Gembong Hanung, Jakarta – Inequality in Indonesia has multiplied over the past three decades, a situation mirrored across many resource-dependent Global South countries, with the solution being an inclusive economic growth rather than excessive state intervention, according to academics.
More than 220 scholars from at least 20 countries gathered for the three-day 2026 Institute for Advanced Research (IFAR) Consortium Conference hosted by the Indonesian International Islamic University in Depok, West Java.
Aiming to examine the current landscape of inequality across Southeast Asia, many scholars pointed to the widening socioeconomic gap in Indonesia, where wealth is increasingly concentrated in a small web of politically-wired individuals.
In countries such as Indonesia, economic growth often came at the expense of shrinking share of labor wages in the national economy, according to sociology professor Vivek Chibber of New York University in the United States.
"Since the 1980s, what policy shifts occurred have overwhelmingly favored the wealthy as against the general population, especially the working population [or] labor in countries like Indonesia," Chibber said in his keynote address on Wednesday.
Income inequality can be seen in the measurement of the country's Gini coefficient as deduced in reports issued by the Statistics Indonesia (BPS).
The latest score for the coefficient, issued by the agency on Aug. 5, was 0.368 in March, slightly rising from 0.363 in September last year. A coefficient of zero represents perfect equality, while one captures a complete unequal condition.
But the coefficient, which was included in BPS' biannual National Socioeconomic Survey (Susenas) report, has not been able to explain the whole spectrum of wealth and income inequality in the country, according to Pierre van der Eng, an associate professor at Australian National University.
He drew from his past study calculating the relative concentration of Indonesian billionaires' wealth to the gross domestic product (GDP), using multiple wealth data listings, including those published by Forbes magazine and others.
After analyzing the data, van der Eng found that between 2010 and 2025, concentration increased mimicking that recorded in the 1990s, when Indonesia was still under the authoritarian rule of late president Soeharto.
He cited the expansion of extractive industries as major wealth sources that have been exploited by billionaires to accumulate wealth over the past 15 years. The approach might resemble cronyism and nepotism under Soeharto's New Order.
"That is the similarity that we have to find and look at the reason for the significant increase in what looks like wealth inequalities," van der Eng said.
The richest 1 percent of individuals in Indonesia held around 20 percent of the country's wealth in 2024, according to data from the World Inequality Database.
The inequality is most evident in eastern parts of the country. In regions such as East Nusa Tenggara (NTT), Sulawesi, Maluku and Papua, factors such as geographical isolation, cultural barrier and poor governance have worsened the gaps, said development economist Umbu Reku Raya of education NGO Sumba Cendekia Bestari.
Based on his research on entrenched inequality impacting Sumba Island in East Nusa Tenggara (NTT) and Papua Highlands, the Jakarta-centered development agenda has put these regions in a more vulnerable position for further discrimination.
"Negative external [factors] such as mining, logging and tourism have also displaced the communities, degraded the environment and hurt subsistence livelihoods," Umbu said in his presentation on Wednesday.
Militarism won't help
The country's current political landscape has further exacerbated inequality in Indonesia, as highlighted by other researchers.
Economist Zulfan Tadjoeddin of Western Sydney University, Australia, described the current situation under President Prabowo Subianto's administration as showing a "parallel convergence" with what had happened in the Philippines, where a small web of businesspeople who owned a large share of wealth were backed by discriminatory state intervention.
While noting a relatively slowing trend of Gini ratio over the past decades, Zulfan noted that on the other hand, "we've seen an increasing wealth concentration".
To "discipline" businesses, NYU's Chibber believes any countries will not need to resort to a "military dictatorship" in order to ensure economic reciprocity and performance benchmarks adhered by businesses.
"If you have a vibrant citizenry and society that are demanding development and anticorruption, that would benefit you," Chibber said.
To ease the wealth and income inequality, he also suggested Indonesia to move beyond exporting raw materials, and instead start expanding manufacturing industries.
Civil society groups have criticized the growing militarism in civilian affairs and aggressive state intervention on the economy under Prabowo for harming both the political and business sphere in the country.
The President has repeatedly conveyed his commitment to slash the wealth gap between the rich and poor in the country, with among the latest was mentioned in his address to the House of Representatives in May.
The Government Communication Office (Bakom) and the Social Affairs Ministry did not respond to The Jakarta Post's requests for comment.
Source: https://asianews.network/inequality-in-indonesia-worsens-as-wealth-gap-widens