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Extreme Inequality Is Not Inevitable

 Children play on a site from which local residents have recently been evicted to make way for new developments, close to luxury apartments in North Jakarta, Indonesia. 	  	In the past two decades, the gap between the richest and the rest in Indonesia has grown faster than in any other country in South-East Asia. The four richest men in Indonesia now have more wealth than the poorest 100 million people. Inequality is slowing down poverty reduction, dampening economic growth and threatening social cohesion.  	  	  	  	 

Children play on a site from which local residents have recently been evicted to make way for new developments, close to luxury apartments in North Jakarta, Indonesia.

In the past two decades, the gap between the richest and the rest in Indonesia has grown faster than in any other country in South-East Asia. The four richest men in Indonesia now have more wealth than the poorest 100 million people. Inequality is slowing down poverty reduction, dampening economic growth and threatening social cohesion. 

 

Press Conference: Launching of the Inequality Report: “Towards a More Equal Indonesia”

Embargoed until Thursday, 23 February 2017 09:00 (West Indonesia Time / WIB)

 Jakarta, 23 February 2017 – Oxfam in Indonesia (Oxfam) and International NGO Forum on Indonesia Development (INFID) launch a report on inequality in Indonesia today, titled “Towards a More Equal Indonesia” as an effort to contribute to the discourse on reducing inequality in Indonesia.

The report aims to push Indonesian government’s effort in eradicating inequality as a priority agenda as planned by Jokowi administration. In the report, there are recommendations presented for government and private sector to ensure that the commitment and good efforts by the government that have been implemented to reduce inequality so far, will be more effective and will ensure that no one will be left behind.

“Oxfam and INFID appreciate the commitment and efforts done by the government so far to tackle inequality. We hope that this report will support the message on the importance and urgency to reduce inequality,” said Dini Widiastuti, Oxfam’s spokesperson for the inequality report.

In this report, Oxfam and INFID also show shocking facts of inequality in Indonesia. Indonesia’s economic growth is relatively stable and proportion of people who live in extreme poverty have decreased to ‘just’ approximately 8%. However, such great progress in economic growth has not been complemented with a more equal income distribution. In the last 20 years, gap between the rich and the rest of Indonesia population grew faster compared to other countries in Southeast Asia.

It has been reported that Indonesia is ranked at the bottom six in the world in terms of inequality level. The wealth of the four richest men in Indonesia is equal to the combined wealth of the poorest 100 million people. Furthermore, the amount of money earned annually from the richest Indonesian man’s wealth alone would be sufficient to eradicate extreme poverty in Indonesia. The report also explains about the increased inequality in urban areas and between districts.

The report also clarifies that the widening gap between the super rich and the other community groups in Indonesia is a serious threat for the welfare of Indonesian people in the future. If inequality is not being tackled immediately, then government efforts to reduce inequality will encounter challenges and will result in social instability.

The key message of this report is that extreme inequality is not inevitable. “This report provides recommendation for the government of Indonesia to implement two major ideas to tackle extreme inequality. First is to renew tax policy in Indonesia, in line with economic potential of the country and the principle of fair burden and benefit distribution. Secondly, to restore and put more pressure on the human resources and labour development,” said INFID Executive Director, Sugeng Bahagijo.

Existing tax regulations must be renewed as they are not able to accommodate the potential tax revenue and capture the reality of wealth owned by the super rich in Indonesia in the last 15 years. According to International Monetary Fund (IMF), Indonesia has a potential tax take above 20% of Gross Domestic Product (GDP), while at the moment, the country only raised up to 13% GDP.

Through this report, Oxfam and INFID call for government to strengthen its commitment and implement a set of policy to reduce inequality, end wealth concentration in the hands of the few at the top and corporation, ensure reduction of inequality between districts and provide bigger opportunities for labour and the poor as well as for women.

Steve Price Thomas, the Advocacy and Campaign Director of Oxfam International, stated, “Indonesia is facing inequality challenges that are multidimensional. Nevertheless, President Joko Widodo has opportunities to prove that Indonesia can be a leading country in the global fight against inequality.” (END)

Resource person:

Dini Widiastuti

Oxfam Spokesperson for Indonesia Inequality Report

dwidiastuti@oxfam.org.uk; 0811-959-3443

 Sugeng Bahagijo

Executive Director

INFID

sbahagijo@infid.org; M: 0815-180-9454

For more information:

Andi Cipta Asmawaty

Campaign and Advocacy Officer –

Economic Justice Programme

Oxfam in Indonesia

acasmawaty@oxfam.org.uk;

M: 0813-8138-3703

 Siti Khoirun Nikmah

Program Manager

INFID

nikmah@infid.org; M: 0858-8130-5213

 

Notes to Editor

The following materials are available for download here: http://oxf.am/ZbM5

Full report and executive summary of “Towards a More Equal Indonesia” in English and Bahasa Indonesia

 

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