The new Bali? Indonesia hopes so

An article published in the Sydney Morning Herald, dated Jan 25, 2011

The new Bali? Indonesia hopes so

Traffic jams are now common in Bali, a victim of its own success in pulling in swarms of tourists and using the money to buy cars and turn rice paddies into hotels.

Across a narrow sea channel lies Lombok, another volcanic island ringed by beaches, where in the capital Mataram the few foreign visitors are more likely to be slowed down by a horse-drawn cart than a tailback of Toyotas.

But authorities in Indonesia, a current emerging market investor darling, have big plans for the island.
A new international airport is expected to open later this year, and Qatar’s sovereign wealth fund is leading a bidding race to develop an unspoilt southern coastline of white sand into a world class resort and luxury residential community.

Indonesia hopes such projects will overhaul its poor infrastructure, seen as both a hurdle to growth and a cash making opportunity, with Asia showing the most investment interest in a sign of new money flows between emerging markets.

Lombok’s leading exclusive development so far, Indian-owned The Oberoi, an isolated and expansive resort of manicured lawns and infinity pools facing Bali, was chosen as the venue for a meeting of Southeast Asian foreign ministers this week.

“We brought the ministers here to show them how unspoilt it is … and the opportunities,” Indonesia’s Foreign Minister Marty Natalegawa said during a stroll through the grounds.

Tourism contributes just 2-3 per cent to the country’s GDP, versus 6 per cent for Thailand, and economists believe boosting Indonesia’s service industries could be a new engine of growth for Southeast Asia’s biggest economy.

Indonesia’s 17,000 islands stretch from the Indian Ocean to the Pacific, and offer pristine coral reefs, diverse cultures, archaeological monuments, striking volcanic scenery and dense rainforests with unique wildlife such as orangutans.

“We think we can do eco-tourism,” said Natalegawa. “We discussed as a group what value-add the region can offer, and we think it is forests and the marine environment,” he said, after taking his counterparts to get their feet wet by releasing baby turtles into the waves and planting trees along the shore.

Despite the symbolic gesture, and a deal with Norway to earn $1 billion by halting forest clearing, the country’s environmental record is poor. Deforestation led it to be the world’s third largest greenhouse gas emitter in 2005, according to the World Bank, with palm oil and timber plantations putting the Sumatran tiger and Javan rhino at risk of extinction.

A bitter dispute between the palm oil industry and environmentalists underlines the difficulties for the region of spurring economic growth and preserving its environment.


Southeast Asia still has plenty of exotic spots that it could promote, especially in Indonesia and Cambodia, said Surin Pitsuwan, head of regional political group ASEAN, also pointing to Myanmar if moves towards democracy enabled investment.

ASEAN, home to 500 million people, aims to liberalise air traffic and invest in improving regional road links.
Local authorities in Lombok, whose wildlife contributed to the theory of evolution through naturalist Alfred Wallace, are keen to develop the industry, but there is no guarantee Bali’s tourism success can be reproduced elsewhere in the archipelago.

Lombok’s culture is not as obviously rich as Bali’s, lacking its famous dances or unique brand of Hinduism, while Bali has learnt over centuries what foreigners look for and still-smiling locals are multilingual. By contrast Lombok’s interior offers a tough hike up active volcano Mount Rinjani and some hard stares.

“People come to Bali for the culture, not the view – the view is better in the Maldives. Here in Lombok it’s nature,” said Widi, from Bali and working at the Sheraton on Senggigi, currently the only developed strip of beach on Lombok, but where an empty coastal road divides surfers and boutique villas from thatched shacks and green mountain humps.

With no timeframe to complete the $600 million project to put 10,000 luxury villas on the southern coast, it seems Lombok is not yet ready for the region’s leaders – Indonesia will host a meeting of Asian prime ministers in Bali later this year.

“Tourism development would be a great thing here in Lombok,” said Widi. “I just hope they plan it better than Bali.”