64.2 Per Cent of Indonesian Population Still Below World Bank Poverty Standard: What are the Indicators?

Indonesia’s poverty figures have come under scrutiny once again after World Bank data showed that more than half of the population lives below the threshold of US$8.30 per person per day.

When converted using an assumed exchange rate of Rp17,600, this amount is equivalent to approximately Rp146,080 per person per day. Over a 30-day period, this totals roughly Rp4,382,400 per person per month.

Data from the April 2024 Macro Poverty Outlook places Indonesia in fourth position out of eleven compared countries. The following list details the countries based on the percentage of their population living below the US$8.30 per person per day standard:

1. Timor-Leste, 71.7 per cent

2. India, 70.7 per cent

3. Laos, 68.6 per cent

4. Indonesia, 64.2 per cent

5. South Africa, 60 per cent

6. Philippines, 56.5 per cent

7. Brazil, 20.4 per cent

8. Vietnam, 17.9 per cent

9. Argentina, 14.5 per cent

10. Thailand, 10.1 per cent

11. Malaysia, 1 per cent

With these figures, Indonesia has a higher percentage than South Africa, which stands at 60 per cent, and the Philippines at 56.5 per cent. The gap is even more significant when compared to neighbouring countries such as Thailand and Malaysia.

In calculating international poverty, the World Bank utilises Purchasing Power Parity (PPP) to account for differences in price levels and purchasing power between countries.

It is important to note that the 64.2 per cent figure cannot be interpreted directly as Indonesia’s official poverty rate. The US$8.30 per day standard is an international poverty line specifically related to countries in the upper-middle-income group.

The World Bank maintains several international poverty lines, which are updated based on changing economic conditions and purchasing power parity. Meanwhile, Indonesia utilises its own national poverty line with a distinct calculation method; because it uses different thresholds and methodologies, the national poverty figure cannot be directly compared to the 64.2 per cent figure.