Africa in Asia? the development challenges facing Eastern Indonesia and East Timor

Abstract

In recent years a distinction has been made in the development literature between “Asian” poverty, which is thought to be the result of high rural population densities and high rates of landlessness, and “African” poverty, which is more the result of sparse populations farming poor quality land and cut off by inadequate infrastructure from markets for goods, labour and credit. This paper pursues this distinction in the context of Indonesia and points out that in recent years the highest incidence of poverty has been found not in the densely settled islands of Java and Bali, but in the more remote and less populated provinces in the eastern part of the archipelago. This paper explores the correlates of poverty by province in Indonesia in 1996 and finds support for the view that the poorest provinces are those characterized by low population densities, undeveloped markets, low road densities and low educational attainment. The policy implications of these findings are examined in the final part of the paper.

Notes

* Anne Booth, Department of Economics, School of Oriental and African Studies, Thornhaugh St, Russell Square, London WCIH OXG, UK.

Much of this paper was written while I was a visiting fellow at the Institute of Southeast Asian Studies, Singapore, from January to May 2001. I am grateful to ISEAS for providing a very supportive research environment, and to the Leverhulme Foundation for their financial assistance.

For discussions of the problems with the official poverty line used by the Central Bureau of Statistics, see Booth (1993) and Bidani & Ravallion (1993). It is not possible here to give a full account of the debate surrounding the official poverty estimates in Indonesia, or to give a comprehensive explanation of the changes in the estimation of the poverty line that were introduced in 1999. Suffice it to say that the changes were made in order to incorporate a larger number of goods and services in the poverty line basket of basic needs. This had the effect of increasing the poverty line, although the magnitude of the increase varied by province, thus affecting the relative poverty rankings. Some critics argue that even the revised estimates still underestimate the extent of poverty in Indonesia, both before and after the crisis; see Dhanani & Islam (2002).

Malaria is much more widespread in Eastern Indonesia than in other parts of the archipelago, and is a major cause of high infant and child mortality.

The correlations reported in Table 5 use data on agricultural wages which are available for only 14 provinces, but other wage series for 26 provinces (daily wages for production workers below the level of foreman) for 1991 show only a weak negative correlation with the headcount measure of poverty in 1993.

See Buletin Ringkas BPS, January 2001, Table 27.

The CBS does not give data on area of land for Maluku, East Timor and Irian Jaya, although the 1993 Agricultural Census did give estimates of land under smallholder cultivation for these provinces. Land data for these three provinces are taken from provincial statistical yearbooks, and are subject to a large margin of error.

The role of average holding size, agricultural productivity per hectare and access to off‐farm income can be seen from the results of an ordinary least squares regression of these variables on the headcount measure of rural poverty. Both value added per hectare in smallholder agriculture and average holding size show the expected negative signs and are highly significant. If a third variable, the proportion of total farm income obtained from the farm holding, is added, over 50% of the observed variation in headcount poverty between provinces is explained. For further discussion of the relationship between agricultural household dependency on income from the farm holding, rural poverty and other demographic and agricultural variables, see Booth (2002), pp. 188–191.

In 1995, there were 20.8 civil servants per thousand people in Indonesia as a whole. In East Timor and Irian Jaya the figures were 32.7 and 36.4, respectively (civilian employees only). Data from Central Bureau of Statistics (1996a, b).

Parts of Eastern Indonesia have been plagued by ethnic and religious conflict in the last 5 years; in the province of Maluku, which is the worst affected region, in‐migration of Moslems from other parts of the country has led to violent clashes with local Christian populations. The problems have been aggravated by the activities of Islamic militias recruited from Java.

For a discussion of the improvements in educational and other indicators in East Timor in the years from 1980 to 1998, see the chapters by Booth and Jones in Hill & Saldanha (2001).

The official data show that numbers of poor in West Java increased by over four million between 1996 and 1999. The percentage increase in the numbers of poor between 1996 and 1999 (by province, excluding East Timor) was negatively correlated with the headcount measure of poverty in 1996 (r=–0.455). See Central Board of Statistics (2001), Table 12.5.

See Alm et al. (2001) for a discussion of the prospects for the decentralization process. Lewis (2002) and Booth (2003) look at the impact of the first round of funding allocations, announced in December 2000, on regional equity.

Additional information

Notes on contributors

Anne Booth *

* Anne Booth, Department of Economics, School of Oriental and African Studies, Thornhaugh St, Russell Square, London WCIH OXG, UK.