Monday, May 13, 2013

'Middle Class' in Indonesia or Partially Poor?

Being middle class in Jakarta is considerably different from being middle class in, say, Oz

Indonesia's booming middle class is a hot topic these days. They spend more, earn more and are expected to supersize the economy in the next decade.

Yet most who fall into the broad middle class category (MACS: middle class affluent consumers) are literally just a fraction better off than those sitting above the poverty line. Considering that the poverty line is US$1.25 a day, the definition of middle class actually veers from those teetering above poverty to the partially poor.

The middle class can now afford to eat more bread, shop in the supermarkets, and enjoy the wonder of Blackberry Messenger. But it doesn't mean they are secure from poverty, or that the social incline of an expanding middle class will automatically lean toward social justice and equality. Indeed, in the midst of rampant corruption, intolerance, and civil conflict, it is difficult to imagine how society will change with people's fortunes.

The partly poor can achieve much more than upward mobility, and if civil society emerges in line with the bourgeoisie, they will. Yet does this neo-liberal view of development and emergent prosperity really include the type of prosperity that a rights respecting democratic society with good governance looks like considering the ambiguity of the label 'middle class'?

The middle class is broadly categorized globally by two groups; 1 billion people who live on US$2- US$4 per day and 1 billion people who live on US$4- US$10 a day, but it has also been stretched up to US$20 a day. In Indonesia, it is commonly expressed as those with an annual income of US$3,000 or more, just over US$8 a day.

Absolute standards provide upper and lower limits; in developing countries this is roughly between US$2-20, and in developed countries starts at US$16 and US$36 to upwards of US$100 a day.

Money is saturating Indonesia and consumption is part of what is driving growth, but being middle class doesn't mean overseas family holidays once a year, a new house on a quarter-acre block and private schooling for the kids.
'Middle class' is a broad definition that obscures what it means to be poor and vulnerable.

Many MACS are at risk of falling back into poverty. To label people living on less than US$10 a day as 'middle class' is to misconstrue the situations of millions as stable and secure. Income inequality is also set to rise. Some people are getting rich quickly, but for those clawing their way out of poverty, it's a much slower process that translates into far less than $57.69 a week in disposable income for the majority of MACS.

Beef is still too expensive for more than a morsel, basics such as onions and garlic have been subject to wildly fluctuating prices, and, as long as McDonalds and KFC represent 'family restaurants' and not just cheap, nutritionally meager fast food outlets, 'middle class' does not imply newly gained luxury and excess.

The middle class should not be misunderstood as a privileged category that is bridging the wealth divide, and hopes should not be pinned on the broadening of the middle class as a panacea to the fairer distribution of wealth in Indonesian society. Social justice is not something that happens on its own when people can afford to eat more bread.

The consumer culture is fast becoming the new religion of the middle class and at this stage no Islamic Defenders Front mob could hope to protest against a queue of Blackberry customers and win.

If consumer culture could translate into less corruption, address ethnic and religious tolerance, better education, healthcare, and clean water, then the middle class can indeed transform society by buying things. But it won't. Social responsibility is not contingent on purchasing power.

The eagerness to glorify people's capacity to buy, to froth over new markets, just mystifies the facts of social inequality and potentially distracts those happily buying Nestle baby powder and Kraft cheese at the local Hypermart, from the reality that the distribution of resources remains highly uneven, and corruption rampant.

Indonesia's middle class are not fuelling the influx of high fashion brands like Louis Vuitton and Co, and they are more geared toward household purchases than luxury items. Even US$20 a day saved for two months to the exclusion of food will not go far in Gucci. Yet Jakarta is home to more of these high end stores than anywhere else in South East Asia.

There are just 116 000 individuals in Indonesia who earn US$150 000 plus per year. The rest shopping in Fendi, driving Hummers, and purchasing homes in Singapore, well, ask KPK how they financed that.

The middle class tend to consume low budget household items, whitegoods, clothing, and foodstuffs, occasionally splash out on a new Yamaha scooter, budget laptop, a Blackberry or Toyota Avanza.

In order to afford the big ticket items, middle class consumers take out loans and lines of credit, which they can then find difficult to repay, further creating insecurity to retain their position as middle class. But the devotion to consumer goods is being stoked like Philip Morris stokes tobacco addiction.

Should a Blackberry or other electronic gadget go on sale, devoted consumers will queue around the block and trample each other like they haven't eaten in days and are waiting for a free piece of meat.

Meanwhile, elites including policemen, politicians, and businessmen, are also trampling each other to get their fingers in the pie, stealing more money than the average partially poor Indonesian can make in two lifetimes.

Competition for resources, for space, for money, is not something that goes away over night. It is a psychological survival mechanism that fuels corruption and inequality so that people don't lose what they have and aspire to amass more wealth.

It's also a symptom of a lack of law enforcement and the particularity of a weak legal system. At its core corruption is an abiding inconsideration for others, and an apathy that legitimises explicit wealth divides.

News articles about outrageous graft scandals juxtapose articles about the emergent middle class contributing to Indonesia's rising economic power, but in reality those living on US$4 a day are more concerned with food to mouth issues than abuse of power.

As long as the example of the elites normalises corruption, the inclination for an emerging middle class to demand social justice will always be stunted, and the transformative properties of consumer culture over emphasised to maintain consent for gross injustices perpetrated by predatory elites.

Viewing the Indonesian middle class as predominantly significant through their increased capacity to buy, but not acknowledging the precipice between abject poverty and partial poverty, on which vast numbers of people hang, fails to address other dynamics that linger on and perpetuate financial and social inequality.

(Lauren Gumbs is a human rights student at Curtin University in Perth and holds a masters degree in Communications. She resides in East Java.)

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