Policy Research
Welcome to another edition of the SMERU Newsletter. In earlier editions we have focussed our attention on the impact of the crisis on the poorer sections of the community. Yet the financial crisis began with the collapse of the banking and corporate sector in urban centers and so it is also appropriate to consider the effects of those events on "white-collar" workers.
In 2003, Indonesia's decentralization reform was in its third year of implementation. The “big bang” start had marked the transfer of resources — assets, personnel and finances — to the regions to compensate for the newly added authorities and functions.
In a fast urbanizing Indonesia, the rural sector still plays an important role in the countrys economy. Although declining, the majority of the population still live and find employment in rural areas. However, rural areas lag behind urban areas in many aspects. As a result, around 80% of all the poor in the country are found in rural areas.
The special theme of this issue of our newsletter is smallscale credit. How to deliver efficient and effective credit services to those individuals seeking small amounts of capital is not a new problem in Indonesia.
This book consists of papers that present the findings of research done by the SMERU Research Institute in Jakarta, Indonesia. Most describe the effects on the poor of the Indonesian economic crisis of 1997-98 and the response of the Indonesian government in the form of a Social Safety Net consisting of poverty mitigation programs.
