Abstract
The study aims to analyze the poverty and micro and small enterprises in 34 provinces in Indonesia, and to analyze the effect of labor and the number of micro and small enterprises on poverty levels in Indonesia. The results indicate that Papua Province has the highest poverty rate and the DKI Jakarta Province has the lowest poverty rate. Central Java Province has the largest number of micro-enterprises, and West Papua Province has the lowest number of micro-enterprises. For small enterprises, Central Java Province has the highest number and West Papua Province has the lowest number. Meanwhile, Central Java Province as the largest number of micro-business workers, and West Papua Province has the lowest number workers. For small business workers, Central Java Province has the largest number and West Papua Province has the lowest number. The results of panel data regression show that some variables, such as small-enterprise worker and the number of micro enterprises, have a significantly negative effect on the poverty rate. On the other hand, micro-enterprise worker and the number of small enterprises have a positive and significant effect on poverty rate.
Highlights
Development and poverty are like two sides of a coin, and both go together in an attempt to improve or as part of underdevelopment and inability to meet the basic needs of life
The highest poverty rate is in Papua Province with 28.7% and the lowest poverty rate is in DKI Jakarta Province with 3.79%
For the number of micro enterprises, Central Java Province has the largest number with 792,822 units, and West Papua Province has the lowest number with 2,138 units
Summary
Development and poverty are like two sides of a coin, and both go together in an attempt to improve or as part of underdevelopment and inability to meet the basic needs of life. The poverty rate had decreased in Indonesia since the beginning of the New Order era. It went from about 40% in 1970 to 17.5% in 1996. After the Asian monetary crisis of 1997-1998, the poverty rate (due to the forced closure of a large number of industries/companies and reduced production volume) increased to 24.2% in 1998. It started to decline every year and was recorded at 12.5% in 2011. Papua has turned to be the poorest province, and DKI Jakarta has the lowest rate of about 4%
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