Making Indonesia Work for the Poor Summary
Making the New Indonesia Work for the Poor - Chapter 4
Making Growth for the Poor
Karina Mahirda – 311380
Growth is essential for poverty reduction. However, growth may bring about one of two things; more equality or more inequality. The current pattern of growth in Indonesia (that leads to a widening inequality) could mean that the government will fail to hit its poverty headcount target by 8.3% by 2009. Looking at the recent past (past 10 years), there are 2 key pathways through which households and individuals have escaped poverty in Indonesia: (1) improvements in agricultural productivity in rural areas and (2) increases in non-agricultural productivity in both urban and rapidly urbanizing rural area, and alternatively by Indonesia’s structural transformation from agricultural sector to non-agricultural sector as some rural areas rapidly urbanized. The question is: what policies help the poor onto these pathways? First, is by maintaining macroeconomic stability. Second, is by investment in the capabilities of the poor. Third, is by connecting the poor to opportunities.
What are the pathways out of Poverty?
We need to acknowledge that there are 2 major groups of the poor that need to be reached: (1) the poorly/uneducated rural households whose members are predominately involved in low-productivity agricultural activities that are mostly disconnected from the major growth centers, and (2) the poor who are living in close proximity to major growth centers but who are struggling to participate in the economic opportunities in those areas. After that, we need to reflect the challenges of reaching these 2 groups of the poor and construct a framework for thinking about the pathways out of poverty. How to do that? We need to set up the 2 main driver of poverty reduction in this country: (1) rising agricultural productivity by the moving from low-productivity (subsistence farming to commercial farming; intensification and diversification), and (2) increasing
Making Growth for the Poor
Karina Mahirda – 311380
Growth is essential for poverty reduction. However, growth may bring about one of two things; more equality or more inequality. The current pattern of growth in Indonesia (that leads to a widening inequality) could mean that the government will fail to hit its poverty headcount target by 8.3% by 2009. Looking at the recent past (past 10 years), there are 2 key pathways through which households and individuals have escaped poverty in Indonesia: (1) improvements in agricultural productivity in rural areas and (2) increases in non-agricultural productivity in both urban and rapidly urbanizing rural area, and alternatively by Indonesia’s structural transformation from agricultural sector to non-agricultural sector as some rural areas rapidly urbanized. The question is: what policies help the poor onto these pathways? First, is by maintaining macroeconomic stability. Second, is by investment in the capabilities of the poor. Third, is by connecting the poor to opportunities.
What are the pathways out of Poverty?
We need to acknowledge that there are 2 major groups of the poor that need to be reached: (1) the poorly/uneducated rural households whose members are predominately involved in low-productivity agricultural activities that are mostly disconnected from the major growth centers, and (2) the poor who are living in close proximity to major growth centers but who are struggling to participate in the economic opportunities in those areas. After that, we need to reflect the challenges of reaching these 2 groups of the poor and construct a framework for thinking about the pathways out of poverty. How to do that? We need to set up the 2 main driver of poverty reduction in this country: (1) rising agricultural productivity by the moving from low-productivity (subsistence farming to commercial farming; intensification and diversification), and (2) increasing