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Even in August 1998, one year into Indonesia’s economic crisis, there were still no new nationally representative data on its social impact.


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This study is the first attempt to systematically examine the impact of bad governance practices in Indonesia on poverty reduction. Indonesia is a country that has endured bad governance for a long period, but has also sustained significant poverty reduction.


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Infrastructures play a crucial role in economic development and poverty reduction. The economic crisis in 1997-98 severely curtailed the government’s capacity to maintain the existing infrastructures, which could adversely affect the prospects for future economic development and poverty reduction in the country.


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The problem of child labour in Indonesia, although generally less prevalent than in other developing countries at a similar stage of development, is significant. As in other countries, this study finds a strong link between the child labour phenomenon and poverty, with the profile of child labour largely mirroring the profile of poverty.


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In early 1998 the government of Indonesia established several social safety net programmes to help the poor and the newly poor cope with the impact of the impending economic crisis, covering food security, employment creation, education, health, and community empowerment.


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