UGM economist Dr. Elan Satriawan emphasized the importance of data-driven and research-based development policies in building an inclusive economy. He warned that non-inclusive economic growth could widen social inequality rather than alleviate poverty.
“Statistics show that the middle class is shrinking and becoming more vulnerable. While they haven’t fallen into poverty yet, this situation must not be ignored,” said Dr. Satriawan during the UGM Teras Pusekra discussion titled ‘Inclusive Economic Growth, Poverty, and the Middle Class’ as shared in a press release to journalists on Wednesday, Mar. 3, 2025.
Although economic growth is a priority, Dr. Satriawan emphasized that the government should not focus solely on growth but also public welfare.
Economic growth should occur at the macro, micro, and medium levels.
“It’s not just about eradicating extreme poverty but also ensuring the middle class maintains strong purchasing power,” he explained.
According to him, strengthening the middle class is crucial for achieving developed-nation status.
Developed countries have a robust middle class that makes a significant contribution to their national economies.
Therefore, economic policies should focus on empowering the middle class through quality job opportunities and greater access to economic opportunities.
“Our next task is to support the middle class who work in the informal sector yet do not receive government assistance and still have to pay taxes. I believe the middle class should be a serious concern for the government,” Dr. Satriawan added.
Regarding data- and research-based economic policies, Dr. Satriawan shared his experience as part of the National Team for the Acceleration of Poverty Reduction (TNP2K) during the presidencies of Susilo Bambang Yudhoyono (SBY) and Joko Widodo (Jokowi).
He explained that TNP2K was established to conduct analysis, studies, and research that form the basis of recommendations given to the government.
Additionally, the team served as a bridge between policymakers and external think tanks, such as universities and research institutions, which produce knowledge and evidence.
In line with TNP2K’s role, Dr. Satriawan underscored the importance of evidence-based policy-making.
“Policies should be based on data and evidence. Their quality could decline if this approach is not followed,” the expert said.
According to Dr. Satriawan, one successful example of an evidence-based policy was the overhaul of the Rice for the Poor (Raskin) assistance program.
During SBY’s administration, Raskin was distributed from the central to the village levels, which created opportunities for fraud, especially in the villages.
In Jokowi’s era, the program was transformed into a voucher system that could be redeemed at local stores.
This change made the distribution more targeted, reduced the potential for misuse, and increased the program’s effectiveness in helping the poor.
“An evaluation by the American Economic Association found this program to be significantly more effective compared to Raskin,” Dr. Satriawan stated.
Author: Tiefany
Editor: Gusti Grehenson
Post-editor: Lintang
Photograph: Antara