Lower Poverty Level Caused by External Factors
Friday, 03 July, 2009 | 13:23 WIB

TEMPO Interactive, Jakarta: Aviliani, an economist from the Institute for Economics and Finance (Indef), has said that lower poverty level was not because of government's program but due to the rise in prices of commodities on the international market.

“It is caused by external factors,” said Aviliani yesterday (2/7).

Aviliani said that the increasing prices of palm oil followed by other commodities have increased farmers' incomes, and most poor people are farmers.

Other factors are the direct cash assistance (BLT) program and stagnant fuel prices.

She said she did not believe that the lower poverty level was caused by increasing wages and job opportunities.

“There is no sustainable policy improvement yet in the industry and poverty sectors,” said this moderator for the presidential debate on economy issues.

Aviliani explained that the regulations over investment affairs do not differentiate between foreign and domestic investors.

Therefore, foreign investors prefer to invest in capital-intensive businesses like telecommunication rather than manpower-intensive sectors.

“Foreign investors should be encouraged to invest in sectors that absorb workers like agriculture and agribusiness,” she said.

She suggested that the government give tax incentives for agribusiness industries and support agrarian reform.

Two days ago, the Central Statistics Bureau (BPS) reported that the number of poor people up to March 2009 as 32.53 million people (14.15 percent of the total population).

This number is the lowest level since 1996 when 34.01 million people (17.47 percent) were considered to be poor.

NIEKE INDRIETTA | EKO NOPIANSYAH