The decline in the poverty rate in the Special Region of Yogyakarta (DIY) in March 2026 is considered a positive achievement. However, Wisnu Setiadi Nugroho, Ph.D., a lecturer at the Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada (FEB UGM), said that behind this achievement lie persistent regional and social inequality issues that require greater attention.
The Central Statistics Agency (BPS) released in early August showed that the percentage of people living in poverty in the Special Region of Yogyakarta in March 2026 fell by 0.38 percentage points from September 2025. However, there is another paradox that is discussed less frequently. While poverty has declined, inequality has actually increased, and the increase has occurred precisely in the area with the lowest poverty rate,” Wisnu said in a written statement on Wednesday (19/8).
According to BPS data, the poverty rate in DIY stood at 9.70 percent in March 2026, down 0.38 percentage points from September 2025. The number of people living in poverty also declined from 422,700 to 408,000. Wisnu said the decline should be appreciated, as it represents the steepest reduction in Java and brings DIY back on track toward achieving a single-digit poverty rate, as targeted in the 2026 Regional Development Work Plan.
Wisnu noted that several programs had contributed to this achievement, including the revitalization of Lumbung Mataraman, labor-intensive programs, MSME empowerment, the renovation of 9,227 uninhabitable houses between 2023 and 2025, and the utilization of the National Single Socioeconomic Data in eight priority locations.
At the city level, programs such as Gandeng Gendong and Kartu Menuju Sejahtera demonstrate that cross-sectoral coordination can work to promote program integration in targeting poor households.
Regional Inequality Remains Wide
Although poverty in DIY has declined, Wisnu cautioned against interpreting the figure solely as an aggregate statistic. There remains a substantial disparity in poverty rates among districts and the city.
Based on 2024 BPS data, the poverty rate was 15.62 percent in Kulon Progo and 15.18 percent in Gunungkidul. Meanwhile, the poverty rate in Bantul reached 11.66 percent, compared with 7.46 percent in Sleman and 6.26 percent in Yogyakarta City.
The pattern remained evident in more recent data. In 2025, the poverty rate in Bantul stood at 11.54 percent, while Yogyakarta City recorded a lower rate of 6.14 percent.
“This means that a resident of Kulon Progo faces a likelihood of living below the poverty line more than twice that of a resident of Yogyakarta City, despite living in the same province and under the same provincial government,” Wisnu said.
The Yogyakarta Regional House of Representatives (DPRD DIY), during discussions on the 2025 Governor’s Accountability Report, described this disparity as a “yellow light,” highlighting Kulon Progo, Bantul, and Gunungkidul as areas requiring more targeted interventions. The distribution of priority locations further illustrates the issue. Of the 18 kapanewon and kemantren designated as priority areas, seven are located in Gunungkidul, two in Bantul, one in Sleman, and three in Yogyakarta City.
Poverty Declines, Inequality Rises
Wisnu emphasized that inequality is an issue that requires serious attention. The decline in poverty has occurred alongside persistently high income inequality.
“When poverty declines, inequality actually rises, and it rises precisely where poverty is at its lowest,” he said.
DIY’s Gini ratio stood at 0.411 in March 2026, placing the province among the three regions with the highest levels of inequality in Indonesia. The situation is even more apparent in Yogyakarta City. Despite having the lowest poverty rate in DIY, the city recorded a Gini ratio of 0.449 in 2024, the highest among all districts and cities in the province.
Wisnu said this condition illustrates the paradox of development in DIY. Poverty is relatively under control, but the gap between high- and low-income groups continues to widen. DIY’s economic growth, which reached 5.75 percent in the second quarter of 2026—the highest in Java—has also not automatically ensured that the benefits of growth are distributed evenly.
“Why does this paradox occur in a region known as a center of education and culture, and which has the highest Human Development Index in Indonesia? In my view, the answer lies with two groups at opposite ends of the life cycle. Both remain insufficiently reached by the existing social protection system,” he explained.
Elderly People and Young Workers Need Greater Attention
According to Wisnu, one group requiring greater attention is the elderly. DIY has the highest proportion of older adults among Indonesia’s provinces. Based on the 2025 Intercensal Population Survey, older adults accounted for 17.83 percent of the population in DIY, or approximately 674,000 people, significantly above the national average of 11.97 percent.
The issue is that many older adults enter old age after spending their productive years working in the informal sector. As a result, they lack adequate old-age protection.
