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Wealth gap widens as Indonesia's rich get richer

Koran Jakarta - December 11, 2012

Jakarta Ė The growth in the number of wealthy individuals over the last 10 years has been spectacular, increasing by five fold or by 500 percent. This can be seen from the total wealth and bank deposits that continue to increase. Data shows that the growth in the number of rich in Indonesia has been the fastest and most spectacular in the world over the last decade, surpassing even China where the number of wealthy people has only risen three fold or 300 percent.

"We project that the growth in [the number] of wealthy people in Indonesia over the next five years will continue to skyrocket by [a figure] of two fold", said Center for Welfare Studies (Perkumpulan Prakarsa) director Setyo Budiantoro in Jakarta on Tuesday December 10. According to Budiantoro, in 2012 the number of people with assets of US$1 million or around 9.5 billion rupiah totaled 104,000.

And by 2017 it is estimated that this will increase to 207,000 people. This growth is among the fastest in the world, along with Brazil, Malaysia, Poland and Russia. Although optimistic about the growth in the number of wealthy, Budiantoro said that this is still not 'quality' growth and is unbalanced. The number of relatively poor people that own assets of less than US$10,000 or around 95 million rupiah still dominates and stands at 82 percent of the population. This far above the global average of 69 percent.

Bank deposits

This wealth inequality can also be seen from the structure of bank deposits that have not changed over the last few years. Total customer deposits in banks, which have reached more than 3,000 trillion rupiah, are held in 111 million accounts. Almost 1,300 trillion rupiah or 43 percent of these deposits are held in less than 60,000 accounts.

So, less than 1.4 percent of accounts hold almost 2,400 trillion rupiah or 78 percent of deposits. Alongside the growth in the number of rich, Budiantoro said that the wealth of the 40 richest people in Indonesia has also increased several fold. Over the last three years, between 2009 and 2011, the wealth of the 40 richest people has increase by four fold.

In 2008 the total wealth of the 40 richest people stood at around US$20 billion or around 190 trillion rupiah. By 2011 this had skyrocketed to US$85 billion or around 800 trillion rupiah. "Meaning the value of the 190 trillion rupiah owned by the 40 richest people in 2008 is equivalent to what is owned by 30 million poor people", said Budiantoro. lex/E-9

Notes

According to the Deposit Security Agency (LPS), in 2012 51 percent of bank deposits totalling 1,700 trillion rupiah were held by 0.13 percent customers. Data from the National Land Agency (BPN) found that the majority of state assets in the form of land were controlled by 0.2 percent of the population.

[Kesenjangan Pendapatan - Orang Kaya di Indonesia Tumbuh Signifikan - Koran Jakarta. Selasa, 11 Desember 2012. Translated by James Balowski.]

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