SOCIAL, ECONOMIC AND DEMOGRAPHIC TREND
IN INDONESIA DURING 1960 - 1994 1
By Prijono Tjiptoherijanto
Indonesia

Introduction

The ultimate goal of Indonesian national development is to achieve the total human being (manusia Indonesia seutuhnya). This concept refers to people with a prosperous and high quality of life, in a balanced and harmonious state related to all the surroundings; their social, natural and manmade environments. This central role puts population in the position as the determinant of sustained economic growth, sustainable development and environmental conditions, while recognizing that population is also affected by the environment and development efforts.

Several social, economic and demographic indicators show that population welfare has been increasing substantially as an effect of economic growth as well as population and social program since Indonesia launched its first Five-Years Development Plan (Repelita) in 1969. This paper describes social, economic and demographic trends in Indonesia between 1960 and 1994. However, due to the availability of data, this description mostly begins with data from the year of 1971.

Economic Development

Before the first Five-Years Development Plan was launched, the economic situation in Indonesia was very unsatisfactory. Income per capita was only US$70, inflation rate was above 100 percent, even during the period between 1961 and 1966 was 330 percent, and the annual GDP growth was only 2.1 percent.

Since the government took up the new order, economic reformation became the first and main job of the government. The state's guidelines of economic restructuring during the First Long Term Development Plan (PJP I: 1969-1993) rested on three cornerstones which are import substitution industrialization, green revolution and resource exploration for international markets. The consistency of this guidelines and very careful economic management lead Indonesia to the impressive record of economic development since the first Five-Years Development Plan (Repelita I) was launched. Economic growth was very high, simultaneously with low inflation rate and manageable foreign reserve.

Table 1: Macro Economic Indicators 1961 - 1994

During the 1970s, Indonesia's economy has developed steadily mostly because of the oil revenue. At that time, oil product recorded as high as 73 percent of the total export. Unfortunately, since the oil price has decreased in the early 1980s, it affected the economic growth. During the period between 1980 and 1985, the annual GDP rose by only around 2.5 percent. This was the lowest economy growth since the Repelita was launched.

Expansion of manufacturing and construction sectors in line with the policy to balance the export of oil and non oil was influencing the economy development after the year of 1985. Between 1985 and 1994, Indonesia has been successful in maintaining the economy growth at above 6 percent per year with the inflation rate under 10 percent. However, since the debt-service payment is still high, the deregulation and liberalization of the national economy should be continued in the future.

Table-2: The Changing Composition of Indonesia's Export
1983 and 1991

Poverty Alleviation

The Central Bureau of Statistics sets a poverty line based on the expenditures required to purchase 2,100 calories a day and allowances for essential non-food expenditures. In 1993, the poverty line was calculated at 18,244 rupiahs in rural areas and 27,905 rupiahs in urban areas for one person on per month basis. Moreover, specific regional conditions are also taken into consideration.

Considering the development process for the last fifteen years, much progress had been made in reducing poverty in Indonesia as seen in Table-3. As indicated in the table, in 1976, of the total population of 135 million people, 54.2 million people or 40.1% were living below the poverty line. In 1993, of the total 172 million people, those living below the poverty line had decreased to 25.9 million people or only 13.6%.

Table-3: Poverty Distribution 1976-1993

The number of people living below the poverty line decreases each year by about 12.6%. The fastest decrease is taking place in the rural areas (16.3% per annum), while it is only 0.6% in the urban centers. The rather rapid decrease of poverty in the rural areas compared to the urban centers is mostly caused by the urbanization of the low income and low educated segment of the population. However, it should be noted that the recent slowdown in the decline in poverty is probably attributable to the slowdown in the growth of per capita income. In addition, it is probably true that the costs of reducing the number of people in poverty may increase as the number and percent of people living in poverty get smaller and as their poverty is less responsive to general growth compared to the sectoral and regional issues.

Apart from absolute poverty, the level of inequality, which is expressed by the distribution of income, personal and regional, is also relatively low as indicated by the trend in the Gini Coefficient (estimated from the distribution of personal expenditure), which fell from 0.35 in 1970 (0.38 in 1978) to 0.32 in 1990.

