Medan, Indonesia – Halimah Nasution once enjoyed a prosperous life, running a successful business that specialized in renting supplies for various celebrations such as weddings, graduations, and birthdays. Together with her husband, Agus Saputra, the couple consistently earned around 30 million rupiahs (approximately ,917) monthly, even after distributing a portion of their income to support family members. This income placed them comfortably within Indonesia’s middle class, a group that is defined by monthly expenditures ranging from two million rupiahs (7) to 9.9 million rupiahs (8).
The onset of the COVID-19 pandemic marked a pivotal turn for their lives, as restrictions on social gatherings across Indonesia significantly impacted their celebratory business. The couple’s livelihood came to a standstill, plunging them into uncertainty. Years later, the couple finds themselves grappling with the consequences of this disruption, emblematic of broader challenges affecting many in Indonesia.
Statistics from the Central Bureau of Statistics reveal a worrying decline in the number of individuals classified as middle class in the country, which dropped from 57.3 million in 2019 to 47.8 million in the current year. Conversely, the “aspiring middle class” saw an increase, rising from 128.85 million to 137.5 million over the same timeframe. Collectively, these two groups represent a significant majority of Indonesia’s 277 million population.
Experts attribute this decline to various interconnected factors, including the lingering effects of the pandemic and existing gaps within Indonesia’s social safety net. Ega Kurnia Yazid, a policy specialist associated with the National Team for the Acceleration of Poverty Reduction, highlighted that while the middle class contributes significantly to the nation’s tax revenues, they often receive inadequate social assistance, largely due to the reliance on formal employment mechanisms.
This lack of support was acutely felt by Nasution and her husband when their business faltered. Nasution noted their minimal aid from local authorities, receiving only a small monthly supplement of 300,000 rupiahs () to assist with basic grocery purchases.
Despite Indonesia’s commendable economic recovery — with an annual GDP growth rate hovering around 5 percent — the economy’s dependency on trade exposes vulnerabilities, particularly as key global partners like the United States, China, and Japan face economic slowdowns. Such circumstances further complicate the challenges experienced by the middle class.
Adinova Fauri, an economic researcher at the Centre for Strategic and International Studies (CSIS), emphasized that the issues facing Indonesia’s middle class mirror deeper structural challenges, notably deindustrialization trends that have reshaped the labor market. With a significant shift from manufacturing to the informal services sector, many workers now find themselves in roles that offer lower wages and scant job security.
To foster sustainable economic growth and revitalize the middle class, experts argue that improvements in labor conditions and productivity are paramount. Fauri advocates for a strategic focus on enhancing labor regulations to meet international standards, positioning Indonesia favorably in global markets.
The recent inauguration of President Prabowo Subianto has brought renewed optimism for economic reform, with promises to drive GDP growth to 8 percent and eradicate poverty through initiatives like a free school lunch program for children. As economic tides shift, families like Nasution’s remain in a precarious position, striving to rebuild their lives while maintaining hope for better days ahead.
Despite the challenges they face—having sold personal assets and taken on lower-paying jobs—the couple holds onto resilience, echoing timeless sentiments about navigating life’s ups and downs. As Nasution reflects on their journey, she expresses faith that with perseverance and perhaps a stroke of luck, their fortunes may one day improve.
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