Tourism in Indonesia: Terrorism, Infrastructure and Asean Common Visa

If we look at terrorist attacks in Indonesia that were aimed at symbols of the western (capitalist) world, then the following incidents occurred since the year 2000: suicide bombings at JW Marriott and Ritz-Carlton Hotels in Jakarta (2009), a suicide bomb and car bombs at two sites in Jimbaran Beach Resort and Kuta on Bali (2005), a car bomb outside the Australian embassy in Jakarta (2004), a suicide bomb at JW Marriott Hotel (2003), suicide bomb attacks in Kuta on Bali (2002), and a car bomb that exploded in the basement of the Jakarta Stock Exchange (2000). Combined, 270 lives were lost in these terrorist attacks, roughly half of these casualties were non-Indonesians.

Looking at the table below, we notice that these vicious attacks coincide with a drop in foreign tourist arrivals in, either the same year (if the incident occurred early in the year), or, the following year. However, after one year, we see a recovery. Thus, it can be concluded that foreign tourist confidence needs approximately one year to recover from a terrorist incident.

Foreign Tourists Arrivals 2000-2010:

	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
Tourists (in millions)	5.06	5.15	5.03	4.47	5.32	5.00	4.87	5.51	6.23	6.32	7.00

^{Source: Statistics Indonesia (BPS)}

An interesting development can been discerned since the JW Marriott and Ritz-Carlton Hotels bombings in 2009. This attack was the last incident that involved a clear western target. Previously, targets of radical Islam also consisted of western or foreign people and symbols of the western world, such as embassies and certain nightclubs or hotels. However, after 2009, attacks have only been directed towards symbols of the Indonesian state, such as police officers. This change of tactics by the radical Muslim community is probably in reaction to the good work done by Densus 88, Indonesia's special counter-terrorism squad (which is funded by the American government and trained by the CIA, FBI and US Secret Service). In short, the absence of terrorist attacks aimed at westerners in the past five years have led to increased tourist confidence and made room for rapidly increasing foreign tourist arrivals in recent years.

In 2013, Indonesia met its target in terms of attracting foreign visitor arrivals. During that year, 8.8 million foreigners entered Indonesia, a 9.4 percentage growth from the previous year. The most important points of entry in 2013 were - as usual - Bali, Jakarta and Batam. More than 6.81 million foreign tourists entered Indonesia in one of these three locations. The tourism sector contributed 3.8 percent to Indonesia's USD $900 billion gross domestic product (GDP) in 2013.

Attracting tourists is an important foreign exchange earner for Indonesia as each foreign tourist spent an average of USD $1,142 per visit in the country. It also has a good impact on much-needed job creation in Southeast Asia's largest economy. However, issues that are negatively affecting development of Indonesia's tourism sector are the lack of good infrastructure (thus curbing intra and inter island connectivity) and human resources as many Indonesians cannot speak English (thus seriously curbing communication between foreign tourists and locals).

The importance of well-developed infrastructure can be seen in the case of the island of Lombok. After the new international airport was opened in late 2011, the number of foreign tourists accelerated by an impressive 137 percent. Obviously, this development brings new local economic opportunities.

ASEAN Common Visa

Furthermore, implementation of the ASEAN common visa is expected to boost foreign tourist numbers further. This visa, which is part of the ASEAN Economic Community, grants members of the ASEAN region the right to enter any other member country using one single permit. This new policy will be implemented by the end of 2015. Knowing how much Indonesia has to offer to tourists, it brings big opportunities as well as challenges to provide a more conducive tourism climate through infrastructure and human resources development.

Foreign Tourist Arrivals in 2013-2014:

Month	Tourist Arrivals          2013	Tourist Arrivals          2014
January	614,328	753,079
February	678,415
March	725,316
April	646,117
May	700,708
June	789,594
July	717,784
August	771,009
September	770,878
October	719,900
November	807,422
December	766,966
Total	8,802,129	753,079

Foreign Tourists Arrivals 2007-2014:

	2007	2008	2009	2010	2011	2012	2013	2014¹
Foreign Tourists (in millions)	5.51	6.23	6.32	7.00	7.65	8.04	8.80	9.3

^{¹ indicates government target
Source: Statistics Indonesia (BPS)}

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