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Bali Investments target for 2011 Set at Rp. 15 Trillion

Ambitious Budget Targets for 2011 Provincial Draft Budget Seen By Some as Trap Being Set for Bali's Governor.

(9/20/2010) Discussions have commenced over Bali's provincial budget for 2011 at Bali's House of Representatives (DPRD). At a House session on September 14, 2010, attended by legislators, executives of the provincial government of Bali, the head of the provincial planning agency and other official heard that the targeted total for investments for Bali in 2011 is set at Rp. 15.78 trillion (US$1.753 billion).

Although the budget meeting was held in closed session, Radar Bali revealed that the draft budget for 2011 projects a growth rate of 6.36%, an improvement over the 5.55% growth rate in 2009 and the 5.66 % rate anticipated for the whole of 2010.

Included in the projected growth figures for 2010 is the assumption that Bali will be able to attract US$15.79 trillion (US$1.753 billion) in investments. The majority of this investment is expected to come from commercial businesses, hotels, restaurants, banking, communications and the service sector. Rp. 2.63 trillion (17%) in projected investments is expected from the public sector with the remaining Rp. 13.15 trillion from the private sector. Local tax collections are also targeted to increase by 17% in 2011.

Some members of the House doubt that the new budget is achievable, claiming the stated targets are too ambitious. Legislator Ketut Kariyasa Adnyana underlined his doubt on the Rp. 13.5 trillion in new investments expected from the private sector: "At this time, with the condition of south Bali's infrastructure as it is, new investment in that area are stagnant. Moreover, the amount of available land is depleted, so where will investments of this size be accommodated? If these investments are supposed to be outside Denpasar, Badung and Gianyar those areas do not have the necessary supporting infrastructure. These targets are just too grandiose."

The Buleleng legislator was equally scathing about expectations to increase local tax collections by 17%. He cynically asked if the government plans to increase vehicles taxes by 17% is actually possible on Bali's already crowded roads. He also reminded that the revenues produced by taxes on local water wells went to the account of the regencies and cities, and not to the province. Expressing his disbelief, he added, "this is all very strange."

Meanwhile, a member of Commission IV, Ketut Mandia, sounded similar opinions, saying there was insufficient land available to accommodate such ambitious investment targets. "Don't think Bali is like Kalimantan or other provinces which can derive income from mining and other sources. If we build new hotels, where is the land? What we must consider is creating a supporting infrastructure in north Bali, east Bali and west Bali. If this happens, there still remains a chance of large, new investments," said Mandia.

Setting a Trap for the Governor?

The vice-chairman of the Commission III of the Bali House, IGP Suryanta Putra, said he was suspicious of the proposed budget, claiming the budget was drawn up by officials preparing to retire, such as provincial secretary Nyoman Yasa.

"There is a chance that they are not serious in their intent, perhaps trying to lay a trap. If the budget fails, this can be portrayed as the governor's failure to comprehend (the issues). I hope this will be studied further. This is a trap being laid by members of Bali's executive," warned Suryanta.

Following the session, Yasa promised that he would review the provincial budget for re-submission to the legislature.