“The problem is not the number of elderly people, but the system that supports them. Old-age security in Indonesia is tied to formal employment, while most elderly people in DIY spent their productive years in the informal sector,” Wisnu emphasized.
The DIY Regional Government has provided Social Security Assistance for the Elderly, amounting to Rp300,000 per person per month since April 2024. However, Wisnu noted that the program targets approximately 8,000 older adults listed in the extreme poverty database, representing less than two percent of the province’s elderly population. Moreover, the assistance remains limited in coverage and primarily focuses on meeting basic needs.
In reality, caring for older adults can impose a greater economic burden on families. When an older adult requires daily assistance, the burden often falls on family members, particularly women of working age, who may subsequently reduce their working hours or leave the workforce altogether.
“One unprotected elderly person can pull two generations down at once,” he said.
Meanwhile, young people of working age face a different set of challenges. The proportion of young people who are not in education, employment, or training (NEET) in DIY stood at 11.25 percent. This figure is relatively low compared with the national average of 19.44 percent, making DIY the province with the second-lowest NEET rate nationally after Bali.
However, Wisnu argued that the issue facing young people in DIY is not simply whether they have jobs, but also the quality of those jobs and their wages. The 2026 provincial minimum wage in DIY of Rp2.41 million covers only around 53 percent of the decent living needs, which amount to Rp4.6 million.
“The minimum wage is among the three lowest nationally, while the cost of living in Yogyakarta is relatively high. The consequence is predictable: even when working full-time, people may still be unable to save, rent decent housing, let alone buy a home,” he said.
This situation leaves some workers outside the category of people considered poor and, therefore, ineligible for social assistance. At the same time, they may not be covered by employment social security because they work in the informal sector.
“This is the group referred to in policy literature as the missing middle—too well-off to receive assistance, yet too vulnerable to be left on their own,” he explained.
Promoting Agrotechnology and Higher-Value Tourism
Wisnu believes these issues cannot be addressed simply by expanding social assistance. Social protection remains important to prevent people from falling deeper into poverty, but local economic transformation is also needed to enable communities to improve their welfare sustainably.
According to him, strengthening the agrotechnology industry is one approach to pursue. Rural poverty in DIY remains at 10.18 percent, higher than the urban poverty rate of 9.55 percent. The concentration of poverty in Kulon Progo and Gunungkidul indicates that the agricultural sector has yet to generate sufficient added value for those working in it.
Wisnu believes that technology- and research-based downstream processing of agricultural products, supported by universities, could be part of the solution. DIY is home to numerous higher education institutions that can contribute to technological development while strengthening the agricultural processing industry.
“An agrotechnology industry can increase the added value of local products while creating better-paying jobs precisely in areas that need them the most,” he said.
The second approach is to shift the orientation of tourism from pursuing visitor numbers toward developing higher-value tourism. Wisnu noted that Yogyakarta’s tourism sector has traditionally grown by relying on visitor volume. Such a tourism model can create a large number of low-quality jobs that are informal, seasonal, and low-paid.
Wisnu explained that shifting toward higher-value tourism requires stronger connections among education, vocational training, and industry needs. In addition, tourism supply chains—including handicrafts, packaged food, textiles, and creative services—need to be encouraged to adopt higher production standards and generate greater added value. Equally important, workers in these sectors, most of whom are informal workers, need access to affordable social security schemes.
Strengthening a Proactive Social Protection System
Beyond economic transformation, Wisnu believes that the system for data collection and the distribution of social protection needs to be strengthened. Poverty can occur at any time due to severe illness, job loss, or the death of a breadwinner. Meanwhile, periodic data collection can result in household conditions changing undetected.
Therefore, he advocates for a more layered social assistance registration system. People who can do so could register through online channels, while vulnerable groups could receive assistance from community volunteers and social workers. In certain situations, the government should also implement proactive outreach mechanisms triggered by events such as severe illness, termination of employment, or the death of a breadwinner.
Wisnu cited the mobile service Si Molis in Yogyakarta City, which visits older adults and persons with disabilities in their homes, as an example of a practice that could be expanded more broadly.
According to him, the measure of DIY’s future development success should not be limited to how many people have managed to move above the poverty line.
“The true measure is how robust the systems and employment opportunities we build are in ensuring that those who have moved up never fall back again, and how quickly we can narrow the gap between Kulon Progo and Yogyakarta City,” he concluded.
Report: Kurnia Ekaptiningrum
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