Wealth Gap Grows Quickly in Indonesia’s Bank Accounts
Rich Indonesians are becoming wealthier much faster than the nation’s lower classes, according to a look at bank accounts.
The Deposit Insurance Agency (LPS) said on Tuesday that the nominal value of bank accounts with more than Rp 5 billion ($545,000) in savings and deposits grew 61 percent to Rp 1,215 trillion in March from the same period a year ago.
In contrast, the nominal value of bank accounts with less than Rp 100 million rose by 16 percent to Rp 471.8 trillion.
Only 58,450 bank accounts contained more than Rp 5 trillion in March, representing just 0.6 percent of the total 101.09 million bank accounts in Indonesia. That 0.6 percent, however, held 43.23 percent of the banking system’s total nominal cash.
The 98.4 million bank accounts with less than Rp 100 million comprised 97.34 percent of the country’s total accounts but accounted for only 16.38 percent of the nominal value of deposits.
LPS, which works with 120 commercial banks and 1,837 rural banks, guarantees deposits and savings of up to Rp 2 billion.
Rich Indonesians have quickly accumulated wealth thanks to the nation’s expanding economy, stable political conditions and low borrowing costs last year.
The country’s $813 billion economy expanded by 6.5 percent last year, the fastest pace since before the 1997 Asian financial crisis, and private consumption accounted for 56 percent of economic activity.
Indonesia’s central bank, Bank Indonesia, also kept its benchmark rate unchanged at a record low of 5.75 percent this month to shore up economic growth.
Maikel Sajangbati, the president director of investment consultant company MaeSa Consulting Indonesia, said in October that if the economy expanded by 6.5 percent this year, rich Indonesians could see their fortunes grow by triple the rate of economic growth.
He said the economic woes of Europe and the United States had not yet had a significant negative impact on Indonesia’s rich, other than making them more protective of their wealth.