Level of Education

Since the massive program of education for all was launched in Indonesia in 1984 through the compulsory education at the primary school, the literacy rate of population aged 10 years and over has increased dramatically from 59.6 percent in 1971 to 84 percent in 1990. The improvement of the literacy rate is also followed by the increase of school attainment and enrollment. In 1990, more than 92 percent of the children at primary school ages (7 to 12 years old) were enrolled in primary school, while in 1971, only 60 percent of those were enrolled in the primary school. The percentage of primary school graduates increased from 19.6 percent in 1971 to 36.2 percent in 1990, whereas the percentage of population aged 10 years and over who completed primary school or higher increased from 26.4 percent in 1971 to 61.8 percent in 1990.

Table-4: Percentage of Population Aged 10 Years
and Over by Education Attainment

Although the status of women's education increases steadily over the period of time, data show that there was still a gap between males and females in the level of education. The higher the level of education, the bigger the disparity between males and females. In 1990, the percentage of males enrolled in junior high school was 44.5 percent, while that of females was only 38 percent. At the university level, the percentage of males' enrollment was 13.8 percent, far higher than females' one which was only 8.7 percent. Besides the gap between males and females, the other issues on education in Indonesia that should be considered by government are the uneven distribution of school and higher teaching institutions between urban and rural areas and also between Java island and areas outside Java island.

Labor Force Participation

Regarding the current age structure of Indonesian population, data indicate that the number of the reproductive working-age of 15 to 60 years is growing faster than that of other age groups. Because of changes in labor participation rates over the years, particularly among women, and changes in age structure of the population, the rate of increase of the labor force has been higher than that of population increase.

While the average population growth rate in the 1980s was 1.9 percent annually, the average labor force increase was recorded as high as 2. 8 percent per year. The increase in the percentage of the labor force is remarkable, from 46.8 percent in 1971 to 53 percent in 1990. The increase was also, in a substantial degree, caused by the increase in participation of women in the labor force. The participation of female labor force has increased steadily from 32.6 percent in 1980 to 39.6 percent in 1985 and over 39.6 percent in 1990. While, the participation of male labor force during the same period has increased from 68.8 percent in 1980 to 68.9 percent in 1985 and 70.6 percent in 1990. Above figures show that the growth of female labor force participation is much faster than that of male labor force participation.

The need to improve the family economic conditions has caused substantial number of women to leave their traditional role as housekeeper. There was a marked decline in the percentage of the population involved in housekeeping only. In 1971, the percentage of housekeeping was 24.5 percent and it was down to 18.5 percent in 1990.

In the past two decades, there has been shift in the structure of employment. In 1971, around 64.2 percent of the total employment in Indonesia was in agriculture sector, while in 1990, this percentage decreased to 49.9 percent. The remainder of the employment was in other sectors of the economy. Three sectors have significantly increased their share of employment in 1990, which are trade (14.7 percent), service (13.1 percent) and manufacturing (11.4 percent). This was as a result of industrial development in 1970s and 1980s.

Population Size, Structure and Composition

The trend of basic demographic indicators such as total population number, mortality, fertility, growth rate, etc. between 1961 and 1994 is shown in Table-5. The Indonesian population has increased by almost 147 percent during the past four decades. In 1950, the total number of population was estimated at 77.3 million people, while the number of inhabitants in the country was 192.2 million in 1994.

The annual population growth rate in 1961 was estimated at 1.56 percent and that in the 1971-1980 period increased to nearly 2.32 percent before slowing down to around 1.63 percent by the year of 1994. The decline of the population growth is regarded as success in family planning program that was launched for the first time in 1968. But given the high growth rates in the past resulting in the growth of the young population, the absolute number of population is expected to continue growing. However, instead of doubling its size in 30 years (by the rate of growth 2.32 percent between 1971 and 1980), the population size will be doubled in about 35 years with the current population growth.

Even though the number of birth dropped and the life expectancy increased dramatically, the age structure is still considered "young" and "expansive. " Most of each age cohort is significantly larger than the cohort born before. In accordance with the situation of age structure, the dependency ratio is still high. In 1971, the dependency ratio was 87.0 and it dropped to 79.1 in 1980 and 67.7 in 1990.

