Government Retains National Poverty Line Despite World Bank Revision

 

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JAKARTA,  Investortrust.id– Government spokesperson Dedek Prayudi says Indonesia will not change its poverty-line methodology in the near term, despite the World Bank’s updated global standards.

 

Dedek explained that Statistics Indonesia (BPS) measures deprivation using two components—food and non-food needs—which are converted into local currency based on prevailing prices. The food component is defined by a requirement of 2,100 calories per day, below which individuals are classified as poor, while the non-food component covers housing space, education and health access.

 

“This approach captures Indonesia’s poverty profile, whereas the World Bank’s figures aim primarily at international comparison,” he said on Tuesday, Jun. 10, 2025.

 

Under the World Bank’s 2021-based purchasing power parity (PPP) adjustment, the global extreme poverty line rose from US$ 2.15 to US$ 3 per day. For lower-middle-income countries, including Indonesia, the threshold increased from US$ 3.65 to US$ 4.20, and for upper-middle-income countries from US$ 6.85 to US$ 8.30.

 

Applying the new benchmarks would place 68.25% of Indonesia’s 285.1 million people—approximately 194.6 million—below the poverty line in 2024.

 

Despite the World Bank’s 2021-based purchasing power parity (PPP) revision Dedek affirmed that no discussions are underway to align the national standard with those higher benchmarks. Under the new PPP reference, poverty in Indonesia would soar to over two-thirds of its 285.1 million people, or roughly 194.6 million individuals.

 

However, economist Wijayanto Samirin of Paramadina University warned that applying the World Bank’s higher threshold would inevitably make Indonesia’s poverty figures appear to spike. He argued that the current official line of Rp 595,000 per person per month understates actual living costs and undermines policy relevance.

 

“As GDP per capita grows, the gap between our national line and the World Bank’s becomes more pronounced,” Wijayanto said, advocating for a gradual upward adjustment to bring the poverty line closer to global benchmarks.

 

Wijayanto cautioned that without such an update, poverty-reduction programs risk relying on low-cost social assistance that merely lifts millions just above an unrealistically low threshold. He called instead for sustainable initiatives that bolster economic empowerment and productivity.

 

Earlier, Arief Anshory Yusuf, a member of the National Economic Council, highlighted political and fiscal hurdles in overhauling the poverty line, including fears of politicizing a sudden rise in poverty data and concerns about ballooning social protection budgets. He suggested that clear public education—distinguishing statistical indicators from program targeting—could address both challenges.

 

In April 2025, BPS head Amalia Adininggar Widyasanti emphasized that each nation must maintain its own poverty standard, reflecting unique socioeconomic conditions. She explained that Indonesia calculates its poverty line by aggregating provincial lines—based on food and non-food needs—into a national figure.

 

“Jakarta’s cost of living differs from South Papua’s, so each province’s line varies before we compile the national data,” Amalia said.