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13 Sep, 2003

Indonesia: From Feast To Near Famine

1. Indonesia: From Feast To Near Famine
2. Government Ponders Shape Of The Visa Policy
3. Look At Root Causes Of Terrorism, Says Zecha

– From Imtiaz Muqbil, Executive Editor, at the Tourism Indonesia Mart and Expo (TIME 2003) in Jakarta, Sept 3-6, 2003


When Indonesia imposes a visa policy as of December 1, 2003, it will complete one of the most dramatic U-turns in the policies of any country in the history of world tourism, bar the United States.

All through the 80s and 90s, a rapid-fire liberalisation of visa and aviation regimes and investment promoting policies made Indonesia one of the fastest growing tourism destinations. In a span of only 12 years, tourism soared from a mere 700,910 in 1984 to 5,034,472 in 1996 (see story below). Today, five years after the May 1998 resignation of President Suharto ushered in “an era of democratic reform,” the country is struggling to cope with a ceaseless litany of ailments, internal and external, financial, communal, political and environmental. Visitor arrivals in 2002: 4,981,004. Seven years of feast have been followed by seven years of near-famine.

The doctors have tried everything — increasing security, organising crisis management programmes, hiring foreign consultants, holding international conferences, reshuffling and restructuring the tourism bodies. But no single set of medication or surgery can do much good in a country as far flung and cultural, ethnically diverse as Indonesia. Like a human medical patient, a problem in one part of the country affects the functioning of others, too. Word spreads, and fear does the rest.

Indeed, Indonesia has virtually become a symbol of all that is going wrong as turmoil strikes travel & tourism worldwide. The visa policy is a desperate act, a supposed solution of last resort. Ignoring protests from the private sector, and citing security concerns, now the dominant factor in decision-making, the Indonesian Ministry of Justice and Human Rights has announced that visas will be required for all except a handful of countries as of December 1. (See story below) Rightly, the travel industry fears the cumbersome process of getting visas will send the industry into a further tailspin.

Indonesia’s tourism problems began in 1997 with the haze caused by forest fires in Kalimantan. In 1998, the haze persisted, albeit to a lesser degree, but was exacerbated by the currency crisis and anti-government riots that led to the May resignation of former President Suharto. In 1999, came the Indonesian elections for a new parliament and president. In 2000, the political disturbances continued, claiming the lives of 15 people in a bomb blast at the Jakarta stock exchange. In 2001, it was 9/11, in 2002, the Bali blast and in 2003, the JW Marriott bombing. Travel advisories have been virtually omnipresent all through.

The controversies that preceded the August 1999 independence referendum in the former East Timor, communal tensions in some of the provinces and separatist violence in places like Aceh have made things worse. The conflict in Afghanistan and Iraq further crimped the global industry, and SARS had more of an impact than all the above. The industry is not looking forward to 2004, when national elections are due again.

Industry officials are running out of explanations. When the first round of political disturbances started, it was positioned as being part of the Indonesia “reformasi” (reformation) period and the growing pains of a fledgling democracy emerging from nearly years of dictatorship. Sympathy was sought, along with time and patience to get the problems sorted out.

Later, when the disturbances did not abate, it was noted that they were all far from any tourist centres, that Indonesia covered a swathe of territory as broad as all of Europe, and tourism industry was not being targetted. The Bali and the JW Marriott bombings put paid to that. None of the travel advisories have been lifted; Indonesia remains on the Australian government’s list of countries to avoid non-essential travel. The trial of the Bali bombers has kept Indonesia in the headlines, complicating image-rebuilding efforts.

While the spirit is still strong, the flesh is beginning to weaken. Tourism Minister I Gede Ardika and Indonesian Tourism Council chief Pontjo Sutowo use identical language in reflecting upon life in the era or reform: “We had been hoping that tourism would help us soften the problems (of nation-building), instead we have become a victim of those problems.”

The structures of the tourism industry have also been affected by the general state of flux in the country’s political and administrative structure. In the cabinet shake-ups of revolving-door governments, the Ministry of Tourism has once been upgraded to a full cabinet level and twice downgraded to a state level. The national policy of promoting grassroots democracy through decentralization and autonomy has given more authority to the provinces to manage their own tourism industries. At the centre, however, funding is negligible and the provinces are basically telling the centre that they are quite capable of going it alone.

It’s not all bad news, however.

