took power in 1966, Indonesias economy has grown steadily(Gough, 1998). Indonesia is one of the highest performing Asian economies. Historically, the second of President of Indonesia, Suharto, announced that 15 per cent of Indonesias total population was poor in the year 1990. From this formal announcement, poverty has become a matter of public concern in Indonesia. Meandwhile, the contrast situation discrebe that the discussion about inequality within the society has been openly going in for already two decades in connection with the disparities in wealth distribution that came with the economic growth (Asra undated). Thus since the 1960s, poverty reduction has been subsumed under the goal of overall economic development (Schwinghammer 1997 in Edig 2005). So far, Indonesia faced an impressive economic growth mainly due to a growing overseas demand for Indonesians industrial raw materials in the New Era (Asra 2000, Edig 2005). The following table discribes the progress of Indonesian economic on the early 1970s to Mid 1980s.

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Ciplis Gema Qoriah, A Discourse Of Poverty In Indonesia

Table 1. Economic development, poverty and equity: Early 1970s to Mid 1980s Early to late 1970s Late 1970s to Mid 1980s Oil Boom Period Ambivalent Policy Period General Economic Oil boom period, large revenue Initial oil price decline, Condition and from oil, inward looking ambivalent policy in opening Policies development strategy, import the economy, some export substitution policy. promotion but continued import substitution Absolute Poverty Rapid decline in urban areas, but relatively constant in rural areas Rapid decline in both urban and rural areas Increase in equity both in rural and urban areas Slower growth in manufacturing, but faster growth of agricultural and rural employment

Equity and Relative Decline in equity in urban areas, Poverty less significant changes in rural areas Labour Market Rapid growth of non-agricultural Transformation and urban employment, especially construction, manufacturing, services. Slow growth of agricultural employment Structural Transformation Rapid decline in the share of agriculture in the economy, large increases in non-manufacturing industry especially construction and mining, slow increase in manufacturing sectors.

Increase in the share of services sectors, and manufacturing sectors, rapid decline in mining sectors.

Sectoral or Specific Rapid agricultural mechanization Policies that reduced agricultural employment Source: Feridhanusetyawan, T, 2000

Heavy subsidy in agricultural production especially rice

Over the past twenty-five years, Indonesia has had an outstanding record of reducing poverty among its inhabitants. The number of inhabitants living on $1 dollar a day (in 1985 dollars) dropped from 87.2 million in 1970 to 21.9 million in 1995. The poverty rate declined by 82 percent during that period. Meanwhile, the number of backwater villages counts to 28,376 in 1996, and many of them are even isolated from common economic activities. A great deal of Indonesias successful reduction of poverty lay with policies that promoted long run growth. Rapid growth in per capita incomes 4.8 percent on average over 30 years more than offset any increases in the poverty rate coming from changes in the unchanged for twenty-five years. Poverty rates are not uniform across the country in 1990, poverty incidence ranged from 1.3 percent in Jakarta to 46 percent in East Nusa Tenggara. The fact of Indonesia economy was summarized that poverty alleviation achieved a huge success in the period of 1970s until the mid 1990s. The national medium-term 80

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development plan in the New Era (REPELITA) did not noted the poverty alleviation program in the chapter of the REPELITA. The first document pointed out the chapter of the poverty alleviation program was stated on the six REPELITA 1994/1995-1998/1999. The Government of Indonesia under Suharto had carried on the number of poverty reduction program and policy, for examples: (1) Presidential Instruction for the Disadvantaged Village (IDT), (2) Disadvantaged Village Infrastructure Program (P3DT), (3) Urban Poverty Reduction Programme (P2KP), (4) Takesra/Kukesra, (5) Small Farmer/Fisherman Income Expansion Project (P4K), (6) sub-district Development Program (PPK/KDP) (Leith et al., 2003). 3.2 Economic of Indonesia during the Crisis The economic crisis that started in 1997 led to a worsening of social and economic conditions, though the impact was less than was expected. The increase in poverty will depend on the decline of real GDP. Projections by the World Bank suggest that a 12 percent decline in GDP could increase the poverty rate by almost 40 percent. However, increases in the poverty rate will vary by region. Poverty rates in urban areas, such as Jakarta, are expected to double from 3.8 percent in 1997 to 8.3 percent in 1999. The rural areas will see the greatest absolute increase in poverty numbers average per capita expenditure by households in the agricultural sector was only 57 percent greater than the pre-crisis poverty line. By way of contrast, before the crisis, average per capita expenditure in the manufacturing and construction sectors was more than twice the poverty line. The other analysis said that after the crisis imposed the economy of Indonesia (1997-1998), there was increasing percentage of poverty up to 40 percent. Until to now, 79.4 million of people still live below poverty line. There are the destitute who need greater efforts to raise them up from misery. Though Ratio Ginis official data of Indonesia unbalance income measures only 0.32, which means there is a relatively even distribution of income. Another poverty situation in Indonesia is summarised in the following tables.

