The middle class in Indonesia is like an idle land that needs attention. If the policy to cultivate the land is right, it will become fertile and productive land. Unfortunately, the land is still lacking attention. The middle class seems to be languishing, not prospering.
The condition of Indonesia's less prosperous middle class is captured in the SUAR Team's Business World Universe Survey. Some of the findings:
- The majority (76.3%) of the interviewees, consisting of corporate decision-makers and economic observers, were of the opinion that the middle class in Indonesia is not yet prosperous.
- The strongest reasons cited are low purchasing power and limited savings.
- The majority of interviewees also said that this middle-class group has not received adequate attention from the government (76.3%).
- Policies that are considered to help the middle class become more prosperous include providing formal employment and providing tax incentives or facilities.
- The government needs to expand the scope of social protection to target not only the poor, but also the middle class.
The definition of the middle class according to the World Bank is a group of people with expenditures that are in the range of 3.5-17 times above the poverty line. With the calculation that the poverty line in 2024 is Rp 595,242, the middle-class expenditure ranges from Rp 2 million to Rp 10 million per month.
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It is not without reason that the middle class demands more serious attention from the government. In terms of quantity, the number of middle-class Indonesians is trending downwards. Meanwhile, in terms of quality, they can easily slip into poverty in the event of an economic shock.
Economically, the middle class is actually the engine of growth through consumption and job creation. Meanwhile, from a socio-political perspective, this group, which generally has high education and skills, is a critical group and dares to voice their aspirations to the government.
If the middle class is neglected, economically they have the potential to fall into poverty and will become a burden on the government so that a larger budget must be allocated to the poor. If the aspirations of the middle class are not heard, the potential for socio-political instability will grow.
It is necessary to formulate appropriate social protection instruments for the middle class population so that this group plays an optimal role economically, socially and politically. If this can be done, the path for Indonesia to move towards a high-income country will be easier.
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