Tourism Sector Indonesia: Rising Foreign Exchange Earnings

But it is interesting to learn that over the past couple of years, the tourism sector of Indonesia has been playing an increasingly important role in terms of foreign exchange (forex) revenues. While forex revenues generated through Indonesia's traditionally biggest export products - namely oil & gas, coal, crude palm oil, rubber, and clothes - have decreased since 2011, forex revenues generated through tourism in Indonesia have increased over the same time (see table below).

Foreign Exchange Earnings Ranking Indonesia:

	2011	2012	2013	2014	2015
Oil & Gas	41.5	37.0	32.6	30.3	18.6
Coal	27.2	26.2	24.5	20.8	15.9
Crude Palm Oil	17.3	18.8	15.8	17.5	15.4
Processed Rubber	14.3	10.4	9.3	n.a.	n.a.
Tourism	8.6	9.1	10.1	11.2	12.2

^{in billion US dollar
Source: Statistics Indonesia (BPS)}

Rising foreign exchange earnings in the tourism sector come on the back of rising foreign visitor arrivals in Indonesia. Although Indonesia may not achieve its foreign visitor arrival target of 12 million people in full-year 2016, the number of foreign tourists in Indonesia will have nearly doubled over the past seven years. Ever since the last big radical Islamic attack (aimed at westerners) in Indonesia (namely the 2009 Ritz-Carlton and Marriott hotel bombings), the number of foreign tourist arrivals has grown quickly in Southeast Asia's largest economy.

The government's decision to allow visa-free access to Indonesia for 169 countries (through Presidential Regulation no.69/2015 on Exemptions of Visit Visa) is also regarded a good move to attract tourists. In fact, those entrepreneurs who are active in Indonesia's tourism industry urge the government to grant this facility to more countries. However, whether this would be enough to achieve the government target of welcoming 20 million foreign visitor arrivals by 2019 is uncertain.

Moreover, the danger of allowing visa-free access to citizens of most countries is that foreigners can easily abuse this facility. While foreigners are only allowed to stay in Indonesia for a maximum of 30 days under this visa-free facility (for example for tourism, visiting a seminar or business meetings), they can violate immigration laws by working illegally in Indonesia and by overstaying in the country. This mostly involves people from African countries.

Below we present the number of foreign visitor arrivals in Indonesia in recent years. Please note that Indonesia's Statistics Agency (BPS) adjusted the definition of foreign visitor arrival per January 2016. This explains the sharp increase in foreign visitor arrivals between 2015 and 2016.

Foreign Tourist Arrivals in Indonesia, 2013-2016:

Month	Tourist Arrivals         2013	Tourist Arrivals         2014	Tourist Arrivals         2015	Tourist Arrivals         2016
January	614,328	753,079	723,039	814,303
February	678,415	702,666	786,653	888,309
March	725,316	765,607	789,596	915,019
April	646,117	726,332	749,882	901,095
May	700,708	752,363	793,499	915,206
June	789,594	851,475	815,148	857,651
July	717,784	777,210	814,233	1,032,741
August	771,009	826,821	850,542	1,031,986
September	770,878	791,296	869,179	1,006,653
October	719,900	808,767	825,818	1,040,651
November	807,422	764,461	777,976	1,002,333
December	766,966	915,334	913,828
Total	8,802,129	9,435,411	9,729,350

Foreign Tourist Arrivals in Indonesia, 2007-2015:

	2007	2008	2009	2010	2011	2012	2013	2014	2015
Foreign Tourists (in millions)	5.51	6.23	6.32	7.00	7.65	8.04	8.80	9.44	9.73

^{Source: Statistics Indonesia (BPS)}

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