Towards Zero Percent Extreme Poverty

The government also pays special attention to the issue of extreme poverty as part of its commitment to the Sustainable Development Goals (SDGs). In fact, President Joko Widodo set the target for extreme poverty to be zero percent by 2024. That is six years earlier than the world SDGs target, namely 2030.

Currently, Indonesia uses an absolute poverty line (GK) measurement to identify poverty. GK is the minimum rupiah value to meet basic needs, both food and non-food, calculated by BPS from data in the National Socio-Economic Survey (Susenas).

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Residents whose expenditure is below GK IDR 550,458/capita/month are grouped as poor residents. Meanwhile, residents whose expenditure is below the extreme GK of IDR 351,957/capita/month—or 1.9 US dollars (around IDR 30,000)/capita/day purchasing power parity (PPP)—are grouped as extreme poor people.

In March 2023, according to BPS release, it was recorded that among 100 residents, nine are living in poverty and among those nine, one is living in extreme poverty. Based on the latest data from BPS, the poverty rate in 2023 is 9.36 percent and extreme poverty rate is 1.12 percent.

In addition to monetary indicators, extreme poverty is also characterized by several traits, including low education, limited access to healthcare, and inadequate basic infrastructure.

City's poor residents are active in their huts located on the West Ciliwung Canal border, which divides the Tanah Abang area, Jakarta, Sunday (23/10/2022).

Special strategy

To overcome extreme poverty, Presidential Instruction Number 4 of 2022 concerning the Acceleration of Extreme Poverty Eradication was issued. This Presidential Instruction sets out three strategies to be implemented by 22 ministries, six institutions and all regional governments.

The first strategy is to reduce the burden of spending for the extremely poor. This strategy ensures that the extremely poor groups receive complementary social protection programs between the center and regions. The target is mainly vulnerable groups, namely those with permanent health disorders, people with disabilities, people with mental disorders, elderly citizens, orphans, and so on.

The second strategy is income improvement. It is aimed at extremely poor residents who are still productive. They are given access to jobs and increased human resource capacity, as well as access and capacity as micro, small, and medium-sized entrepreneurs, including access to financing. Through this strategy, it is hoped that extremely poor households can move up the social ladder to access further programs such as mentoring, training, and financing.

The third strategy, reducing pockets of extreme poverty. This strategy is aimed at increasing access to basic services and increasing connectivity between regions.

Poverty is like a vicious circle (vicious circle) which can be both a cause and an effect.

The target is for poor and slum areas to become healthy areas with adequate basic infrastructure, especially decent housing, children's play areas, sanitation, drinking water, and clean water availability.

Children of the constitution

To ensure the achievement of the zero percent extreme poverty target, supporting prerequisites are needed. First, in accordance with Inpres No 4/2022, a priority locus and sharp and high-quality targeting data are required.

In accordance with the assignment under inpres, the Coordinating Ministry for Human Development and Culture (PMK) has issued the Coordinating Minister's Decree (Kepmenko) PMK No. 25/2022 regarding Priority Locations and Extreme Poverty Eradication Targets, as well as Kepmenko PMK No. 30/2022 on Policy Sources and Types of Data Used.

As a follow-up to the ministerial regulation, data on the Acceleration of Extreme Poverty Eradication (P3KE) has been established, which is the result of triangulation and matching of data from the National Family Planning Coordinating Board (BKKBN) family census, the Ministry of Home Affairs' national identification number (NIK) data, and the Ministry of Social Affairs' Integrated Social Welfare Data (DTKS).

A homeless person unwinds on the sidewalk of Jalan MH Thamrin, Jakarta, Friday (16/2/2024).

The triangulated data is then categorized into 10 levels or deciles according to their welfare. Each decile is further divided into 10 percentiles to ensure which individuals and neighborhoods are most eligible to receive policy interventions.

P3KE data is updated every year and now includes more than 71 million families by name by address (BNBA) or more than 245 million individual data. For program interventions, this data has been used by 25 ministries/agencies and more than 85 percent of provincial, district and city governments.

Secondly, the P3KE data is expected to serve as a guide for all parties to synergize, converge, and complement each other (sicocom). Sicocom occurs when all programs intertwine and strengthen each other, moving centripetally towards a single target point, and complementing each other.

To serve as a guide for convergence and complementarity, the Coordinating Ministry for Economic Affairs has established Kepmenko PMK No. 32/2022 as the General Guidelines for Accelerating the Eradication of Extreme Poverty and formed a Convergence Program Task Force to oversee the occurrence of synergy and complementation through Kepmenko PMK No. 7/2023.

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Third, the involvement of non-governmental elements, such as the business world through corporate social responsibility (CSR), social organizations, philanthropic institutions, amil zakat institutions, and universities. Currently, these institutions have been very active in supporting the above three strategies. However, their roles and contributions need to be further enhanced.

Fourthly, equally important is to ensure that all ongoing efforts continue to be sustainable. The significant reduction of the extreme poverty rate from 2.14 percent (2021) to 2.04 percent (2022) and 1.12 percent (2023) needs to maintain its momentum. Inpres No. 3/2022 will end in 2024, but its continuity needs to be maintained by the new government.

Extreme poverty reduction may not be able to reach zero percent. If the decline rate can be maintained as last year at 0.92 percent, in 2024 the number could decrease by 0.3-0.4 percent.

This is where the state is obligated to accompany and provide assistance to them, in accordance with Article 34 Paragraph (1) of the 1945 Constitution which states that "The state shall take care of the poor and neglected children". They are the "constituent children" who must not be left behind because they are one of the virtues of the constitutional mandate and the reason why this Indonesian state stands.

Muhadjir EffendyCoordinating Minister for Human Development and Culture