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Indonesia's reformed economy can't quash inequality

South China Morning Post - May 20, 2018

Resty Woro Yuniar – On a sunny Friday in Denpasar, the capital of Indonesia's Bali, a group of burly men gather at a small, gated, two-house complex across from the city's main cathedral.

Some sit outside smoking and playing with their smartphones. Some chat inside the unfurnished main house. A white SUV, a dirt bike and a shiny Harley-Davidson – with a number plate from East Java – are parked at the unkempt courtyard. A woman brings them cold water and French fries back and forth from the adjacent house.

Judging from their look, language and skin tone, it is clear these men are not natives of Bali. Some wear formal suits or Balinese batik shirts. They have just attended a wedding ceremony held by the governor of their hometown of East Nusa Tenggara, the country's southernmost province some 1,500km from Denpasar.

About 50,000 East Nusa Tenggaranese live on the resort island, one of Bali's biggest demographics. Some arrived to pursue higher education in Bali's universities, most of the rest came to earn a living from tourism.

"Most people in East Nusa Tenggara work as civil servants. I wanted to be an entrepreneur so I went to Bali to study tourism and to be a chef," says Melkianus Mesakh Boleng, who moved to Bali in 1998 from Kupang, the capital city of East Nusa Tenggara. "If I returned to East Nusa Tenggara, I could not implement what I had learned in Bali because there is no tourism industry to begin with, so I stayed here."

Bali is the first choice for many people like Boleng who try to escape poverty and an educational lag in East Nusa Tenggara, Indonesia's second-poorest region after remote Papua. The country has enjoyed rapid economic growth in the past two decades, following the removal of Suharto's 32-year autocracy in 1998, a historic event widely known as Reformasi, but not all areas have shared in the success.

Among the catalysts of the 1998 student-led movement was the high price of necessities such as rice, flour and sugar. Indonesia was the hardest-hit country during the 1997 Asian financial crisis, when a drastically devalued rupiah triggered a ripple effect in the economy. Many workers were laid off as companies couldn't pay mounting debts, hitting people's ability to afford necessities such as food and petrol. The crisis led to people demanding the nation's wealth be spread equally across the archipelago, rather than being concentrated in Java, as it was under Suharto.

Twenty years after Reformasi, Indonesia's economy has made notable progress. Southeast Asia's biggest economy hit the trillion-dollar milestone at the end of last year, and the jobless rate is at its lowest in more than 20 years. Indonesia is a member of the G20, alongside countries such as Germany, the United States, and China, underlining the country's increased contribution to the global economy.

To distribute the prosperity to all corners of the nation, former president Megawati Sukarnoputri put the ministry of development to work accelerating efforts in the East Indonesia region in 2001. The ministry's work was carried on by her successors, Susilo Bambang Yudhoyono and now President Joko Widodo. In 2015, Widodo took the initiative further by starting village funds, distributed equally each year to all 75,000 villages in the country. But critics say the funds are often wasted by inept or corrupt village officials, especially in disadvantaged areas such as East Nusa Tenggara.

"The government uses the same formulation to determine village fund allocation for all kinds of villages. This is not proportional as the problems faced by advanced and poor villages are different," says Enny Sri Hartati, executive director at Jakarta-based Institute for Development of Economics and Finance. In many villages, funds are managed by an existing, dominant economic force, exacerbating the unequal wealth distribution in poor areas, Hartati adds.

From this year's 60 trillion rupiah (HK$33.4 billion) in village funds, Jakarta allocates 2.5 trillion rupiah to East Nusa Tenggara, up from last year's 2.3 trillion. Inappropriate fund management and corruption, however, threatens its effectiveness.

Three heads of villages in Southwest Sumba regency were suspected of creating fake projects. East Nusa Tenggara is the electoral district of disgraced former House speaker Setya Novanto, who was sentenced to 15 years in prison after receiving more than US$7 million in an electronic ID card graft case.

Overall in Indonesia, 112 heads of villages misappropriated the funds last year, up nearly fourfold from 2016, according to Indonesian Corruption Watch, an NGO formed during the 1998 Reformasi movement.

Yet many East Nusa Tenggara diaspora have found success in Bali, such as Andre Wembatowak. The father of two first migrated to Bali in 2005 after graduating high school, following in the footsteps of his friends. He had saved what little money he earned from driving a public minivan in his hometown of East Sumba to afford a two-day journey to Bali by vessel, which costs 500,000 rupiah.

Three days after arriving in Bali, he found a job as a driver for a local money changer in Kuta, where he was paid the minimum wage. After saving enough money, he quit the driving job after seven years and opened up his own travel business and a car showroom back home. "I chose Bali because the flow of money is faster here," Wembatowak says. "To be where I am now takes hard work."