Indonesia is taking its terrorism problem very seriously. In addition to stepping up security, the authorities are working with international agencies to keep militancy under control. However, their job is being made much more difficult by what is widely felt among Indonesia’s 190 million Muslims to be an American-Israeli war on Islam disguised as a war on terror. On 14 September, thousands of them rallied in the streets of Jakarta to protest against Israeli occupation of Palestine. There is extensive sympathy for this view among Indonesian tourism industry officials. Mr Alwin Zecha, a prominent tourism personality in the Asia-Pacific who has Indonesian roots, urged in his keynote speech at TIME 2003 that it is about time Indonesian tourism began to take a closer look at the “root causes of terrorism” (See story below).

The private sector is assuming a more dominant position in running the industry. The TIME show itself is essentially a private undertaking, funded by the Indonesian Tourism Promotion Board, also headed by Mr Pontjo, a prominent hotel owner. The local PATA chapter is getting more active and played a major role in a highly successful PATA annual conference held in Bali last April. Future roadshows planned in the regional countries will have government funding but be organised and managed by the private sector.

At the moment, domestic tourism is proving a saving grace. With 40 million Indonesians travelling for business and pleasure, the tourism industry is focusing more on attracting this much more stable market. Last year, the Indonesian government adjusted its national holidays to merge a mid-week holiday with a weekend, thus giving Indonesians more opportunities to travel over what becomes a long weekend. While the rich-poor income gap is colossal, the economy is awash with private money, riding on the back of the huge consumption power of a large population. The Jakarta stock exchange has been on a roll in the last few weeks.

As the industry looks to 2004, the combination of an upcoming election and visas scarcely holds out good prospects. Another arrivals downturn certainly will affect jobs, which in turn will affect security. The national police chief himself admitted as much when he told a recent ASEAN hotel conference in Jakarta, “If this problem is not handled immediately and systematically, it is predicted that this may give rise to such social symptoms as unemployment as a result of the termination of work contracts, which in turn will have an impact on security and social order.”

He was actually referring to the SARS crisis, but if visas affect tourism, it will affect jobs which in turn will affect security which in turn will scare off visitors. The vicious cycle will continue to turn.


These figures of visitor arrivals to Indonesia show how feast has turned to near famine in the tourism industry. Crisis management consultants and others who lift this research are kindly requested to give credit to Travel Impact Newswire.

The Suharto era of visa liberalisation (1983), opening up of aviation and investment opportunities:

1984 – 700,910;

1985 – 749,351;

1986 – 825,035;

1987 – 1,060,347;

1988 – 1,301,049;

1989 – 1,625,965;

1990 – 2,177,566;

1991 – 2,569,870;

1992 – 3,064,161;

1993 – 3,403,138;

1994 – 4,006,312;

1995 – 4,324,229,

1996 – 5,034,472.

The troubles begin

1997 – 5,185,243 (forest fire haze, currency and economic crises strike, anti-Suharto demonstrations begin)

1998 – 4,606,416 (more political disturbances, Suharto resigns in May 1998 and is succeeded by caretaker President Habibie, initial euphoria is followed by political turmoil as parties jockey for power)

1999 – 4,727,520 (elections are held for new parliament and president, In October, Abdul Rahman Wahid is voted president and Megawati Sukarnoputri becomes VP, referendum is held in East Timor, Acehnese demand similar referendum)

2000 – 5,064,217 (more political turmoil, Jakarta stock exchange blast claims 15 lives, Aceh disturbances continue).

2001 – 5,153,620 (full-scale military operations begin in Aceh, more political turmoil, Megawati Sukarnoputri becomes President in July, World Trade Centre attacked in New York on Sept 11)

2002 – 4,981,004 (Bali bomb blast in Oct, Afghanistan conflict, war on terror, Aceh peace accord signed)

2003 (Jan-July) – 1,949,342, -21 % over Jan-July 2002 (Iraq conflict, SARS, war on terror, JW Marriott bombing in Jakarta in August, Aceh peace deal collapses and martial law is imposed in May 2003)

Source of all figures: Pacific Asia Travel Association, Ministry of Tourism and Culture, Indonesia.


From: The Jakarta Post, September 10, 2003

The Indonesian government says it is considering granting 23 countries, including the United States, Japan and Australia, with a visa-on-arrival facility. The facility is part of a new visa policy that will take effect on Dec. 1.

The new policy will also exempt citizens of 10 countries or territories — that have already granted Indonesians with visa-free entries — from having to apply for a visa for visiting Indonesia, Minister of Justice and Human Rights Yusril Ihza Mahendra said.

