Inequality of Income Distribution in Rural and Urban Poor Communities (A Case Study on Former Beneficiaries of PNPM-M Program in Banyumas Regency)

Dijan Rahajuni,Lilis Siti Badriah,Suprapto Suprapto,Sri Lestari,Ascaryan Rafinda

doi:10.20884/1.erjpe.2017.12.2.1140

Dijan Rahajuni, Lilis Siti Badriah + Show 3 more

Open Access

https://doi.org/10.20884/1.erjpe.2017.12.2.1140

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Abstract

The success of economic development should not only focus on economic growth, but also efforts to increase income and purchasing power along with equal income distribution. Inequality of income distribution is a problem that must be addressed immediately because it will have a broad impact on the next development process. The object of this research was poor communities as the beneficiaries of revolving loan of The National Program for Community Empowerment-Independent (PNPM-M). The research method was survey on beneficiary respondents in urban areas (PNPM-MP) and rural areas (PNPM-PMd), conducted using a questionnaire. Data analysis in this research used income distribution inequality criteria from World Bank and Gini Ratio. The result found that more than 50% of respondents both in groups and areas had low income and did not meet the standard for decent living standard (KHL). The average respondents income distribution both in the groups or areas according to the World Bank and Gini Ratio criteria was in the moderate category. However according to areas, inequality of income distribution in rural areas was higher than in urban areas. To minimize income inequality between the communities, community groups and areas, it is necessary to empower the community based on the potential of local economic resources.Keywords: Income Distribution, PNPM-M, KHL, Gini Ratio

Highlights

Economic growth in Indonesia surpasses population growth, but poverty still persists
Condition of Income Distribution of NPM-MP and PNPM-MPd Loan Beneficiaries Based on World Bank Criteria, and Low, Moderate, and High Inequality Overall, seeing from condition of income distribution in each urban village/village, sub-district samples both in urban and rural areas, and all samples in Banyumas Regency areas, the category of respondent condition in low income group is more than 50% of total respondents, even the overall PNPM-MPd beneficiaries in sample area reach 86%, while the percentage of PNPM-MP beneficiaries is only 66%
More than 50% of respondents are in low-income group calculated based on the respondents domicile group, program in the areas, and overall areas

Summary

Introduction

Economic growth in Indonesia surpasses population growth, but poverty still persists. In September 2016, the percentage of poor people in urban areas was 7.73 percent, while the percentage in rural areas was 13.96 percent. The number of poor people in rural areas is higher than in urban areas. Number of poor people reaching 14.83 million people (10.09%), divided into urban poverty of 7.04 million people (7.72%) and rural poverty of 7.79 million people (13.94%). This condition shows the difference in the number of poor people between urban and rural areas. The high poverty rate indicates the difference in community income distribution, both in urban and rural areas

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