The proportion of the population under 15 years old has been declining from 44.0 percent in 1971 to 41.0 percent in 1980 and 37.0 percent in 1990, while that of the population over 60 years old has been increasing from 2.5 percent in 1971 to 3.8 percent in 1990. This was related to the improvement of health and nutritional status which enhances the life expectancy and life span of the population.

The pattern of demographic transition in Indonesia is not too different from what occurred in the developed countries. However, the speed is so much faster. Some provinces such as D.I. Yogyakarta, East Java, DKI Jakarta and Bali have already achieved replacement level within 25 years of development progress.

Table-5: Basic Demographic Indicators 1961-1994

Fertility Trends

There is no question about that the fertility rate in Indonesia has declined steadily since the national family planning was launched for the first time in 1968. In 1961, Crude Birth Rate was 46 percent and it remained high in 1971 (40.6 percent). But after 1971, CBR dropped very fast and steadily and was estimated at 24 percent in 1994. The total fertility rate (TFR) has declined rapidly since 1971. During the period between 1967 and 1971, women had an average of 5.6 children during their reproductive lives and the average declined to 2.8 in 1994.

Indonesia's experience in fertility transition is largely related to the expansion of family planning programs, the wider use of contraceptives, the increase in level of education, especially among women, and the wider coverage of primary health care programs. In the recent time, more than 47.1 percent of married women are using modern method of contraception during their child bearing years. This figure varies according to provinces; 70 percent in Bali, 57 percent in Yogyakarta, 20.4 percent in East Timor and 18.9 percent in Irian Jaya.

There is a wide variation in the TFR among the provinces in Indonesia. Some provinces such as Jakarta, Yogyakarta, Bali and East Java already reached TFR below 2.5, while the TFR in the rest of the country is still 3.0 or higher. Even in West Nusa Tenggara, the TFR has declined very slowly from 6.65 in 1971 to 4.97 in 1990.

Mortality Trend

As well as fertility, Indonesia has a great experience of declining mortality, particularly infant mortality, since 1971. However, compared to other ASEAN countries, mortality in Indonesia still remains relatively high. Crude death rate in 1971 was estimated at 19.1 and it dropped to 7.8. Meanwhile, infant mortality has declined faster than CDR from 145 per 1000 live births in 1971 to 57 per 1000 live births in 1994. Similarly, life expectancy at birth increases dramatically from 45.7 years in 1971 to 63. 1 years in 1994. The lowest infant mortality in 1990 was found in Jakarta (40 per 1000 live births), while the highest was found in West Nusa Tenggara (145). Meanwhile, the maternal mortality rate (MMR) has decreased very slowly from 450 per 100,000 births in 1986 to 350 per 100,000 births in 1994.

The decrease of mortality in Indonesia was accompanied by shifts in the cause of death in all age groups. Although the cause of death is still dominated by the infectious diseases, the proportion of people's death caused by cardiovascular and other degenerative diseases tends to increase. It reflects that epidemiological transition has occurred in Indonesia. However, it can not be classified as a traditional epidemiological transition since the increase in non-infectious diseases is still accompanied by high incidence of infectious diseases. This means that epidemilogical transition has experienced polarization, which makes intervention more difficult. Furthermore, about 60 percent of the cause of infant and child death are related to acute respiratory infection, diarrhoea, neo-natal tetanus and malnutrition.

Population Distribution and Mobility

Based on the 1990 Population Census, Java island, which is only 4 percent of the total area, was occupied by 60 percent of the total population. Meanwhile, at the same time, only 5.1 percent of the total population lived in Kalimantan. During the period between 1961 and 1990, the proportion of the population who lived in Java island has decreased only by 5 percent, and that in Sumatra has increased by 4.1 percent (see Table-6).

Table-6: Population Distribution by Island, 1961, 1971, 1980, 1990

The main stream of migration in Indonesia is still dominant between Java island and Sumatra island. In 1990, of the total population, about 17 million people or 9.9 percent moved across the country. This number increased from about 11 million or 7.8 percent of the total population in 1980, and the total migration number increased by 55.8 percent during the period of 10 years. About 50 percent of the total migration event in Indonesia occurred in Java island, 30.6 percent in Sumatra and the rest in other islands. These figures reflect that Java and Sumatra Islands still dominate the migration stream in Indonesia, even though the proportion of the migrants to Sumatra island slightly decreased during the period between 1980 and 1990.

