Growth, Growth Accelerations, and the Poor: Lessons from Indonesia

We study the impact of growth and growth accelerations on poverty and inequality in Indonesia using a new panel dataset covering 26 provinces over the period 1977-2010. This dataset allows us to distinguish between mining and non-mining in Indonesia. Growth in non-mining significantly reduces poverty and inequality. In contrast, overall growth and growth in mining appears to have no effect on the same. Growth acceleration in non-mining reduces poverty and inequality whereas the same in mining increases poverty. We expect that the degree of forward and backward linkages of mining and non-mining sectors explains the asymmetric result.