Wembatowak's life stands in stark contrast to many of his fellow countrymen in Sumba, an island in East Nusa Tenggara just a one-hour flight from Bali.

In Weepatando in Southwest Sumba, people live in wicker-walled, tin-roofed, bamboo-floored houses nestled among the hills, paired with damaged roads. Residents rely on firewood, gathered from a nearby forest, to cook. For water, villagers spent their own money to build a rain-fed well; the water is still dirty because the well is uncovered. During dry season, when the well recedes, those without motorcycles walk in the scorching heat to fill jerry cans with 20 litres of water from the nearest natural spring, 7km away. Public transport? Only pricey two-wheelers, or ojek. Service stations are non-existent.

"In 2012, the government installed solar panels here, but they stopped working three years ago... struck by lightning... now we are using oil lamps again," says Lukas Lelulende, head of the local Village People Empowerment Agency (LPMD), who adds the lamps are a fire hazard and not bright enough for schoolchildren to do their homework.

Weepatando is one of 238 villages in Sumba left without electricity. Water scarcity translates to limited livestock ownership. Damaged roads also delay health care access, which is already unaffordable for many.

"A woman from here endured three days of painful labour, her family does not have a motorcycle to take her to hospital, so she died on the way to a community health centre," Lelulende says.

Many from the village have left to work in Bali or Java, as well as abroad to Singapore, Malaysia, or Hong Kong. Few have returned, and rarely do any send money to the families they left behind. Wembatowak in Bali says he only sends money on-demand, mainly when his parents request it for Sumba's many traditional ceremonies.

"I have worked in Malaysia for two years, in Denpasar for nine months... I needed money to send my children to school," Ester Laliwunda, a mother of six, says. "I want to return to Bali but I don't have the money to pay for the vessel." Now, Laliwunda's family depends on their crops, which bring in only 200,000 rupiah per month.

Poor infrastructure is not just in the villages. The province's capital Kupang, about a two-hour flight from Denpasar, suffers similar problems. "In theory, there are no poor villages in Kupang because it is a capital city, but in reality there are so many poor people in Kupang," mayor Jefirstson Riwu Kore says. "Kupang is dark and it lacks proper drainage, pavements... water is only available for three hours a day. We are very left behind compared with our brothers in Bali."

When life gives you lemons, make lemonade – this is the fighting mantra for Wilhelmina Mali Dappa. Just replace the lemons with corn and tubers. Surrounded by government neglect, the mother of six, 44, tries to make a difference in Sumba by advocating for women's empowerment.

Hailing from Weekokora village, Mama Mina, as she's widely known, first learned about her rights as a woman in 2013, when she joined Indonesia Women's Coalition (KPI). Through the organisation, she also learnt how to increase the value of Sumba's staples such as corn, tubers, coconut and coffee. "I did not know how to process commodities such as corn or tubers, which are abundant in Sumba. Here we typically just grind the corn and eat it as corn rice," she says.

She now earns 60 million rupiah per year from selling chips, tortilla, Sumba coffee, virgin coconut oil and crops such as swamp cabbage, aubergines, carrots, mustard greens and tomatoes. With this, she can send her three oldest kids to colleges in Kupang and Yogyakarta in Java.

Mama Mina's life trajectory illustrates how East Nusa Tenggaranese could rise from poverty without ever having to leave. The province is, after all, the home of the renowned Komodo Island and the popular diving spot of Labuan Bajo. It also breeds high quality cows, thanks to its vast savannah, and is blessed with extensive coastlines and ample maritime resources such as seaweed. One could argue that Sumba offers more scenic, pristine beaches than Bali.

Not all who work in Bali achieve success like Wembatowak. Plenty of newcomers go astray upon arriving, and due to a lack of identity documents, become hard to track. In one case, an East Nusa Tenggaranese woman went missing and was later found in a brothel in Bali. Many fall victim to human traffickers.

Back in Sumba, on a recent hot Sunday, Mama Mina assembles more than a dozen women in a church perched on a hill overlooking a 700-year-old tree in Weepatando village. Almost all of the attendees are her relatives who, unlike Mama Mina, still grapple with financial hardship. By sharing her entrepreneurial skills, Mama Mina hopes her relatives can prosper and understand their long-forgotten rights in society.

"I want women [in Sumba] to know that their place is not only in the kitchen, well, and in the bed," Mama Mina says. "We are equal to men."

Source: http://www.scmp.com/week-asia/politics/article/2146844/indonesias-reformed-economy-cant-quash-inequality