Globalisation and Poverty: Indonesia in the Twentieth Century

Discussing Indonesia as a case-study for examining the impact of globalisation on poverty, this paper is elaborating the historical background of Indonesia’s development and welfare since 1900. This rare discussions include the impact of Dutch’s colonialism and 1930s depression on Indonesia’s welfare. There is also analysis on the expulsion of most Dutch nationals from Indonesia in the late 1950s and the nationalisation of Dutch enterprises, together with greater controls on Chinese businesses. Regarding poverty eradication during Soeharto’s era, the author mentions that while the government continued to claim falls in the incidence of poverty, the official poverty line was declining relative to average per capita expenditures, and that a more realistic poverty line would show both a higher incidence of poverty, and a smaller decline. This paper also critisizes the way Central Board of Statistics defining the poverty line in these current years. It is revealed by the author that the lessons of the last three decades of the 20 century were that faster growth based on increasing links with the global economy reduces poverty, but also increases vulnerability to shocks, originating from domestic as well as international sources.