How Far Has Indonesia’s BPS Progressed in Revising the Poverty Standard?

Indonesia’s Statistics Indonesia, known as BPS, is still studying how to revise the country’s poverty standard. The agency said the work involves a broad evaluation of the measurement method, not simply an increase in the nominal poverty line.

BPS said the review aims to reflect changes in consumption patterns and Indonesia’s socio-economic conditions. It is examining every component of the poverty line, including food and non-food needs.

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The refinement being studied is not just about raising the nominal poverty line, but is an evaluation of the overall method of measurement to be more relevant to the development of consumption patterns and the socio-economic conditions of the Indonesian society.

For food needs, the options include using 2024 as the base year, expanding the commodity basket from 52 to 57 items, and setting a fixed energy threshold of 2,100 kilocalories per person per day. BPS is also studying the reference population, prices, consumption quantities and energy requirements. It is considering median prices to make the calculation more resistant to price differences.

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Any changes in the future need to consider empirical evidence, statistical principles, data comparability between periods, as well as input from experts and stakeholders.

The agency is reviewing both the non-food basket and the method used to calculate it. One option would use a direct method. Another would use an indirect approach based on food share and total expenditure. BPS is also studying how to update the poverty line in later periods so it reflects price and economic changes.

BPS said the formula, parameters and timing for the new methodology remain unsettled. It said future changes must consider empirical evidence, statistical principles, comparability across periods and input from experts and stakeholders. The current national poverty line stands at Rp3,091,866 per household per month. Deni Friawan, an economist and researcher at the Centre for Strategic and International Studies, said the existing standard measures minimum survival needs rather than what constitutes a decent living in different Indonesian regions.

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So it's not just about measuring the minimum standard of living to survive, but how much is the standard of living decent for the people of Indonesia in their respective regions.