Shesar Andriawan – The economic gap between the rich and the poor in Indonesia continues to widen as the nation's wealthiest are expected to take advantage of a bigger share of the country's economy this year, while the poorest will enjoy a smaller share, an academic says.
Wijayanto Samirin, deputy rector for business cooperation and development at Paramadina University, said on Friday that gross domestic product in 2013 amounted to $930 billion, but despite the huge economic pie, the distribution was uneven.
Wijayanto said that Indonesia's richest 10 percent enjoyed 25 percent of GDP today, while the poorest 10 percent only enjoyed 4.3 percent. He predicts that the figure would increase for the rich and shrink for the poor this year, with the richest 10 percent expected to enjoy 30 percent of GDP and the poorest 10 percent to enjoy a mere 3 percent.
"For the richest 10 percent, the 5 percentage point increase won't be very significant. But for the poorest 10 percent, a 1 percentage point drop will make a big difference," Wijayanto said at an event in Jakarta to mark the 16th anniversary of Paramadina's founding.
Wijayanto said that Indonesia had been far too complacent, following praise from international institutions about its economic growth.
"We have been overwhelmed with support. The IMF [International Monetary Fund] predicts that Indonesia's economy will be the seventh [biggest] in the world after China, United States, India, Brazil, Mexico, and Russia," he said.
"The World Bank also said the same. McKinsey gave a more optimistic projection, saying Indonesia would become the seventh-biggest economy in the world by 2030, outpacing Germany and Britain." Economy-wise, Indonesia ranks in the lower half of the Group of 20 nations.
Wijayanto, who is also an economic analyst, said the widening wealth gap could create problems in the future because it could make people feel inferior, which could damage social cohesion.
"Cohesion is a requirement for the country to become great. Mistrust will only widen if the gap between rich and poor gets wider. The country will grow if the gap is closed. Such a condition can only be achieved if economic and political institutions are inclusive. They can all play a role here," he said.
Wijayanto blamed the wealth gap on what he called the government's wrong policies. He said the government issued policies that were not needed but at the same time did not issue those that were necessary.
With regard to the nation's current economic condition, Wijayanto said that Indonesia was like a car that was speeding fast but had left some things behind.
"Do we have to slow down? Or get the car to move backward? No. The solution is to get a bigger car so that everyone that was left behind can come along," he said.
"If you want to go fast, go alone. If you want to go far, go together. So if the country wants its economy to grow fast, ignore the gap. But if the country wants to grow big, then embrace many people, lessen the gap."