BALI UPDATE #305 - 22 July 2002

Bali: Bargain for Europeans

Surge in Euro's Value Against the Dollar Spells Savings for Smart Europeans.

An increase in the Euro's value to virtual parity with the U.S. dollar means that Euro-earning visitors now enjoy more buying power in Bali. balidiscovery.com takes a look at the implications of the currency shift, its implications, and how smart European travelers can make their money go further in Paradise.

Bali - A Dollar Based Economy

Despite the widespread use of the Indonesian Rupiah for daily commerce, Bali's tourism economy is largely dollar-based. Because the Rupiah is technically a "non-exportable" currency, most hotels on the island post their published room prices in U.S. Dollars, with some even posting the cost of food and beverage and other services in dollars. Special "contract rates" extended to travel wholesalers and operators are generally also posted in U.S. Dollars.

Meanwhile, most restaurants and shops sell their goods in Rupiahs.

This means that European travelers converting their Euros into Dollars or Rupiahs now get almost 10-12% more than they did only a year ago. As a result, dining and hotels in Bali - already a bargain by any standard - have become even less expensive for European visitors.

Are You Paying Too Much For Your Bali Holiday?

European visitors to Bali utilizing the services of a major European wholesaler may be failing to reap the full benefit of their strengthening Euro against the Dollar.

Most European wholesalers negotiate their room rates in U.S. Dollars and then convert those rates into Euros in the process of constructing their package rates. Often forced to rely on brochures and prices printed only once a year - the hotel, local transportation, and other components of a Bali holiday marketed in Europe may have been costed when the Euro traded at a 10% to 12% disadvantage to the Dollar. Short of launching an interim promotion before their next brochure printing, prices on offer for Bali may not be reflecting the true level of savings currently available to Euro spending tourists.

How Europeans can Get the Best Deal in Bali

To avoid paying too much for their Bali holiday, European travelers should check and compare current real time prices with an established Bali travel website, such as balidiscovery.com. Prices listed at that website are in U.S. Dollars and guaranteed to be the lowest available on the Internet, allowing European travelers to construct a complete Bali holiday secure in the knowledge that they're getting full value for their hard-earned Euros.

More information: Book a Hotel with balidiscovery.com

Love for Sail

U.S. - Indonesian Friendship Founded on a Shared Love of a Tall Ship.

If Indonesia as a nation was sailing through a patch of rough water in 1999, the same could be said for the 200 man crew of its once-proud Barkentine tall-ship training vessel - KRI Dewaruci. Despite severe economic hardships and political uncertainty at home, the bold young recruits set sail from Indonesia on the tri-masted KRI Dewaruci in that year, destined for San Francisco to participate in the Gold Rush Sail and Tall Ship Parade sponsored by the State of California.

Promised financial and material support upon arrival on America's West Coast, the young cadets arrived in San Francisco Bay in July of 1999 only to be told that their hosts had suddenly withdrawn support for the event. The proud crew of nearly 200 on the KRI Dewaruci found themselves in a foreign land without fuel, water, essential food supplies and on board a ship in bad need of repairs following a rough Pacific passage.

Fortunately, their plight did not go unnoticed. Russ Coggeshall, the General Manager of the San Francisco Yacht Club and a friend with Indonesian roots, John Hartono, visited the ship and fell instantly in love with its fast fading glory. Determined to come to the rescue, the San Francisco Yacht Club's management, staff, and the Club's Chef lobbied San Francisco purveyors of fresh produce, meat, and other necessities (including a local brand of gourmet ice cream) to donate their stocks for the 200 cadets and crew.

Buoyed by the their replenished food lockers and their instant adoption by the people of San Francisco, the young Indonesian swabbies repaid their host at the San Francisco Yacht Club with an impromptu show as their contribution to America's Independence Day celebrations.

That night a long and very mutually beneficial friendship was established between the people of America and the eager group of select young Indonesian sailing cadets.

KRI Dewaruci

The KRI Dewaruci was built in Germany in 1952 and is one of the few remaining tall ships of its kind still sailing the seven seas. The KRI Dewaruci's only armament is the goodwill carried by her Naval cadets, selected from over 300,000 candidates who come from all of the islands of Indonesia, many from Bali. Her main role in the Indonesian Navy's Armada is to act as a training tool for her Cadets. Her unofficial role, however, is as a symbol of national unity and cross cultural cooperation among the Indonesian people she representes in her every port of call.

When the ship arrived in San Francisco in 1999 she was showing the wear of its many years of service and the lack of funds from a Government with, frankly, facing more pressing social requirements than the upkeep of its aging sailing vessel.

Undeterred, Russ Coggeshall and John Hartono established the Friends of the Dewaruci Foundation to raise funds for much needed repairs to the vessel. Working together with their Indonesian counterparts at the Yayasan Sahabat Dewaruci approximately US$3 million was raised through events held in Jakarta and during the ship's port calls in San Francisco, Los Angeles, Florida, Baltimore, New York, Boston and Hawaii.

