Inequality in Indonesia
Over the past 20 years, the disparity between wealthy Indonesians and the rest of the population in Indonesia has increased exponentially. Special Staff of the Vice President of Indonesia, Bambang Widianto said at a 2021 guest lecture that Indonesia is the fourth most unequal country globally. According to Oxfam, “the four richest men in Indonesia have more wealth than the combined total of the [most impoverished] 100 million people.” This increase in inequality in Indonesia undermines the fight against poverty while slowing the nation’s economic growth.

How Inequality Affects Citizens

Inequality in Indonesia affects the nation’s inhabitants in many ways. Some groups including women face harsher impacts of inequality. Poverty impacts women disproportionately as does low wages and job insecurity. In terms of Indonesia’s Gini coefficient, “a measure of national consumption inequality,” the country notes an increase from 31.1 in 1999 to 38.2 in 2019. This means “income distribution has become much more unequal.” The Asian financial crisis brought impacts mostly affecting the wealthiest, however, “since 2003, Indonesia’s richest 20% have enjoyed much higher growth in incomes and consumption,” thus contributing to inequality in Indonesia. According to the Asian Development Bank (ADB), almost 10% of the nation lived below the national poverty line in 2020.

5 Facts About Inequality in Indonesia

  1. Geographic Disparities. Indonesia has a complex geographical setting as it comprises about 7,500 islands and more than 43% of the population lives in rural areas. In these areas, access to basic infrastructure and services, such as electricity or decent roads for transportation is rare. In addition, large corporations control some territories and their business activities contribute to increasing inequality by benefiting mostly the wealthy.
  2. Education Inequalities. The Indonesian education sector suffers from underfunding and there are many barriers to equal access, such as poverty. This is notable in secondary education where net secondary school enrollment rates stood at 78.7% in 2018 while the primary school net enrollment rate was 93% in the same year. Without a complete education, impoverished Indonesians cannot access higher-paying, skilled jobs to break cycles of poverty. In addition, children from wealthier families have the benefits of a high-quality private school education while others attend average schools with lower-quality education standards. Impoverished children are more likely to drop out of school because education in Indonesia is only free until Grade 9. These inequalities are notable within the job market: “High-salary, formal jobs for highly qualified workers on the one hand and informal, low-wage jobs requiring low skills on the other.” The Jakarta Post said that “unequal access to skills and rising wages for the skilled has increased wage inequality.”
  3. Economic Growth Inequalities. According to a 2016 article by The Jakarta Post based on World Bank findings, just 20% of Indonesians reaped the benefits of the country’s economic growth over the past decade. This means that the economic growth did not benefit 80% of the nation, equating to 205 million people.
  4. Children Face the Impacts of Inequality. Due to poverty stemming from inequality, inadequate nutrition means that 37% of Indonesian children endured stunting in 2016. Stunting impairs mental and cognitive development, increasing children’s struggles in attaining an education, which limits their skills and thus limits their chances of securing higher-paying jobs.
  5. The Family Hope Program (PKH). This program provides “conditional social assistance” to impoverished families in Indonesia. It began its operations in 2007 as an initiative of the Ministry of Social Affairs. The program’s assistance improves access to “basic social services in health, education, food and nutrition, care, assistance and other social protection.” In 2019, the Indonesian government provided 10 million households with conditional cash transfers worth $2.21 billion. The program allocated each household “a base benefit” of Rp 550,000 (Indonesian rupiah) with additional benefits “such as an additional Rp 2 million per annum” for every secondary school student in the household. In 2020, a study shows that the PKH program improved by 53% the school re-enrollment rates of unenrolled or drop-out students aged seven to 15 years old from beneficiary families. PKH also decreased by 48% “the number of children engaged in wage work.” In relation to health outcomes, “toddlers of recipient families are now 23% less likely to suffer from stunting.”

The Path Going Forward

There is a desire on the part of the Indonesian government to reduce inequality in Indonesia. President Jokowi’s administration made addressing inequality a priority during 2017. To further reduce inequality in Indonesia, a 2017 report by Oxfam indicates that “a living wage for all workers” is important as is ” increasing spending on public services” and raising the tax obligations of wealthy individuals and companies. With a commitment to reducing inequality in Indonesia, nationwide poverty can simultaneously reduce.

Ander Moreno
Photo: Flickr


In 2013, 28 million Indonesians lived below the poverty line. Impoverished families throughout the nation were often too poor to afford healthcare and education for their children, leading to illness and injury that trapped them in generational poverty.

In an effort to break this generational cycle, the World Bank, in combination with the Ministry of Social Affairs, has created the Family Hope Program.

Financial and Developmental Aid

The Indonesian Family Hope Program works through a series of cash transfers. The money is given to parents who agree to participate in health and nutrition training, take their children to clinics when they’re ill and keep their children in school.

The program also provides startup money and skills training to parents. These micro-investments give families the means to become entrepreneurs and run their own family businesses, ensuring economic growth and generational development.


Mothers participating in the program are encouraged to give their children the best possible start to life — beginning in the womb. The World Health Organization (WHO) recommends that women have four antenatal check-ups throughout the course of their pregnancy, thus lowering the risk of complications, infections and other life-threatening incidents through screenings. Yet, few women receive all four visits.

The Family Hope Program has increased the number of antenatal checkups by more than 7 percent. This establishes a precedent of continued family health. As mothers are healthier during and after pregnancy, children are healthier and receive better healthcare as a result. The 7 percent increase in antenatal care resulted in a mirrored raise in child immunizations by 7 percent.

The nutritional aspect of the program has also positively impacted childhood development, decreasing the number of children suffering from stunting by 5 percent. As a result of children being healthier, they are able to focus better and attend school.


Along with the cash grants, more than 11,000 facilitators trained in education and nutrition hold seminars teaching mothers how to manage finances, improve the health of their families and aid their children in their studies.

The program has resulted in increased enrollment and school participation.

Many children from poor families stop attending school after completing their primary education, though not due to a lack of desire to attend. The program has removed financial barriers keeping children from continuing their education for the more than 3 million families that the program has reached.

Children now are 8 percent more likely to go on to secondary education and 10 percent more likely to enroll in junior secondary school. According to the United Nations, more education equals higher earning potential and better health, which are essential to end the generational poverty cycle.

Claire Colby

Sources: NCBI, United Nations, World Bank, World Health Organization
Photo: PBase