THE EFFECT OF ECONOMIC GROWTH AND HUMAN DEVELOPMENT INDEX ON POVERTY IN INDONESIA

Indonesia’s economic growth, which ranges from 5% - 6% per year, apparently has not been able to reduce the number of poor people. There has even been an increase in the total of poor people, which is currently around 37 million people. A World Bank study shows that almost 50% of Indonesia’s population is categorised as “poor” and “on the verge of poverty”. The problem of poverty deserves significant attention from all parties. Economic growth accompanied by an increase in the number of poor people is certainly inviting several questions, such as who is enjoying the economic growth and whether the economic growth is caused by increased productivity or the use of factors of production, etc. In Indonesia, economic growth seems to be concentrated in specific sectors, while some other areas have relatively slow growth that poverty reduction is difficult. Hence, research on economic growth, human development, and poverty levels in Indonesia is warranted. The results are expected to explain the phenomenon of increasing poverty in Indonesia.