Regaining confidence

Regaining confidence

It is encouraging to note that less than 10 days after the
deadly bomb attack in Bali the government is already preparing
concerted efforts to restore international confidence in the
tourist paradise and in Indonesia in general.

More than 150 representatives from national and international
airlines, hotels, tour operators and other travel-related
businesses completed a two-day national meeting in Bali on
Wednesday that worked out crash programs to restore the island's
image as a safe place to visit.

Technical details of the programs have yet to be worked out
but the presence of chief economics minister Dorodjatun Kuntjoro-
Jakti and tourism and culture minister I Gede Ardika at the
conference demonstrated the government's sense of urgency that
fast actions are indeed required to cope with the devastating
damage inflicted by the tragedy on the island's economy and the
country as a whole.

Even though regaining international confidence will depend
largely on how swiftly the government is able to answer the
questions around the terror bomb and how strong is its
determination and political will to suppress terrorism, crash
programs are needed to address the enormous economic damage in
view of Bali's heavy reliance on tourism.

Analysts' estimate that at least 400,000 workers might lose
their jobs as a result of the steep fall in tourist arrivals is
not too pessimistic a prediction because tourism is a multi-
sectored, labor-intensive operation.

Crash programs therefore are urgently needed to help these
victims survive until international confidence is fully restored
and tourist arrivals return to normal. Soft-term loans for small
and medium-scale enterprises and value-added and income tax
relief will greatly help companies to weather the business
crunch.

However, the extent and duration of the sufferings could be
decreased through concerted joint promotion programs with
national, international airlines, hotels and tour operators to
bring in foreign and domestic tourists.

First of all, before we ask for international cooperation to
help us in promoting Bali, it is now the time for local tourists,
who usually go overseas for their year-end vacations to
demonstrate their national solidarity by holidaying in Bali. At a
time when our country is now being isolated by travel warnings by
many countries, we need to go all out to show to the world that
the Oct. 12 bomb attack was an isolated incident.

Scenes of big crowds enjoying the beaches and shopping at
handicraft shops in Bali could speed up the process of regaining
tourists' confidence in the island. Big discounts on air fares
and hotel rates would be great incentives for domestic tourists
to spend holidays in Bali.

The government also needs to immediately work out joint
programs with international airlines that operate daily flights
to Bali, such as Garuda, Singapore Airlines, Qantas, Japan
Airlines, China Airlines in selling generously-discounted package
tours to Bali. Next on the program could be bringing in
international travel writers to Bali in December to see for
themselves the latest situation in Bali.

Since the damage is not limited to Bali but is also further
hurting the already fragile national economy and is detrimental
to Indonesia's image in the international community, the
government needs to implement crash programs to regain consumer
and business confidence in the country's economic prospects.

Much has been said about the great costs inflicted by the bomb
attack in the form of lost tax and foreign exchange revenues and,
even more devastating, lost investor confidence.

In this context, crash programs are not so much completely new
measures but rather the acceleration of key reform programs in
bank and corporate restructuring, asset recovery, privatization
of state companies and governance and legal reforms to offset the
setback caused by the tragedy in Bali.

Yes, an unforeseen incident or tragedy like the one that hit
Bali could change investors' calculus. Barring another deadly
incident; with firm and prompt actions by the government to
crackdown on terrorism and to push ahead with its reform
measures, businesspeople would assign a reasonable probability on
the economy's prospects.