Indonesia is the world’s fourth most populated country, with growth expected to peak in 2065. Therefore, there will soon be a need to provide more food and job and market opportunities for Indonesia’s coming generations. It is imperative that poverty greatly reduce in order to meet these ends for Indonesia’s future population growth. While poverty reduction in Indonesia faces a myriad of challenges, there is also a pantheon of solutions to meeting this goal.

Poverty in Indonesia

Though Indonesia has a large population and is considered a middle-income country, most of the populace does not have adequate wealth. The richest four men in the country have more wealth than the poorest 100 million combined. This inequality, which includes gender inequality, brings great obstacles to improved infrastructure and economic stability for Indonesia’s future.

Impact of COVID-19

Indonesia had the second-highest number of COVID-19 cases in Southeast Asia (5.91 million), with the impact of the pandemic pushing nearly 5 million more people into poverty throughout Southeast Asia. This has complicated Indonesia’s goal of getting more people out of poverty alongside neighboring countries. The pandemic caused increased unemployment and lowered tourism rates across the region. However, Indonesia is still pressing forward with policy and economic changes to combat the pandemic’s ill effects.

Economic Change

Indonesia’s Finance Minister Sri Mulyani Indrawati is pushing for the World Bank to make major reforms in order to provide more investment into helping nations like Indonesia combat the effects of COVID-19 and climate change well into the future. Most notably, the desired change is the expansion of the forms of responses to monetary crises. These crises are issues ministers like Indrawati claim the World Bank is not currently equipped to handle. Indrawati also said that using mixed leverage of funds from multilateral funds, private investment and government revenue will help Indonesia and its blended finance in order to adequately cover the costs of combating its current issues and cementing institutions to help in future economic and health-related issues.

Environmental Change

Indonesia is a nation consisting of chains of flush forest islands and environmental diversity. This biodiversity has experienced deforestation in the past. The biodiversity is vital to reinforcing Indonesia’s natural infrastructure to counteract the effects of climate change and natural disasters. Therefore, Indonesia has recently experienced decreased deforestation and the integration of local indigenous groups into the maintenance of its forests. These efforts are ensuring natural resources and environments can aid poverty reduction in Indonesia. Efforts like the Green Growth Plan and the BioCarbon Fund Initiative for Sustainable Forest Landscapes are allowing more of the small impoverished communities, such as the Jambi province, to engage in new job and conservation opportunities, fortifying poverty reduction in Indonesia.

Indonesia’s Future

With Indonesia being one of the largest lending partners of the World Bank, there are plenty of opportunities and avenues for the development of future programs to reduce inequality and poverty. The World Bank notes that areas of gender, digitalization, improved infrastructure, human capital, natural asset management and environmental challenges will all be important factors in poverty reduction in Indonesia. However, if the World Bank makes reforms, alongside internal development and recovery, then Indonesia can eliminate poverty.

– Albert Vargas
Photo: Pixabay