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Minister Ardika to Review Visa on Arrival Policy

If Overall Effect of Policy Hurts Tourism Government Pledges Fees Will be Revoked.

(1/26/2004) Although the changes in the visa policy that will see the nationals of many countries pay US$ 25 for a 30 day visa upon arrival in Indonesia seems certain to go ahead on February 1, 2004, Indonesia's Minister of Culture and Tourism, I Gede Ardika, has promised that the Government will cancel the charges if it is demonstrated that the visa policy has hurt tourism.

Speaking to reporters in Jakarta, the Minister said that following an initial six month introduction, the policy and its effect on the tourism sector would be reviewed.

Opposition from Industry Leaders Continues

The Chairman of the Association of Indonesian Tour and Travel Agents (ASITA) Mr. Ben Sukma, was quoted in the Indonesian-language Bisnis Indonesia, saying, "there is certain to be a downturn in tourism visitors. We are not sure how many, but the government tourist arrival targets for the year will not be met." Because of this, Sukma has promised to continue to lobby for a delay or repealing of the unpopular pay-for-visa-on-arrival system.

Government by Trial and Error

Bali's travel leaders continue to participate in the chorus opposed to the immigration policy change. Mr. Putu Agus Antara, Chairman of the Bali Tourism Board and Mr. Agung Prana, Chairman of the Bali chapter of ASITA have termed the visa policy as government by trial and error. While accepting that the new policy is largely a fait accompli, they have urged the government to waste no time in repealing the measure if it is proven to adversely reduce arrivals or if the Government fails to deliver on its promise to process the purchased-visas in 2-5 minutes per foreign visitor.

Figures that Don't Add Up

As reported in past articles at balidiscovery.com, the economics of the new visa policy just don't add up.

Consider the following:

The Government is targeting 5 million visitors for 2004.

Assume that 2 million of that total come from countries required to pay a US$ 25 visa fee on arrival; the gross receipts of revenues collected by the Government will total US$ 50 million.

Divide US$ 50 million by US$ 1,000, which is the estimated average spend of a tourist visiting the country. The resulting figure of 50,000 is the number of tourist that must be lost from arrival totals to result in a zero sum game between visa fees collected and foreign exchange lost through tourist spending.

Thus, a loss of anything more than 1% in total tourist arrivals resulting from the new visa policy means the national economy will come up a loser.