Indonesia | Economics

Friday, September 01, 2006

It's official: The 2006 poverty rate is ...

Just to give a heads-up on the controversial poverty rate: The Central Body of Statistics (BPS) has just announced that the March 2006 poverty rate is 17.75%. This was an increase from 15.97% in February 2005.

This announcement is unlikely to stop the controversy ignited by some Indonesia Bangkit economists..., who accused the government of meddling into the calculation of the 2006 poverty rate. These economists claimed that their calculation pointed to a poverty rate close to 22% in 2006, mainly due to the impact of the 126% increase in domestic fuel prices (on average) in October 2005.

Personally, I didn't (and still don't) buy these claims. My back-of-the-envelope calculation here in Nalar Ekonomi (in Indonesian) suggested that the unconditional cash transfer (UCT) of Rp.100,000 per household (or, on average, about Rp.25,000 per person) would cushion the impact of the October fuel-price increase on poor households' consumption.

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