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The Tip of Many Icebergs in Bali

Editorial: Poor Enforcement of the Rules is at the Root of Many of Bali's Tourism Problems.

(9/7/2010) The tourism business in Bali can be likened to a soccer match conducted without the benefit of referees. The resulting "free-for-all" is as it is: a chaotic scramble for the tourist dollar in which issues like product quality, consumer protection and product sustainability take a distant back seat.

And. like its analogous Indonesian soccer match, when a referee does makes an appearance in local tourism circles he is all too often verbally abused, accused of bad motives, ignored and, all too frequently, offered a pay-off. Disrespected, poorly paid and demoralized at every turn it's hardly surprising that many officials in these parts, both in tourism and soccer, are more adept at waving the rules than in enforcing them.

The Breakdown of the Social Covenant

This lack of a discernible set of rules consistently applied is bad for Bali and, in the long-term, for sustainable tourism investment. On the one hand, bona fide domestic and foreign investors submit to a complicated bureaucratic registration process; submit detailed building and environmental plans; hire staff and pay them in compliance with local labor laws; and pay a variety of taxes. On the other hand, these same entrepreneurs are dismayed to find competitors operating at their very doorstep offering similar products and services without these same burdens imposed by "playing by the rules."

In the current circumstance, many local business people who earnestly try to play by the rules can be forgiven for scratching their heads; wondering why they try fulfill their civic duties when enforcement is largely absent before officials who refuse to perform their role as "referees" charged with enforcing the social covenant.

To avoid accusations of leveling a public diatribe unsupported by facts, allow us to outline just three sub-sectors of the island's tourism sector where the lack of rules and reputable officiating is harming Bali:

Travel Agent Registration - We applaud current moves by the provincial government to rationalize the number of illegal and dormant travel agents on the island. Whatever the final outcome of these moves, however, we hope the promised streamlined cadre of agents will also consider introducing a consumer protection mechanism that will serve to encourage visitors to deal only with legally registered agents.

Suggesting current rationalizing steps may be doomed from the outset, the government seems overly concerned with travel agencies already listed on the government books, while leaving untouched the hundreds of "tourist information offices" and illegal travel websites operating in Bali selling travel products outside any regulatory supervision.

Tourism Transportation - Recent well publicized fights for territory among Bali's taxi operators are on their most basic level a reflection of the government's failure to enforce existing transportation rules. Fights between competing taxi companies camouflage a much larger failure of the government to crack down on unlicensed tourist transport operations by villas, hotels and gypsy transportation operators. Clearly, if the illegal sector of tourism transportation operators were closed or brought into line, there would be plenty of business to keep licensed transportation and taxi operators busy.

Villa Operations - A just completed survey by Udayana University showed that Bali is severely oversupplied with tourist accommodation. This problem, too, would be largely eliminated if the unlicensed and illegal villas competing against Bali's formal accommodation sector were shut down.

The Clock is Ticking

Unfortunately, it is all too easy to compile an even longer list of where Bali's failure to fairly and consistently enforce the "rules of the game" is at the root of the island's current "catch-as-catch-can" approach to development.

Bali desperately needs fair-minded and hard-working referees. Without them, the resulting game is not fun to watch and, predictably, result in a competition where there are no real winners.