15 Oct 2002

TERROR IN BALI

ERIC ELLIS, Kuta Beach.

TRAVEL SECTOR TROUBLE LOOMS FOR ONE OF INDONESIA'S TOP REVENUE EARNERS AS HOLIDAY CANCELLATIONS MOUNT.

Confronting the world's media in the bizarre surrounds of Bali's Hard Rock Hotel and its "Reggae Rooms" and "Psychodelic Floor" yesterday, Indonesia's besieged tourism tsar put on as brave a face as the circumstances allowed.
"Yes, of course many foreigners are scared and they are cutting short their holidays," admitted Mr Setyanto Sentoso, chairman of Indonesia's state-run Culture and Tourism Board. "But there are also some resorts who are telling me they still have 80 per cent occupancies."
Mr Setyanto was insistent. "We will pull through this. We in Bali have had big challenges in the past and we will overcome this terrible situation."
The problem for Mr Setyanto and Indonesia's already battered economy is that precious few holidaymakers, international tour operators and governments share his optimism. Since Saturday night's nightclub bombings that killed up to 200 mostly young foreign tourists, scores of traumatised travellers have preferred to spend the night camped out on Kuta Beach. Cheryl, a 21-year-old New Zealand backpacker, said: "I've got an early flight home tomorrow and I just can't go anywhere near a building any more. I'm never coming back here."
Across the world, government and tour companies are forming similar views of Bali and Indonesia. The US, the UK, Australia and Japan, Bali's top four tourist catchments, have warned against travel to Indonesia generally and Bali in particular. Yesterday, Europe's biggest tour operator, Germany's TIU, cancelled all holidays to Bali while its main competitor in Europe, Thomas Cook, offered reimbursements on pre-paid packages.
A proposed start-up airline, Air Paradise, that was planning services from Denpasar to Australia and regional centres has postponed its arrival, probably for ever.
It was not supposed to be like this. Five years after the financial crisis that ruined Indonesia's economy, ousted the Suharto kleptocracy and ushered in four presidents in five years and communal strife across the archipelago, Bali seemed Jakarta's last remaining hope.
While the wider economy has back-pedalled, Bali has been a relative boom island, managing to sidestep Indonesia's ills by stressing its unique Hindu culture in mostly Muslim Indonesia.
Tourism is Indonesia's second biggest industry after resources, accounting for as much as 10 per cent of the still stricken wider economy. And it is Bali that is Indonesia's biggest drawcard - from Mick and Jerry and their Hindu-marriage-that-wasn't to the young backpackers and "Ibiza East" crowd. Some 1.5m tourists entered Bali directly last year, about half the total for Indonesia. Denpasar's Ngurah Rai Airport is one of south-east Asia's busiest.
Bali's effective divorce from Indonesia has been deliberate, more commercial pragmatism than political separatism. As many parts of Indonesia - Aceh, East Timor, Maluku, South Sulawesi - have descended into bloody ethnic and religious wars, Bali has sold itself to the west as a refuge of tranquility.
Indeed, the word "Indonesia" is barely mentioned these days in Bali's international product marketing, which seems almost treasonable in a sprawling multi-cultural island nation that proudly hosted the very summit, the Bandung Conference of 1955, that gave rise to the political potency of the Third World, but now struggles desperately to avoid being Asia's Yugoslavia.
It has also helped Bali that President Megawati Sukarnoputri is part-Balinese and, thus, hugely popular on the island. The island is effectively her political heartland and was her launching pad in the mid-90s while Suharto was still in power. In 1999, her newly formed Indonesian Democratic Party of Struggle obliterated Suharto's once mighty Golkar party on Bali, garnering more than 90 per cent of the vote and launching her march to the presidency last year.
But Bali's success has also been its Achilles' heel. With its hard currency cashflow and just 3m people, Bali is Indonesia's richest centre outside the capital Jakarta, which has three times its population. That wealth has also given it political power in Jakarta. During the Suharto era, Bali and his US-dollar generating resorts became a virtual ATM machine for the ruling family. Even today, the island's nationalists complain that Bali's resources are at bursting point because of the massive internal immigration of job-hungry Indonesians to the island.
In addition, associates of Megawati's husband Taufik Kiemas are rumoured to be developing business interests on the island, such as a planned Formula One circuit and a controversial casino project. Such projects have rankled Balinese nationalists who see external influences as "cultural pollution". Those same activists have also complained that Bali plays host to too many foreign tourists, who are also regarded as polluting.
But, after the weekend's events, those worries may now be over.