Just three years later, by July of 2002, the KRI Dewaruci has been completely refurbished and ready for another 50 years of service to the Republic, conveying her Indonesian ambassadors of goodwill to every corner of the world.

"Spirit of the Dewaruci" lives on.

Russ Coggeshall has adopted Indonesia as his second home, visiting regularly with friends to supervise the restoration work at the Surabaya dockyards, touring the country, and finding new projects such as securing valuable volumes for Indonesia's Naval Academy Library.

Ross is due for his next visit to Indonesia in September, bringing a group of friends from the Yacht Club for an extended visit to Bali with arrangement handled by Bali Discovery Tours.

More information: Contact Russ Coggeshal - Friends of Dewaruci

Physics as an Olympic Event

International Physics Olympics Being Held in Bali.

The International Physics Olympiad (IPhO), an annual physics competition among top high school students from all over the world is taking place in Bali, July 21-30, 2002.

Over 307 competitors together with a large contingent of supporters and observers representing 72 countries will be on hand for the contest conducted at the two hotels selected to host the event - The Hotel Ina Grand Bali Beach and Sheraton Nusa Indah Resort.

First established in 1967 and administered by an organizing committee based in Poland, the IPhO Bali competition represents the 33^rd time the event has been held between top high school students who sit for intensive examinations covering three theoretical problems and two experimental problems. At the end of the event, top finalists are awarded gold, silver or bronze medals and honorable mentions based on their problem-solving performance during the course of the competition.

Officially supported by Indonesia's Ministry of National Education, the Bali Physics Olympiad is organized by Institut Teknologi Bandung (ITB), the oldest and most prestigious science and engineering university in Indonesia. Originally scheduled to be held in Bandung, West Java, the home to the University, a decision was subsequently made to move the event to Bali in order to encourage wider international participation.

More information: Visit the IPhO Website

Editorial: Chop Suey Management

Bird of Prey Will Play: Struggle Over Control of Chinese Inbound Market Continues.

Indonesia's failure to conceptualize a professional approach to the Chinese travel market, highlighted in Bali Update #298, entered a new phase this week when the members of the purpose-formed oversight body - The Indonesia-China Travel Commission (ICTC), voted to return the role of coordinating the Chinese market to the Indonesian Association of Tour and Travel Agents (ASITA) .

Apparently unhappy with the management of the ICTC, citing a lack of transparency, decisions to suddenly impose substantial financial guarantees on its members, and efforts to reduce from 86 to 19 the number of tour operators officially licensed to do business with tourist from the People's Republic of China, the members of the consortium voted to return the mandate on Chinese travel back to ASITA. The dramatic move was approved by a vote of 42 to 16, among the 58 members of 86 member strong ICTC attending a July meeting in Jakarta.

Quoted in the Indonesian-language Bali Post, Mr. I Gusti Bagus Yidhara echoed the thoughts of those who voted against the ICTC, saying he hoped that the future handling of the Chinese travel market would not created a complicated bureaucracy that only serves to burden members of the travel industry. Mr. Yudhara is the Chairman of the Bali Chapter of ASITA.

If It's Not Broke, Don't Fix It

balidiscovery.com strongly supports Mr. Yudhara's sentiments and goes one step further by suggesting that the policy adopted by the Government in issuing "special licenses" to travel agents permitted to handle the Chinese market is fundamentally flawed.

Despite the requests of PRC diplomats for such a policy, the simple fact remains that the challenges of handling the Chinese traveler are easily within the capabilities of any licensed Indonesian tour operator who chooses to handle this market.

Are the needs of the Chinese visitors really that much more complex than those of the Russian, Italian, French, or any other national group? We think not.

Arguments that licensing is needed to avoid victimization of the Chinese traveler to Indonesia are, we believe, largely a smoke screen. One only need point to the fact that travel agents who had long ceased operations somehow managed to make it through the first screening of those designated to handle the Chinese market as proof that the licensing process was never really about the needs of the Chinese consumer. Moreover, that monoplistic desires to control this market are at play is further evidenced by the fact that the protracted debates of the past months over who should control the Chinese market consortium have been largely devoid of any discussions on consumer protections for the Chinese consumer.

Despite the grandiose plans of small men to dominate the potentially important Chinese travel market to Indonesia, the irrefutable fact remains that the travel consumer is best served by a large, free, and open market run by travel professionals held to the highest standards of ethics and travel practice.

We are prompted to ask: Does this Chinese Emperor Wear No Clothes?

More information: Bali Update #298 Editorial: Chinese Take-Away

An Island With Strings Attached

Bali's Airport Issues a Warning to Aviators.

With local police authorities unable or unwilling to enforce a local regulation that prohibits kite flying in the proximity of Bali's Airport, Administrators at Bali's Ngurah Rai International Airport have issued a formal Notice to Airmen (NOTAM) warning of the potential threat posed by kites aloft in the approach and departure pattern of the Bali airport.

The NOTAM, issued worldwide, advises pilots to exercise caution during Bali's kite flying season from May to October.

