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Bali: Beyond the Tragedy

UNDP and World Bank Publish Report Analyzing the Impact of the Bali Bombing.

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A report entitled "Bali: Beyond the Tragedy", prepared by the World Bank and the United Nations Development Program (UNDP), was released in early October. That report aimed to provide an independent assessment of the current overall condition of Bali's tourism sector within the local economy; evaluate donors and governments response to date in dealing with the effects of the bombing; and suggest medium to long term strategies for sustainable recovery in the island's economy.

Key Recommendations – Security

The report stressed that maintaining tight security in Bali is a key factor in rebuilding consumer and investors confidence in the region, recommending:

• The re-establishment of public security and international perceptions of safety in Bali.

• The introduction of Bali residency registration, beach patrols, and tighter policing policies.

• Continuance of current efforts to professionalize the island's police force while developing targeted, area based, community policing policies.

• Using community based programs to reduce social tensions among various sub-groups on the island.

• Recognizing village heads, traditional adat leaders and the police as the main actors in managing social tensions.

Key Recommendations – The Economy

The report insists that a concerted effort must be made to diversify the sources of growth behind the Balinese economy, recommending and observing:

• Tourism's economic success has created the vulnerability of an undiversified economy in Bali.

• While the number of arrivals is gradually improving in the aftermath of the bombing, there has been a noticeable decline in the quality of tourists as measured by average spend and average length of stay.

• Development of tourism in Bali has been concentrated in the island's South, with the north lagging behind and limiting economic opportunity in those regions.

• World-wide changes in the tourism economy suggest Bali should not delay in efforts to build a more diversified and sustainable economy.

• The recent bombing in Jakarta only serves to underline the on-going vulnerability of Bali's tourism sector which is subject to the vagaries of unpredictable events both outside and inside Indonesia.

Recommendations – Beyond Bali

Also highlighted in the report was the need to integrate the Bali experience into a national approach to strengthening and developing a more resilient economy.

• The impacts of the Bali bombing were severely felt in villages of East Java with strong economic linkages to Bali including trade and migrant labor.

• Silver and wood industries in Pasuruan, granite and metal producers in Tulungagung, and wood and bamboo producers in Banyuwangi all reported more than 50% drop in turnover after the bombing.

• A dialogue is needed between regional governments and tourism stakeholders in Bali and other adjoining regions to develop a comprehensive tourism recovery program involving national and local actors.

• A need to review investment policies and plans to encourage diversification and attract smaller investors to Bali and Lombok.

Recommendations – Community Based Development

The report concluded that:

• 94% of the kecamatan level key respondents in Bali observed an average 40% decline in their incomes.

• Average highest declines were recorded in Karangasem (49%); Gianyar (47%); Buleleng (39.9%); and Denpasar (40.7%).

• Among those losing their jobs following the bombing, over half reported returning to their ancestral villages.

• Among respondents, an estimated 29% of workers were affected by job losses.

• Unemployment impact was more often expressed in terms of reduced income and underemployment, rather than formal termination.

• Among 500,000 people working in the hotel sector, anecdotal evidence suggests up to three-quarters were either working on reduced shifts or been made temporarily redundant.

• Schools in Bali reported an increase drop out rate of 31% following the bombing.

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