Data on migration flow show that Jakarta is still the attractive area as a destination of migration. In 1990, 39.9 percent of the total population in Jakarta were migrants. At the same time (the year of 1990), other attractive provinces were West Java, Lampung, East Kalimantan, Riau and Yogyakarta. On the contrary, West Nusa Tenggara, East Nusa Tenggara, South Kalimantan and North Sumatra were less attractive provinces.

The proportion of population who live in urban areas has increased from 14.8 percent in 1961 to 33 percent in 1994 with an annual growth rate of around 5 to 7 percent. Meanwhile, the annual growth rate of rural population during the same period was 1 to 2 percent. The highest level of urbanization occurred in Java island and about 63 percent of it were due to the ruralr-to-urban migration and reclassification, while only 37 percent were due to the natural increase in urban areas. In consequence of urban development, the number of metropolitan areas in Indonesia has increased rapidly. In 1950, Jakarta was the only one city with more than one million inhabitants, while in 1990, there were eight cities with more than one million inhabitants which were OKI Jakarta, Bandung, Surabaya, Medan, Semarang, Palembang, Bogor and Ujung Pandang.

Another component of urbanization that also needs to be analyzed is primacy rate. The concept of primacy rate refers to how significantly the largest city influences the other surrounding cities. At the national level, "the primacy rate" in Indonesia is still at acceptable level. However, if the analysis is down into the regional level, it is clear that "the primacy rate" in several regions should be concerned. The development of Ujung Pandang in South Sulawesi, for example, is not supported by other medium cities. Consequently, the influence of Ujung Pandang to surrounding cities is relatively high.

There are tendencies among several large cities to keep growing larger, and then form the so-called metropolitan cities. Jakarta, the capital, for example, has long been the largest city in the Southeast Asian region with an estimated 9 million people in 1995. It is expected to become one of the largest cities in the world within the next fifteen years, if it continues to grow at its present rate.

References

1. The State Ministry for Population and Environment Jakarta, 1992, Penduduk Indonesia selama Pembangunan Jangka Panjang Tahap Pertama.
   
2. The State Ministry for Population/NFPCB Jakarta, 1994 Indonesia Country Report: Population and Development.
   
3. The International Bank of Reconstruction and Development, 1990, Indonesia: Poverty Assessment and Strategy Report, Washington DC.
   
4. World Bank, Indonesia : Sustaining Development, Washington,D.C, USA, January 1994
   
5. Gustav F. Papanek, 1987, Ekonomi Indonesia, PT Gramedia, Jakarta, Indonesia, 1987.
   
6. Kartomo Wirosuhardjo, 1992 Development, Environmental and Population Planning; the Case of Indonesia, Paper presented at the Expert Group Meeting on Population, Environment and Development, United Nations Headquarters, 20-24 January 1992.
   
7. Mochtaram Karyoedi, 1993 Kajian Pola Persebaran Penduduk Perkotaan di Indonesia, Makalah dipresentasikan dalam Pertemuan Kajian Pola Persebaran Penduduk di Daerah Perkotaan, Kantor Menteri Negara Kependudukan/BKKBN, Bandung 26-27 Nov 1993.
   
8. Prijono Tjiptoherijanto, 1994, Recent Picture of the Indonesian Economy, paper presented at the seminar on "Media's Role in Asia's New Marker Economies" organized by the Asian Institute for Development Communication (AIDC), Penang, Malaysia, 15-17 December 1994.
   
9. Prijono Tjiptoherijanto, 1994, Pola Persebaran dan Mobilitas Penduduk di Indonesia, paper presented at the seminar on "Development of Eastern Part of Indonesia" organized by the State Ministry for Population/NFPCB, Jakarta, 21 December 1994.
   
10. Prijono Tjiptoherijanto, 1995, Relationship between Transmigration, Urbanization and Poverty Alleviation in Indonesia, paper submitted for an 'International Seminar on Population Resettlement for Poverty Alleviation,' Jakarta 27 November -1 December 1995
    
11. Sjahrir, 1995, Catalan Ekonomi Indonesia, Adhiprint, Jakarta, Indonesia, 1995.

Jakarta, November 1995
Prijono Tjiptoherijanto

1 Paper submitted to Asian Urban Information Center of Kobe, Japan, November 1995