Ari A. Perdana and John Maxwell INTRODUCTION Prior to the economic and ﬁnancial crisis (henceforth the Crisis) that gripped Indonesia in the late 1990s the previous 30 years had seen a substantial reduction in poverty brought about largely through rapid economic growth rather than through special measures, that is programs and policies that were speciﬁcally targeted at the poorest sections of the community. The real gains in poverty reduction, and the accompanying signiﬁcant improvement in a key range of socio-economic indicators – such as declining infant mortality and rising school enrollments, literacy rates, nutrition and living standards – were achieved against a backdrop of sustained economic growth and the general improvement and expansion of public infrastructure and community social services. Of particular importance were the provision of basic education and health facilities through an active construction program of schools and community health centers. Important also were the development and expansion of roads and communication networks, a rural electriﬁcation program, and the provision of supplies of clean water. These programs were all largely funded out of the public purse through the national development budget (see Booth, 2000 and Hill, 1996: 198–9, 1994: 105–7). Despite the fact that Indonesia has always been a poor country where poverty has always been a fact of life, and although there had previously been a number of government general development programs that provided indirect assistance to those who were among the poorest sections of the community, especially in rural areas, it was not...
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