Poverty in Indonesia

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When one thinks of Indonesia, images of lush green jungles, komodo dragons, sparkling blue oceans, and massive blackened volcanoes immediately come to mind. Its diverse culture and rich history make the country stand out amongst its Southeastern Asian neighbors. The tropical scenery and art of shadow puppetry is what attracts millions of tourists from across the globe.

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The spirit of the Indonesian people and their unique customs never fail to bring a smile to one’s face. Indonesia’s story carries many folds and layers, it is a story of great achievement and progression. The archipelago has acquired extraordinary feats since World War II, the first being its ability to gain independence following the drastic years of Dutch colonialism. Throughout the course of time, the country has managed to overcome even the most distressing obstacles, such as the Asian Financial Crisis of 1997. It earned the title of ‘fourth most populous’ and has produced a steadily increasing class of young, eager workers. Another incomparable achievement of Indonesia is, surprisingly, its reduced poverty rate. Recent studies have found, to their dismay, that the poverty rate has been nearly cut in half since 1999 (Poverty in Indonesia, 2017). Despite this, Poverty in Indonesia (2017) reports that twenty-eight million people continue to live below the poverty line. This arises numerous questions from leaders all over the world but research has shown that Indonesia’s poverty is a result of the country’s geographical, economic, and political insufficiency. The poverty that is prevalent in Indonesia is due to the corrupt government, inflation, and poor infrastructure.

Corruption is among one of the leading causes of poverty in Indonesia because it extracts money from struggling citizens and widens the substantially large gap between the rich and poor. Indonesia’s corruption actually traces back to its second president, Suharto. He ruled as dictator of the nation for about thirty years until he was forced to resign by riots sparked by the public for his corrupt and demeaning nature, in addition to having kept fifteen billion dollars worth of state funds for his personal benefit. According to Simons (2000), during the economic crisis of 1997, when small landowners asked for compensation on lands they had lost over mass evolution projects in court, they were ignored and accused of being associated with illegal organizations (p. 34). Suharto’s family, who was already knee deep in immaculate wealth, were the ones who received the landowners’ rightful payment. The laws that had been enforced long ago had lost its meaning, for the Suharto Clan was showered with booming contracts, unnecessary bank loans, and political protection on behalf of the judicial system. The poor, who were in a perpetual state of despair, sunk even lower into the black hole known as poverty. They had no hope, because Suharto’s exploitation of their labor and firm grip on the little means they possessed had trapped them. By taking away affluence from the lower class, one can see that government corruption, especially that of the ruler, is the culprit behind Indonesia’s plunging impoverished community. What’s more, after Suharto’s fall, authority and corruption simply shifted to the local authorities. Indonesia’s police and military forces, as stated in Bribery and Corruption (2016), are in the running for most corrupt institution in the country because they do not regard bribery, for example, as an act of corruption. As a result, revenue generated from private entrepreneurs and huge companies are strewn directly into the pockets of authoritative officials and soldiers, rather than for the good of the penniless citizens. The divide between the rich and poor widen further, because the less educated are unable to afford the significantly high standards that the rich formulate for them. If wealth had been evenly distributed amid the well off and needy, income inequality would be dramatically lowered and the poverty rate would drop from 17.4% in 2003 to nearly zero in 2010. Poverty, perhaps, would not be as intense as it is now, if corruptible individuals did not deliberately remove money from the hands of laborers and establish immeasurable barriers in the middle of the working and lavish class. The fluctuation in prices of food is a product of the gap between rich and poor?

Inflation also contributes to the rising poverty rate in Indonesia since it limits people’s access to crucial necessities like food, and prevents the action of accepting imports from other foreign countries. {REVISE] Prior to the Asian Financial Crisis of 1997, Indonesian speculators took advantage of what was believed to be prosperous times and gathered a total of eighty billion dollars worth of foreign debt in anticipation of accumulating tons of fortune (Dori, 1998). Their naive belief of the stability of their economy had led them to exploit their currency, the rupiah, to its full extent; in exchange for dollar bills. After selling out the rupiah for dollars continuously, the value of the rupiah ultimately depreciated to a record-breaking low. Even central banks refused to amend the situation because it had escalated too far. Through his presentation, Dori (1998) conveys that the crumbling of the rupiah had brought Indonesia’s economy to a standstill. Those who had borrowed loans from Indonesia’s banks were therefore unable to pay off their debt. Bank activity halted, which prevented exporters from selling their goods to foreign countries. Indonesian producers, additionally, were unable to pay for the expenses that went in conjunction with the goods they manufactured. The effect that this catastrophe had on the poor was horrific. Prices of basic staples like rice, had skyrocketed. Indonesia’s rural community spends up to 70% of their income on food, as found by Indonesia’s Biggest Challenges (2017), so to have had to depend on a monthly income of $100 makes them extremely vulnerable to starvation and the looming extent of poverty. A second element that adds to the inflation in Indonesia are in fact, natural disasters. Because Indonesia is located within the Pacific Ring of Fire, it is susceptible to frequent earthquakes and tsunamis. Moreover, droughts and countless floods have overcome the small island. As a consequence, food shortages are abundant, and the swelling of resources is strickening. The inflation of material goods, as well as the inability to import or export goods causes Indonesia’s poor to remain in the outskirts poverty for they have no way of recovering.

Finally, Indonesia’s lack of infrastructure plays a part in increasing the poverty line because it isolates the poor from urban services and education, which leads to extensive malnutrition and maternal mortality (Hughes, 2017). [REVISE}

Although it has generated significant economic growth in a relatively short period of time, Indonesia appears to have left the impoverished behind in the dust. Out of the 260 million people residing in that country, more than 26 million live beneath the poverty line (The World Bank in Indonesia, 2017). The pay gap between the rich and poor is simply appalling, and the number of citizens settled in particularly rural areas have an extremely low chance of survival. For years, analyzers have struggled to identify why Indonesia’s poverty-stricken population continues to suffer under distressing circumstances. The answer lies within the corrupt government, dramatic rise in day to day resources, and the scarcity of infrastructure.

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