In Indonesia, poverty has been declined since 2006 from 17.75% to 9.41% in 2019 due to strong economic growth and other poverty reduction efforts. The inequality, however, remains considerably high. Since 2010, Indonesia’s Gini ratio remains above 0.38. The poverty and inequality situation has been worsen post-pandemic. Indonesia’s headcount poverty rate back to double digit, 10.14% in 2021, while the Gini ratio climbed to 0.384, its highest rate since 2018. While focus on economic inequality is important, the picture of inequality in Indonesia should be assessed through a multi-dimensional aspect, not limited to households income or expenditure.
Indonesia is a fourth most-populous and also the largest archipelagic country in the world. It makes any policy context should be assessed carefully throughout population groups, income class, and geographical location due to the difference in the provision of public infrastructure and policy efforts within the country. As such, a comprehensive inequality diagnostic report is needed to assess overall condition of inequality in Indonesia not only using monetary indicator (income or expenditure), but also social assets, in terms of access to education, health, water and sanitation, employment, and other basic infrastructures needed for households.
The Extension of the Research Facility on Inequalities will cooperate with leading research center, LPEM FEB UI, and national statistical office, BPS, to conduct comprehensive inequality assessment and produce an inequality diagnostic report as the basis for launching a national dialogue about inequality and stimulate policy interventions to overcome inequality.
This project is part of the Extension of the EU-AFD Research Facility on Inequalities (RFI). Coordinated by AFD and financed by the European Commission, the Extension of the RFI will contribute to the development of public policies aimed at reducing inequalities in four countries: South Africa, Mexico, Colombia and Indonesia over the period 2021-2025.
The objectives of the Inequality Diagnostic Research in Indonesia are:
- to produce a working paper which will consolidate data and resources (papers) around inequality issues to profile the prevailing situation of inequality in Indonesia.
- to conduct capacity building activities for national research center and the national statistical office in performing data analysis for the Inequality Diagnostic Research Report.
- to introduce specific tools for multidimensional inequalities diagnostic in Indonesia.
This research will lead to a comprehensive Inequality Diagnostic Research Report in Indonesia and will contribute to public debate and discussion on Inequality in Indonesia. Indeed, this project will perform a thorough analysis of multi-dimensional aspect of inequality in Indonesia and a comprehensive breakdown based on income groups, geographical locations, and gender. It will also include analysis of prior policies that have been taken by the government to reduce inequality and how it performs overtime. The output of this research will help government to identify priorities and policy options in order to further reduce them.
You will find below the research publication related to this project:
Read the press release: LPEM FEB UI, AFD, and BPS Release the Inequality Diagnostic Report for Indonesia 2023
This project is carried out with the support of the European Union
Contacts:
- Oskar Lecuyer, AFD Research Officer
- Emmanuel Fourmann, AFD Research Officer
The content of this project information sheet falls under the sole responsibility of the AFD and does not necessarily reflect the opinions of the European Union.
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