Chapter II

DISCUSSION

2.1 Social Inequality

According to Badruzman (in Aziza, 2011), social inequality is a social imbalance that
occurs in society and causing striking differences.
Based on the Perception Gap Survey conducted by Lembaga Survei Indonesia (LSI) (in
World Bank, 2014), respondents felt the gap was getting higher and exceeded reasonable limits.
More than 90 percent of respondents say Indonesia is lame and as much as 40 percent say
Indonesia is very lame. Respondents also feel the gap has increased in recent years.
Approximately half of the total respondents said the gap has increased in the past five years and
only 15 percent have stated that the gap in Indonesia has decreased. (Pemilihan kata) In addition,
the survey results stated that respondents believe the 20 percent of the richest group grew
rapidly, 20 percent grew moderately, and 60 percent of low-income group revenues are
unchanged. (2 word choice) In fact, based on most of the measurement of inequality in Indonesia
has reached a high level. In 2002, 10 percent of Indonesia's richest people consumed as much as
the total consumption of 42 percent of the poorest while in 2014 they consumed as much as 54
percent of the poorest. (2 word choice)
To measure the inequality of the most commonly used gauge is the Gini coefficient
where 0 is fully equivalent and 100 means completely unequal. (2 word choice)

(March, 2016 World Bank)

 During the Asian financial crisis of 1997-1998, the poverty rate rose sharply, while the
Gini ratio declined. This is because everyone is affected by the Asian financial crisis, the richest
segment of the population hit hardest. (word choice and style) The Gini ratio increased from 30
(in 2000) to 41 (in 2014), the highest ever recorded. However, this increase is probably still
lower than the actual situation because household surveys are usually less representative of the
richest households. (word choice)
Although the former was relatively moderate based on international standards,
Indonesia's inequality rate has now become high and rising faster than most of East Asia's
neighbors. Over the past 15 years of sustained growth has helped to reduce poverty and create an
economically well-established social class growth. Between 2000 and 2014, after recovering
from the Asian financial crisis, Indonesia's per capita real (Gross domestic product) GDP grew
an average of 5.4 percent per year. This growth helps many people get out of poverty. The
poverty rate is reduced by more than half from 24 percent during the crisis to 11 percent by
2014. Economic growth also helped create a stronger middle class than ever before. Currently,
there are 45 million people or 18 percent of the richest people of all Indonesians who are
economically well established and enjoy a high quality of life. (Word Choice) They are the
fastest growing segment of the population, with a 10 percent annual increase since 2002.
However, the economically well-established group of Indonesians left the remaining 205 million
behind. The growing consumer class enjoys most of the benefits of economic growth. Between
2003 and 2010, per person consumption for the 10 percent of Indonesia's richest people rose by
more than six percent per year after taking into account inflation, but the increase was less than
two percent per year for the poorest 40 percent of the population.(Word Choice) This has an
effect on slowing poverty reduction rates, with the number of poor falling just two per cent per
year since 2002, and almost no decrease in the number of people vulnerable to poverty. (banyak,
spelling, enhancement, style)

2.2 Cause of Inequality

In the World Bank (2014) there are four major drivers of inequality in Indonesia affecting
current and future generations. (Word Choice) First, the inequality of opportunity means not
everyone can develop the skills needed to get high-paid jobs. Not getting a chance starts even
before birth. Some children from poor households do not get adequate nutrition during the most
important growth stage, from the time they are in the womb until they are two years old. (Word
Choice) As a result, these children experience stunting, which fails to reach the right height
according to their age. Their cognitive abilities grow more slowly than children who grow up,
resulting in lower levels of education and lower earning as adults. (spelling atau confused word)
This is one of the most important development challenges, 37 percent of Indonesian children
experience height that is not appropriate for their age. (word Choice and unclear reference)
Secondly, the greater the demand to have the right skills in a modern economy, the
rewards for those who get good jobs are higher. (word Choice) While those who do not have the
required skills, get stuck in informal jobs or jobs with productivity and low wages. (word
Choice) Low skills are because their opportunities to develop such skills are limited. Workers
from richer households are more likely to be more educated and more skilled at making a profit
from higher wages. (word choice) When the first and second factors are combined, the wage
inequality increases.

Third, the increasingly centralized financial resources are in the hands of a handful of
wealthy households that lead to higher income inequality today and strengthen the inequality of
human and financial resources in the next generation. (Word Choice) Households earn income
not only through work but also financial and physical assets. The share of income generated by
work has decreased. While parts generated by capital, such as financial assets and property have
increased. This happens not only in Indonesia but also in other countries in the world. (Unclear
Reference) In Indonesia, there are high returns on these assets over the last decade. However,
most wealthy households have access to these resources. Ten percent of the richest Indonesians
control about 77 percent of all wealth in the country. (Word Choice) One percent of the richest
people even own half of all wealth, occupying the second highest position with Thailand after
Rudia from 38 countries. (Word Choice) Few households can enjoy income from financial and
physical assets.

