Bali not getting its slice of the tourism pie

Rita A.Widiadana and Wasti Atmodjo, The Jakarta Post, Sanur

When the government launched the regional autonomy policy in 2001, the reaction in Bali was positive and hopeful.

With many Balinese seeing their island as Jakarta’s cash cow, it was hoped that regional autonomy would stop the central government’s heavy control of the resort island’s income.

Before regional autonomy, Indonesia’s natural resources, regional strengths and decision making were all in the hands of bureaucrats in Jakarta. With the announcement of regional autonomy, many people in Bali saw it as an opportunity to enjoy the full strength of revenues from tourism, agriculture, garment and textile manufacturing and handicrafts.

But five years after the implementation of regional autonomy, the reality on the ground in Bali is far from this picture.

“Bali has faced a lot of crucial problems in implementing the regional autonomy scheme since its introduction to the province,” said Ida Ayu Mas, a member of the Regional Representatives Council at the House of Representatives, speaking at an year-end seminar in Bali in late December.

Under the current regional autonomy laws, authority in certain areas outside of the monetary, fiscal, foreign affairs, defense and security sectors, is transferred from the central government to regional governments.

Bali has a population of 3.2 million, spread through eight regencies — Gianyar, Klungklung, Bangli, Karangasem, Buleleng, Tabanan, Jembrana and the wealthy Badung — and one municipality, Denpasar. Each regent has full authority over his regency, often eliminating the role of the provincial government in enforcing regulations and policies.

“The system has led to occasional conflicts between regional and provincial administrations,” said Ida Ayu, a candidate for the 2008 Bali gubernatorial election.

Many feel that inconsistent policies and contradictory regulations imposed by provincial and regional governments have brought Bali into social, cultural and environmental catastrophes and that the focus on regional autonomy has worsened disparities among regencies and has intensified local rivalries between regional and provincial governments.

I Made Arimbawa, a member of the local legislative council and a chairman of the special autonomy task force team, told the seminar he urged the central government to grant Bali special autonomy status by 2008, when it will elect a new governor.

Bali, at only 5,632 square kilometers in size, is different to other provinces in terms of social, cultural and religious backgrounds, he said.

“Some legal instruments of regional autonomy do not fit with Bali’s situation,” Arimbawa said, citing as an example a 1999 law that allows regional governments to retain 80 percent of forestry, fishing and general mining revenue.

The law also enables regional administrations to receive 15 percent of oil revenue and 30 percent of that from natural gas, along with the reallocation of 25 percent of the central government’s budget to regional authorities.

Arimbawa said that the law clearly recognized revenue-sharing, but that such recognition was not given to the tourism and handicraft sectors, which are key to Bali’s income.

“Under the implementation of current regional autonomy policy, Bali has lost many things, while at the same time, the other nature-rich provinces have gained huge profits from it,” he said.

With more than 50 percent of Indonesia’s US$6.5 billion tourist-related revenue coming from Bali, Arimbawa said, “it is quite fair if we demand that 50 percent of the earnings be returned to Bali.”

The special autonomy proposed to the central government includes certain provincial authority in issuing regulations regarding the province’s natural resources, including land use, religious and cultural assets.

The province will also establish new institutions in line with its characteristics such as customary court that deals with local issues.

Representatives of the local tourist industry are also demanding the government be more transparent in its reporting of revenues from the visa-on-arrival policy.

“We have never been informed how much we have got from visa fees since (the policy) was enacted in 2004,” Bagus Sudibya, chairman of the Bali Tourism Board said at the meeting.

According to Bank Indonesia’s Denpasar Office, Bali received $11.9 million from arrival visas in 2006, a drop of 42.3 percent from the same period in 2005, when it amounted to $20.57 million.

Airport revenue sharing is also an issue. Ngurah Rai International Airport in Tuban Kuta receives a minimum of 1.5 million visitors every year.

“We want to be given tax revenue sharing to improve tourism infrastructure in Bali, including improvements to the airport and hotel security systems,” Sudibya said.

Wayan Supartha, professor of economics at the University of Udayana in Denpasar, identified a number of constraints faced by Bali province in enforcing regional autonomy.

The professor said that the lack of local government technical and financial resources was a major obstacle to enforcing regional autonomy policy.

“The incompetence of regional administrations in handling certain issues has led to acts of corruption, collusion and nepotism at local levels,” he said.