Election Year Economics: Understanding Indonesia’s Development Challenges in 2024 (Part-3)

By: Dr. Mohamad Ikhsan Modjo (Financial Economic Specialist’s BINUS International Finance Program)

One way to anticipate the increase in urban poverty is by accelerating the provision of public services in urban areas. At the national level, development efforts have been boosted with the issuance of Presidential Regulation Number 59/2017 on implementing the Sustainable Development Goals (SDGs). Through this regulation, mainstreaming and localizing efforts to achieve sustainable development goals in various regions will be more focused and vibrant in the coming years, thereby strengthening existing development efforts, including poverty alleviation efforts.

In addition to poverty, inequality is also recorded as an issue that will become a burden in the coming years. Despite the decreasing inequality rate, where the Gini ratio continues to decline from the previous year to 0.393, reflecting progressive income equality, inequality remains a major issue that, if not anticipated quickly and carefully, will spread to various other issues in the social and political fields. This is evident from the record of inequality in Indonesia in 2022, which shows that the wealth of the richest 1% of the population is equivalent to the poorest 49% of the population in Indonesia. Collectively, the wealth of the four richest Indonesians reaches almost US$25 billion, equivalent to the wealth of the poorest 100 million people.