Examining the nexus of the poverty-growth-inequality triangle in Indonesia: empirical evidence from province-level data

Indonesia showed a good record in combating poverty during 1976 –1996. Sustained economic growth in Indonesia over that period was the primary factor in supporting the reduction in poverty. The poverty incidence signi cantly decreased from 40.1 percent (1976) to 11.3 percent (1996). However, when the crisis hit, the economic growth stalled, and poverty gures jumped from 17.5 percent (34 million) in 1996 to 24.2 percent (49.5 million) in 1999. This indicates that a large number of households were just slightly above the poverty line so an economic shock could easily push them down the line.