Jenny H. Backstrom, Kuta – It is still the rainy season in Bali. But other forms of clouds, confusion and uncertainty, currently cover the island. The hot topic causing this confusion is the much-debated new visa-on-arrival policy, to be effective February 1.

For Bali the policy is a potential nightmare. The island's tourist industry has been trying to recover since the October 2002 bombing and the more recent threat of SARS in the region.

The policy, previously scheduled to take effect on December 1, 2003, will restrict visa-free entry to tourists from only 11 countries – instead of the present 48. The countries include Singapore, Thailand, the Philippines, Brunei Darussalam, Hong Kong, Macao, China, Peru and Morocco.

The 21 nationalities that lose their visa-free status but are still able to apply for a 30-day visa on arrival include the United States, Britain, Canada, France, Switzerland, Italy, Germany, Taiwan, Japan, South Korea and Australia.

The new policy also cuts the length of stay in Indonesia for short-term visitors from 60 days to only 30 days with an optional US$10 payment for three-day visit and $25 for a 30-day visit. Visitors from the affected countries are by far the largest groups to visit Bali. Three of the countries – Japan, followed by Australia and South Korea – are the island's biggest tourist markets.

With only three days left to its implementation, question marks still hang over the scheme. Which segments of the tourist market will be hit hardest by the regulation? What will the economic consequences be? Opinions on these matters vary.

Association of Indonesian Tour and Travel Agents (ASITA) Bali chairman I Gusti Agung Prana said the government's decision was political and had to do with national pride and respect.

The Bali provincial government supports the decree – especially the reduced length of the visa. The visa, it says, will protect local people from being exploited by expatriates living in Bali without a business visa. However, most in the industry are against the additional visa fee, which they say is a transparent money-making scheme that will further discourage tourism.

Bali Tourism Board (BTB) chairman Putu Agus Antara remarked: "The smell of politics spiced with other interests is strong." I Gde Pitana, the head of the Bali Tourism Agency, objects to the visa fee and the date of its implementation. The decision had nothing to do with economic and security issues as had been argued by Minister of Justice and Human Rights Yusril Ihza Mahendra, he said.

Pitana said the new regulation would not increase security in Bali as 30 days was easily enough time to plan and carry out a terrorist attack, plus any threats were unlikely to come from outside Indonesia.

"The timing is very bad," he said, adding that Bali was still suffering from the effects of travel warnings imposed on the island by Western countries after the Bali bombing.

Two-thirds of total arrivals in Bali each year are tourists traveling on package deals and many of these are families who would perhaps find it difficult to pay $25 for each member, he said. Tourists will object to the extra costs, especially those who booked packages up to six months ago.

However, Pitana does not believe that halving the visa to 30 days will have a big impact on tourism in Bali. Even before the Bali bomb in 2002 the average stay had been only 9.5 days, with the longest stay about 21 days.

"Very, very few stay longer than 30 days, maybe less than 10 percent," he said. Tourists who usually stay the longest in Indonesia are backpackers and surfers.

Pitana said that Bali needed "quality tourists" interested in culture, upmarket environments and spending their money. Since surfers and backpackers did not fit into this category, losing some of them would not have a big impact financially on Bali.

However, a walk around in budget areas like Kuta, where every other motorbike seems to be equipped with board racks, suggests that Bali's long-term stay clientele would have to make a difference to the island's local economy.

Antara said that while budget travelers were a minority and often spent less money than other tourists, their money was of great importance. It usually went straight into the pockets of local people in small-scale businesses, he said.

This is the case not only in Bali but also in other regions such as Sumatra, Java, Lombok and Sumbawa, to where longer-term visitors often travel.

"Since we have a lot of poor people, the budget travelers are important," Antara said, adding that their role in Bali's economy was often played down.

"Bali benefits from people staying longer," he said. "I believe we will lose these people." This is a shame, he said, because budget travelers and families love Bali and may be more "loyal" than other tourists. "There is no logic behind the decision," he said.

And indeed, it does seem illogical to implement a law likely to hit almost every segment of Bali's tourist market: Families and package deal tourists with the visa fee, surfers and backpackers with the limited stay, and expatriates with both.

Up until the last meeting, it was expected that the visa law implementation would be postponed, Agung Prana said. "During a crisis like this we need all the segments of the tourist market." In the short-term Bali will lose visitors, maybe as many as 30 percent, but as time goes by and the clientele changes, the provincial government and tourism board predicts that tourist numbers will return to normal levels, he said.

There will be an evaluation of the new regulation in six months. If indicators show that the market has been badly affected amendments will be a priority.