Asian Development Bank to help Bali recover

Asian Development Bank to help Bali recover

William J. Willitts, Reuters, Sydney

The Asian Development Bank (ADB) will restructure part of its Indonesian lending to help the tourist island of Bali recover from the devastating effects of the October 12 bombings, president Tadao Chino said on Wednesday.

The ADB chief said the nightclub bombings, which killed over 180 people, including about 90 Australians, was a horrific tragedy that threatened the wider Indonesian economy, adding that he was concerned about its impact on Asia as a whole.

"Incidents like the Bali bombing can have a damping effect on tourism and also on investor confidence, this is very serious," Chino said at a news conference in Sydney before giving a speech on reducing poverty in Asia.

In the past month, hotel vacancy rates in Bali have plummeted as Australia and other governments warn against travel to the resort island.

Chino said that in addition to steps taken by Indonesia "to improve and restore confidence", the ADB wants to redirect some of its lending to help Bali.

An Australian parliamentary study says Bali accounts for 40 percent of Indonesia's US$5.4 billion in tourism revenue.

"There are so many projects which are ongoing, which are still in the process of formulation. These will be reviewed and refocused to give emphasis, focus on Bali island," Chino said.

Last year, the Manila-based multilateral lending organization approved public and private loans worth $500 million for Indonesia, making it the fourth-largest recipient of the $5.4 billion in loans it approved for the region.

Chino said the Bali bombings fueled a concern held by foreign investors about the level of risk in Asia.

"These incidents are taken as symbolic of the risks and unrest of the region," Chino said.

"External investors will have concerns that Asia is a place where this kind of thing happens because there are several incidents, not only the Bali bombing, but many examples of security concerns in many parts of Asia," he said.

"I am very concerned about the perception of Asia as a whole."