On inequality - Fighting illegal plantations, inequality in asset ownership in Indonesia, Oxfam paper on Indonesia

18 Mar 2017: Fighting illegal plantations, inequality in asset ownership in Indonesia

National park fights back against illegal plantations, Apriadi Gunawan, The Jakarta Post March 11, 2017 http://www.thejakartapost.com/news/2017/03/11/national-park-fights-back-against-illegal-plantations.html -- More than 2,000 hectares within the National Park had been converted into plantations, which were mostly spread throughout Langkat, North Sumatra and Southeast Aceh. The forest conversions were mostly committed by local people who were supported by payments from outside investors. “Most of the investors come from Medan,” Joko said...http://www.thejakartapost.com/news/2017/03/11/national-park-fights-back-against-illegal-plantations.html

EDITORIAL: Inequality in asset ownership, The Jakarta Post March 16, 2017 -- The Agrarian and Spatial Planning Ministry has set itself a target of granting 5 million land titles this year at a cost of Rp 2 trillion (US$148 million), which will be fully financed by the state budget. Land titles will empower the poor to take maximum benefit from their physical assets, such access to bank loans. Usually, registering a property can be an arduous and costly procedure. Ministry data shows that of the 136 million plots of private land across the country, only 46 million plots have legal titles... Encouraged by the smooth implementation of a land reform pilot project last year, the ministry will also speed up the redistribution of neglected land, estimated at 12.7 million hectares across the country, to landless people around forests through local customary communities.,,Many plantation companies hold land concessions of more than 500,000 ha, or more than six times the land area of Singapore. We are afraid that if the expansion of plantations, especially oil palm, by big companies remains at its current rate of more than 100,000 ha per year, mounting problems of inequality of income, wealth and land conflicts could threaten the long-term sustainability of the plantation industry, even the macroeconomic stability.

24 Feb 2017: Oxfam paper on Indonesia

OXFAM BRIEFING PAPER, FEBRUARY 2017: TOWARDS A MORE EQUAL INDONESIA - How the government can take action to close the gap between the richest and the res


Since 2000, economic growth has taken off in Indonesia. There has been a significant increase in the country’s score on the UN’s Human Development Index (HDI), and the proportion of people living in extreme poverty has fallen from 40 percent to 8 percent. However, the benefits of growth have not been shared equally, and millions have been left behind. If the $3.10 World Bank ‘moderate’ poverty line is used, the number of Indonesians living in poverty shoots up to 93 million (36 percent of the population). Many more Indonesians live just above the poverty line, making them vulnerable to falling back into poverty. In the past 20 years the gap between the richest and the rest has risen faster than in any other country in South-East Asia.1 Indonesia has the sixth worst inequality of wealth in the world. In 2016, the wealthiest 1 percent of the population owned nearly half (49 percent) of total wealth.

The drivers of inequality in Indonesia are complex and multi-layered, ranging from structural causes to more specific policy choices. Following a period of relatively equitable growth, market fundamentalism introduced following the financial crisis of 1997 has produced an economy that enables those at the top to capture by far the greatest share of the benefits of growth...

The taxation system has failed to play its necessary role in redistributing wealth, and is far from reaching its revenue-raising potential to fund inequality-reducing public services. Indonesia’s tax collection as a percentage of GDP is the second-lowest in South-East Asia. The IMF has calculated that the country has a potential tax take of 21.5 percent of GDP. If it were to reach this figure it could increase the health budget nine times over. Indonesia’s tax base is also the victim of tax dodgers. In
2014 $100bn flowed from Indonesia into tax havens, equivalent to nearly 10 times the education budget in that year...

 This has been recognized by President Joko Widodo (Jokowi), who has described levels of inequality as ‘dangerous’ and made tackling inequality the top priority for his administration in 2017. A new ‘Economic Justice’ policy package has been launched to tackle inequality, including measures to increase land redistribution, to tax land speculators, improve access to credit for micro, small and
medium-sized enterprises, and to increase the skills of Indonesia’s workforce. While these measures are welcome, the Indonesian government can and must go further. In particular, it must do more to ensure fair work and wages for the majority of Indonesians and to implement a progressive taxation system that raises more revenues to invest in vital public healthcare and education services....