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Foreign investment dominates Bali’s tourism

Publication Date : 29-06-2012


Foreign investment dominates the tourist industry in Bali, Indonesia, particularly hotels and restaurants.

According to Bali Investment Coordinating Board data on 2011 investment plans for hotels and restaurants, the value of foreign investment plans reached more than US$943.2 million.

The value of investment realised reached more than $440.2 million. As for domestic investment, Rp 930 billion (US$98.58 million) has been realised.

The ratio between foreign and domestic investment is wider than in 2010, where the value of foreign investment realised reached $263 million, while domestic investment was only 143 billion rupiah ($15 million).

"The gap widens each year," said Suta Astawa, board's head of foreign investment control, adding that the figure showed that foreign investment dominated all sectors in Bali.

According to government data, the biggest investor is the British Virgin Islands with a planned investment value of $723.5 million, followed by Singapore with $219.7 million.

Last year's biggest realisation was a joint investment involving several countries with a value of $362.9 million, followed by Singapore with $77.3 million.

Astawa said the provincial administration did not limit foreign investment in tourism.

"This is a continuously growing sector in Bali, and we don’t implement a quota. This sector is open to more investment, but for projects throughout Bali, not only in the south of the island."

However, South Bali remains the most popular area for foreign investment, despite a moratorium on developing tourist accommodation in South Bali implemented in January last year.

"Several ongoing projects were approved before the moratorium took effect," Astawa said, denying media reports on the ineffectiveness of the moratorium signed by the Bali governor.

A team from Udayana University in Bali is currently researching whether the moratorium should be continued or revoked. The research is expected to be completed by the end of July.

"The central government has asked us many times about the uncertainty of the moratorium, as investors are waiting to decide on their projects."

Since the moratorium took effect, investment has increased in other parts of the island, such as in Buleleng and Karangasem. In 2011, investment in Buleleng jumped to $226.2 million in foreign investment and 109.6 billion rupiah ($11.6 million) in domestic. Foreign investment value is higher than in Badung, the South Bali area, with a value of $157 million.

"If the land reaches its capacity, investors will move from Badung to other areas, because tourism remains a lucrative sector in Bali," Astawa said.

The investment board and regency administrations should adhere to the spatial master plan before issuing new licenses to investors.

The 2009-2029 Bali spatial master plan has regulated areas in which star-rated hotels are allowed to be built. The largest area is Tulamben, Karangasem, with 16,203 hectares, Nusa Dua with more than 10,000 hectares, Ubud with 7,712 hectares and Nusa Penida with 6,795 hectares.

Sixteen areas in Bali are designated as tourist zones. Bangli is not zoned as a tourist area because it has a reservoir.

"Only a three-star hotel is allowed to be built there," Astawa said.

Bali Forum for the Environment (Walhi) has asked the governor to extend the moratorium.

"A comprehensive study on Bali’s carrying capacity has to be completed, so that it can be used as guidance in tourism development," said Wayan Suardana from Walhi.

Walhi also urged the provincial administration and stakeholders to draft a master plan on sustainable development in Bali to protect the island’s culture.


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