By: Winna Nartya *)
The government under President Prabowo Subianto’s leadership deserves praise for its success in significantly reducing the poverty rate by March 2025. According to BPS data, the number of poor people dropped to 23.85 million people, or 8.47% of the total population, down 0.21 million compared to September 2024. This achievement did not come by itself, but was the result of four integrated strategic programs designed to holistically target the root causes of poverty.
First, the government is building a solid data foundation through the National Social and Economic Single Data (DTSEN) format. With DTSEN, social assistance can be allocated precisely to its intended target because each recipient family is identified based on standardized welfare indicators. Until now, one of the main obstacles to aid distribution has been fragmented and unintegrated data, which has resulted in some aid going to those who are not actually entitled. DTSEN will close this gap, ensuring that aid truly reaches underprivileged segments of society.
Second, the Free Nutritious Meals program provides a dual benefit: improving children’s nutritional adequacy and creating jobs. The government recognizes that malnutrition affects not only health but also academic achievement and long-term productivity. Therefore, by providing three nutritious meals and two snacks daily in schools, poor children are given an equal opportunity to grow healthily. Furthermore, local communities—especially those who have lost their jobs—are involved in the program’s supply chain, from raw material procurement to food distribution. Thus, the program directly contributes to reducing unemployment and increasing the incomes of poor families.
Third, the government is launching the Merah Putih Village/Sub-district Cooperative as a village economic instrument. This cooperative is designed to drive local businesses and open new business opportunities, such as agricultural processing, craft production, and the provision of village services. Through a partnership model between the government, banks, and community empowerment institutions, the cooperative is expected to mobilize working capital, strengthen managerial capacity, and foster a culture of savings. In the long term, an increasingly independent village economy will reduce dependence on subsidies and direct cash assistance.
Fourth, the downstreaming of raw commodities program strengthens domestic added value while simultaneously creating jobs. Instead of exporting raw materials, the government is encouraging the establishment of upstream and downstream industries—for example, processing palm oil into oleochemical raw materials or refining nickel into high-quality metal products. This policy not only increases foreign exchange but also creates thousands of technical and non-technical jobs, from production to distribution.
These four strategies demonstrate that the government is not simply providing short-term assistance but is building the foundations of an inclusive and sustainable economy. The successful reduction in poverty by 0.21 million people in the past six months signals that a cross-sectoral approach can work.
Deputy Speaker of the House of Representatives, Sufmi Dasco Ahmad, expressed his full support and continued coordination with the Statistics Indonesia (BPS) to explain detailed poverty figures to Commission IX to ensure government policies are based on accurate data and public aspirations. Such transparency is crucial to ensure every evaluation step can be conducted openly and provide solutions.
In the realm of development economic theory, the government’s integrated approach can be understood through the concepts of multiplier effects and inclusive growth. The Free Nutritious Meals Program, for example, not only improves nutritional intake—which directly boosts human resource productivity—but also stimulates aggregate demand in the food and distribution services sectors. Money spent on raw materials and wages for local workers circulates back into the village economy, creating a ripple effect (multiplier) that magnifies the program’s initial impact on Gross Domestic Product (GDP). Such interventions are effective demand stimuli, especially when directed at low-income households with a high marginal propensity to consume.
Meanwhile, the establishment of the Merah Putih Village/Sub-district Cooperative and the acceleration of downstreaming reflect the principles of structural transformation and endogenous growth theory. Village cooperatives—which operate based on the principle of mutual cooperation—capture informal productive potential into a formal institutional framework, increasing the efficiency of capital allocation and facilitating access to affordable credit. Institutional innovation can spur sustainable growth from within (endogenous). Downstreaming of raw commodities also adds domestic value, expands the industrial base, and fosters human capital accumulation through improved technical skills. Thus, these two instruments contribute to sharpening the foundation of the national economy from the supply side, in line with the long-term development strategy towards Indonesia Emas 2045.
This integrated approach is both pragmatic and progressive. Rather than opting for purely populist programs, the government is designing mutually reinforcing policies. If implemented consistently, Indonesia will not only reduce poverty but also strengthen the resilience of the national economy—toward the vision of Golden Indonesia 2045. Hopefully, this synergy between data, social programs, cooperatives, and downstreaming can continue to be strengthened so that no more families are trapped in structural poverty.
*) economic observer