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Editorial: Tourism as an Export Commodity

Tourism Must be Viewed as Part of the Country's Export Economy.

(10/6/2003) Governments everywhere know the value to their home economies of the new money from abroad created through export activities. The role played by the "multiplier effect" of foreign exchange earnings is of particular importance to developing economies, such as Indonesia's, fueling expansion of the job market by stimulating new investment. Recognizing the myriad benefits to the Nation, right thinking policy makers endeavor to foster policies that provide stimulus to their export economies.

Tourism as an Export Commodity

Within the context of the drive to stimulate exports, we are amazed at the inability of our leaders to view the Nation's tourism industry as Indonesia's most valuable exporter.

The arguments supporting such a view are both many and compelling:

The business of tourism in Indonesia is dedicated to persuading people from abroad to visit our shores, leaving substantial sums of foreign exchange in their wake. While tourism may differ in its approach to exports, the benefits that accrue to the country's economy are the same.

Other exports, such as oil and gas, compel the nation to ransom valuable limited resources for much needed foreign capital, while a well-managed tourism industry can generate equal or greater amounts of exchange promoting a renewable resource capable of sustainability over the long term.

Upgrades in the nation's infrastructure demanded in order to remain competitive with other tourism destinations in the region also bring quality of life improvements enjoyed by the host population. The benefit of modern airports, hospitals, telecommunications services, and well-lit roads and sidewalks are shared by tourists and locals alike.

While the manufacturing sector exports are often tied to the employment of semi-skilled labor at near-subsistence wages, a healthy tourism sector's demand for workers creates a pool of multi-skilled, relatively well paid middle-income Indonesians who buy homes, appliances and vehicles produced by other Indonesian workers. What better illustration is there than tourism of the much praised "multiplier effect" provided by exports?

Seen in its entirety, tourism is a major taxpayer. Tax revenues are taken at a number of posts along the tourism production chain. Goods and services used by the industry are taxed, as are payrolls and every sale in a hotel or major attraction.

Tourism can be seen as a "free university." Consider the numerous senior corporate managers in Indonesia who first learned their communication and managerial skills working in the nation's hospitality industry. Hotel Managers are constantly bemoaning how their "best and brightest" staffs are "head hunted" by recruiters from the nation's banks, insurance firms, and other major corporations.

Perhaps we are prejudiced in favor of tourism, but we can't think of any sector of the economy more in need or more worthy of careful cultivation by the Government.

Bali Concord II

The meeting of ASEAN Heads of State taking place in Bali October 7-9, 2003 will result in the Bali Concord II declaration signed by all 10 member countries of the Association. Indonesia, as one of the driving forces behind the declaration, boast its ratification represents ASEAN's shared political will to create a stronger regional economy through the dismantling of existing tariff and non-tariff barriers to the region's export economy.

We applaud and support the sentiments embodied in the Bali Concord II, but the sad irony of Indonesia's rousing support for the declaration within the contest of the current controversy over changes in the visa policy is not lost on us. While on the one hand aspiring to leadership in the movement for intra-regional trade and tariff liberalization, Indonesia is at the same time taking steps that threatens to cripple both its own national tourism sector as well as the region's transportation and tourism players.

Seemingly, this contradiction between the Country's fervent desire to promote regional trade on the one hand and plans to restrict tourism flows on the other is also not lost on our ASEAN neighbors. Last week the Singapore Tourism Promotion Board (STPB) publicly complained that the new system to require the citizens of many countries to purchase a visa on arrival in Indonesia threatens to not only cripple Indonesia's tourism economy but will also have a negative "lead-on effect" to other ASEAN destinations. ASEAN'S ongoing campaign to promote the region as a tourism destination is necessarily weakened when any one member of the grouping takes any step to inhibit the free movement of people through the introduction of visa fees and exit taxes.

Seeking Brave and Insightful Leadership

Historically, movements to liberalize trade require far-sighted and courageous policy makers prepared to suffer the political discomfort required to manage the introduction of a more liberalized trade environment. While we acknowledge the good intentions of Indonesian Ministers intent on protecting national security interests through changes in the visa policy, we wonder if the new Visa-On-Arrival policy will in fact end up undermining national security by contributing more pain and suffering to an already wounded economy?