Nationals from countries other than the two above categories are required to apply for a visa through conventional procedures.

“At the next Cabinet meeting, President Megawati will decide which countries (of the 23 countries) will be given the visa-on-arrival facility,” Yusril said. During the press conference, Yusril was flanked by Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono.

The new policy, which was initially scheduled to take effect this October, excludes visitors from 10 countries, mostly in Southeast Asia. They are nationals from Thailand, Malaysia, Singapore, Brunei Darussalam, the Philippines, Hong Kong, Macao, Chile, Morocco and Peru.

Regarding the controversial amount of fees for the visa-on-arrival facility, Yusril said that the government would determine the amount at the next Cabinet meeting. The amount of fees has been a source of controversy after the government, through its Presidential Decree No. 18/2003 dated on March 31 this year, stipulates that visitors must pay US$30 for a visa when entering Indonesia.

The visa fee has triggered massive protests, especially in Bali last month, where thousands of local tourism players staged a street rally protesting the policy. They said the policy would badly hurt domestic tourism industries who had yet to recover from the Bali bombings and the JW Marriott Hotel bombing in Jakarta.

Yusril said that the granting of the facility was also based on reciprocity and mutual benefit principles. “The visa-on-arrival policy is not given to countries that do not grant Indonesian citizens the same conditions with the policy,” said Yusril.

Meanwhile, the number of tourists a foreign country contributes to Indonesia is another consideration behind the government’s decision to grant or not to grant the visa-on-arrival facility. The new visa policy replaced Presidential Decree No. 15/1983, which granted free visas to nationals of 48 countries. It also reduced the length of stay, from 60 days to 30 days. Only after strong protests from domestic tourist industry that the government agreed to loosen the policy and agreed to grant a visa-on-arrival facility to the 23 countries.

In Tuesday’s meeting, State Minister of Tourism I Gede Ardika suggested that the length of stay for tourists be extended to 45 days. The government has yet to respond to his proposal. The visa-on-arrival facility will be available at seven airports, including the Soekarno-Hatta International Airport in Jakarta and Polonia Airport in Medan, North Sumatra and several seaports, including Tanjung Priok in Jakarta and Belawan, North Sumatra.

Countries short-listed for visa-on-arrival facility: 1. The United States 2. The United Kingdom 3. South Africa 4. Argentina 5. Brazil 6. Denmark 7. United Arab Emirates 8. Finland 9. Hungary 10. Australia 11. Italy 12. Japan 13. Germany 14. Canada 15. South Korea 16. Norway 17. France 18. Poland 19. Spain 20. Russia 21. Switzerland 22. New Zealand 23. Taiwan


One of Asia’s leading tourism industry executives, Mr Alwin Zecha, chairman of the Pacific Leisure group and life member of the Pacific Asia Travel Association, has become the first to urge the Indonesian tourism industry to look beyond just fighting terrorism and at the root causes of terrorism.

Keynoting at TIME 2003, Mr Zecha spoke after an opening speech by Indonesian tourism minister I. Gede Ardika who merely rehashed the familiar themes of ‘fighting terrorism’. Instead, Mr Zecha drew extensively upon a study done by Travel Impact Newswire to remind the Indonesians that fighting terrorism required what spa marketers would call ‘holistic solutions’ — a combination of diplomatic, political and military efforts, not just crackdowns. He quoted the study as saying that smokers cannot hope to arrest a lung cancer simply with chemotherapy unless they address the root cause first: smoking itself.

Mr Zecha, who is of Indonesian background and well-regarded in the country, repeated the study’s challenges to both the World Travel & Tourism Council and the World Tourism Organisation to respectively assess how much money will have to be spent on beefing up travel security world-wide, and how that money could make a much more important contribution to combating terrorism if it were to be spent on more useful things like improving education, health-care and sanitation facilities in the developing countries.

Later, Mr Zecha said he had received an enthusiastic response to his speech from an industry that recognises that state terrorism by various governments is just as responsible for global geopolitical problems as terrorism by fanatic groups, but is afraid to say so publicly for fear of offending companies that supply business from those countries.

The speech was also picked up by various media. Mrs Wuryastuti Sunario, editor and publisher of Indonesia Digest, published it at length. She commented, “Peace and security, that are the sine qua non of the industry, have now become the primary world issue. It is now time that the industry insist that there must be solutions to peace. The industry must take a stand on an issue that is an inherent and intrinsic part of democratic process.”