Table 2. Percentage of Population Below the Poverty Line by Urban and Rural Area in Indonesia, 1996-1999 Year 1996 Number of Population Below the Poverty Line (Millions) Urban 9,42 Rural 24,59 Urban + Rural 34,01 Percentage of Population Below the Poverty Line Urban 13,39 Rural 19,78 Urban + Rural 17,47 81

Ciplis Gema Qoriah, A Discourse Of Poverty In Indonesia

1998 1999

17,60 15,64

31,90 32,33

49,50 47,97

21,92 19,41

25,72 26,03

24,23 23,43

Source: Based on National Socio Economic Survey Table 3: Percentage of Indonesian population below different poverty lines for Indonesia Poverty line National National 1 US$ PPP 2 US$ Source: World Bank 2004 Year 1996 1999 2002 2002 Headcount index (%) 15.7 27.1 7.5 52.4

Table 4: Poverty gap ratios for Indonesia No. 1. 2. 3. 4. 5. 6. Source: UN 2005 Year 1993 1996 1998 1999 2000 2002 Poverty gap ratio (in %) 2.7 2.2 5.6 2.3 1.0 0.9

The poverty gap ratio shows that the mean distance below the poverty line expressed as a percentage of the poverty line. The mean is taken from the entire population. The non-poor are counted as having a zero poverty gap or in other words a zero shortfall from the poverty line. The table 4 summarized that the poverty gap ratios for the entire Indonesia between 1993 and 2002 in relation to the international poverty line of 1 US$ PPP are listed. Additionally this table also pointed out that the influence of the economic crisis is extremely apparent again, looking at the poverty gap ratio of 1998. Also the positive development concerning poverty after the crisis can be observed (Edig, 2005). Meanwhile, according Skoufias et.al (2000) that based on the perspectives of household during the crisis, the performance of households was a considerable drop in the welfare during the first year of the economic crisis. Furthermore Skoufias et.al describes that average per capita expenditures declined significantly, and at the same time inequality increased. The poverty rate appears to have doubled in the first year of the crisis. However, transitions into and out of poverty reveal remarkable fluidity. Many households have indeed suffered from falling incomes and entered into poverty. The crisis also threatens future income capacity through damage to the health and education of Indonesians. During crises, education tends to suffer first as households pull children out of school to try to cope with the crisis. Bank projections suggest that approximately 2.75 million students in primary and junior secondary school are at an increased risk of dropping out, and 400 000 primary school students are unlikely to continue onto junior secondary school. The health sector has been severely impacted by 82

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the sharp depreciation of the rupiah, which has raised the prices of drugs, vaccines, contraceptives, and other medical supplies. 3.3 Government Program for the Response to the Crisis Given that the crisis is affecting the poor primarily through reduced employment and increased prices on critical commodities and services, the Governments strategy focuses on maintaining the real income of households while guaranteeing access to quality basic education and health services. The anticipation of the impact of the crises started in mid of 1997, Indonesia government establised the Social Safety Net Program (JPS an acronim of Jaring Pengaman Social). JPS was launced in early 1998. The aim of the JPS is to protect the poor from falling down deeply in to poverty and through four prouged strategies: (1) ensuring the availibility the affordable rice, (2) improving household purchasing power through employment creation, (3) preserving access to critical social services, particularly health and education, and (4) sustaining local economic activity through regional block grant and the extension to the small enterprise credit. The following table describes the areas and major program of the JPS.
Table 5. Areas and Major Program of the Indonesian Social Safety Net

No. 1. 2.

Safety Net Area Food Security Employment Creation

Program Operasi Pasar Terbuka (OPK) (special market operation for the cheap rice): sales of subsidized Padat Karya (meaning Labor Intensive): a loose, uncoordinated, collection of the several labor intensive programs across variety of the government departments PDM-DKE: a community fund program that provide block grant directly to villages for either public works or a revolving fund for credit Scholarship and Block Grant: - Scholarship directly into the elementary (SD), lower secondary (SMP), upper secondary (SMU) student - Block Grant to selected school JPS-BK: a program providing subsidise for: Medical Service Operational support for health centre Medicine and imported medical equipment Family planning service Nutrition (supplementary food) Midwife services

3. 4. Education

5.

Health

Government of Indonesia stated on that the JPS Program shoud be appropriate program with specific character, for examples: transparency, quick of disbursement of benefit, direct financing for the benefecieries, accountability and communit partipation. But the research of Sumarto et.al. (2001) pointed out that the implemantation of the program was plauged by problems of targeting the benefecieries and delivering benefits to intended the targer groups. On other programs during the crisis, in the same time Indonesia has restored massively its economic stability since mid 1998. Especially in financial system the problem of domestic prices and real wages have recovered (Widyanti et al. 2001). Nevertheles, Indonesia has a high unemployment, a fragile banking sector, endemic 83

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corruption, inadequate infrastructure, a poor investment climate and unequal distribution among the regions (CIA 2005, Edig, 2005). Concerning the poverty reduction program, Pattimura pointed out that Via Presidential Decree (KEPPRES) No. 124 of 2001, the Indonesian government established a Poverty Management Committee (KPK), headed by the Coordinating Minister for Peoples Welfare and Poverty Alleviation, who was responsible to the President. This presidential decree did not clarify the purpose of establishing the KPK, or its authority. Articles 4 and 5 of this decree set forth only the function and goal of the KPK, which is to take concrete measures to accelerate the reduction in the number of poor people in all regions of Indonesia. The function of the KPK is to make policy, monitor, and report on poverty alleviation to the President.

