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.

Find out more about the Extension in Indonesia

The objectives of the Inequality Diagnostic Research in Indonesia are: 

1. to produce a working paper which will consolidate data and resources (papers) around inequality issues to profile the prevailing situation of inequality in Indonesia.
2. to conduct capacity building activities for national research center and the national statistical office in performing data analysis for the Inequality Diagnostic Research Report.
3. to introduce specific tools for multidimensional inequalities diagnostic in Indonesia.

This research has led to a comprehensive Inequality Diagnostic Research Report in Indonesia and contributes to public debate and discussion on Inequality in Indonesia. Indeed, this project performed a thorough analysis of multi-dimensional aspect of inequality in Indonesia and a comprehensive breakdown based on income groups, geographical locations, and gender. It also includes 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:

• The Inequality Diagnostic Report: Indonesia

Read the press release: LPEM FEB UI, AFD, and BPS Release the Inequality Diagnostic Report for Indonesia 2023

• Oskar Lecuyer, AFD Research Officer
• Emmanuel Fourmann, AFD Research Officer

The Covid-19 pandemic has forced societies around the world to make difficult trade-offs, as they try respond to the public health crisis on one hand, and to the economic and social distress arising out of it on the other. In South Africa, these combined crises have exacerbated already high levels of unemployment, deepening poverty and heightening levels of hunger and food insecurity.

To mitigate the combined health, social and economic crises stemming from the Covid pandemic, South African President Cyril Ramaphosa announced, in April 2020, a range of support measures to mitigate their impact, including emergency social protection and employment stimulus measures.

Find out more about the Extension in South Africa

This research project aims to study the local stimulus effects of South Africa's PES and national social grants program. In order to do so, it brings together a wide range of existing and new data sources, such as shopper data provided by Shoprite Checkers and programme participant data from Harambee Youth Employment Accelerator, which are securely merged while preserving individual anonymity using local tech company Omnisient’s proprietary encryption technology. 

The primary research focus will be on the multiplier effects of these two programs, that is, the effects of the programs on the economy beyond the direct impact of spending on program participants and their households.

These program-specific multiplier effects are crucial to the overall evaluation of the programs, particularly in the context of budget constraints, but are difficult to identify in a credible empirical manner given the lack of work on them in South Africa. 

In studying them, this project thus has the dual objective of characterizing the spending patterns of stimulus beneficiaries and then examining how such spending is likely to stimulate economic activity in industries further up the product supply chain. Much of the analysis proposed is descriptive and extrapolative rather than causal when it comes to quantifying multiplier effects. 

Thus, the overall goal of this research is to provide an incomplete but conservative and credible quantitative baseline for thinking about program-specific multipliers in South Africa, in an environment where such evidence is lacking.
 

The publications and webinars related to this research project are available below.

• Anda David, AFD Research Officer