The most pressing political-economic issue facing Indonesia is poverty reduction. The Department of Defense’s role in this regard is to provide support in enabling the government’s delivery system with regard to the numerous programs and projects administered or co-joined with various domestic and international agencies, both public as well as private.

Poverty in Indonesia, measured in income terms, affect 48% of Indonesia’s total population of 220 million. The government’s Medium Term Development Program (Rencana Jangka Menengah, RPJM) aims to reduce the poverty head count from 18.2 percent in 2004 to roughly 8.4 percent by 2009. When the plan was announced in the first cabinet meeting in late October 2004, no one foresaw the various domestic and international crises that would severely affect the trajectory of the poverty reduction programs.

Following the tsunami in late December 2004, there occurred earthquakes, mudflows, rice crises, the spike in international oil price rises and a host of residual social and ethnic conflicts throughout the archipelago arising from the crises of 7-8 years before. In addition, other natural and man-made disasters severely diverted the government’s resources to effectively alleviate poverty at the scope and speed that was originally targeted in late October 2004.

The World Bank’s Jakarta Office, in its outstanding report “Making the New Indonesia Work for The Poor” (November 2006) makes a clear case for the urgency that in addition to income-poverty, Indonesia still faces a long and difficult journey in pursuing programs to drastically reduce non-income poverty: malnutrition among a quarter of all children below the age of five; high maternal mortality rates (307 deaths in 100.00 births); education outcomes remain weak (among 16-18 year olds from the poorest quintile, only 55 percent completed junior high school (Sekolah Menengah Pertama, SMP); access to safe and clean water is slow (43 percent in rural areas, 78 percent in urban areas for the lowest quintile).