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index that covers all aspects of life (Multidimention Poverty Index / MPI) accros the
southeast asian has great variation. In 2011, Thailand was ranked 103 of 187 countries based
on HDI ranking with MPI was 0.006. Philippines was ranked 112 with MPI value was 0.064.
Indonesia ranks 124 of 187 countries with a value of 0.095 MPI. According to the data and
synergized with the policy from OIC, the problem of poverty in the OIC members in
Southeast Asian country need to be addressed.
12.5
10.8
3.6
Thailand
Filipina
Malaysia
Indonesia
per day, non-food: food, clothing, housing, health and education). According to the UNDP's
definition of poverty is the condition of someone who does not have the income to meet basic
needs of food, and do not have the ability to support basic human survival. UNDP poverty
divided into four kinds, namely income poverty, human poverty, basic needs and poverty
reduction capabilities.
Through a hadith that the Prophet once said: "People are not poor people around (to
beg) and not the person who is rejected (because) one or two grains of dates, or a bite of two
mouthfuls of food. However, the poor are those who keep away from begging and
poverty"(Narrated by Saheeh Muslim 999, 1982: 207).
Gunnar Myrdal has its own theory about the 'vicious circle of poverty or
backwardness'. The concept is contrary to the concept of the cycle of poverty proposed by
Nurske. Where the causes of poverty by Nurske due to lack of capital formation.
According to Myrdal, poverty not only in the matter of capital, but more due to the lack of
nutrition, education and other basic needs. Poor state stems from low income resulting in a
lack of quality nutrition, low nutritional quality will lead to lower health which led to low
productivity. Low productivity caused low income, and in turn lead to poverty.
Poor
Country
Low
GDP
Low
Income
Low
Productivity
Low Nutrition
Quality
Low Health
Quality
b) Non-Food Poverty Line (GKNP), is the sum of the value of the minimum requirement of
commodities non-food (urban: 51 commodities, rural: 47 commodities) were selected
covering housing, clothing, education, and health.
2.2. Human Development Index Using Islamic Concept
One of main contributor for Islamic Concept for Poverty is Sadeq (1991). According
to Sadeq (1991:4) index of economic development consists of: (1) economic growth, (2)
equitable distribution of income and welfare, (3) health and environmental friendliness of
social norms and values - values of Islam. High economic growth and a high level of income
is essential to meet the needs of food, shelter, clothing, education, medicine and comfort for
all human needs. If the income is not distributed across the population, only a few people
who enjoy the fruits of growth and development while others suffer, it is not desirable in
Islam. Islam requires that income and wealth should be distributed equally. Therefore, Sadeq
(1991: 5) characterize the economic development index in Islam consists of : growth,
equitable distribution and Islamic values. So the function of the equation is economic
development:
D = f (G, E, V) ..................................................................................................(1)
where
D = E = Equity (equity)
G = V = Islamic Growth Value
3. Research Metodology
The data used is secondary data obtained from the Human Development Report
(HDR) in the UNDP, the World Bank, as well as read other literature related to the study of
both print and internet media. Pooled data is annual data 1990 -2011 with an analysis unit 4
states of Southeast Asia. Some of the data is converted into natural logarithms to reduce the
scale and simplify the analysis.
The variables included in the study are. Human Development Index, GDP per capita,
Government Spending in Education, Government expenditure on health sector, Gini ratio
(ratio imbalance), Clean Water Access as the proxy of islamic value. In this case is the
dependent variable is the percentage reduction of poverty as measured by the national
poverty line (national poverty line) set by the state authorities in a region.
3.1. Econometric Model
The focus of the study is to investigate how human development component (Human
Development) and the index of economic development (Economic Development Index)
determinated to the level of poverty in some OIC member countries and Muslim-majority
countries and non OIC member countries non -Muslims in Southeast Asia.
Then the econometric model used in this study is a panel regression model equations are:
P = f ( LnHDI, LnGDPkap, Educ, Health, LnGini, AW)........................................(2)
Where :
P
= number of poor citizens
LnHDI
= Human Development Index
LnGDPkap = per capita GDP
Educ
= Government Spending in Education
Health
= Government expenditure on health sector
LnGini
= Gini Ratio
AW
= Clean Water Access
4
4. Findings
The model is estimated by panel data analysis followed Baltaghi (1998). The first
stage of analysis is the PLS method followed by a fixed effect method and random effect. In
the next stage, it is not the data can be analyzed using a random effect. The best model is
selected through the Chow test to compare the PLS with fixed effect. The next Hausmant test
and LM test can not be done.
According to the previous test the best model that tested the Determinants of Poverty,
Comparative Analysis of OIC Member Countries and Non Member Countries in Southeast
Asia using Fixed Effect Panel Regression Model.
