High Level Panel on Inclusive Economic Growth: Reducing Poverty and Inequality

The SMERU Research Institute, under the auspices of the Ministry of National Development Planning/Bappenas, organized a High Level Panel on Inclusive Economic Growth: Reducing Poverty and Inequality in Bali, 10 October 2018. Part of the IMF-World Bank Group Annual Meetings 2018, the panel served as a platform for policymakers, development actors, local and international partners to meet and share ideas on inclusive economic growth, the role of Islamic finance and technology to induce the more inclusive economic growth.

Following the opening remarks by the Minister of National Development Planning/Head of Bappenas Professor Bambang P. S. Brodjonegoro, the panel was divided into three sessions, each with a specific theme, namely (i) Inclusive Economic Growth and Development Agenda, (ii) Poverty, Inequality, and Islamic Finance, and (iii) Inclusive Economic Growth: Lessons for Indonesia.

The first session was moderated by Asep Suryahadi (Director of SMERU) and it presented M. Chatib Basri (Indonesia’s Finance Minister of 2013–2014), Paul Winters (Associate Vice President of the Strategy and Knowledge Department IFAD), and Ridwan Kamil (Governor of West Java). M. Chatib Basri stated that the rise in inequality is experienced by not only Indonesia, but also several other countries. He stressed the importance of focusing on job creation, budget allocation on education, health, and social spending, as well as labor market deregulation. Paul Winters claimed that, in the process of reaching inclusive economic growth, productive agriculture is part of the equation. The recently elected Governor Ridwan Kamil presented the programs he will implement in West Java, such as Program Satu Desa Satu Perusahaan (One Village One Company), Omaba (Infant Food Delivery by Motorcycle Taxi), and online micro banking; they are all aimed at reducing poverty and inequality.

Under the theme of Poverty, Inequality, and Islamic Finance, the second session was moderated by Vivi Yulaswati (Director for Development of Small and Medium Enterprises and Cooperatives—Bappenas). The first speaker of the session, Mahmoud Mohieldin (the World Bank Group Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships) highlighted the issues of accessibility and quality of poverty data. He also recommended policy interventions from the government to pave the way for the development of Islamic finance, which in turn could support sustainable development. The second speaker, Bambang Sudibyo (Chair of BAZNAS), stated that economic growth has so far benefited the upper community groups more than it has the middle to lower groups, thus widening social disparity. This gives more stress to the importance of adopting the Islamic philanthropic approach in Indonesia by continuing to explore the potential benefits of the zakat system. Yenny Wahid (Wahid Foundation) as the third speaker presented the Peace Village, one of the foundation’s programs that emphasizes the empowerment of productive economic communities. In the program, community members are given access to credit, recommended to save as a micro insurance mechanism, facilitated with vocational training to build their capacity, etc. The program’s objectives, if conveyed, will be a driver of economic growth. The last speaker of the session, Yasuyuki Sawada (Chief Economist—Asian Development Bank), said that the level of inequality in Asia continues to increase and this problem needs to be addressed immediately so as not to continue to hamper sustainable economic growth. The Islamic financial system can be an alternative to maintain growth momentum in Asia.

The last session closed the whole event. Moderated by Muhammad Iman Usman (Founder of the Teacher's Room), it presented a number of speakers from the private sector, namely Azalea Ayuningtys (Du'Anyam's Founder and CEO), Teddy Oetomo (Chief Strategy Officer—Bukalapak), Brett Gerson (Public Policy Counsel—Google Asia Pacific), and Peng Bo (General Manager, Rural Finance Business Department—Ant Financial). The four speakers conveyed the experiences and programs of their business institutions in community empowerment, both regionally and globally. They also expressed the importance of collaboration between the private sector and the government as well as government support in the form of regulations that help create an environment conducive for technology industry, which in turn will accelerate the achievement of inclusive growth.

All the materials presented are available at the following link: http://bit.ly/inclusive-2018. In addition, photo documentation is available on the SMERU Research Institute's Facebook page (https://www.facebook.com/SMERUInstitute/).