Indonesia mulls leasing islands for tourism

Fitri Wulandari, The Jakarta Post, Jakarta

The Indonesian government is considering leasing a number of small islands to individual and corporate investors for resort development in a bid to boost tourism.

Minister of Culture and Tourism I Gede Ardika said that the government was studying experiences in leasing islands for resort development in the Maldives.

"We are learning from the Maldives how to set up our own regulations on leasing islands for resort development," Ardika told reporters during a workshop on Tourism Development on Small Islands on Monday.

The workshop was also attended by Maldivian Deputy Minister of Tourism Mohammad Saeed.

According to Ardika, there are many uninhabited islands in the country which could be developed to support tourism.

According to ministry data, of the some 17,500 islands in Indonesia, only 3,000 islands have been developed for land based- development.

However, Ardika said, the government has yet to set up regulations on leasing islands for resort development.

"We've just started. But hopefully this year we will have finished the draft," Ardika said, without mentioning a time frame.

He added that the rules for leasing islands would be integrated into Law No. 9/1990 on tourism, which is now under revision.

Located in the Indian Ocean, the Maldives archipelago consists of 1,190 islands.

The Maldives Tourism Act stipulates that islands for resort development can be leased for a maximum of 25 years. The period can be extended up to 35 years when the investment exceeds US$10 million.

It can also be extended up to 50 years if the investors sell 50 percent of their share of the resort to the public.

Tourism contributes over 30 percent to the Maldive's gross domestic product. Seventy percent of foreign currency earnings come from tourism, and makes up 40 percent of government budget resources.

Vanessa C. Satur of the Asia and Pacific Section of the World Trade Organization said that leasing islands was a very profitable and practical way of developing tourism.

However, Satur underlined that the government should play a central role to facilitate local people and investors.