Structural problems causing poverty remain unaddressed

Fabiola Desy Unidjaja The Jakarta Post Jakarta

Siti Solikhatun Nasirun, 22, packs her bag and gets ready to join a group of Indonesian migrant workers to Singapore.

"If I had a chance of better living conditions in Indonesia, I would never choose to go and work outside the country," Siti said at her family's small hut in Cirebon, West Java.

Siti, the only child of a vegetable farmer, said she used to have a decent standard of living and was able to finish her studies at elementary school in 1992. However, since then, living had become more difficult and her family could no longer support themselves by selling vegetables.

Our lives have become even harder since 1998, when the economic crisis took its toll, with prices soaring, yet real wages falling.

So now, understandably, Siti tries to escape her family's poverty by moving to Singapore to become a maid.

There are millions of people like Siti in Indonesia, who remain caught in a cycle of poverty.

These people have been living in structural poverty, according to Gunawan Sumodiningrat, secretary for the National Committee for Poverty Reduction.

They are the result of structural faults in the country's economic policy that places more emphasis on growth rather than on the distribution of wealth and resources.

"Structural causes are the most significant causes of poverty because, like most developing countries, our development strategy is not people-centered," Gunawan said recently.

Efforts to reduce or eradicate poverty have actually been in place since this country achieved independence, but they have never really touched on structural issues.

Most poverty eradication efforts touch more on programs to ensure the poor have access to basic needs and basic services.

And those programs have brought about improvements to the living standards of the poor, but they have not been able to raise the poor out of poverty.

The most notable achievements were recorded during the 32-year administration of former president Soeharto.

Soeharto managed to reduce the number of poor people from over 40 percent of the whole population in 1976 to only 15.1 percent in 1990 and further to 11.3 percent in 1996.

However, this impressive result was swept away by the economic crisis, which began in the middle of 1997.

Since the crisis, the number of poor people has risen drastically to 24.2 percent in 1998, although in 2000 the figure was reduced to 16.1 percent.

According to the government's assessment of Agenda 21 on sustainable development, the number of poor people living close to the poverty line is still relatively large, despite the various poverty eradication programs.

The increasing number of people living just above the poverty line is not an indicator of freedom from the poverty trap. It may actually mean that those people just move from destitution to conditions close to poverty.

This only confirms that the various poverty alleviation programs have actually failed to address the structural problems of poverty.

Data from the United Nations economic and social survey of Asia and the Pacific in 2002 show that the income or consumption of the poorest 20 percent of the population have remained virtually unchanged over time in Indonesia.

"This means the reduction in poverty, if any, is largely the result of income growth and not because of an equal share of revenue," the report stated.

Therefore, what's important for Indonesia now, in terms of poverty reduction, are efforts to help the poor gain greater access to resources, according to Bambang Shergi Laksmono, a social researcher from the University of Indonesia.

"What the country needs is a proportional allocation of funds between the large-scale and small-scale businesses to ensure equal access to economic resources," he said.

He cited the government's decision to take the bulk of debts owed by tycoons through Indonesia's Bank Restructuring Agency (IBRA), which should have been followed by a similar approach with the poor.

"If the government is willing to provide Rp 600 trillion (more than US$66 billion) to bail out banks, they should also have given such an amount of money to small businesses," he said.

If the government could not give that amount to small businesses, he said, at least it could provide guarantees to banks to give money to small businesses.

Responding to various suggestions, the current government has launched two major policy measures to reduce the number of poor people by 2.8 million people every year.

The first involves measures to increase the income of poor families by providing jobs and economic opportunities through the mobilization of community funding. Second, are measures to reduce the spending of poor families by providing assistance in health care, education, food and infrastructure.

Whether these programs will really help the poor or just be another program that will increase the dependency of the poor on aid from central government remains to be seen.

After all, the country must take a structural approach to uproot the structural problems of poverty.