Download the Indonesia Human Development Report 2004. - UNDP

Chapter 6A National Summit for human developmentSince its financial crisis Indonesia has undergonea systemic transition that involves not just economicrestructuring but also dramatic political and socialchanges. There have been some notable successes,not least in keeping this disparate nation together.But the price of immediate survival has been to createthe potential for widening disparities between richand poor regions. In the long term this will proveunsustainable. Indonesia has to arrive at a newconsensus on the core rights of all citizens – whichcan be achieved by holding a National Social Summitfor human development.As this report has demonstrated, Indonesia sufferedserious setbacks to development as a result of the 1997financial crisis and its aftermath. The government didrespond quickly with an emergency social safety net. Andstandards of human development more or less returnedto pre-crisis levels. Nevertheless, Indonesia still lies in thelower half of the global human development table – ranked112 out of 175 countries – and lags behind comparableASEAN neighbours such as Malaysia, Thailand and thePhilippines. Since Indonesia’s rate of progress remainsslow the gaps are likely to widen further.There have also been widening gaps within Indonesia.The recovery has been very uneven. Generally the regionsthat already had higher HDIs have made faster progressthan those with the lower HDIs. Thus, between 1999 and2002, the highest ranking province, DKI Jakarta, improvedits HDI value at an annual rate of 2.2% while the lowestranking province improved only at an annual rate of 1.5%.The picture is even starker at the district level. Althoughmost districts managed annual increases in their HDIs ofbetween 1.5% and 2%, some 18 districts saw their HDIsfall. In some cases disparities have also become moreevident as a result of the splitting of districts: the betteroff parts registering an increase in HDI while the worseexperience decreases.These disparities will also be reflected in theachievements of the MDGs. Thus although Indonesia asa whole will hit many of the MDG targets for 2015, thepoorer districts are likely to miss them. Extrapolating fromhistorical experience, the 2001 National HumanDevelopment Report (NHDR), concluded, for examplethat the provinces of Bengkulu and West Kalimantan wouldtake 148 and 124 years respectively to achieve the MDGtarget of access to clean water.In addition to regional disparities there are also markeddisparities between social groups. Even before theeconomic crisis infant mortality was three times higheramong the poor than the rich. And the richest 20% werealso spending eight times more on privately provided healthservices. Literacy and enrolment rates are also higheramong the rich than the poor. At the heart of all thesedisparities are the effects of poverty. Although the overallpoverty rate has dropped back from its peak during thecrisis, it is still around 18%, with probably a further 30%of the population capable of falling below the poverty lineat any time.Public expenditure and human developmentAs the previous chapter has illustrated, progress inhuman development can be the result both of economicgrowth and of government spending on public services.Historically, Indonesia has largely depended on theeconomic channel: rapid income growth from the early1970s to the late 1990s allowed individuals to spend moreon health and education. Meanwhile the government spentrelatively little on services such as health, education andpublic safety and order.This imbalance has contributed to a significant healthand education divide. This is because the benefits of publicspending tend to be spread fairly evenly but those fromprivate spending are inevitably skewed towards the rich –unlike the situation in Thailand and the Philippines, forexample, which spend significantly more on public healthand basic education. Indonesia also underspends on58National Human Development Report 2004