Unrest weakens economy<\/p>\n
Tourism, besides mining and agribusiness, should be the most
\npromising industry in Indonesia when most other economic sectors
\nare still suffering from depressed domestic market demand and
\ncredit crunches. As the rupiah's exchange rate against the
\nAmerican dollar remains low, or almost 70 percent below its level
\nbefore the economic crisis hit Indonesia in August 1997, this
\nvast archipelagic country is theoretically a paradise for foreign
\ntourists and the most competitive supplier of minerals in the
\nworld market.<\/p>\n
However, the recent wave of sectarian clashes on several
\nislands in Maluku and Lombok island in West Nusa Tenggara, the
\nseparatist rebellion in Aceh, the northernmost province in
\nSumatra and demonstrations by thousands of villagers on Bintan
\nisland, near Singapore, have prompted governments in many
\ncountries to issue advisories warning their citizens against
\ntraveling to Indonesia. The hotel association in Lombok estimated
\nit would take many years to restore the credibility of the
\nisland, east of Bali, as a tourist destination. All hotels on the
\nisland, which used to cater for more than 300,000 tourist
\narrivals a year, now look like haunted properties. The local
\nadministration said it might receive only a tiny fraction of the
\nRp 9 billion (US$1.2 million) in local levies it expected from
\nhotels this year.<\/p>\n
Unrest on the Indonesian island of Halmahera has forced
\nAustralia's Newcrest Mining Ltd. to shut its Gosowong gold mine
\nand evacuate 300 employees to Manado, North Sulawesi.<\/p>\n
Last week, Iluka Resources Ltd.'s 75 percent-owned PT Koba Tin
\nunit halved its output at its operations on Bangka Island in
\nsouthern Sumatra due to increasing tensions in the province. Its
\noperations have been affected by a breakdown of law and order in
\nthe region, resulting in the uncontrolled theft of tin
\nconcentrate from production sites.<\/p>\n
This spate of violence is showing just how readily the long-
\nrepressed tensions, so common in diverse Indonesia but checked
\nunder Soeharto's centralized authoritarian rule, are coming to
\nthe surface. Many are afraid that the simmering conflict and the
\nbreakdown of law and order in several areas might encourage local
\nleaders elsewhere to push against the power of the central
\ngovernment. This momentum, if uncurbed, could grow to the point
\nwhere the process will spread quickly, like an epidemic, to other
\nareas.<\/p>\n
Unrest or violence is especially inimical to the tourism
\nindustry as tourism is foremost an experience, a lifestyle choice
\none makes to escape familiar surroundings and explore different
\nparts of the world. Everyone involved in the travel industry,
\nfrom customs officers and taxi drivers to hotel receptionists,
\ncontributes to the memories visitors take away with them and
\nplays a part in delivering total customer service, satisfaction
\nand delight. But security conditions or the perception about the
\nsecurity situation is the key to tourism credibility. Nothing
\nwithin the travel industry means anything without security.<\/p>\n
Tourists will not even consider plans to visit a country where
\nthe security situation is out of control and this is especially
\ndamaging to the process of Indonesian economic recovery. Because
\nof its multi-faceted nature, the tourism industry involves a wide
\nvariety of economic activities. Tourist arrivals immediately
\ninject additional purchasing power into the local economy,
\ngenerating additional demand for a host of services and goods,
\nranging from transportation, hotels, food and souvenirs. These
\nsectors happen to be labor-intensive, the very type of economic
\nactivity the country sorely needs to create jobs from its massive
\npool of the unemployed.<\/p>\n
The tourism industry is completely friendly to the environment
\nas it feeds on local attractions such as natural beauty and the
\ncreativity of human resources to arrange cultural events and
\nproduce goods.<\/p>\n
It is tragic that the unfavorable security conditions have
\nlead to a situation where the country is unable to capitalize on
\nits present highly competitive edge in the tourism industry. Even
\nthe goodwill of Singapore's Prime Minister Goh Chok Tong, who in
\nthe middle of this month committed his government to spending
\n$1.2 million to promote Indonesia and Singapore as a joint
\ntourist destination, will not help much. This is a great loss, as
\nthe planned joint promotion would enable Indonesia to take
\nadvantage of the more than seven million tourists annually
\nvisiting the island republic.<\/p>\n
It is, therefore, more imperative than ever for the government
\nto act firmly and quickly restore a strong system of law and
\norder and strengthen local leadership in the various provinces to
\nbring things under control. Without these preconditions, there
\nwill be no change for the better and the series of whirlwind
\nvisits President Abdurrahman Wahid has made or will make to many
\ncountries to promote Indonesia will be wasted.<\/p>",
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"sponsor": "Okusi Associates",
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