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The People of Indonesia, Social Issues

Southeast Sulawesi, East Nusa Tenggara, West Nusa Tenggara, Riau, East Kalimantan

Indonesian society has experienced a profound shift in the location of wealth. For much of the period since independence in 1949, wealth was concentrated in rural areas, particularly beyond Java. The rural elite prospered through their control of land and through their success as crop exporters. With industrialization in and around the larger cities, however, the wealth has shifted to urban areas of Java and Bali. Wealth is now derived from manufacturing, infrastructure projects, and the services sector.

A skewed pattern of income distribution is a growing problem in Indonesia, with many Indonesians living in poverty, especially in rural areas. In 1996 the wealthiest 10 percent of Indonesians accounted for 30.3 percent of spending, while the poorest 10 percent accounted for 3.6 percent of the country’s total spending. Overall inequality is lower in Indonesia than in nearby Thailand, the Philippines, or Malaysia, largely because Indonesia’s wealthiest are still a very small proportion of the population.

Indonesia also has large differences in income distribution among its provinces. The provinces with the largest shares of the gross domestic product (GDP) are East Kalimantan, Jakarta, and Riau: East Kalimantan and Riau are rich in natural resources, and Jakarta is successful in industry and services. The poorest provinces are all in eastern Indonesia: East Nusa Tenggara, West Nusa Tenggara, and Southeast Sulawesi. The government has tried to stimulate the economies of these provinces.

Many young villagers continue to leave the rural areas for the city, leaving many villages with concentrations of older people. In the cities, rapid growth has strained services and infrastructure beyond their limits, and most new migrants, unable to afford adequate housing, drift to ramshackle squatter settlements. Housing for other Indonesians—in cities and in villages—is little better. In 1995 fewer than half of all houses had a toilet, 24 percent had earthen floors, 33 percent had no electricity for lighting, and 83 percent did not have piped drinking water.

Article key phrases:

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