Income inequality a big bugbear for Indonesians: Poll

Income inequality a big bugbear for Indonesians: Poll
Slum dwellers dismantling their houses along railroad tracks in Jakarta last month, as part of the government's plans to upgrade the service and improve safety. Growth has increased by 5.9 per cent over the past five years, but it is expected to slow down to just above 5 per cent this year.

SINGAPORE - Some 40 per cent of Indonesians feel the current distribution of income in South-east Asia's largest economy is "extremely unequal", a recent survey has found.

Another 52 per cent feel that it is "less equal" than should be the case.

Still, more than half feel that their lot will improve in the next year, with more lower-income and lower-middle-income residents expressing optimism.

These joint findings by prominent pollsters Indonesian Survey Institute (LSI) and Indikator Politik Indonesia were released yesterday, and highlighted what observers said is a key task for the next administration when it takes office on Oct 20.

"Fifty-two per cent expect their economic condition will improve next year, and 68 per cent of respondents expect their economic condition will improve in the next five years," LSI executive director Dodi Ambardi said.

At the same time, 45 per cent feel income inequality is a "highly urgent" issue for the new government, while another 39 per cent said it is "quite urgent".

The economy has been growing by some 5.9 per cent on average over the past five years, but growth is expected to slow down to just above 5 per cent this year.

Per capita income has also risen more than threefold since President Susilo Bambang Yudhoyono took office, from 10.5 million rupiah (S$1,155) a year in 2004 to 36.6 million rupiah last year.

But the Gini coefficient, which measures income inequality, with 0 being total equality and 1 most unequal, has surged from 0.34 in 2005 to 0.41 today.

Presidential aide on economic affairs Firmanzah told The Straits Times after a panel discussion on the survey results that such inequality was inevitable for a country going through industrialisation, such as Indonesia.

The pollsters interviewed 3,080 people across Indonesia, in cities and villages, between late May and early June.

Mr Maruarar Sirait, an MP from President-elect Joko Widodo's Indonesian Democratic Party of Struggle (PDI-P), said he believed current calls to raise fuel prices will further widen inequality. But most observers said that while fuel price hikes will cause short-term pain, they are needed for longer-term solutions to develop the economy and help lift up more Indonesians.

Many economists said that while recent economic growth has been steady, money which should be spent on education and infrastructure went instead to fund subsidies, at the cost of creating more jobs.

LSI's Mr Dodi said: "Indonesians believe that job creation and providing social protection for the poor and vulnerable are two main policies that need to be pursued by the new government in reducing income inequality."

This article was first published on August 2, 2014.
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