JakartaPost-June 10, 2025
The Indonesian government is revising its poverty line definition that has been in place for 26 years as per capita gross domestic product (GDP) has sharply increased and consumption patterns have shifted. National Economic Council member Arief Anshory Yusuf said the redefinition is being worked on by his office alongside Statistics Indonesia (BPS), the National Development Planning Agency (Bappenas) and the Statistics Society Forum. Indonesia last revised its poverty line on 1998. “It is rather late, so it has to be done soon. Hopefully this year before long, we will announce the new [poverty line],” Arief was quoted as saying by Bisnis.com on Monday. One driving motivation behind the move was that the poverty line affects economic policy. For example, when the poverty rate is low, the government does not have to focus its energy on pushing labor-intensive industries. Secondly, the revision is needed on the basis of accountability and trust of authority. People would question the low poverty rate when they are experiencing malnutrition or stunting, said Arief.
“When people feel dissatisfied, their trust toward the government erodes. That’s what’s more dangerous,” he said. He explained that so far, two concerns are affecting the planned redefinition efforts, one being politics, given that revising the line upward automatically classifies more people as poor, and another is the concern of a ballooning social aid budget. Indonesia measures poverty based on a monthly expenditure set at Rp 595,243 (US$37) per individual. The council is proposing to lift that to at least Rp 765,000, which Arief says is not too far off from the standard used by the World Bank. The World Bank has recently adopted some changes to its process for measuring poverty, the most important of which is the usage of 2021 purchasing power parity (PPP) as opposed to that measurement from 2017 used in the previous calculation. The World Bank set the international poverty line at $3 per individual per day from $2.15. The line was lifted to $4.20 per individual per day from $3.65 for the lower-middle-income group. In monthly terms, that standard translates to about Rp 1.5 million spending per individual per month and under this definition, 68.2 percent of Indonesians or 194.4 million people fall below the poverty line. Read more at:
