ECONOMIC GROWTH AND

POVERTY REDUCTION IN
INDONESIA BEFORE AND
AFTER THE ASIAN FINANCIAL
CRISIS
 CHICKA HUSNUL H
1709617021
A N N I S A W I DYAWAT I
1709617030
P R AW E S T R I Y E K T I P
1709617051 GROUP 1
ERIZKA BAITY R
1709617064
M E LWA N DA R I E K A M
1709617079

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 THE ASIAN
FINANCIAL
CRISIS

(1997-1998)

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 In the late 1990s, the Asian economy
was hit by one of the worst financial
crises in modern history. The crisis,
known widely as the Asian financial
crisis (AFC) of 1997–1998, had
severely impacted on a number of
Asian countries and created long
lasting effects in those countries.

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 Depreciation of
Rupiah (1997)

The rupiah was

INDONESIA devalued

The inflation
rate rose

Food price
escalated

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 Protests and mass riots against the
incumbent New Order regime
The economic crisis in
exploded in Jakarta and several
Indonesia developed
other cities, which culminated in
further into a major the resignation of President
political upheaval. Soeharto in May 1998.

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 Among the most prominent
consequences of the AFC in
Indonesia was the abrupt
escalation of the poverty rate.
Even though the economy has
recovered relatively quickly, since
then Indonesia has experienced a
slower pace of poverty reduction
compared to the pre-AFC period.

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 THE Output
STRUCTURAL
SECTORS OF THE
INDONESIAN
ECONOMY
Economic
Employment
Growth

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 POVERTY
TRENDS AND
PROFILE

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 LONG TERM TRENDS IN POVERTY

CENTRAL
STATISTICS
BODY

42,5%

2002 AND 2010

18,2% TO 13,3%
 URBAN AND RURAL POVERTY

1998

2010
SECTORAL POVERTY PROFILE
21,1
%
.
31,8
%

2002
.
57,7%
 ECONOMIC
GROWTH AND
POVERTY
REDUCTION
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 Sumarto and Suryahadi (2007)

THE GROWTH–
POVERTY
MODEL

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 Based on pooled dat a from four Southeast
Asian countries (Thailand, Indonesia,
M a l a y s i a a n d t h e P h i l i p p i n e s ) , Wa r r ( 2 0 0 6 )
found that growth of the ser vices sector
had accounted for the largest reductions in
pover ty in those countries. In taiwan,
h o w e v e r, i t w a s i n d u s t r i a l s e c t o r g r o w t h
that was found to have had the greatest
i m p a c t o n p o v e r t y ( Wa r r a n d Wa n g 19 9 9 ) .

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 GROWTH
ELASTICITIES OF
URBAN POVERTY

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 CONTRIBUTION OF
SECTORS TO RURAL
POVERTY REDUCTION

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 CONTRIBUTION OF SECTORS
TO URBAN POVERTY
REDUCTION

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 IN A COUNTRY WELL GOVERNED, POVERTY IS
SOMETHING TO BE ASHAMED OF. IN A COUNTRY
BADLY GOVERNED, WEALTH IS SOMETHING TO BE
ASHAMED OF.
Confucius

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 THANK YOU

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