Challenges on Bulletin of Indonesian Economic Studies



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Poverty puts an individual into a state of hopelessness, lack of self-esteem, powerlessness, lack of confidence, and meaning of life. Various studies state an alarmingly high level of poverty in the countries incredibly the least developed and developing countries. In China, eradication of poverty has been among the resettlement. Issues like change in climate, scarcity of water, desertification, and loss of biodiversity pose significant challenges to agriculture which is the primary poverty alleviation tool. Poverty alleviation refers to a set of social and economic strategies intended to contain poverty among individuals. Cooperatives provide micro-credit to the less fortunate families at market interest rates. Since the wealthy farmers require enormous amounts of credits, they limit the loans to a certain amount to allow the poor farmers to access them.  The provision of low-interest rates for borrowing by the institutions also assists the financial structures in increasing. This swift growth among rural financial setups contributes heavily to the promotion of poor area’s development.  Cooperatives are widely known for their efforts in the reduction of poverty. All these cooperatives, be it social or economic, are fantastic mechanisms that guarantee the communities’ prosperity in the least, and developing states that often lack capital and education access have cooperatives as the primary mechanism supporting the less fortunate communities. They help these nations put together the available resources to solve their issues, common identification objectives, and aim for the sources and indications of poverty. Cooperatives often target to support agriculture as the main driver in poverty eradication. There exists considerable evidence supporting agriculture to have contributed sufficiently towards reducing poverty.

Farmer cooperatives have been viewed as the best contributor to the poverty alleviation campaign.  (Wu and Xu 2019). Ministry of Agriculture presented data that displayed approximately 2 billion registered cooperatives in China. This meant that every village had an average of 3 cooperatives. Farmers who had joined these cooperatives accounted for 48% of the overall farmers in the country. This indicates that cooperatives have grown to be among the most effective mechanism in the efforts to fight poverty. It is essential to support agriculture through various ways to ensure it provides more income and more job openings.  Bresciani and Valdes emphasized that the contribution of agriculture towards poverty reduction has been widely appreciated and is higher than the agricultural GDP share.


There is a dire need to establish innovative and mutual partnerships between private, public, and other sectors like NGOs for practical efforts towards the fight. Approachable structures within the government assure comprehensive gratification of human, economic, and social rights. This consequently allows different actors to take part in poverty alleviation effectively. There ought to be effective harmonization between government and non-governmental actors to avoid repetition: forming an empowering environment that permits non-governmental actors to impact on policies related to poverty eradication. Reformation of existing states and their structures like the regionalized planning and establishment of county poverty eradication secretariates to bring together the organizations involved in the alleviation f poverty at the grassroots level. To eradicate poverty programs effectively, the state must advance its governance and command its institutions to work for the poor people tirelessly. The government can work towards developing steady and statutory arrangements. This can be done by decentralizing power, enforcement of the law, securing property rights, transparent management of resources, encouraging investments among the private sectors, particularly in production and creation of markets for agricultural goods.  Civil societies ought to be supported by both the public and private sectors to deliver. NGOs, religious structures, and CBOs must be supportive in the facilitation of agricultural products. The stakeholders involved in poverty eradication must stick to the bottom-up approach. This involves the involvement of local communities in every phase of the project and policymaking. The state can come up with societal rules that enable the blossoming of markets and formulate policies that support equal resource allocation to boost the well-being of citizens.

To eradicate poverty there is a need to provide adequate physical and financial capacities. Adequately resourced states are only the ones who can beat poverty in modern days. Cooperatives provide micro-credit to the less fortunate families at market interest rates. Since the wealthy farmers require significant amounts of credits, they limit the loans to a certain amount to allow the poor farmers to access them.  The provision of low-interest rates for borrowing by the institutions also assists the financial structures in increasing. This swift growth among rural financial setups contributes heavily to the promotion of poor areas’ development.  The Civil Society’s role is to complement the private sector’s role towards poverty reduction.  The two acts as a catalyst to ensure positive change within a government and advocate for the poor.  Here we involve local and worldwide NGOs concerned with the alleviation of poverty. civil society’s strength  towards developing nations varies according to various factors; among them is the strength of the country itself



Through the adoption of modern new technologies, poor farmers can get on-farm benefits. For this to happen, with the help of research, the technologies should be suitable for the conditions of farming of the less fortunate people. The farmers must be provided with the necessary knowledge and resources to use the technologies. The institutions providing the services and resources should not be biased, for instance, favoring the large farms. The services should be accessible to the poor with their small pieces of land and no resources. The poor also require safe ownership to invest in modern technologies that may not have immediate yields.   Insecure ownership of the land may put the farmers in a precarious position of eviction when the well-off farmers decide to expand their farms resulting from the advanced technologies with more returns.


