Urban Poverty, Informal Sector and Poverty Alleviation Policies in Indonesia
This paper examines urban poverty levels and the conditions under which the urban Indonesian poor live. It traces their key survival strategies while coping with the economic crisis of 1997-98. It also discusses the concepts and nature of poverty, inequality and poverty trends.
While talking about the urban poverty in Indonesia, the paper elaborates on the recent trends and poverty issues, specifically with respect to Jakarta. It also provides evidence from results of a survey of poor families showing that sending children to work in an informal sector eventually means income diversification; this income diversification results from a state of poverty.
The paper goes on to elaborate various causes of poverty, some of which are listed below:
- Poverty and economic backwardness in rural areas;
- Large dependence on agriculture;
- Unequal distribution of land;
- Increased production cost with respect to agriculture;
- Reduced government subsidy to agriculture sector;
- Heavy migration to urban areas.
Finally, the paper concludes by:
- Highlighting the importance of policy implications on poverty alleviation;
- Recommending improvement of labor productivity and distribution of agricultural assets as long term priorities and the need for employment-friendly economic growth policies.
