Behind the rise of income inequality in Indonesia

 

The controversy over the Jakarta Bay land reclamation project that has triggered months of national debate seems to center on several critical issues. But the reclamation saga is not only about legal, environmental, corruption and human rights issues, as it appears on the surface.

The root cause of the conflict lies much deeper. It is about the glaring inequality of income and wealth between the desolate and poor people in northern Jakarta ( most of whom are low-level workers or fishermen ) and the super rich, who reside in the luxurious and glittering residential areas nearby.

What happened in North Jakarta is a reflection of what has taken place all over the country. It is the result of what went wrong in Indonesia’s economic journey for the last 10 years. While the economy experienced a high rate of growth, the income gap between the rich and the poor kept rising.

Indonesia’s Gini coefficient, an indicator of income inequality in a country, rose from 0.3 in 2000 to 0.40 in 2015. ( The higher the Gini coefficient, the more unequal the distribution of income ).

Income inequality in Indonesia is now worse than in Thailand, Vietnam, Cambodia and Laos, although it is better than in the Philippines and China.

According to a recent World Bank report, only 20 percent of Indonesians benefitted from the growing economic wealth during the last decade, while 80 percent — or about 205 million people — were left behind.

According to the World Bank, Indonesia has one of the highest wealth concentrations in the world. The richest 10 percent of Indonesians own an estimated 77 percent of the country’s wealth. Half of the country’s assets are owned by the richest 1 percent. Worse, the concentration of wealth is increasing faster than in other countries. Income from these assets sometimes is taxed at a lower rate than worker income and has a much lower rate of tax compliance.

This means the rich are able to save a larger percentage of their income, increasing inequality in the future. The figures are based on several surveys, but it is known that getting the rich households as survey respondents is more difficult than getting answers from the poor. It is likely that the outcome of the surveys understates the extent of the wealth concentration, so that the actual wealth concentration is worse than stated in the surveys.

How has this inequality come about? The most obvious evidence is the inequality in opportunities. Children from poor households do not have the same opportunities in education as children of the rich. Children of the rich go to high-quality but expensive schools, while the children of the poor go to mediocre schools. The quality of education they receive will determine their future careers.

Moreover, because of poor nutrition and inadequate sanitation, children from poor families are generally less healthy. For instance, 37 percent of Indonesian children are stunted, which impairs their cognitive development. This will impact their future, because when they enter the job market, they will have a low level of skills.

Inequality is equally visible in the labor market. The relatively high growth of the Indonesian economy has created a severe imbalance in the labor market, where demand for skilled workers is high amidst an abundant supply of low-skilled workers.

As a result, a dichotomy in the labor market has developed: High-salary, formal jobs for highly qualified workers on the one hand and informal, low-wage jobs requiring low skills on the other.

Unequal access to skills and rising wages for the skilled has increased wage inequality. This inequality is set to rise, as the rapid growth of the service sector and digital economy changes the structure of the economy for the benefit of those with highly specialized skills.

Various shocks (financial crises, crop failures, sudden illness or natural disasters) can hurt the income of the poor and rich alike. However, the rich households have access to mechanisms to cope with shocks, like digging into their savings or insurance. But poor households must rely on loans from friends and families or sell productive assets. This erodes their ability to earn income and invest in the health and education needed to climb up the economic ladder.

It is possible that government policies will in the long term narrow the income gap. Infrastructure projects, which are labor intensive, support for labor-intensive industries, rising salaries of government employees or even the controversial increase in minimum wages and various social programs in education and health could help reduce income inequality. But given the current extreme inequality in income, the impact of those programs would be insignificant.

The widening gap in income should open our eyes to the failure of tax policies as an instrument of income distribution. Tax compliance remains low and tax evasion among high earners is still common. This raises the question of equity; because the effective tax rate paid by the wealthy is lower than that paid by low earners.

To let this situation prevail is fiscally irresponsible and morally unjustifiable. Also, massive corruption in the form of bribes, kickbacks that have siphoned off trillions of rupiah from government revenues, has undermined the government’s ability to redistribute income more equally.

The simmering anger and resentment among various groups over government failure to achieve a more equitable distribution of income should not be taken lightly. It could threaten social peace and stability.

by: Winarno Zein

source: The Jakarta Post, Wednesday, June 8, 2016

Bangun Manusia, Atasi Kesenjangan

Membangun infrastruktur, pendidikan, dan peningkatan kesehatan diyakini menjadi cara untuk mengurangi kesenjangan sosial yang masih terjadi.

Isu kesenjangan kembali menjadi perhatian dalam memperingati hari kelahiran Pancasila 1 Juni. Seperti tecermin di dalam kelima silanya, tujuan dari keberadaan Indonesia adalah kemakmuran secara adil dan merata bagi rakyat tanpa terkecuali.

Dalam kenyataan, kesenjangan kemakmuran kita bertambah lebar dalam satu dekade terakhir. Kesenjangan terjadi dalam berbagai sisi. Pembangunan fisik di Jawa lebih diutamakan daripada luar Jawa, terlihat dari ketersediaan infrastruktur dan pertumbuhan industri. Akan tetapi, kesenjangan kemakmuran juga terjadi antara kota dan desa serta antara sektor pertanian dan nonpertanian.

