Social Impact of the Indonesian Crisis: New Data and Policy Implications

Policy Research

Expenditure changes and poverty impact. This paper looks first at new data sources on changes over the last year in expenditures and asset ownership and asset sales as proxies for income changes due to the crisis. These data dispel the notion that half of Indonesia’s population will slip below the poverty line (predictions which were analytically unsound in any case). Instead the new data show large falls in expenditures, but that the falls have varied enormously between urban and rural, across regions of Indonesia and across households between rich and poor. Sectors. Next this paper discusses the three areas targeted by the government in its social impact mitigation programs: employment creation and income maintenance, education, and health. Within these areas, this paper revisits the original forecasts -- the scope of the problem as it had been understood -- in light of new data noting possible policy and program design implications. Comparison of the impacts between rich and poor, urban and rural and across regions of Indonesia paints a more complex and varied picture of crisis impacts across the archipelago. There is a serious crisis to be addressed, but addressing the crisis requires that the responses be tailored to the actual dimensions and pattern of the crisis.

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Jessica Poppele
Sudarno Sumarto
Lant Pritchett
Jessica Poppele
Lant Pritchett
Research Area 
Research Topic 
economic crisis
Publication Type 
Working Paper
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