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Bank Indonesia: Bali’s Economy must not depend solely on Tourism

Saturday March 31, 2007

Head of Bank Indonesia in Bali, Ketut Sanjaya told a recent discussion forum on Bali’s Economic growth in 2007, that the island province  should not solely and continuously depend on Tourism alone to boost its economy, reports Kompas daily.

It has been proven that tourism is very sensitive to and is adversely impacted by issues such as safety and security. For this reason, Bali must push an alternative priority sector besides tourism to boost the island’s economy, which can, among others, be the agricultural sector, said Sanjaya.

The provincial government must study the ups and downs of the tourism sector, and consider options whether this sector can still be boosted further, or whether indeed this sector has reached its maturity. In this case, other sectors must be sought to improve district economies, which may be in agriculture or services.

In the aftermath of the two Bali bombings, Bali’s economy in 2006 grew by 5.27% only, which declined from 5.56% in 2005m said Sanjaya. The main reason being the decline in trade, hotel and restaurant demand that are the main growth pillars of Bali’s economy.

In 2006, the number of international tourist arrivals was down 9.1% compared to 2005:  from 1.26 million to 1.38 million. This slide immediately impacted on related and processing industries that support the tourism sector. The industrial sector also slowed down by 4.36% as a result of weakening local buying power.  

Before this, many experts on the environment have already warned that Bali has exceeded its carrying capacity to cater to increased tourism demands.