Fourth, shocks can affect inequality at any stage within this framework by eroding
households' ability to earn income, save, and invest in educational health. There are many types
of shocks that can erode household resources and income, including economic, health, social and
political shocks. Shocks can affect the underlying revenue-generating assets. For example,
natural disasters may cause loss of livestock or damage to equipment used to make a living.
Shocks can also reduce the revenue derived from such assets for example drought can reduce
yields. Shocks can reduce the income benefits if there is a change in food prices. (word choice)

2.3 Reduce Inequality

In the World Bank (2014) Brazil implements several ways to reduce inequality. It can be
used by Indonesia because in some ways Brazil is similar to Indonesia, as large and resource-
based Brazil economies have experienced rapid growth during the 2000s, their political system is
highly decentralized, Brazil has passed the transition to become an upper middle income country.
(Grammar dan spelling) Brazil has also experienced a high income and opportunity imbalance
similar to that experienced by Indonesia today. There are four drivers behind the decline in the
level of inequality in Brazil that can be applied in Indonesia, namely macroeconomic stability,
expansion of primary and secondary education, pro-poor expenditure of state, and the expansion
of social assistance. (word Choice)

First, the poor have benefited from stability and macroeconomic growth. Because the
poor have no access to financial instruments that can protect them from inflation, a
macroeconomic climate that keeps the price of goods stable stabilizes the benefit of the poor and
vulnerable in Brazil. At the same time, widespread economic development has led to job
creation, allowing poor households to earn better income. (Grammar)

Second, the expansion of primary and secondary education has changed the profile of
labor. The inequality of workers' incomes in Brazil is largely due to inequality in education.
Brazil began to implement a planned policy to expand education for poor households. (3 word
Choice)

Third, a more pro-poor country's expenditure policy and a significant expansion of social
assistance also contributed to the decline in inequality. Government spending is used almost half
as much for social programs, including cash transfers, health, and education. A significant
increase in state spending on social assistance plays a key role in reducing inequality. (Word
Choice) Increased contribution contribution and noncontribution from the Brazilian government
accounted for about 30 percent reduction in the Gini ratio between 2001 and 2009. (miss spelling
word)
 Fourth, the expansion of social assistance. Social assistance can be used to protect
households from shocks and facilitate upward mobility. One example of social assistance is the
transfer of tunain that can be a counterweight. (spelling) However, the effectiveness in reducing
the gap depends on how well the target of social assistance is. Thanks to these policies, the
income of the poor in Brazil rose the most in that period. Indonesia can do it to reduce the gap.

2.4 Inequality in the Perspective of Pancasila

The current inequality does not correspond to the second principle of pancasila and.
Pancasila the second precept sounds a just and civilized Humanity and Pancasila sila boundary
sounds social justice for all the people of Indonesia. The meaning of Pancasila sila is to build a
fair attitude toward others, to respect the rights of others, to realize social justice and common
welfare, and mutual cooperation and cooperation. In addition, inequality is not in accordance
with the 1945 Constitution of Article 34. Article 34 has 4 verses which are:
1) The poor and neglected children are kept by the state.
2) The developing country's social security system for all the people and the members of
the community are weak and incapable in accordance with human dignity.
3) The State is responsible for the provision of appropriate health service facilities and
public service facilities.
4) Further provisions regarding the provisions of this article shall be governed by law.
If there is still imbalance then it Pancasila and the 1945 Constitution has not been
resolved. It is because there can be inequality then there is still a group of people who are not
entitled and justice did not happen. For example, in the field of education that occurs between the
inhabitants of remote areas and local people. The facilities and quality of teachers in the second
area are very different from the accuracy. For example, poor households may lack access to
include children to school, and maintain their health, so that they are less productive as adults.
They may also not be able to open a business. Compared to rich households that are not difficult
to include to school and maintain their health, so that their productivity is good. This proves that
the 1945 Constitution and Pancasila have not been applied.
In Aziza (2011), apabaila viewed from the legal and political aspects, the State of
Indonesia is a democratic country that has a common right in the law. However, there are still
certain acts, for example in the number of detention facilities between the poor and the rich. Rich
people who are involved in corruption cases, facilities people, who like small criminal cases,
such as stealing a melon or two seeds kakau, abuses by law enforcement officers. In fact, it is not
uncommon for victims of criminals to be lighter for people who commit a light theft act.
According to Indonesia Corruption Watch (ICW) (in taylor, 2016), the defendant of corruption is
still given a light sentence by the Corruption Court. ICW Judicial Law and Monitoring Division
investigator Aradila Caesar conducted a search during January to June 2016. From the results of
the investigation, there were 384 defendants from 325 cases that were 71 percent. The average
given by the prosecutor to the defendant is for 40 months or 3 years and 4 months. This is
inversely proportional to that given to those who have no power. For example, an elderly
woman. Asyani 5 prison threat 7 teak logs owned by perum pehutani. This is proven until now
the term Blunt Law of Upward, Sharp Down is still valid and not in accordance with Pancasila
and the 1945 Constitution.