As reported in Bali Update #298, literally hundreds of kites - some the size of a large truck - are launched by local village associations during the season of strong off shore winds. Flown on the end of ropes, often stretching many thousands of feet above the ground, these kites can cause traffic accidents and major power outages when they return uncontrolled to the earth. Moreover, encounters between the kites and local aircraft do occur with at least two reported "entanglements" taking place in recent months between the kites and a large commercial aircraft and a local sightseeing helicopter. Fortunately, no injuries were reported in connection with either of these incidents.

Local regulations carrying fines and prison sentences for those flying kites in Bali's air traffic control areas are in place, if not in force. A law passed in 2000 absolutely prohibits kite flying within 9 kilometers of the airport; flying kites at more than 100 meters above ground level between 9 and 18 kilometers from the airport; and over 300 meters in a radius between 18 and 54 kilometers from the airport. Nonetheless, in what seems to be blatant contempt for these rules, hundreds of kites dot the skies of Bali, including areas immediately adjacent to the airport's runway.

Local press reports have noted the reluctance of Bali's Police authorities to take an active role in enforcing the kite flying rules, gambling with the potentially tragic consequences of a mid-air aircraft encounter with one of Bali's massive kites.

More information: Related Story: Go Fly A Kite!

Drugs - A Growing Problem?

Latest Police Statistics Suggest Drug Use May Be Expanding.

Latest statistics released by the Provincial Police Headquarters in Bali demonstrate, depending on how they are interpreted, either an epidemic of drug abuse on the island or a more vigilant police enforcement underway against drug offenders.

Interim figures through the end of June 2002, show a total of 128 arrests on narcotic related charges. If the current rate of arrests holds constant for the remainder of the year, police will have arrested 11 percent more drug suspects than in 2001 when a total of 231 narcotic arrests were recorded for the entire year.

Perhaps more remarkable, this projected level of arrests for drug crimes in 2002 would represent a 449% increase in the level of drug-related arrests over the past 5 years.

Additional data provided by the police also indicate a dramatic increase in hard drug usage as measured by the quantities of Heroin seized by Bali's police authorities.

Bali's Narcotic Arrests Year Indonesian Nationals Foreign Arrests 1998 47 10 1999 99 6 2000 191 27 2001 219 12 2002 (interim, half year) 114 14

Merpati Needs Cash Injection?

Airline Boss Says Cash Needed for Daily Operations.

Financially troubled Merpati Nusantara Airlines (MZ) is apparently starting to experience a real cash crunch.

The Airline’s recently appointed CEO, Mr. Hotasi Nababan, publicly complained recently about the lack of cash, saying written requests for a cash injection from its owner, the Government of Indonesia, remain unanswered.

Citing US$ 10 million as the amount needed as working capital to keep the airline clicking along, the Airline Executive was unsure if the needed funds would be dropped by the government or obtained via a privatization of the carrier.

MZ has an outstanding debt total of Rp. 1.7 trillion (approximately US$189 million), Rp. 800 billion of which has been restructured.

MZ operates a fleet of 35 aircraft comprised of seven types of aircraft – all with an average age in excess of ten years.

More information: Related Story: Setiawan Djody to Acquire Merpati?

Embassy as Brochure Depots

Minister Ardika to Give New Role to Indonesian Embassies.

Indonesia's Minister for Culture and Tourism, Mr. I Gde Ardika, has announced a new initiative that will enlarge the role of Indonesia's overseas diplomats in promoting national tourism.

Responding to complaints from the nation's diplomats that tourism promotion material in their possession was either non-existent or badly out-of-date, Minister Ardika promised that promotional material is in the process of being updated and would soon be available for distribution in all overseas missions of the Republic.

With the closure of most of the Countries overseas tourism promotion offices since the onset of the political and economic crisis that began in 1998, Indonesia has been at a distinct disadvantage in efforts to portray a positive national image abroad. (Bisnis Indonesia)

Theme Announced for PATA Bali Conference

Emphasis on Heritage and its Preservation.

The theme of the 52^nd Annual Pacific Asia Travel Association (PATA) Conference to be held in Bali April 13-17, 2002, has been announced.

"Culture and Tourism: From Heritage to Legacy" will form the central theme of tours, conference sessions, discussion groups and distinguished keynote speakers during the Bali conference expected to draw over 1,000 participants. In adopting the theme, PATA is reminding the tourism industry of the special role it plays in the promotion and preservation of indigenous cultural traditions around the world.

Program details, including exciting pre and post conference tour options, will be announced in the coming weeks and months.

Founded in 1951, the Pacific Asia Travel Association is the recognised authority on Pacific Asia travel and tourism. PATA provides leadership to the collective efforts of 41 national government members, 48 state and local tourism bodies, 66 airlines and cruise lines -- all in all, nearly 2,000 travel industry companies. PATA's membership includes 17,000 travel professionals throughout the world.

More information: E-mail Contact for 2003 PATA Conference