Poverty Dynamics in Indonesia

While the overall poverty rate in Indonesia has declined by almost 50 percent in the 20 years to 2018, many Indonesians are still vulnerable to poverty. While a small percentage of Indonesians are chronically poor, poverty in Indonesia is largely a transient phenomenon. The number of transient poor–those moving in and out of poverty–was estimated at 17.92 percent of the population or 44.2 million people in 2013. The chronic poor and transient poor share common characteristics. The majority of household heads are self-employed with lower levels of educational attainment. They mostly work in the agricultural sector, have less access to formal funding and basic services, and own fewer assets. For the transitory poor, the government needs to provide a better safety net and coping mechanisms to reduce their vulnerability. The chronic poor need basic services (especially in rural areas) and programs that can support a sustainable increase in their income.