Blockchain
Blockchain, Poverty and
Time Travel to 2030
We all know the story. Government
made a forecast of its expenditures
and revenues in every fiscal
year; Government disbursed the
funds, poverty rate decreased,
income inequality stayed volatile.
Everything was in balance until the
UN announces SDGs (Sustainable
Development Goals, a joint
agreement to make the world in
its best possible form by 2030,
without a single person living in
less than 1.90 US Dollar a day. Now
policymakers have been craving for
a solution to realise this demanding
goal. Blockchain quickly intrudes
100 The World Financial Review July - August 2019
BY NAMIRA SAMIR
into the life of many, including
those sitting at the highest level of
leadership. Sadly, many would think
of it as a trivial revolution. Will time
change our mind?
It is the year 2030, and Indonesia, after an
utter failure of reaching the 0% of poverty
rate by 2030 professed “If only I had the
chance to do one thing differently, it was to
adopt Blockchain technology nationally when
it was first being introduced”.
U
N set an ambitious goal for
year 2030, one of which is to
completely eliminate poverty in
its multidimensionality. The 193 member
states concurred the agenda and adopted
them since the year 2015.
Despite agreeing with this collec-
tive objective, Indonesia encounters
tremendous challenges in tackling depri-
vation. It is, as we all aware, a home to
diversity. Its population are divided into
five main islands which encompasses
34 provinces with distinctive livelihood
activities subjected to socio-economic
conditions in that particular area.
Poverty, which happens to be
the result of inability to fulfil basic
necessities, is influenced by access to
opportunities. Deprived households
in regions with extreme distance from
populous cities which have been associ-
ated with persistent growth tend to have
far less opportunity for improvement.
Economics 101 would tell us that
there are two main approaches on how
a country can address poverty; macro-
economics and microeconomics. The
former stresses on how external factors
such as inflation, consumer buying
power, and declined economic growth
would cause turbulence that only makes
the poor worse off. Meanwhile, the
latter looks at poverty alleviation strategies from the
internal capacity of the household. How deprived
households can meet their basic needs.
Being in a constant battle with poverty, Indonesia
has implemented a range of programmes and
investments that derived from both macroeco-
nomic and microeconomic approaches aiming
to win the war of poverty. It invests heavily on
infrastructure, with the planned budget for 2019
415 trillion rupiahs and the cumulative allocation
for infrastructure, poverty and unemployment
increased from Rp.1,343.1 trillion (2017) to
Rp.1,454.1 trillion (2018)1.
Yet, the result of the assumed “pro-poor budget
allocation” was not so favourable, with the latest
data informs that poverty merely declined by 0.16
points from 9.82% (Mar 2018) to 9.66% (Sep
2018)2. With simple math, we know what this
implies; Indonesia, if continuing the current ways
of alleviating poverty, will be nowhere near the
SDG 1 (No Poverty)3 by 2030.
Increased State Budget for poverty alleviation
means nothing if there is no significant improvement
on the livelihood conditions of the poor. They have
been waiting for opportunities to directly knock on
their doors and said “This is the way out. We will
guide you through the process and we will make sure
that your family will be better off afterwards”.
The conventional way to address poverty is just like
a one-man show, in which the Government happens
to be the sole Actor, and its citizens are the audi-
ence. Whatever the Government says or do with its
performance will determine its audience’s conditions.
They might be happier, sadder, or perhaps remain
unchanged with the performance.
But we must never forget to include the initial
condition of the audience into our estimate. Some
might come to the show with enormous happiness
or extreme sadness. If the purpose of the show
is to make everyone feeling satisfied, how can the
Government resolve this inequity of emotional
The limitations of the Government State Budget suggest the need
for new collaborative approach among communities to ensure that
those who are poor can live in physical and spiritual prosperity, and
acquire the same opportunity and benefit from growth,
state and make everyone happy? Is it possible?
Happiness in this matter is in relation to having
sufficient capabilities to make ends meet. The
Government employs various instruments to make
sure that its performance touches the lives of many,
most importantly, the unfortunate.
The limitations of the Government State
Budget suggest the need for new collaborative
approach among communities to ensure that those
who are poor can live in physical and spiritual
prosperity, and acquire the same opportunity and
benefit from growth, just like what is articulated
on the Article 28H of the 1945 Constitution of
the Republic of Indonesia4.
But the question is, how do we channel these
resources and deliver them right away to the door
of impoverished households?
It’s time to re-read the first paragraph.
Kate Raworth in her widely read book
“Doughnut Economics” emphasised the need to
look out for better ways of ending poverty. We
must not be trapped in century years old strategies
and instruments that will only make the promi-
nence such as the SDGs merely a remark of ‘good
progress’, and not an ‘incredible achievement’ in
the development sphere.
The CAF World Giving Index 20185 lists
Indonesia as the most generous in the world. This
achievement must be seen as an opportunity to use
our inner good deed to help others. The problem
is that there was no scheme that allows us to help
with our abilities, until blockchain enters.
Blockchain technology started to actually
gaining fame in 2016 with its offering of simpli-
fying the way to perform transactions, while at
the same time making everything traceable. When
the idea was first presented, the first word that
came to the minds of millions was “nonsense”.
But here it is three years later and evidence of its
positive impact on human lives could not be more
affirming.
worldfinancialreview.com 101
Blockchain
With the blockchain technology, transfer of wealth and the
ability to help each other becomes ‘borderless.’ You can be
in one of the northernmost countries while still creating an
impact on the deprived people in further South.
