Growth must hit 7% to reduce poverty, says Dorodjatun

Growth must hit 7% to reduce poverty, says Dorodjatun

The Jakarta Post, Jakarta

Indonesia needs to increase economic growth by at least 7 percent
in order to alleviate the state of poverty under which 38 million
people live, the economic minister said on Friday.

Coordinating Minister for Economic Affairs Dorodjatun
Kuntjoro-Jakti said economic growth should reach 7 percent
annually to enable the country to absorb the new work force of
2.5 million each year.

However, he admitted that to increase the current rate of
around 3 percent to 7 percent would not be feasible for several
years, due to the size of the population and the economy, which
has not yet recovered.

"This year, we are going to reach 4 percent. Next year, if the
world economy improves, we will be able to reach 5 percent," he
said.

Besides increasing the economic growth rate, poverty could
also be reduced by creating new employment opportunities,
focusing on socio-economic policies, and adapting poverty
eradication policies to reflect the real conditions in the
regions.

Dorodjatun, speaking at the "Free from Poverty" forum, did not
say what concrete steps the government would take to alleviate
poverty.

Data from the Central Statistics Agency (BPS) shows that the
number of people living in poverty reached 37.1 million in 2001
and increased to 38.5 million last year.

According to the International Labor Organization (ILO),
people living under the international poverty standard earn less
than US$2 per day, which puts 110 million Indonesians under the
poverty line.

Dorodjatun said once Indonesia managed to achieve the desired
growth rate, the government and businesspeople should distribute
growth fairly.

As for now, the banking industry should channel more loans to
small enterprises, particularly those in villages, he said, while
the stable macroeconomic condition should help businesses create
jobs.

At the same forum, economist Revrisond Baswir from Yogyakarta-
based Gadjah Mada University urged the government to seriously
combat corruption and free up more funds for the poor. He also
criticized the government for not taking serious measures against
corruption.

Revrisond also lamented that the government had shifted the
responsibility for reducing poverty to the market mechanism.

"The government should channel more money to the agriculture
sector so as to improve the income of the poor," he said.

Trade union leaders shared similar views, saying the
government should ease the process of providing loans to small
enterprises and farmers.

Meanwhile, businessman Djimanto from the Indonesian Employers
Association (Apindo) agreed that macroeconomic stability was a
key factor to reducing poverty, as was improving the investment
climate.

Friday's tripartite forum, sponsored by the ILO, was held to
mark the International Day for the Eradication of Poverty and to
discuss the Poverty Reduction Strategic Paper (PRSP).

The paper was drafted to meet requirements set by the World
Bank and the International Monetary Fund on 80 indebted
countries, including Indonesia, in order to obtain more loans
from international financial institutions.

The PRSP, which is expected to be finished in June next year,
will outline the spirit of the government's programs in reducing
poverty.