Indonesia Moves to Update Decades-Old Poverty Metrics
Jakarta, Indonesianpost.com – Reported by Antara, Indonesia is set to reevaluate how it measures poverty, with the National Economic Council (DEN) leading a planned revision of the current calculation method. The move comes as international standards evolve and economists call for more accurate measurements of living standards.
Luhut Binsar Pandjaitan, Chairman of DEN, revealed the initiative during the International Conference on Infrastructure (ICI) 2025 in Jakarta on Thursday. While no timeline was given, he confirmed that the council is assessing poverty line benchmarks and will present its findings to President Prabowo Subianto.
“We’ve discussed this internally and agree that an update is necessary,” Pandjaitan said. The review will involve close coordination with Statistics Indonesia (BPS), the agency responsible for official poverty data.
The push for revision follows the World Bank’s recent adjustment to its global poverty calculation, which now uses 2021 purchasing power parity (PPP) data. Under the new standard, the poverty threshold for upper-middle-income countries like Indonesia rose from $6.85 to $8.30 per day—a shift that, if applied, would dramatically increase Indonesia’s reported poverty rate to 68.25%.
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However, BPS has clarified that its current method differs significantly from the World Bank’s. Rather than relying on cross-country PPP comparisons, BPS determines poverty based on local consumption data from its National Socio-Economic Survey (Susenas), measuring the minimum cost of basic food and non-food needs.Experts argue that Indonesia’s approach may need modernization. Wahyudi Askar of Celios pointed out that BPS’s Food Poverty Line (GKM) and Non-Food Poverty Line (GKNM) metrics are outdated, failing to reflect current living costs.
Wijayanto Samirin, an economist at Paramadina University, echoed this view, suggesting Indonesia gradually align with the World Bank’s higher threshold. “Our current poverty line is set too low,” he said. “A more realistic benchmark would better inform policy.”While DEN’s evaluation is still in early stages, the debate highlights a broader challenge: balancing international comparability with local realities. Any changes to Indonesia’s poverty measurement could reshape social assistance programs and economic policy—making this more than just a statistical update, but a decision with real-world consequences for millions. (BL)