Blockchain as part of the Internet 2.0, is
unlike the internet that we know. It is a new
revolution which enables mass collaboration
among the society.
A report by Stanford University in 20196
reveals that 55% of the blockchain-oriented
initiatives are projected to contribute positive
changes to individuals’ health, education and
financial conditions.
So many lives are at stake due to changes
which are happening in their area. Be it declined
business activities, decreased consumer buying
power, or economic uncertainty, among others,
that risks the livelihood of not merely the poor,
but also those who live slightly above poverty
line.
Blockchain with its promise of better
problem-solving, enables us to create solutions
which were previously not being thought about.
Take for instance HalalChain, the first
public blockchain that focuses on facilitating
traceability and distribution of social funds
such as zakat and cash waqf, as well as other
Islamic financial products, all aiming to improve
financial inclusion and alleviate poverty7.
In response to high poverty rate in Muslim
countries and among Muslim communities,
“No society can
surely be flourishing
and happy, of which
the far greater part
of the members are
poor and miserable”.
102 The World Financial Review July - August 2019
HalalChain is working on creating a decentralised
solution based on blockchain and Internet of
Things (IoT) which enables the Government to
execute its programmes specifically addressed to
a targeted population.
HalalChain is one vivid example of a
blockchain service provider that goes beyond
“facilitating payments and verify records.” It
seizes the opportunity of distributing wealth
more equally through technology.
As we all know, the real problem of real-
ising the global goals is not the lack of fund,
it is purely the absence of a reliable means of
collecting them from various sources, including
charitable giving and donations as well as alter-
native finance instruments.
With the blockchain technology, transfer
of wealth and the ability to help each other
becomes ‘borderless’. You can be in one of the
northernmost countries of the world while still
creating an impact on the deprived people in
further South.
The advantage of using blockchain for
poverty alleviation does not stop there. The
Service Provider and the donors can also trace
the usage of the funds provided to the chosen
household and evaluate the impact individu-
ally and collectively.
Surely, there are some critical challenges about
using blockchain for poverty alleviation. For
instance, for blockchain to be adopted nation-
ally, it has to earn the public acceptance. This is
a serious issue considering many still think of
blockchain as cryptocurrencies.
Furthermore, we need to educate the public
about the utilisation of technology in daily lives.
Although Indonesia is among the world’s highest
users of technology, its penetration rate is lower
than many countries in Asia Pacific, with 60% of
the population do not have internet access, a data
by The International Monetary Fund (IMF, 2019)
revealed.
We are only a decade away from our target to
end poverty in all its forms. Regret will always
arrive when the time that we have has gone and
sorrow is everything that we will experience had
we decided to make no changes in our current
strategies on tackling poverty.
Adam Smith once said “No society can surely
be flourishing and happy, of which the far greater
part of the members are poor and miserable”.
Indonesia was built with high hopes and believe
to make its citizens free from suffering. It is time
for this country to take the leap. It is only the
right momentum to design a decentralised future
to tackle poverty. Blockchain has a lot to offer
but a dream will just be a dream, an action plan
will just be an action plan if there are no concrete
steps taken.
What an interesting reminder time travel has
given to this country, that one small change can lead
to a very different outcome.
Are we ready for a revolution?
Namira Samir is a development
economist based in Indonesia with
main interests in multidimensional
poverty, regional inequality and Islamic
social finance. She holds a master’s
degree in Islamic Finance and Management from
Durham University, UK. She can be reached at
namiraalhasni@outlook.com
HLC Attends Global Halal Summit 2019 In Malaysia, Providing Blockchain solution for
Islamic economy. Source: https://hlc.com/media
References HalalChain is one
1.Ministry of Finance of Indonesia. (2019). State Budget
Data, accessible at https://www.kemenkeu.go.id/dataapbn vivid example
2.Badan Pusat Statistik. (2019). Percentage of Poor People of a blockchain
in September 2018, accessible at https://www.bps.go.id/ service provider
pressrelease /2019/01/15/1549/persentase-penduduk-mi-
skin-pada-september-2018-sebesar-9-66-persen.html
that goes beyond
“facilitating
3.United Nations. (2015). Goal 1: End Poverty in All Its
Forms Everywhere, accessible at https://www.un.org/ payments and
sustainabledevelopment /poverty/å verify records.”
4.UNESCO. (2003). The Constitution of the Republic of
Indonesia of 1945, accessible at http://www.unesco.org/
education/edurights /media/docs/b1ba8608010ce0c48966
911957392ea8cda405d8.pdf
5.Charities Aid Foundation. (2018). CAF World Giving Index
2018, pp.10, accessible at https://www.cafonline.org/docs/
default-source/about-us-publicationscaf_wgi2018_report_
webnopw_2379a_261018.pdf
6.Stanford Graduate School of Business. (2019). Blockchain for
Social Impact – Moving Beyond The Hype, pp.2, accessible at
https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/
study-blockchain-impact-moving-beyond-hype.pdf
7.HalalChain. (2018). Halal-Chain White Paper, accessible
at https://hlc.com/wp-content/uploads/2018/09/white-
paper.pdf

It is time for this country to take the leap. It is only the right momentum
to design a decentralised future to tackle poverty. Blockchain has a lot
to offer but a dream will just be a dream, an action plan will just be an
action plan if there are no concrete steps taken.

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