JAKARTA - The Central Statistics Agency (BPS) reported that the number of poor people as of March 2025 reached 8.47 percent of the total population of Indonesia, or around 23.8 million people, down 0.1 percentage points compared to September 2024.
In response to this, the Executive Director of the Center of Economic and Law Studies (CELIOS) Bhima Yudhistira said that gradual poverty reduction is a natural thing in developing countries with demographic bonuses like Indonesia. However, this very small decline reflects serious challenges in poverty alleviation efforts.
"Ideally, the poor will continue to decline along with increasing economic productivity and increasing the country's ability to provide access to public services. The problem is, a decline of only 0.1 percent points shows that our ability to continue to reduce poverty is decreasing," he said in his statement, Sunday, July 27.
Bhima said that many people came out of the poverty line, but at the same time, many also fell poor again or became new poor, so that the net decline was very small and did not reflect significant progress in improving people's welfare.
Not only that, he believes that the actual poor population in the field, far more than the government's poverty rate and so far, there is a striking gap between official poverty data belonging to the Indonesian government and data released by international institutions.
As for the latest World Bank report, around 68.2 percent of Indonesia's population lives below the international poverty line, or the equivalent of 194.4 million people. This figure is very different from the official data of the Central Statistics Agency (BPS) which recorded only 8.57 percent or 24.06 million people categorized as poor.
Bhima assessed that this difference arose because of the methodology of measuring poverty used.
He said that this 8-fold disparity shows there is a problem in the way we define poverty and BPS has been using a poverty measurement approach based on spending and items that have not changed much and are no longer in accordance with economic reality.
Bhima revealed that the fundamental problem of poverty data has an impact on government policy making and for example, government claims related to the success of social protection, agricultural programs, MBG, and downstreaming are not completely reflected in BPS data.
The poverty rate during the use of the long poverty line method will not answer the reality on the ground. So if BPS still removes the poverty rate without a revision of the poverty line, the data is less valid," said Bhima.
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Bhima added that due to BPS data, it could not be a reference for social assistance programs because the problem of data accuracy made the government spend a larger budget for the identification of beneficiaries.
"The BPS data should be used for poverty alleviation programs, but the government must look for its own data by name by address to map the poor according to different criteria from BPS", said Bhima.
Director of Public Policy CelIOS Media Wahyudi Askar said that the impact of this outdated BPS methodology had a direct effect on budget policies and social protection.
According to him, with the small number of poor people according to government data, the allocation of the social protection budget in the 2026 RAPBN also has the potential to be suppressed or will not increase significantly.
"In fact, apart from fuel subsidies, the percentage of Indonesia's social welfare budget for Gross Domestic Product (GDP) is only about 1 percent, and is one of the lowest in Asia. Indonesia is still far behind neighboring countries such as Vietnam, Malaysia, and Thailand which have allocated more than 5 percent of GDP for social protection," he said.
The media said that the measurement of BPS poverty data which is no longer relevant is also exacerbated by a data collection system that requires social assistance recipients to be registered in the Integrated Social Welfare Data (DTKS).
"If the poverty line is too low, automatically many vulnerable people are not caught in the category of the poor according to DTKS data and ultimately do not receive any social assistance", he said.
He said that CelIOS sees that an urgent solution is the reform of the methodology of measuring national poverty and countries such as Malaysia and the European Union have periodically adjusted their methods in line with socio-economic developments. Indonesia must follow similar steps.
According to CelIOS, this reform requires political courage and requires a Presidential Regulation (Perpres) that sets a new approach in defining cross-sectoral poverty. This Perpres will be the basis for data integration, indicator synchronization, and adjustment of poverty alleviation programs. However, this will only be successful if poverty data is no longer used for political purposes alone.
Alternatively, CELIOS proposes that welfare measures are no longer only based on total expenditure, but on income that can be spent (disposable income), namely net income after deducting basic obligations such as taxes and basic necessities, as well as with this approach, the effectiveness of state fiscal policy can be measured more accurately.
In addition, other welfare indicators such as access to education, health, housing, decent wages, old-age insurance, unemployment rates, to the level of crime and corruption must be used simultaneously to evaluate development and at this time, the government tends to choose positive data with a weak methodology, while ignoring other important indicators.
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