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Thursday, July 2, 1998 Published at 12:17 GMT 13:17 UK


Business: The Economy

The suffering of Indonesia's poor

Poverty now dominates Jakarta's landscape

Nearly half of the Indonesian people have been dragged into poverty by the Asian economic crisis.

New figures from the government show that the number of Indonesians living in poverty has leapt by 60 million people in the past two years.

The central statistical bureau estimates that 79.4 million people, or 40% of the population, now live below subsistence level. And it says that the figure could reach 47%, or 95.8 million by the end of the year.

In 1996, the figure was 22.5 million, or 11% of Indonesia's population of 205 million.

The chief of the Central Bureau of Statistics, Mr Sugito, said the projections were made on the basis of the projected inflation rate, macroeconomic standards, falling incomes, and a change in the consumption pattern.

The poor have been hit by an increase in the price of imported food as the rupiah plummeted in value from 2,450 to the US dollar one year ago to 15,000 today.

The bureau defined poor people as those who cannot afford food with a nutritional value of 2,000 calories a day, or per capita earnings of less than 52,000 rupiahs ($3.50) a month in urban areas and 41,000 rupiahs ($2.70) in rural areas.

Per capita income in Indonesia has dropped from $987 to $585 from 1996 to 1997, while GDP is projected to fall by a further 10% this year.

Indonesia is in the throes of economic reconstruction and political turmoil, following the resignation of President Suharto in May after months of demonstrations.

The IMF has just agreed to resume a $43bn rescue package, but bankruptcies, factory closures and unemployment are sweeping through the country's industrial landscape.

Some 20 to 30 million Indonesians are expected to be unemployed by the end of the year.

The new package will allow some subsidies for the poor, but will also continue the process of dismantling industries, many of them owned by the relatives of President Suharto.



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