Abstract

Poverty in Indonesia remains a critical issue, with a current rate of 9.57% that has not met the RPJPN target of 6.5% to 7.5%. This study analyzes the impact of mandatory government spending in education, health, and infrastructure on poverty from 2011 to 2022, using Generalized Method of Moments (GMM) with data from 33 provinces. Findings indicate that spending in education and health significantly reduces poverty, while infrastructure spending does not show a notable effect. To effectively combat poverty, the research recommends that the central government optimize its allocation of mandatory spending and enhance funding in other areas to achieve better outcomes. read more

Abstract

MSMEs, also known as micro, small, and medium-sized enterprises, are the backbone of the economy in developing countries. Empirical studies indicate that SMEs generally face obstacles, particularly in financing. This study focuses on two main aspects: indexing financial inclusion using principal component analysis (PCA), and analyzing credit and financial inclusion using vector autoregression (VAR) for forecasting. Through a two-stage indexing methodology, the study emphasizes the importance of geographical reach in financial inclusion availability compared to demographic reach, with availability being the most crucial dimension compared to accessibility and usage. VAR models and forecasting were developed for the period from March 2012 to July 2022 in Indonesia, incorporating other variables, such as access to credit, credit risk, and real GDP. The use of VAR demonstrates consistency, accuracy, and reliability in producing predictions that closely approximate reality, providing a critical basis for policymakers.  read more