Boom Times in Bali

The island of Bali was once a palm strewn paradise where visitors came for sun, surf and the charms of a unique culture. Now foreign money is pouring in, jackhammers split the air and traffic jams are part of the landscape. Jamie James looks at the fallout.

An influential association has urged the Bali administration to toughen up on unscrupulous investors, whose profit-seeking adventurism risks inflicting irreversible damage on the island’s environment and culture.

“I don’t agree with the assumption that generalizes all investors as bad investors. However, I strongly urge the government, the provincial and regional administrations, to take firm measures against unprincipled investors who would destroy Bali. Bali Daily reported .

The government must reject the investment plan presented by these investors,” Indonesian Businessmen Association (Apindo) Bali chapter chairman Panudiana Kuhn said on Wednesday on the sidelines of the association executive board’s inauguration in the Bali governor’s office.

Panudiana pointed out that the administration already had several legal instruments to launch a strong action against those investors. One of them is the Bylaw No. 16/2009 on Bali’s Spatial Arrangement. The bylaw, which is strongly supported by the governor and rejected by all the regents and mayors, offers stronger protection to the island’s environmental features and sacred zone, as well as a first ever clause on prison sentences for government officials who issue permits for destructive investment.

“The government is strongly expected to be firm and unwavering in its commitment to protect the island. If an investor violates the bylaw, if he plans to construct a high-rise building taller than the 15-meter limit set by the law, if he plans to build too near to the shoreline, then the administration should simply refuse to issue the permit,” he elaborated further .

His statement truly reflected the concern voiced for decades by the island’s intellectuals and environmental activists, who view the regional administration as too weak in dealing with the onslaught of unscrupulous investors. The regional administration has been accused of turning a blind eye to uncontrolled development, particularly in the tourism industry, for the sake of increasing their respective regency’s revenue.

Panudiana deplored the uncontrolled development that has transformed the island into a chaotic landscape of hotels and villas.

“Nowadays, hotels mushroom around rice fields and housing areas. They shouldn’t be allowed to build on those areas in the first place. And the local administrations have acted too little and too late to rectify the problem,”

With an expanding tourism industry, Bali has become a favorite of investors, “The number of investments in Bali is increasing by the year. That shows that Bali is still a favorite investment destination,” said Ketut Wija, the government’s official in charge of economic and development affairs.

The increasing investment has spurred the island’s economic growth. The resort island booked economic growth of 6.36 percent last year. This year, as of June, the island’s economic growth reached around 6-6.4 percent. Bali needs a total of Rp 18.29 trillion (US$1.93 billion) in investment by the end of this year in order to achieve economic growth of 6.57 percent.

Wija denied that the government was not firm on rogue investors. “We have a bylaw on spatial arrangement that will be implemented soon,” he said.

Since being enacted in 2009, the bylaw on spatial arrangement has yet to be implemented due to a prolonged “turf war” between the governor and the regents. The Bali administration is still drafting 23 regulations as the implementing tools of the bylaw.

The bylaw offers stronger protection for the island’s greenbelts, shorelines and ravines. It also incorporates the term and definition of “sacred zone” taken from the island’s Parisadha Hindu council’s 1994 bhisama (sacred decree), which was issued in response to public uproar over the construction of the Bali Nirwana Resort near Tanah Lot Temple. The decree created a sacred zone around temples, prohibiting the construction of tourism facilities within 5 kilometers of major temples, such as Besakih and Uluwatu, and within 2 kilometers of minor temples.

“When I moved from Manhattan to Bali in 1999, tourism was long established in the beach resorts of Kuta and Sanur and the gorges surrounding the village of Ubud. But most of the island was still recognizably the tropical arcadia of travel brochures – where gentle rice farmers devoted themselves to the glamorous rituals of their unique religion.

Yet soon after the turn of the new millennium an astonishing, tourism-driven building boom began, which shows no sign of abating. A decade ago the island’s arid southern peninsula of the Bukit was virtually uninhabited outside the government-sponsored tourist enclave of Nusa Dua. Now it is chock-a-block with luxury hotels. North of Kuta, in Seminyak and along the west coast, ancient rice fields have been paved with holiday villas, thousands of them – and they’re all made out of ticky-tacky and they all look just the same.”

Life’s a beach – for the tourists. Some locals are benefiting from the boom – but at what price? Murdani Usman / Reuters

“That isn’t quite fair. Some of the new houses are fine works of architecture fitted out in exquisite taste; but most of them are built on the cheap for quick sale, spreading across the hillsides like a burgeoning fungus. The sheer volume of building over the past eight years has created an aesthetic crisis as the natural beauty of the island is immolated in the mad dash for foreign dollars. Supply now far exceeds demand. In 2010 the Indonesian Ministry of Culture and Tourism estimated that Bali was oversupplied with tourist accommodations by 9,800 rooms; in 2011 something like 10,000 more rooms opened their doors to visitors. The provincial government has declared a moratorium on hotel-building, in a classic case of shutting the barn door after the horses have bolted and the grooms have run off with the tack and saddles.

Fortunes are being made, no doubt about that. Land values in prime tourism areas continue to soar. In 2004 my partner and I signed a 20-year lease on a restaurant on Jalan Petitenget (Petitenget Street) in Seminyak. In those days it was a quiet area with a few budget resorts and tourist restaurants here and there amid the rice fields and cow pastures. If 10 cars drove by in an hour it was a busy day. Eight years later in peak season the road is jammed day and night, slowed to a crawl by the lumbering behemoths of concrete mixers and tourist coaches. Today, we could sell our restaurant for 15 times our initial investment, but we have no intention of doing so while the punters pack the place out night after night.”

Diana Darling writes: ‘The wish to conserve Bali is something like the wish to stay young.’ The standard line around here has long been that traditional Balinese culture is indestructible, and there’s as much truth in it as there ever is in wishful thinking. The values of the Balinese themselves are under attack by the forces that are transforming most places in our world – the relentless cycle of getting and spending in a global economy.

Jamie James’ most recent book is Rimbaud in Java: the Lost Voyage (Editions Didier Millet, Singapore). He and his partner own and operate Waroeng Bonita in Seminyak, Bali

Sources : Bali Daily and New Internationalist Magazine - Boom Times in Bali,  Tourism destroying Bali  posted by  Jamie James

Edited by Jamesrudy

 Bali Daily 

Foreign investment dominates Bali’s tourism

by Luh De Suriyani on 2012-06-28

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

According to Bali Investment Coordinating Board (BKPMD) 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 realized reached more than $440.2 million. As for domestic investment, Rp 930 billion (US$98.58 million) has been realized.

The ratio between foreign and domestic investment is wider than in 2010, where the value of foreign investment realized reached $263 million, while domestic investment was only Rp 143 billion.

“The gap widens each year,” said Suta Astawa, head of BKPMD 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 realization was a joint investment involving several countries with a value of $362.9 million, followed by Singapore with $77.3 million.

Suta 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,” Suta said, denying media reports on the ineffectiveness of the moratorium signed by the Bali governor.

A team from Udayana University 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 Rp 109.6 billion 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,” Suta 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,” Suta 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.