Ah, Bali. Land of holy temples, age-old traditions, beaches and jungles – and hordes of influencers in flowing white clothing.
The vacation hotspot is one of 17,000 islands that makes up Indonesia, the largest archipelago in the world. Its verdant rice terraces and Hindu temples define its landscape and make it catnip for the Instagrammers and tourists who flock to the island every year.
In 2019, Indonesia welcomed 16.1 million foreign tourists, according to data from the country's central bureau of statistics. Bali's Ngurah Rai International Airport saw 6.23 million foreign arrivals that year, the most of any airport in the country. While some would argue that tourism has "ruined" Bali, it has become an indispensable part of the island's economy: An estimated 80% of Bali's economy is tied to travel.
The pandemic, of course, ground tourism to a halt globally, and Indonesia was no exception. In April 2020, foreign arrivals in Bali dropped by more than 93%. In the same month, the government announced the pandemic was forecast to wipe out $10 billion from its tourism revenue by the end of the year. By November, Indonesia announced it was in its first recession in 22 years.
Now, the government is trying to kick start tourism with a series of proposed measures that include travel bubbles between several of its islands and nearby Singapore, and a five-year visa targeting business travelers and digital nomads.
It's also planning to spend $275 million on 108 infrastructure projects this year to mint a series of "new Balis," a sweeping initiative that aims to bring tourists to new parts of the vast country.
But all that development comes at a cost. Insider spoke with economists as well as tourism and Southeast Asian development experts to understand what kind of downsides a new surge in tourism could create. Some of those experts expressed doubt that the appeal of Bali can be replicated in the first place – while others are concerned about the impact widespread tourism will have on the country's people and environment.
One of those experts, Jaeyeon Choe O'Regan, who has a Ph.D. in tourism management and focuses on sustainable community development and poverty alleviation in Southeast Asia, told Insider the project raises a series of red flags.
"I'm concerned about replicating the idea of Bali in these provinces because they have characteristics, resources, heritages, and people that are totally different from Bali," Choe O'Regan said.
Indonesia launched its plan to replicate the success of Bali years before the pandemic.
President Joko Widodo described the plan to a group of businessmen during a trip to Hong Kong in May 2017: "You all know Bali, our famous island paradise? With improved infrastructure, we will launch a program called 10 New Balis."
Last year, the government narrowed that list down to five "super priority" locations, which were selected based on their accessibility, their viability as tourism destinations, and the presence of a pre-existing tourism scene to build on.
The list includes:
- Borobudur, the world's largest Buddhist temple, which dates back to the 8th century. It was restored in the 1970s, and is located in South Java.
- Mandalika, a resort area that was designated a Special Economic Zone in 2014. It's located on Lombok, an island that neighbors Bali, and is set to be the host of the Grand Prix Motorcycle race (MotoGP) later this year.
- Labuan Bajo, a fishing town that's known as the gateway to the home of the Komodo dragon.
- Lake Toba, a large lake in North Sumatra that sits in the caldera of a volcano.
- Likupang in North Sulawesi, a popular diving and snorkeling site.
Luh Putu Mahyuni, a Balinese associate professor of management accounting at Universitas Pendidikan Nasional (a private university in Bali) and a Ph.D. in sustainable business and economy, told Insider that Indonesia's approach to selling each location as a tourism destination will likely vary.
"The central government will sell Lake Toba for the beauty of its nature – they will sell eco-tourism," she said. "In Borobudur, they will sell the temples, so it's historical and cultural tourism."
She also pointed out that even with the natural and cultural resources across these destinations, not all elements of Bali are replicable – particularly when it comes to religion. While Hinduism is practiced by less than 2% of Indonesia's total population, it's practiced by almost 87% of people in Bali, per data from the country's central bureau of statistics.
Bali is also home to more than 20,000 temples, according to a 2014 paper called "The Readiness of Bali as Spiritual Destination" released by a team of French and Indonesian universities. Between its myriad temples and its many wellness clinics and yoga retreats, the island has become a magnet for tourists who like a little spirituality with their vacation.
"Basically, the 'new Balis' are dependent on natural beauty and some history. But Bali is known for richness of culture – in Bali, you can find a living culture that is closely related to religious practices, which you will hardly find in other areas in Indonesia," Luh Putu said. "This is the one that is missing in the 'new Bali' [scheme]."
In a 2019 report for the Organization for Economic Cooperation and Development (OECD) focusing on Indonesian tourism, economists Patrice Ollivaud and Peter Haxton laid out the government's tourism goals. Those goals focused on getting as many people to visit as possible.
"Initially [the government] was focusing on attracting more and more tourist numbers," Ollivaud told Insider on a phone call. "That gradually changed."
A representative for the Indonesian government told Insider the strategy for 2021 is not tied to the number of visits, but instead prioritizes "tourists who have a high income."
But even as the program's focus shifts away from mass tourism, the locations may still collectively have their work cut out for them, as indicated by the World Economic Forum's (WEF) 2019 Travel and Tourism Competitiveness report.
When it comes to tourism infrastructure and as compared to Asia Pacific nations, Indonesia ranked in the bottom 40% of the WEF report. And while it scored high on the WEF's ranking of price competitiveness (No. 6 of 140 countries total) and prioritization of travel and tourism (No. 10), the county is lagging in tourist service infrastructure (No. 98) and in environmental sustainability (No. 135).
