PROGRAM OF DIRECT CASH ASSISTANCE and RICE FOR POOR ASSISTANCE

TO MINIMIZE THE INCOME INEQUALITY

IN BANTEN PROVINCE YEAR 2008-2015

BY Group 7
Members :
1. Dwi Satria Firmansyah (16.9095)
2. Krisnanda Prasetya Adi (16.9229)
3. Nada Salvia (16.9320)
4. Rona Casanova Siagian (16.9400)

TOPIC DISCUSSION :
 Background
 Labor and Employment Conditions in Banten Province
 Wage System and UMR in Banten Province
 Economic Condition of Banten Province
 Inequality Revenue of Banten Province’Peoples
 Government Programs Bridging Inequality
 Direct Cash Assistance and Poor Rice in Banten Province
 Conclusion

 Background
According to BPS, poverty is seen as an economic inefficiency to meet
basic food and non-food needs (in terms of expenditure). Elimination of
poverty and the development of inequality income distribution is one of
the core problems of development, especially in Developing Countries,
one of Indonesia.
Todaro and Smith (2004), said that poverty alleviation and income
distribution inequality is at the core of all development issues and is
the goal of development policies in many areas.

Based on BPS data from 2008 to 2011, the Gini Ratio coefficient of
income inequality in Indonesia rose from 0.35 to 0.41, then began to
stabilize and relative decline from the year 2011 - 2016 of 0.41, which
can be concluded that the income distribution in Indonesia still uneven
(inequality). In 2010, the Gini Ratio Coefficient in Banten Province
was the largest in Indonesia, which was about 0.42, then decreased year
by year.

In order to cope with the declining purchasing power of poor people due
to the rise in prices as a result of subsidized cuts, the government
introduced the first-ever Cash Assistance program to the public in 2005
BLT in 2008 was coupled with the Raskin program previously run since
1998 where the same goal is to help poor households.

 Labor and Employment Conditions in Banten Province

  Wage System and UMR in Banten Province
Based on the Regulation of the Minister of Manpower Number: PER / 01 /
MEN / 1999 on "Minimum Wage", UMR is the lowest monthly wage consisting
of basic wages including fixed allowance applicable in one province.

Tahun 2008 2009 2010 2011 2012 2013 2014 2015

Kabupaten/Kota
Kabupaten
Pandeglang 840.000 918.950 964.500 1.015.000 1.050.000 1.182.000 1.418.000 1.737.000
Lebak 842.000 918.000 959.500 1.007.000 1.047.000 1.187.000 1.490.000 1.728.000
Tangerang 953.850 1.055.000 1.117.245 1.285.000 1.527.000 2.220.000 2.442.000 2.710.000
Serang 927.500 1.030.000 1.101.000 1.189.000 1.320.000 2.080.000 2.340.000 2.700.000
Kota
Tangerang 958.782 1.064.500 1.118.000 1.290.000 1.257.000 2.203.000 2.444.301 1.730.000
Cilegon 971.400 1.099.000 1.174.000 1.224.000 1.347.000 2.200.000 2.443.000 2.766.590
Serang 927.500 1.030.000 1.050.000 1.156.000 1.231.000 1.798.446 2.116.000 2.375.000
Tangerang Selatan 1.290.000 1.231.000 2.220.000 2.442.000 2.710.000
Banten 837.000 917.5 933.3 1.000.000 1.040.000 1.170.00 1.325.000 1.600.000

 Economic Condition of Banten Province

In 2015, GDP of Banten Province at current prices of 477.94 trillion rupiahs. The three main
sectors contributed to the biggest GDP of Banten Province were Manufacturing Processing
sector of 134.33 trillion rupiahs (33.48%), followed by the Trade and Retail, Car and Motorcycle
Repair sector by 49.15 trillion rupiahs (12.08%) and transportation and trade sector amounted
to 23.56 trillion rupiahs (10.22%).

The economic growth in Banten Province in 2015 is 5.37% slower than economic growth in 2014
(5.74%) and in 2013 (6.67%).

Growth Rate of GDP at Constant 2010/2000 Constant Price 2008-2015

2008 2009 2010 2011 2012 2013 2014 2015

Banten 5.77 4.71 6.11 7.03 6.83 6.67 5.47* 5.37 **
Indonesia 5.74 4.77 6.14 7.03 6.16 5.71 5.2* 4.98**
* Data is still temporary
** Data is still very temporary

 Inequality Revenue of Banten Province’Peoples

a. Definition
The distribution of income is essentially a concept of income
distribution among every household in the community. The concept of
measuring the distribution of income can be shown by two basic
 concepts, namely the concept of absolute inequality and the concept of
relative inequality
• The concept of absolute inequality is a concept of imbalance
measurement using parameters with an absolute value.
• The concept of relative inequality is a concept of measuring the
inequality of income distribution that compares the amount of income
received by a person or group of community members with the total
income received by society as a whole (Sukirno, 2006).
b. Measurement of Inequality Income
 Lorenz curve
The Lorenz curve illustrates the cumulative distribution of national
income amongst the layers of the population

 Gini Index or Gini Ratio

Gini Ratio is used to see the relationship between the amount of income
received by the whole family or individual with total revenue. The size
of the Gini Ratio as a measure of income distribution has a value
interval between 0 and 1.

