Cards for the Poor and Funds for Villages: Jokowi’s Initiatives to Reduce Poverty and Inequality

When President Joko “Jokowi” Widodo took office in 2014, Indonesia was facing stagnating poverty and high inequality. To address these problems, he quickly introduced several initiatives, mainly in the form of social assistance programmes which gave the poor access to education and health services, as well as food and cash transfers, and grants for villages as mandated by the Village Law. This paper assesses the implications of these initiatives on poverty and inequality, by correlating economic growth with real per capita household consumption growth by quintile at the district level. The results indicate that economic growth has become less pro-poor during the first three years of the Jokowi government. This is indicated by lower growth elasticity of consumption of the poorest 20 per cent of the population, while those of the middle quintiles have increased significantly and that of the richest 20 per cent remains the highest. This suggests that Jokowi's poverty and inequality reduction strategy is not sufficient. A complementary approach to connect the poor to economic growth - through job creation and income generation - is needed. Furthermore, the findings also show that it is important to pay more attention to assist the livelihood of the poor who live in Java as well as the urban poor.