Bali blasts impoverish thousands

Bali blasts impoverish thousands

Agence France-Presse, Kuta, Bali

The bombers who targeted Western holidaymakers on the resort island of Bali one year ago also impoverished hundreds of thousands of Indonesians, a report released on Monday said.

The report on the impact of the nightclub blasts said "probably hundreds of thousands of people" have experienced substantial cuts in working hours and salaries for a sustained period since the crisis began, while many others have lost jobs and livelihoods.

The report by the United Nations Development Program, the U.S. Agency for International Development and the World Bank, says the once prosperous "crown jewel" of Indonesian tourism is suffering more than expected.

"It is clear now that the crisis is deeper and longer lasting than at first anticipated, giving greater urgency to the need for effective action," it said.

Tourist arrivals are unlikely to return to normal until next year at the earliest, it warned.

The bombings, blamed on the al Qaeda-linked Jamaah Islamiyah (JI), killed 164 foreign holidaymakers and 38 Indonesians and prompted a tourist exodus.

They shattered "the image of a peaceful, innocent Bali," the report said, and the war in Iraq and the SARS outbreak were added blows.

Tourist arrivals are recovering but revenue is lagging, with deep discounts needed to attract new visitors -- who spend less than traditional ones.

The August hotel bombing in Jakarta, which killed 12 people and is also blamed on JI, "highlights the continued vulnerability of Indonesia's tourist industry and economy to terrorist attacks."

Average income islandwide fell by 43 percent between October 2002 and May 2003 and some businesses have seen turnover drop by more than 60 percent. Between January and April, "anecdotal evidence suggests" that up to three-quarters of hotel workers were either working fewer hours or had been temporarily laid off.

More than half of small and medium industries laid off workers. Some 31 percent of schools, mainly in the impoverished northeast of the island, reported students dropping out this year.

But this represented less than one percent in terms of student numbers.

"There are always a lot of dropouts," World Bank country director Andrew Steer told a press conference at which the report was released.

"The extent to which this increased this year was not as great as some of us had feared and that is a great tribute to the community system here in Bali."

The report, prepared in cooperation with the Indonesian government, urged national and regional administrations to focus on maintaining and improving security.

U.S. ambassador Ralph Boyce, at the same press conference, stressed "the importance of continued vigilance on the part of Indonesian authorities to ensure that Indonesia remains peaceful and free from further terrorism."

The report said Bali should diversify its economy to absorb future shocks by strengthening exports which build on existing tourist-oriented industries.

The central government should study ways to address crises more effectively, especially following the devolution of power to regions, it said.

"Responses (to the crisis) have been fragmented and there has been a lack of focus on the most vulnerable," the report said.

The government should consider scrapping plans to start charging many tourists a US$35 visa fee, it said.

The report warned that the golden days may be gone forever and "recovery in the sense of return to past conditions may not be an option for Bali" given global tourism trends.

The longer-term agenda of regenerating the island as a destination and building a more diverse economy should not be delayed, the report says.