4.1. OIC Member Countries
Firstly the data is processed by the PLS approach, then the Fixed Effect. By using the
Chow test, indicating the probability of 0.0226 <alpha of 5%, which means reject H0. Thus a
good model to use in analyzing poverty OIC member countries in Southeast Asia with a fixed
effect model.
Table 4.4. Fixed Effect Test (Chow Test)
Effect Test
Statistic
Cross-section F
5.678152
d.f.
Prob.
(1,36)
0.0226
R-squared
Coefficient
Probabilitas
30.51978
0.0012
-20.03931
0.0000
-0.883651
0.203
2.234913
0.0000
-16.9844
0.0021
0.227771
0.0055
244.0371
0.0000
Cross-section fixed (dummy variables)
Weighted Statistics
0.73697 F-statistic
14.4095
Adjusted R-squared
0.685825 Prob(F-statistic)
0.000000
S.E. of regression
452.0835
Durbin-Watson stat
Unweighted Statistics
1.976598
R-squared
2.039244
475.2533
Effect on Fixed Data processing using criteria weighting Cross Section Weights in GLS,
which assumes a cross section heteroscedasticity (accommodate the heteroscedasticity) as in
the previous data processing. So that the resulting probability has a better level of
significance.
To determine the individual effect of the above analysis, the obtained results effectnya fixed
cross section is:
Tabel 4.6. Cross Section Fixed Effect
CROSSID
Effect
1
2
6.690556
-6.690556
37.382863
6
d.f.
Prob.
(1,36)
0.0000
Coefficient
Probabilitas
15.18562
0.0000
-10.45005
0.0000
-0.628459
0.1047
-0.153202
0.0000
0.848467
0.6071
0.117355
0.0000
106.2046
0.0000
Cross-section fixed (dummy variables)
Weighted Statistics
R-squared
0.887526 F-statistic
40.58193
Adjusted R-squared
0.865656 Prob(F-statistic)
0.000000
S.E. of regression
706.1943
Durbin-Watson stat
Unweighted Statistics
1.073527
R-squared
0.861553
919.0379
function.
4.3.
The estimation shows by the Table 4.2. This table shows that the poverty ratio to human
development index is higher at two OIC countries compare to non OIC countries. According
to the output estimation the probability does significant to support this finding. The
incereasing level of HDI not always followed by the decreasing of poverty level.
Table 4.7. Comparative Poverty Elasticity to Human Development Index
Members of OIC
30.528
4.4.
The output of government spending in the education sector has negative but insignificant.
In non-Muslim countries with a slope coefficient of -0.628459, probability value 0.1047>
of 5%. While in Muslim countries, the value of the slope coefficient of the education variable
with probability -0.883651 0203> of 5%. Probability values were not significant means that
government spending in the education sector have no effect on poverty.
However, government spending in the health sector of Thailand and the Philippines
provide real impact on poverty. Each sector health expenditure occurs OIC non-member
states A 1% larger than the non-OIC member countries B, it will cause the level of poverty in
the non-OIC member countries A is lower than B-related non-Muslim countries by 0153 per
cent. These results agree with Wieser (2011) from the results of his research states that
government spending on health infrastructure is an important factor in the determination of
the impact of government spending on poverty. While the results of panel data output for
Muslim majority countries have coefficients 2.234913 with probability 0.0000. Then the state
health sector spending Malaysia and Indonesia have significant positive relationship to the
level of poverty. That is, when the country's health sector expenditure Muslim A greater than
1% OIC member countries B, then poverty in Muslim countries a greater than 2.234913%
OIC member countries B. Rising government spending health sector, but the level of poverty
in Muslim countries still occur.
4.5.
Output estimates of GDP per capita in Thailand and the Philippines showed that the value
of the coefficient of elasticity of poverty on the probability -10.45005 GDP by 0000. There is
a negative and significant relationship between GDP per capita and the level of poverty.
Likewise in Malaysia and Indonesia, has a coefficient of elasticity of poverty on GDP per
capita for 0000 with probability -20.03931. Significant probability 0.000 < 5%, indicating
the influence of GDP per capita on poverty. That is when the GDP per capita of Muslim and
non-Muslim countries A greater than 1% Muslim and non-Muslim country B, then poverty in
Muslim and non-Muslim country A is lower than B and non-Muslim countries for their
coefficient - respectively.
4.6. Gini Ratio
The value of the Gini coefficient of elasticity of poverty ratio in the country of Thailand
and the Philippines with probability 0.848467 and 0.6071. That is, the Gini ratio (ratio
imbalance) has no effect on the level of poverty in the non-Muslim majority country. On the
8
where the majority of poor people live in rural areas have access to clean water level
requirement is higher. The increase is necessary as a reflection HDI index of the quality of
human life. The addition of fairness indicators, job security, democracy, etc. will make the
HDI as an indicator of human development is more comprehensive.
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