In other words: It's an inexpensive country to visit, and the government is focused on tourism – but the infrastructure to receive those tourists is weak, and the government's environmental regulations to protect natural resources are very weak.
As the authors of the 2019 OECD report put it, "Infrastructure needs are enormous compared to government funding capacity."
Closing the accessibility gap
So, what does it take to turn an area into a "new Bali?" For one thing, there's the matter of physically getting to each location.
"The government is currently focused on infrastructure, because the connectivity from Bali and Jakarta to these five new Bali destinations is very bad," Luh Putu said. "That's the biggest challenge."
Both the island of Lombok (on which Mandalika is located) and Labuan Bajo have small international airports, but Luh Putu said the roads linking the airports to their destinations need to be improved. Borobudur is a two-hour drive from the closest airport in Jakarta, a city where the traffic has been described as a "nightmare," while Lake Toba is a four- to five-hour drive from the closest airport.
Likupang, known for its snorkeling and diving, is the area that faces the biggest developmental challenges due to limited infrastructure and tourist attractions, as well as the lack of good internet access, the representative for the Indonesian government said.
Bali, on the other hand, is home to Indonesia's second-biggest airport by airline count: Ngurah Rai International has two terminals and receives direct international flights from hubs including Beijing, Singapore, and Sydney. The airport is a 40-minute drive from tourist hotspot Ubud and a 10-minute drive from the Bali party town of Kuta.
To fill the accessibility gap between Bali and the would-be Balis, the government said in an April press release that it would be allocating part of its spending on connectivity. In the case of Mandalika, for example, part of the area's budget is being used to connect Mandalika to Lombok airport. In Lake Toba, part of the budget is going towards road and bridge upkeep, and in Borobudur, it will be used for flood control infrastructure.
But, as Choe O'Regan, the Ph.D. who focuses on sustainable community development, said, "It's not just the roads and the airports."
Ollivaud echoed the same idea: "Transportation is an important part of the deal. But there's also all this other environmental infrastructure that's very important and often lacking in Indonesia."
At the core of the plan to replicate Bali as a tourism model is a basic and pervasive problem: Succeeding could be harmful to local people and local environments, both Ollivaud and O'Regan said.
"Pollution is becoming a huge problem for Indonesia, not only plastic but also having proper water is an issue," Ollivaud said.
"Replicating Bali is a bit of a dangerous idea," said Choe O' Regan. "Bali has serious issues – water shortage, garbage management, people pushed out of villages and homes because of fancy resort development."
In December 2017, the island declared a "garbage emergency" and three-and-a-half miles of beach were deemed an emergency zone because they were so overrun with plastic waste. (The government representative said Indonesia is targeting a 70% reduction in marine debris by 2025.) It's also experiencing a water crisis that's driven in part by its popularity as a tourist destination.
Development plans in Mandalika – which, as a Special Economic Zone, is attracting foreign investment in addition to government investment – in particular, have raised red flags overseas. In March, UN human rights experts urged the Indonesian government to respect human rights after sources found local people were forced off their land without compensation. The Indonesian government representative told Insider it rejects the UN's concerns, calling them "false and hyperbolic."
Ollivaud and Choe O' Regan also both pointed to the importance of developing vocational training programs in the new tourism areas so that locals can find employment, and not only in low-income positions.
"Local people usually get hired for cleaners, receptionists, drivers. These developments generally make low-income jobs for local people," Choe O' Regan said.
Luh Putu, the Balinese professor, is more optimistic. She said the new locations are being developed with Bali's issues in mind: "The government learned a lot from the case of Bali tourism. They realized mass tourism generates a lot of negative impacts on the environment."
She went on to note that Bali's model of tourism is evolving, too, and pivoting towards a village-tourism model in which income is generated in and kept among the local communities.
"If you come to Bali right now, there's a lot of tourism based around villages that's more sustainable in terms of the environment and the culture," Luh Putu said. "Tourists are invited to experience living like a villager to interact with the local culture."
Emerging from the pandemic
Some indicators show the initiative was succeeding in drawing tourists into the new locations before the pandemic struck.
Borobudur and Lake Toba, for example, emerged as new tourism destinations in Indonesia in recent years, per the OECD report. Construction projects including zoning, road construction, and waste management have been ongoing throughout the pandemic in all five locations, the government representative said.
But while the initiative is riding on Bali's international renown to attract tourists, the question still remains whether the island's innate appeal will rub off on other Indonesian destinations.
"Even though they have marketing plans, I don't know how they will actually attract tourists to these locations," Choe O'Regan said. "I think people will still prefer to go to Bali."
And independent experts and government officials alike acknowledge that the stakes are high with this latest tourism push. Luh Putu said that success across the new destinations would bring some much-needed stability to Indonesia's tourism sector.
"Currently, most of Indonesia's tourism income comes from Bali," Luh Putu said, referencing pre-pandemic information. "If the five destinations are a success, it will improve the resilience of tourism because the country won't only be dependent on Bali for income."
On the flip side, Basuki Hadimuljono, Indonesia's minister of public works and public housing, identified what's at stake should the program fail.
"For tourism, first the infrastructure must be repaired, then amenities and events, then a massive promotion," Hadimuljono said in an April press release. "If that's not ready, tourists come once and won't come back again."