'Bali bombing to cut tourism to Indonesia by 20%'

'Bali bombing to cut tourism to Indonesia by 20%'

Agence France-Presse, Tokyo

The precedent of a tourist massacre in Egypt in 1997 suggests Indonesia will suffer a 20 percent drop in foreign visitors following last month's deadly bombing on the resort island of Bali, the World Bank said in a report published Wednesday.

The number of visitors to Egypt plummeted 17 percent and revenue from tourism fell 19 percent immediately after the attack in Luxor which killed 60 foreign holiday makers, the bank recalled.

"In the circumstances one could expect at least a 20 percent drop in Indonesia's tourism after the Bali attack, which would represent a little under a one percent loss of income," it said in its East Asia Update.

The impact on consumer and business confidence could reduce economic growth in 2003 by one percent, the report said, adding that Indonesia's gross domestic product (GDP) next year is currently estimated to expand 3.2 percent.

The Bali bombing "is the reason why we do not have an acceleration of growth for Indonesia next year", says Homi Kharas, chief economist for East Asia and the Pacific at the World Bank.

In 2001, tourism in Indonesia generated US$5.4 billion, comprising 3.7 percent of its GDP. For the whole of Asia, which has also been indirectly affected by the Bali drama, the tourism industry brought it between $25 billion and $26 billion last year, accounting for four to five percent of the region's economic output.

The prejudice against East Asia as a holiday destination had already intensified following the Sept. 11 attacks on New York and Washington. Tourism to East Asia from September to December 2001 was down eight percent from a year earlier.

At that time, foreign visitors had only just started to return to Indonesia after dropping sharply in the wake of Asia's financial crisis in 1998, when the number of visitors dropped by 17 percent and revenue from tourism plunged 36 percent, noted the World Bank.

"The horrific Oct. 12 attack on tourists in Bali underlines the urgency of fighting terrorism and political violence and, more generally, of strengthening law and order in the Southeast Asian countries," the report said.

"The experience of countries like Egypt also shows that tourism can recover substantially from terrorist attacks if the government takes sufficiently firm action against the perpetrators."