The formula for calculating Gini Ratio is:

 World Bank Criteria

Table of Inequality Indicators According to the World Bank

 Classification Inequality Income Distribution Inequality
40% of low-income residents receive
High Inequality less than 12% of total revenue

40% of low-income residents receive

Inequality Moderate 12% - 17% of total revenue

40% of low-income residents receive more than

Low Inequality
17% of total revenue

c. Inequality of Revenue in Banten Province Based on Gini Ratio Calculation

by BPS

Table Gini Index of Banten Province

Wilayah Indeks Gini

Provinsi 2015 2014 2013 2012 2011 2010 2009 2008
Banten 0.4 0.35 0.39 0.38 0.4 0.42 0.37 0.34

Table Gini Index of Indonesia

Indeks Gini
2008 2009 2010 2011 2012 2013 2014 2015

Indonesia 0,35 0,37 0,38 0,41 0,41 0,413 0,41 0,40

d. Poverty in Banten Province

Jumlah Penduduk Miskin Menurut Kabupaten/Kota (Ribu Jiwa)

Kabupaten/Kota
2015 2014 2013 2012 2011 2010 2009
Kab Pandeglang 124.42 113.14 121.1 109.1 117.6 127.8 140.28
Kab Lebak 126.42 115.83 118.6 106.9 115.2 125.2 142.23
Kab Tangerang 191.12 173.1 183.9 176 188.6 205.1 256.15
Kab Serang 74.85 71.38 72.8 76.1 82 89.2 82.9
Kota Tangerang 102.56 98.76 103.1 106.5 114.3 124.3 106.1
Kota Cilegon 16.96 15.53 15.9 15 15.4 16.8 15.37
Kota Serang 40.19 36.18 36.7 34.7 37.4 40.7 32.76
Kota Tangerang Selatan 25.89 25.29 25.4 18.7 20.1 21.9 -
Provinsi Banten 702.4 649.19 677.5 642.9 690.9 751 775.79

 Government Programs Bridging Inequality

 Direct Cash Assistance Program
The Direct Cash Assistance Program aims to provide assistance in the
form of a certain amount of money each month to the Poor Household
(RTM), which is intended to compensate for the reduction of fuel
subsidies. to:
1. Helping the poor to keep fulfilling their basic needs.
2. Preventing the decline in the level of welfare of the poor due to
economic difficulties.
3. Improving shared social responsibility.
4. Provide a posotif impact on community development and become
incentives for unproductive ones
5. Reduce the number of poor people.

Rice Program For Poor Families

Rice for the poor is a food subsidy intended for poor families as an
effort by the government to improve food security and provide
protection to poor families.
This program aims to reduce the burden of Household Goal expenditure
(RTS) through the fulfillment of some basic food needs in the form of
rice and prevent the decline in energy and protein consumption. In
addition, Raskin aims to increase / open access to family food through
the sale of rice to beneficiary families with a predetermined amount.

Family Hope Program

The Hope Family Program is a social protection program that provides
cash assistance to the Very Poor Household (RTSM) and for the Poor
Household (RTM) family members is required to implement the terms and
conditions set forth.

School operational assistance

School Operational Aid is a government program to provide non personnel
funding funding for primary and junior secondary education units as a
form of implementation of the 9-year compulsory education program.

 Direct Cash Assistance and Poor Rice in Banten Province

- Direct Cash Assistance Program

In 2008, the central government issued direct cash assistance as
compensation from the fuel price hike. In 2010, the Direct Cash
Assistance program was replaced by the Hope Family Program
because the funds from the Direct Aid Foundation had not been
liquid until then.

- Rice Program For Poor Families

Banten Provincial Government is preparing a fund allocation of Rp
10.2 billion to assist the distribution of rice for poor people
in Banten province in 2016. This amount increased Rp 3 billion
compared to last year which was only about Rp 7.2 billion.

- Direct cash assistance and Rice Program For Poor Families

as one of the solutions to bridge inequality of income

Cash direct aid and rice aid program for the poor is one of the
solutions taken by the government to be a way to bridge the
 income inequality across Indonesia. This solution is taken as a
form of government awareness of the lack of proper fuel subsidies
that have been more beneficial to the benefits of middle to upper
class people

No. Tahun Raskin BLT PKH

1 2008 629.318 629.318 33225
2 2009 629.318 629.318 10380
3 2010 629.318 19464
4 2011 629.318 9666
5 2012 586.944 7202
6 2013 526.178 526.178 37379
7 2014 526.178 88652
8 2015 526.178

Below is a table showing the correlation between Total Amount of Poor People
in Banten Province with Number of Households receiving Rice for the Poor

Table Correlation of Poor People and households receiving rice for the poor

 Conclusion

 From the discussion in the previous chapter, it can be concluded that

the Direct Cash Assistance and the Rice Program for the poor are not
effective enough to overcome income inequality in Banten Province.
 The government should further examine the factors that can improve the value of the Gini
coefficient ratio