Indonesia’s Poverty Situation during the COVID-19 Pandemic
Indonesia’s COVID-19 daily case numbers continued to increase throughout 2020 and into early 2021 and was accompanied by the implementation of a social restriction policy.
Indonesia’s poverty rate declined slightly from 10.19% in September 2020 to 10.14% in March 2021, but this rate is still higher than it was before the pandemic (9.2% in September 2019).
Households have used various coping mechanisms to meet their daily needs, such as selling assets or reducing expenditure.
Social assistance programs can ease the burden on households during crises resulting from the COVID-19 pandemic.
The COVID-19 Pandemic Is Not Over Yet
Indonesia has so far been unable to control the COVID-19 pandemic. Since the announcement of its first COVID-19 case in March 2020, reported daily cases have continued to increase during 2020 and through into 2021. From the current situation, it is clear that Indonesians cannot yet enjoy a full return to the living conditions experienced before the pandemic struck.
Indonesia’s economy has entered crisis state since the 2nd quarter of 2020. Two reasons are behind this crisis. First, increasingly more of the population (including those who are productive) are becoming infected with COVID-19. This lowers households’ ability to fulfill their daily needs, particularly for those directly affected by the COVID-19 pandemic. Second, the social restrictions imposed by the government have prevented the economy from operating at 100% of its full capacity with a number of businsses having to close down and workers be temporarily laid-off.
One indicator of the economic crisis is the economic growth rate. On 5 May 2021, Statistics Indonesia released a report that Indonesia’s economic growth rate in the 1st quarter of 2021 was -0.74%. The economic conditions during this period were much worse than before the pandemic, even though it showed improvement when compared to the economic situation in 2020. This indicates that Indonesia’s economy is still well below the normal rates of the period before the pandemic began. At the same time, the rate of growth of the per-capita national income (the measurement of national average welfare) also decreased by 3.15% in 2020. This indicated that there has been a decline in the level of household welfare in Indonesia in 2020 in comparison with 2019.
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