Pillars of Bali economy begin to tremble

By GEOFF CUMMING

On a field of gravel in Bali's mountainous interior, a woman and three of her children sit crushing stones around a small mud pool.

Inside the walled compound of her extended family home, a daily offering to the gods sits on a concrete shrine, wilting beneath an oppressive sun.

Crops of tapioca, breadfruit, bananas, limes and mandarins rise above rampant undergrowth on orchards outside the small village, which is dominated by its central temple.

Life in this humid rainforest is a world removed from the teeming bazaars of Kuta, the hedonistic playground of young Westerners, and the luxury resorts that dot Bali's southern coast.

Existence here is similar to the subsistence living found on most of Indonesia's 13,000 islands. Every available inch of land is utilised, orchards giving way to terraced rice paddies on the steep slopes and lowlands.

But even in the hinterland villages, it is impossible to escape the pervasive influence of tourism, Bali's lifeblood.

In the shade, old men sit whittling carvings from softwood which, darkened with shoe polish, will make their way to the souvenir shops in the south.

Younger men and women, if they can speak English, leave their villages to work in the resorts and hotels, where frontline staff might earn $200 a month. Uneducated young men seek jobs as labourers on building sites in the capital, Denpasar, or on road and footpath construction, earning $3 a day.

Village life is increasingly subsidised by the money sent home by those employed in the hotels and resorts. In some compounds, the image of Third World simplicity is disturbed by the sight of a late-model television or stereo inside the sparse concrete huts that form bedrooms and living rooms. But the money also pays for village children to go to school.

It is estimated that 87 per cent of Bali's three million residents depend on tourism, either directly or indirectly. If the 1.4 million a year visitors from Japan, Australia, New Zealand, Europe and America stop coming, it is not just the resort and hotel owners and taxi drivers of the densely populated south who will feel the pinch, but the peasant farmers and villagers of the lush green interior.

"It's certainly going to have a big impact on visitor numbers for a long time to come," says expat New Zealander Jan Manjika, who runs a tour and accommodation company in Denpasar.



"Hotels won't want staff, developers won't have any work and this will filter down into the villages where people are much less able to cope.

"So many children are saying they won't be able to go to school now."

The perpetrators of the bombings knew this. They could not have chosen a better location to target Western hedonism, cripple Indonesian tourism and undermine the regime of President Megawati Sukarnoputri.

The 5600sq km island is by far the jewel in the crown of Indonesian tourism, drawing nearly a third of all visitors to the region and earning billions each year in foreign exchange.

Tourism accounts for 4 per cent of gross domestic product and employs eight million workers. The bombings sent the Jakarta Stock Exchange plunging along with the value of the rupiah.

Simon Milne, professor of tourism at the Auckland University of Technology, says for the Muslim fundamentalists suspected of the bombings, the impact on the Indonesian economy was an important motive.

"Tourism is a pillar of the national economy and if this pillar is eroded, alongside so many other parts of the Indonesian economy, it adds to the downward cycle and creates rich pickings for these fundamentalist groups among the young unemployed and the disaffected.

"A lot of these people want to see Bali become part of a greater Muslim state and not represent different religious leanings."

Milne says the impact on visitor numbers will be long-term. While young Australians may return within a few months, "risk averse" families and older holidaymakers will steer clear of Bali for much longer.

Wayan Mardika, who manages a villa complex at Saminyek, north of Kuta, says tourism in Bali has only just recovered from the impact of September 11. Hotel occupancy rates this month hit 85 per cent.

For several years, the industry's rampant expansion has been plagued by events such as the Indonesian forest fires, the Asian economic crisis, the fall of Suharto and the violence that marred Indonesia's withdrawal from East Timor.

This will be far worse, says Mardika. "We are all hoping the world will see that this is not the work of the Balinese, that it is something related to international terrorism."

Locals accept that most tourists already in the country wish to go home, he says. What worries them is that it may take years for the visitors to come back.

Mardika has visited hospitals and spoken to people who have lost their families or jobs. A security guard he knew at the Sari nightclub supported a wife and three children. "They cannot do anything so they just wait. Maybe they will get a new job. They have no idea."

Most who work in the south come from villages in the north and east of the island. "If they lose the head of the family it will affect the whole village."

Anthropologist Graeme MacRae, of Massey University's school of social and cultural studies, says the bombings are also a psychological blow for the peace-loving, humble Balinese. The weekend shattered the myth that the largely Hindu island could remain a haven in a sea of Islam, immune to the religious tensions plaguing Aceh and other Indonesian islands, he says.

"All Balinese are deeply attached to the idea of their home being somewhere safe, friendly and secure, while the rest of the world is racked by conflict and violence."

The island's reputation as an exotic paradise has been cultivated since it first attracted wealthy European and American travellers early last century. In the late 1920s, the rainforest town of Ubud was a retreat for European artists, notably the German musician and painter Walter Spies, and visits by celebrities including Charlie Chaplin helped to spread the word. The first hotels were built on Kuta beach in the late 1930s.

But World War II, independence and political instability delayed the development of the industry until the mid-1960s, when President Suharto assumed power and began to open up the country to foreigners.

About the same time, Bali became a popular staging post for hippies taking the overland route between Australia and Europe. While Suharto wanted to develop Bali as a plush destination for wealthy Americans and Europeans, Kuta's balmy surf beach was soon on an unstoppable roll.

"It was cheap, it was exotic, it was just a fantastic place to be," says MacRae.

While Kuta continued to attract the surf and party set, Bali started to attract families and retired people and the industry diversified.

"Bali more or less invented the idea of cultural tourism and it was done in a way whereby the proceeds were fed back into conserving and building the Balinese culture."

Today, there is much more to Bali tourism than Kuta's bars, shops and hawkers' markets. More sophisticated tourists venture inland to the comparative cool of Ubud, with its spa resorts clinging to the Tjampuhan gorge, covered by rainforest.

At Nusa Dua on the south coast, multinationals and wealthy Indonesians have poured billions into luxury resort developments for well-heeled Japanese, American and European visitors. Here, the Hiltons, Sheratons and Hyatts come with 2000-seat conference venues attached and world-class golf courses nearby.

The beaches north of Kuta cater for families with three and four-star hotels and self-service villas for those who know their way around.

There is more to do than surf, shop or lie on the beach. Nightly performances at nearby temples provide colourful insights into Balinese culture and religion while local tour companies offer soft adventure activities such as river rafting, whale watching and rainforest tours.

Adrian Vickers, an Asia-Pacific specialist at Wollongong University, says the local mantra of "Bali is safe" has been used as a substitute for boosting its police and infrastructure, using some of the proceeds of tourism.

But Andrew Renton-Green, an associate fellow at Victoria University's Centre for Strategic Studies, says the nature of terrorism is that the targets are "very difficult to predict and to quantify".

Responsibility for counter-terrorism in Indonesia had only recently been handed from the military to a police force of about 150,000 catering for a population of 250 million on 13,000 islands.

"Quite clearly there's going to be an economic downturn and it will have some very severe repercussions for those at the bottom of the heap."

Bangkok-based travel writer Imtiaz Muqbil says the bombings exploded the myth that "certain destinations, by dint of their cultural and ethnic camaraderie, will not have these things happen".

Bali messages and latest information on New Zealanders
New Zealand travellers in Bali, and their families around the world, can exchange news via our Bali Messages page. The page also contains lists of New Zealanders in Bali and their condition.

Foreign Affairs advice to New Zealanders

* Travellers should defer travel to Bali

* NZers in Bali should keep a low profile and remain calm

* Foreign Affairs Hotline: 0800 432 111

Feature: Bali bomb blast

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