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Dirty Money

Is Baliís Hotel & Villa Building Boom Tied to Money Laundering?

(8/17/2012) An economist from Bali’s Udayana University, Professor IKG Bendesa, is calling on the regional governments to be vigilant in guarding against illegal money laundering practices in the construction of new tourist accommodation in Bali.

Quoted in the National News Agency Antara, Bendesa, speaking at a seminar on the “Critical Analysis of Development to Achieve Public Welfare,” said: “In Bali there is an explosion of hotels offering room rates below Rp. 300,000 per night. In this condition, these properties should be suffering losses, but in reality they continue to survive. It is not inconceivable that these accommodation investments are the result of laundered money and corruption."

The assistant Rektor of Udayana University lamented that despite a moratorium on new hotels in Bali by the provincial government of Bali, the additional of more accommodation is happening at an uncontrolled pace amidst declining occupancy rates and tariffs reflecting unhealthy competition between hotels.

Bendesa added: The government has no blue print for hotel accommodation; not because of regional autonomy but because the of unhealthy governance. “

Villa mushroom everywhere, he explained, but these new projects fail to bring new sources of income and employment. The government, he accused, is unable to control outcomes in either the areas of  finance or employment.

“These are indications of an underground or shadow economy creating ill effects on the region’s economy. There is the possibility that those involved in money laundering are purposely investing their fund into hotels and property in Bali.” he said.