The world’s third-most populous democracy is still experiencing some growing pains. Following the authoritarian New Order era, Indonesians are navigating how best to address the needs of a diverse population, most of whom live in poverty. Besides unemployment, some of the main challenges facing Indonesians are inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among its regions.
Conditions vary greatly from island to island and poverty isn’t always evident to travelers. Islands like Bali and Lombok — with economies that rely heavily on tourism — face similar challenges as the rest of the country, but these struggles aren’t always evident in top visitor destinations. The worst-off villages are typically a few hours’ drive away from resorts and beachfront hotels — Bali’s poverty is primarily in the western, less-developed side of the island.
The numbers released by the government show a 50 percent reduction in poverty since 1999, which would mean that only 11 percent of the population lives in poverty, which doesn’t match the reality of life in Indonesia. There is a huge population of people who are “near poor” that might not survive an economic downturn or natural disaster. The government reports a low unemployment rate, but workers who do as little one hour of paid work per week count toward the percentage of employed citizens.
Indonesia has a population of approximately 261 million people. It’s a young country, with 41 percent of the population age 24 or younger, and 42 percent between ages 25 to 54. The population is split fairly evenly, with only 3 million more males than females.
Of the total population, 55 percent live in urban areas and 45 percent live in rural environments. The western islands are home to 80 percent of the population; the most populous are Java, Sumatra, Suawesi, and Kalimantan. Java and Sumatra are the main economic hubs for Indonesia, and there’s a significant gap in health, wealth, and employment between these heavily populated islands and rural areas like Papua or Maluka. This ongoing economic inequality affects the economy and social structures of the country.
A 2016 Human Development Index report released by the United Nations Development Program shows that Indonesia is still struggling to close its gender equality gap. The inequality was linked to social and cultural factors, differences in education levels, lack of access to general services, and to financial services. Indonesian society is largely male-dominated, often due to religious teachings or traditions in both Islam and Hinduism. The report also showed a wide gap in gross national income per capita between the sexes, with men earning almost twice as much as women.
Only 51 percent of women compete in the labor force, compared to 81 percent of men. The country’s recent push toward female empowerment has led to better credit access for women. It will take time and continued action in order to break Indonesian women free of religious, familial, and cultural obligations that prevent them from being an equal participant in the country’s economic engine.
Access to Education
Indonesia has the world’s fourth-largest education system, with 55 million students and more than 236,000 schools in 500 districts. Unfortunately, the quality of the schools is low. For every 100 students, only 25 come out meeting minimum international standards in literacy and numeracy. The education system has also been racked by teacher shortages and repeated cheating scandals. All of these shortcomings matter in terms of stunted lives and the future of the economy. Education in Indonesia is compulsory for twelve years, and parents can choose between state-run public schools supervised by Ministry of Education and Culture, or private religious (usually Islamic) schools supervised and financed by the Department of Religious Affairs.
By 2014, there were 118 state universities and 1,890 private higher educational institutions in Indonesia. Entry to state universities depends on the nationwide entrance examination scores. The constitution dictates that 20 percent of the national budget is dedicated to education. Alternative schools like Bali’s Green School or Lombok’s Learning Village are setting trends for educational systems and student success, but sadly are far beyond the average Indonesian’s budget and are almost exclusively used by expats.
In 2014, President Joko Widodo launched an Indonesia Smart Card program that provides for students’ educational needs and guarantees 12 years of free education. The cards also guarantees free higher education for poor students who pass the university entrance exams. It remains to be seen how much of an improvement this effort will have on Indonesia’s educational system.
Setbacks and Natural Disasters
On several occasions during the past 20 years, Indonesia has made global headlines due to devastating natural disasters resulting in the deaths of hundreds of thousands of human and animal lives and the destruction of important infrastructure. The weak state of infrastructure and property combined with high population density means that natural disasters in Indonesia cause more casualties than they should.
Indonesia is home to the most active volcanoes in the world. There is at least one significant volcano eruption in Indonesia every year. Most of the active volcanoes are located in isolated regions, and thus do not cause great damage to the environment or casualties. Volcano eruptions take less toll in human lives today than in the past, due to better volcano warning techniques and better-organized emergency evacuations.
It’s important to note that because of Indonesia’s location on top of several tectonic plates, earthquakes are quite common. There are regular seismic events, but only a few damage property and take lives. Given Indonesia’s location, earthquakes are an expected phenomenon, but unfortunately the warning systems in place have proved unreliable.
Recent earthquakes have dominated headlines about Indonesia. On August 5th, 2018, an earthquake hit Lombok that destroyed cell phone towers, which took away the warning system that could alert locals to the impending tsunami. September 28, 2018 saw a 7.5-magnitude earthquake hit Sulawesi, followed by a tsunami that devastated the island’s northern shore.
One of the most noteworthy earthquakes that hit Indonesia in recent history was the 9.2-magnitude earthquake in December 2004. That quake caused a devastating tsunami, killing over 167,000 people in Indonesia alone which resulted in the displacement of more than half a million of people as thousands of homes were wiped away.
Floods and Man-Made Disasters
Indonesia's rainy season, in combination with deforestation or waterways clogged with debris, can cause rivers to overflow and result in floods. Floods and landslides occur in most parts of Indonesia and can cause hundreds of casualties, destroy houses and other infrastructure, and ruin local businesses. Extreme wet or dry seasons can, on bad years, ruin food crop harvests and trigger inflation.
Man-made natural disasters such as forest fires caused by the traditional slash-and-burn culture on the islands of Sumatra and Kalimantan have far-reaching environmental consequences. Farmers’ and companies’ use of slash-and-burn practices to clear land for palm oil plantations causes many hazards. According to a World Bank report released in December 2015, some 100,000 man-made forest fires destroyed about 2.6 million hectares of land on Kalimantan and Sumatra between June and October 2015. It also caused a toxic haze to spread to other parts of Southeast Asia. This disaster is estimated to have cost Indonesia USD $16 billion and released 11.3 million tons of carbon each day — a figure that exceeds the 8.9 million tons of daily carbon emissions in the European Union — becoming one of the worst natural disasters in human history.
What You Can Expect
Natural disasters are a part of life in Indonesia — that won’t change anytime soon. The country needs to build a better evacuation system on a limited budget. Bali and Lombok are relying on tourism to break the cycle of poverty. Luckily, the islands’ natural beauty is enough to still attract plenty of adventurous travelers. Visitors are part of an essential economic engine that will allow Indonesia to provide its citizens with better access to healthcare and education.
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