Indonesia's ten years of rising income inequality (2004 - 2014)

The phenomenon of rising income inequality has become a prominent topic of the economic development discussion in the recent years. As rising income inequality has become a worldwide problem of not only developing countries but also developed countries, Indonesia was no exception. In the last decade, Indonesia experienced a substantial increase in its Gini coefficient. Despite having impressive economic growth and extensive attempts in generating prosperity for all during the ten years of Yudhoyono 's administration (2004-2014), the income disparity was unusually higher than Indonesia had ever experienced. This literature-based study examines this situation by putting emphasis on the Indonesia's domestic economy and institutional factors. The discussion suggests that changes in the economic landscape, poor implementation of employment-related policies, and issues on the development programs for correcting inequality were the culprits behind unprecedented inequality in the last ten years. Since the government of Joko Widodo is now focusing on correcting income inequality, the efforts should be focused on how to improve the quality of education, the implementation of employment policies, as well as the capacity of the government to fulfil development agenda under current economic circumstances.Master of Science (International Political Economy