Private firms have been of great support in the reduction of poverty among individuals. They do it through investments and dispersal of reasonable practices to farmers. Private sectors could alleviate poverty via different channels. The first way is via the taxes made to the government. These taxes are then utilized to go through the taxes they pay to the government, which could then be used to back up public services. The poor individuals benefit a lot from the taxes assuming the pro-poor state of the essential services, such as in Indonesia, where spending on education systems and public health is pro-poor (Sparrow et al. 2020). The other way is via investment of capital. For instance, the creation of a store can create employment. Narayan et al. (2011), in their discussions with the poor citizens, found that securing employment is among the successful ways of escaping poverty.  Lastly, the other channel is creating competition that will boost productivity and result in low prices of essential products that will benefit society. Klein (2011) claims that the productivity that boosts characteristic is among the significant differences between the private and public sectors.


The challenges and limitation that have hindered the alleviation of poverty are as follows:



Poor Governance

Poor governance has made it hard to alleviate poverty among citizens of a particular state. The link amidst resource distribution, specifically the management of natural resources, highly depends on the governance systems. Pro-poor development and management of resources sustainably will call for sustainable resource management will immediate modifications in governance. Poor governance has resulted in unequal distribution of resources.  Schools play a vital role in the long-term reduction of poverty. Poor governance has failed to provide affordable education among citizens. This means the low-income families will continue being poor.

Most nations have fallen under the low wage category due to Fluctuations in employments resulting from recent pandemics.

Initially, there were well-paying jobs, even the industrial ones that do not require high education. Later the good jobs were no more. The introduction of technology has replaced the individuals who worked in various positions.   The appearance of new jobs, even with education, is paying way less than the lost ones. For instance, in America, a quarter of the employments pay below the line of poverty that is less than 23ooo dollars annually.


Family structure

The structure of the family has also participated in increased poverty that has been hard to eradicate. The number of single mothers is increasing every day. With the current economy, a two-earner family setup is fundamental regardless of whether the family is poor or not.  Poverty among single mothers with kids to raise has been widespread in these modern days. A woman who is not interested in getting married should have a well-paying job that will sustain her family entirely, and with the current low wages in the world, it is close to impossible.


.           Poverty alleviation has several positive impacts on the citizens. They include advanced access to food that leads to more excellent health, access to improved education systems, and numerous job openings. The reasons for cutting down poverty calls for all-inclusive reforms to create an opportunity for everyone and minimize the number of households that live in complete poverty. There is a need for the implementation of specific approaches to minimize the number of single mothers. This will consequently minimize the number of children that suffer in poverty.  There is a need to take care of agriculture and try as much as possible to advance it y use new technologies as it’s the primary driver of poverty alleviation. Together with other sectors, the government should take part and invest heavily in agriculture and if it needs to eradicate poverty easily and everywhere.  This can also be done by creating better markets for agricultural products that will boost farmers. Poverty has had a massive role in the weakening of democracy. The political leaders have taken advantage of citizens’ situations.  This has resulted in a system with unbalanced voices in which the poor fail to exercise their citizenship rights. Those that are well off are the ones that make decisions, and the state officials hear their voices.






In conclusion, technological innovation can be very critical for the growth of agricultural cooperatives. It ensures survival among the developing and transitioning states.  (Garnevska et al., 2018)

The growth of agriculture will continue to reduce poverty; this is because it is more labor-intensive and accessible to every poor household. What the government needs to do is advancing ways of farming, for instance, by supporting agricultural research.
















Zhang, H., Xu, Z., Wu, K., Zhou, D., & Wei, G. (2019). Multi-dimensional poverty measurement for photovoltaic poverty alleviation areas: Evidence from pilot counties in China. Journal of Cleaner Production241, 118382.

Sparrow, R., Dartanto, T., & Hartwig, R. (2020). Indonesia under the new normal: Challenges and the way ahead. Bulletin of Indonesian Economic Studies56(3), 269-299.

Williams, G., Thampi, B. V., Narayana, D., Nandigama, S., & Bhattacharyya, D. (2011). Performing participatory citizenship–politics and power in Kerala’s Kudumbashree program. Journal of Development Studies47(8), 1261-1280.

Sietz, D., Boschütz, M., & Klein, R. J. (2011). Mainstreaming climate adaptation into development assistance: rationale, institutional barriers, and opportunities in Mozambique. Environmental Science & Policy14(4), 493-502.

Maspaitella, M., Garnevska, E., Siddique, M. I., & Shadbolt, N. (2018). Towards high-value markets: a case study of smallholder vegetable farmers in Indonesia. International Food and Agribusiness Management Review21(1030-2018-051), 73-88.




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