Without An Economic Recovery Agenda, The City Is A Poverty-Prone Point

JAKARTA The government needs to take short and long-term interventions to overcome poverty in urban areas.

After experiencing delays, the Central Statistics Agency (PS) finally announced the number of poor people in Indonesia. According to BPS, the poverty rate in March 2025 was 23.85 million people, down about 200,000 people compared to September 2024 which reached 24.06 million people.

However, the spotlight is that although the national scale of poverty has decreased, it turns out that not in urban areas where the poor actually increase. The poor in the city rose 220,000 people to 11.64 million people. On the other hand, in rural areas it fell 430,000 people to 12.58 million people.

According to a survey in September 2024, the percentage of poor people in rural areas was 11.34 percent. In March 2025, the number fell to 11.03 percent. In urban areas, the number of poor people in September 2024 was at 6.66%.

Recent survey results show the figure has risen to 6.73%, meaning there is an increase of around 0.07%.

Compared to September 2024, the number of poor people in March 2025 urban areas increased by 220 thousand people, from 11.05 million people in September 2024 to 11.27 million people in March 2025.

Jakarta, including one of the cities whose poverty rate has increased according to the latest BPS data. As of March 2025, the poverty rate in the capital city reached 4.28 percent, up from 4.14 percent in September 2024. This figure is the first increase since the COVID-19 pandemic.

Assistant for the Economy and Finance of the Regional Secretary of Jakarta Suharini Eliawati said the situation reflected that the economic recovery in Jakarta was not evenly distributed.

"The burden of the economy is getting heavier for low-income people. We will take seven quick steps to overcome new poverty and reduce inequality," said Suharini in a written statement.

Head of the Macroeconomic Center for Development of Economics and Finance (INDEF) Rizal Taufiqurrarahman said that the spike in urban poverty is a reflection of the fragile resilience of the domestic economy in the city, especially when facing pressure on food prices and stagnant employment opportunities.

"City is no longer the center of opportunity, but rather a vulnerable point if it is not accompanied by a responsive sectoral economic recovery agenda," said Rizal.

He also highlighted that the city's poverty line which reaches IDR 629,561 per capita per month, or an increase of 2.24 percent from September 2024 is a challenge in itself. For the people of the city, the burden of living does not only include food price pressures, but also transportation costs, and housing which continues to swell while economic mobility is increasingly limited.

"This is not just a matter of income, but about access to basic services and increasingly eroded social stability," he explained.

Meanwhile, economist from the Center of Economic and Law Studies (CELIOS) Nailul Huda said, one of the causes of the increasing poverty rate in urban areas was layoffs (PHK) that occurred in the formal sector. Just like the increasing unemployment data in the formal sector, which operates more in urban areas.

PHK factories or service companies, many occur in urban areas. So potentially people become poor, will be high in urban areas," said Huda when contacted by VOI.

According to BPS, Indonesia's unemployment rate as of February 2025 is 7.28 million people. Compared to February 2024, the number of unemployed people rose 0.08 million. Specifically, BPS recorded an additional 83,450 unemployed people compared to February last year.

The high unemployment rate is due to the incomparable of employment opportunities with job seekers. Last May, the job supply exchange titled Job Fair Bekasi Pasti Kerja 2025 held by the Bekasi Regency Manpower Office was invaded by tens of thousands of job seekers. As a result of the boom in visitors, several people fainted.

Nailul Huda from CelIOS said that the management of poverty alleviation in urban areas is different from in rural areas. In urban areas such as Jakarta, the main problem is the minimal availability of formal employment opportunities.

"This means that the approach is that investment must be increased. The existence of sufficient employment opportunities can generate decent income for the people of Jakarta or immigrants," he explained.

Meanwhile, Rizal Taufiqurrahman emphasized that solutions to urban poverty cannot depend on cash assistance for a moment. According to him, the government needs to carry out short-term to long-term interventions.

"Spatial data-based social protection must be strengthened in the short term, while the medium-long term must focus on productive employment, informal sector legalization, and incentives for city MSMEs," Rizal explained.

If there are no further price shocks and food control programs and city employment opportunities are running adaptively, Rizal is optimistic that the urban poverty pressure can be controlled.

However, there are still risks lurking. High urbanization without the creation of formal work and adequate basic services will expand the poor city group.

"Without an integrated policy design, the urban poverty rate will be difficult to reduce sustainably," he concluded.