Setiap negara mengalami masalah melebarnya kesenjangan, termasuk di negara-negara kaya. Namun, kita telah memilih Pancasila sebagai dasar negara yang mensyaratkan keadilan sosial bagi seluruh rakyat. Hal itu selalu mengingatkan kita bahwa pertumbuhan ekonomi saja tidak cukup sebagai cara menyejahterakan rakyat.

Kesadaran adanya kesenjangan antara wilayah barat dan timur Indonesia sudah lama ada. Sebutan kawasan barat dan timur selain menggambarkan pola kekhasan hayati di kedua bagian Indonesia itu, juga menegaskan ada perbedaan kesenjangan pembangunan dan kemakmuran di antara kedua kawasan tersebut.

Membangun infrastruktur di luar Jawa dan Sumatera dengan fokus pada bagian timur Indonesia yang kini tengah digiatkan pemerintah dimaksudkan, antara lain, untuk menurunkan kesenjangan sosial itu.

Terbangunnya infrastruktur yang baik berupa jalan, pelabuhan, bandara, jaringan kereta api, dan listrik bertujuan menumbuhkan kegiatan ekonomi setempat melalui berkembangnya industri dan perdagangan di dalam pulau dan antarpulau. Tumbuhnya kawasan ekonomi baru di luar Jawa dan Sumatera juga akan mengurangi tekanan penduduk di Jawa yang menampung separuh lebih penduduk Indonesia dengan akibat kerusakan lingkungan parah.

Sementara infrastruktur hanyalah alat pengungkit untuk menaikkan kemakmuran, faktor terpenting lainnya adalah membangun manusia. Indeks Pembangunan Manusia bagian timur, seperti juga kondisi infrastruktur fisik, juga tertinggal dari rata-rata nasional.

Memperbaiki tingkat pendidikan dan kesehatan adalah cara meningkatkan kesejahteraan. Pendidikan yang diharapkan adalah berbasis kearifan lokal agar masyarakat dapat mengembangkan diri selaras dengan kekayaan sosial, budaya, dan alam setempat sehingga dapat membangun daya saing yang kuat. Dalam konteks tersebut, memperbaiki tingkat kesehatan menjadi bagian melekat karena dalam tubuh yang sehat terdapat jiwa yang sehat.

disadur dari Kompas, Sabtu, 4 Juni 2016

Tantangan Kesenjangan

Persoalan kesenjangan sosial ekonomi kembali diangkat dengan menggunakan momentum peringatan hari kelahiran Pancasila tanggal 1 Juni.

Sekalipun Indonesia sebagai negara merdeka sudah berjalan jauh sekitar 71 tahun, ketimpangan sosial ekonomi terkesan tidak mengecil, tetapi justru cenderung melebar. Realitas sosial ekonomi, yang penuh ketimpangan, benar-benar menjauhi amanat sila kelima Pancasila dan konstitusi yang menekankan keadilan sosial.

Ketimpangan sosial telah menciptakan jeritan kemiskinan, crying poverty, bagi puluhan juta warga Indonesia, sementara segelintir orang yang menguasai mayoritas kekayaan negara hidup dalam kegelimangan harta. Sangat tidak adil! Upaya menghapus kesenjangan dan kemiskinan semakin sulit oleh kegaduhan politik dan pertarungan kepentingan yang tidak pernah habis-habisnya.

Isu kesenjangan ekonomi terdesak ke belakang oleh kerasnya pertarungan kepentingan politik. Namun, perlu dikemukakan, kesenjangan sosial yang dibiarkan melebar, tanpa ada upaya serius untuk membereskannya, berpotensi menjadi ancaman berbahaya, yang memengaruhi kehidupan berbangsa dan bernegara secara keseluruhan.

Sebelum keadaan memburuk, upaya keras sangat diperlukan untuk menekan dan mengurangi secara bertahap kesenjangan sosial ekonomi. Penghapusan kesenjangan ekonomi tidak hanya sesuai dengan tujuan kemerdekaan ataupun amanat Pancasila dan konstitusi, tetapi juga untuk tujuan kemanusiaan.

Dengan menggunakan momentum peringatan hari lahir Pancasila, semangat perlu dikobarkan untuk melaksanakan cita-cita kemerdekaan bagi masyarakat adil dan sejahtera. Sangat diharapkan keadilan sosial, seperti diamanatkan dalam sila kelima Pancasila, segera diwujudkan. Seperti pernah disinggung, perwujudan prinsip keadilan sosial akan memperkuat kualitas perwujudan sila-sila lainnya.

Tantangan mewujudkan keadilan sosial tidaklah kecil. Keadaan akan lebih berbahaya jika ketimpangan tidak segera dibereskan. Kesenjangan tidak hanya menjadi ancaman bagi orang-orang terpinggirkan secara sosial ekonomi, tetapi juga lambat laun akan berbahaya bagi orang-orang kaya dan bahkan negara-bangsa.

Secara sosiologis sering dikatakan, kekuatan sebuah sistem kehidupan sosial sangat ditentukan oleh mata rantai paling lemah. Seluruh mata rantai kuat tidak bergerak jika ada mata rantai lemah dan rapuh. Segera terbayang, jika tidak segera diatasi, ketimpangan sosial sebagai mata rantai paling rapuh sangatlah rawan mengancam kehidupan berbangsa dan bernegara secara keseluruhan.

disadur dari Kompas, Jum’at, 3 Juni 2016