Indonesia's Wealth Classification System: Understanding the Criteria

Classification Based on Expenditure

The Indonesian Central Bureau of Statistics (BPS) and the Ministry of Finance (Kemenkeu) have established a comprehensive classification system for the country's population based on monthly expenditure levels. This system, which is aligned with the World Bank's measurement standards, categorizes individuals into five distinct groups: poor, vulnerable, lower class, middle class, and upper class.

The Classification Categories

1. Poor: Individuals with per capita expenditure below the poverty line
2. Vulnerable: Those with expenditure 1-1.5 times the poverty line
3. Lower Class: People with expenditure 1.5-3.5 times the poverty line
4. Middle Class: Individuals with expenditure 3.5-17 times the poverty line
5. Upper Class/Wealthy: Those with expenditure exceeding 17 times the poverty line

Understanding the 'Wealthy' Classification

To be considered 'wealthy' or part of the 'upper class' in Indonesia, an individual's per capita expenditure must be more than 17 times the established poverty line. This criterion provides a clear benchmark for assessing wealth status in the country.

Implications of the Classification System

This classification system has significant implications for economic policy and social programs. By understanding the distribution of wealth across different categories, policymakers can better target interventions and develop more effective strategies for poverty reduction and economic growth.