Income gap widening, says BPS

Income gap widening, says BPS

JAKARTA (JP): The chairman of the Central Bureau of Statistics
(BPS) Sugito Suwito disclosed yesterday that the income gap
between those in the lowest and highest brackets has been
widening in the past five years.

The results of surveys on family incomes showed that the
ratios between the lowest and the highest income brackets were
one to 6.5 in 1975, one to 5.3 in 1980, one to 3.8 in 1985, one
to 4.3 in 1990 and one to 6.2 in 1993.

Sugito explained at a hearing with the Budgetary Commission of
the House of Representatives that his bureau had developed its
own model to measure the equality of incomes among Indonesian
families, called the Indonesian Social Economic Accounting
System.

The system, derived from the social accounting matrix, has
been applied for the calculation of the income spreads among
Indonesian families in 1975, 1980, 1985, 1990 and 1993.

"We can see from the data that the gaps had been narrowing in
the period between 1975 and 1985, while in the period 1990 to
1993, the gaps widened again," Sugito told the commission.

Based on the bureau's calculations, Indonesian families were
broken down into 10 major groups, ranging from farm laborers who
have no land to toil at the lowest level to the highest income
groups living in urban areas.

The per capita income of the lowest-income group recorded in
1975 was Rp 40,110 (US$12.1 at current rate) per year, while that
in the highest group was Rp 259,700. In 1980, the lowest got Rp
103,820 and the highest Rp 547,990; in 1985 the lowest Rp 247,370
and the highest Rp 906,570; in 1990 the lowest Rp 438,420 and the
highest Rp 1.9 million; in 1993 the lowest Rp 502,200 and the
highest Rp 3.1 million.

"In terms of incomes, all groups have been growing. However,
the rate of growth of those in the upper-income group has been
higher than in the lower-income group," Sugito said.

Based on the same system, the bureau had also conducted
surveys to measure gaps between small and large non-oil
industrial entities in the period between 1983 and 1994.

"From the industrial sector, we can clearly see the problems
of economic divisions," Sugito said.

Contribution

The results of the bureau's surveys showed that the
contribution of non-oil industries to the gross domestic product
increased from 11.6 percent in 1983 to 21.2 percent in 1994. Of
the increase, large-scale industrial companies enjoyed the
fastest growth, while the growth of the household, small and
medium industries was very small.

The contribution of large industries to the gross domestic
product increased dramatically from 7.72 percent in 1983 to 21.19
percent in 1994. Meanwhile, the contribution of the combination
of household, small and medium industries rose very slightly from
3.9 percent in 1983 to 4.9 percent in 1994.

Indonesia's gross domestic product rose from Rp 77.6 trillion
in 1983 to Rp 337.35 trillion in 1994.

In its surveys the bureau defined large industrial companies
as those which employed over 100 workers. They were then
classified into three groups: those employing between 100 and 500
workers, those employing between 500 and 1,000 workers and those
employing over 1,000 workers.

Of the three groups, those with over 1,000 workers enjoyed the
highest growth in terms of the number of companies and their
added value.

The number of industrial firms with over 1,000 workers
increased from 229 in 1983 to 773 in 1994, and their combined
added value rose from Rp 2.8 trillion to Rp 32.15 trillion.

The number of large industrial firms with labor force of
between 500 and 1,000 people rose from 442 with total added value
of Rp 1.2 trillion in 1983 to 976 with added value of Rp 14.66
trillion in 1994.

The number of large industrial companies with labor forces of
between 100 and 500 people grew from 2,177 with total added value
of Rp 1.9 trillion in 1983 to 4,610 with added value of Rp 14.7
trillion in 1994. (rid)