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Anonymous. 2000. Attacking Poverty: World Development Report 2000/1, Chapter Outline: The World Bank. http://www.worldbank .org/poverty /wdrpoverty/ wdroutline199 .pdf Anonymous. 2000.World Development Indicator 2000. The World Bank. Washington, DC. Bigsten, Arne and Jrgen Levin. 2000. Growth, Income Distribution, and Poverty: A Review. Working Paper in Economics No 32 November 2000-11-03 Boltvinik, J. 1999. Poverty Measurement Methods- An Overview.UNDP.Washington D.C. http://www.undp.org/poverty/publications/poverty_reduction_series.htm Damanhuri. 2000. Challenges and Strategy of Indonesia Economic Development: Trespass of Globalization and Political Economic Fundamental, Economic Journal, Journal of the Faculty of Economics Padjajaran University Dharmawan, A.H. 2000. Poverty, Powerlessness, and Poor People Empowerment: A Conceptual Analysis with Special Reference to the Case of Indonesia, Working Paper in the Workshop on Rural Institutional Empowerment, Frankfurt am Main, Germany, August 26th Edig, van Zenia Felice. 2005, Measurement of Absolute Poverty and Indicators of Poverty among Rural Household in Central Sulawesi Indonesia, Master Thesis, University of Goettingen. Feridhanusetyawan, T. 2000. Globalization, Poverty And Equity In Indonesia, Working Paper for OECD, Paris-France, 30 November-1 December 2000 Gough, Leo. 1998, Asian Meltdown: The End of The Miracle?, Capstone Publishing, UK. Leith, Jennifer, Catherine Porter. 2003. SMERU Institute. Peter Warr (2003): Indonesian Rice Tariff. Research Report on Poverty and Social Impact Analysis, Government of Indonesia an DFID, March 2003 Lok-Dessallien, R. 1999. Review of Poverty Concepts and Indicators. UNDP. http://www.undp.org/poverty/publications/poverty_recuction_series.htm. Maxwell,S. 1999. The Meaning and Measurement of Poverty. ODI Poverty Briefing No.3. http://www.oneworld.org/odi/briefinf/pov3.htm Miceli. D, 1998. Measuring Poverty Using Fuzzy Sets. Discussion Paper No. 38. National Centre for Social and Economic Modelling. Faculty of Management. University of Canberra. Osmani, S.R. 2000. Participatory Governance, Peoples Empowerment and Poverty Reduction. SEPED Conference Paper Series No.7.UNDP. Washington, D.C. Pattimura. 2002. Poverty and Inequality. INFID Annual Lobby 2002 85

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Ravallion, Martin. 1992. Poverty Comparison A Guide through Methods and Concepts. LSMS Working Paper 88. The World Bank. Washington D.C. Sumarto, Sudarno, Suryahadi, Asep and Wenedfrida Widyanti, Design and Implementation of the Indonesia Social Safety Net Programs: Evidence from JPS Module in the 1999 SUSENAS. SMERU Working Paper. Sumarto, Sudarno, Suryahadi, Asep and Alex Arifianto. 2004. Governance and Poverty Reduction: Evidence from Newly Decentralised Indonesia. SMERU Working Paper. Suryahadi, Asep and Sudarno Sumarto. 2001. The chronic poor, the transient poor, and the vulnerable in Indonesia before and after the crises, SMERU working paper Skoufias, Emmanuel, Asep Suryahadi and Sudarno Sumarto. 2000. Changes in Household Welfare, Poverty and Inequality during The Crisis. Bulletin of Indonesian Economic Studies. Vol 36 No 2, August 2000, pp. 97114 White, H. 1999. Global Poverty Reduction: Are we heading in the right direction? Journal of International Development, 11, 503-519. Widyanti, Wenedfrida, Sumarto, Sudarno and Asep Suryahadi. 2001. Short-term poverty dynamics Evidences from Indonesia, SMERU working paper Witt, Matthias. 1998. Der Fondo de Inversin Social Ein effizientes entwicklungspolitisches Instrument zur Bekmpfung der Armut in Bolivien? Gttinger Studien zur Entwicklungskonomie 6. Vervuert. Frankfurt am Main

World Bank. 2004. World Development Report 2005 A Better Investment Climate for Everyone. Washington DC

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