February 17, 2021 | Invest Indonesia

Economic Recovery Program Rescued Five Million People from Poverty

Source from: Antara News

Original News HERE

The national economic recovery program (PEN), especially social protection in 2020, rescued over five million people from poverty during the COVID-19 pandemic, according to a Finance Ministry’s official.

“This means that the PEN program throughout 2020 is believed to have rescued more than five million people from becoming the new poor,” Chief of the Fiscal Policy Board at the Finance Ministry Febrio Nathan Kacaribu stated here on Monday.

Kacaribu noted that social protection was the main instrument to protect poor and vulnerable people during the pandemic that had a significant impact on poverty.

The poverty rate rose by 0.97 percent to 10.19 percent in September 2020 as compared to 9.22 percent in the corresponding month a year earlier, he pointed out.

In the first quarter of 2020, the percentage of poor people increased by 0.37 percent to 9.78 percent from that in March 2019. In total, the number of poor people stood at 27.55 million in September 2020, up 2.76 million as compared to the same month a year ago.

In comparison with September 2019, the rural poverty rate rose to 13.2 percent, from 12.6 percent, and the urban poverty rate increased to 7.88 percent, from 6.56 percent.

The Gini ratio, a statistical measure to gauge economic inequality in a population, rose slightly by 0.005 points to 0.385 in September 2020, from 0.380 a year ago.

Kacaribu highlighted the World Bank’s poverty rate projection of 11.8 percent in the absence of social protection programs.

He noted that the government’s intervention had protected the consumption of not only the poor but also those from the middle-income bracket.

Central Statistics Agency (BPS) Chief Suhariyanto noted during an online press conference here on Monday that the hike in poverty rate due to the pandemic could be curbed owing to the government’s social protection programs.

Hence, despite an increase in the number of poor people, the figure was not as high as that projected by several international institutions, he pointed out.

Citing an example, Suhariyanto remarked that the World Bank in June 2020 had forecast the number of poor people due to the pandemic in Indonesia to increase to lie in the range of 10.7 percent to 11.6 percent in the absence of the government’s intervention.

“The increase in September 2020 was only 0.97 percent. This suggests that the various social protection programs launched by the government during the pandemic have helped, especially people from the low-income group,” he affirmed.

The coverage of social protection programs was raised to 60 percent, from 40 percent of the lower-income bracket, he revealed.

The government allotted Rp695.2 trillion in budget funding for PEN in 2020, while the funding realization reached 83.4 percent, or Rp579.78 trillion.

Of the total budget funding, Rp230.21 trillion was allocated for social protection programs, and the realization had reached Rp220.39 trillion.

Reporter: Astrid Faidlatul H/Suharto
Editor: Fardah Assegaf, Ine