TED Case Studies

Tourism in Bali

CASE NUMBER: 335 CASE MNEMONIC: BALITOUR CASE NAME: Tourism in Bali

IDENTIFICATION LEGAL CLUSTERS GEOGRAPHIC CLUSTERS TRADE CLUSTERS ENVIRONMENT CLUSTERS OTHER FACTORS

I. Identification
1. The Issue
The island of Bali, Indonesia, always has been an enchanting place for foreigners. Images of rice paddies, beautiful beaches and temples and a fascinating culture draw tourists from all around the world. It was only in the 1970s that tourism in Bali started to develop. The industry did bring many benefits to the island, such as increased employment, and its transformation from a marginal economic area of the country to the most important area in Indonesia after Jakarta. However, Bali s tourism development occurred quickly and without proper planning. Therefore, tourism has caused some serious damage to the island's environment. As one example, the sleepy village of Kuta became a tourist enclave, with its natural resources degraded and its infrastructure overwhelmed. This paper will discuss the origins of tourism in Bali and how it has affected the island's environment. It also will discuss proposed alternatives to let tourism and the environment coexist in a more balanced fashion.

2. Description

Mass tourism in Bali began in 1969 with the construction of the new Ngurah Rai International Airport, allowing foreign flights directly into the island, rather than arrival via Jakarta. Three years later, in 1972, the Master Plan for the Development of Tourism in Bali was drawn by the government of Indonesia. The government wanted to make Bali the "showcase" of Indonesia and to serve as the model of future tourism development for the rest of the country.(1) The plan was financed by the United Nations Development Programme and carried out by the World Bank. A consulting company from France, SCETO, drew up the plans, which called for the development of tourism in the southern peninsula of the island, Nusa Dua, and allowing day- trip excursions to the interior in order to protect the cultural integrity of Bali, the island's main attraction. (2) The plan was to cater to well-to-do tourists from Australia, Japan, Europe and North America. The original government strategy did not produce the expected results. Instead of attracting the well-heeled to luxury hotels and resorts, the island drew many young and budget-conscious travelers,eager to see more of the island than just resort facilities. Consequently, the tourist industry in Bali unintentionally evolved in order to cater to two types of tourism: the "package-tour group high-spending tourists on the one hand," and "individual low-spending tourists on the other." (3) Locally owned tourist facilities sprung up in Kuta, Ubud, Batur, Lovina and Candi Dasa to cater to the increasing number of budget travelers. The big, luxury resorts pampering the upper- scale tourists were owned by big multinationals from both Indonesia and abroad. (4)

It was not until the 1980s, however, when an oil market collapse forced Indonesia to promote other exports and investments, that the expected tourism targets the government anticipated were reached. Moreover, after Garuda Airlines, the Indonesian airline, decided to allow foreign airlines to fly directly into Bali, tourism soared. Tourist arrivals in Bali grew from 30,000 in 1969 to 700,000 in

1989. (5) From 1990 to 1993, these numbers rose from 2.5 million to 4 million. (6) Bali's population in 1992 was about 3 million. (7) The rapid and unplanned tourism development of Bali has had a great impact on its natural environment, affecting water resources, increasing pollution and localized flooding and putting pressure on the island's infrastructure. (8) There has been an increasing generation of waste due to the rising local population and tourist numbers. In the capital Denpasar, for instance, about 20 percent of the solid waste was not collected or disposed of. Instead, it was left in "informal" landfills, dumped into canals or left on the streets. (9) Other environmental problems due to mass tourism are deterioration of water quality in coastal areas and destruction of coral reefs, which are used in building construction. (10) Hotels have been built along the coast and other areas without regard to the water supply and waste disposal capacity, and many commercial developments do not conform to provincial regulations regarding the protection and integrity of historical and sacred sites. Candi Dasa, which attracts travelers wanting to escape the crowds in Kuta and Sanur, already shows the strains on the environment due to unplanned tourism. The coral reef around the shoreline has been damaged by the villagers who use it for building new guest houses. But as the reef disappeared, beach erosion began. To save what remained of the beach from washing out to sea, "a row of monstrous concrete sea walls was built, worsening the erosion and adding an eyesore." (11) Because of this environmental degradation, Candi Dasa is losing tourists, and is "well on its way to becoming Bali's first tourist ghost town." (12) It is not only the coastal regions that have been affected by tourism development. Many large inland agricultural areas and river basins have been affected as well. There has been a steady loss of agricultural land, in particular the wet irrigated rice fields, or sawahs, because of the increasing urbanization and tourism development. (13) Ubud, the quaint inland artist's village, has not been able to escape environmental damage done by tourism. As the town is becoming more popular, the rice paddies around the area are being drained in order to build more guest houses. (14)

The best example of the impacts of rapid tourism development in Bali, however, can be seen in the town of Kuta, located on the isthmus south of Denpasar and north of Nusa Dua. Around 1970, before tourism exploded in Bali, Kuta was a small Balinese village of 9,000 people, with little economic or cultural importance in Bali. (15) Most of the population was poor, deriving its income from farming and fishing, although land was not very productive and the income from fishing very sporadic. (16) There were no restaurants and only two small hotels located in the outskirts of the village. The only potential resource of the village was the beach, although the Balinese had no value for it since it was not productive land and spiritually impure. (17) Although Kuta was by no means targeted by the government's tourism plan of Bali, its location close to the airport, its beach access, inexpensive airfares from nearby Australia, along with the villagers' ability to respond to tourists' basic needs, allowed it to unintentionally develop into a tourist mecca. By looking at the numbers, it is evident how tourism exploded in such a short period of time. Tourist visitors in Kuta (18)
1972 6,095 1973 14,522 1974 18,010 1976 14,852 1979 36,052 1980 60,325

By 1980, a third of the tourists coming to Bali stayed in Kuta. (19) By 1975 there were more than 100 locally owned hotels and 27 restaurants compared to 2 and none respectively in 1970. (20) This rapid development of Kuta produced many negative effects on the town's environment and infrastructure. Kuta became a "polluted, unpleasant, and diminished" town. (21) The coral reefs were badly damaged since much of it was sold for the construction of the airport and new roads for Nusa Dua.

(SeeCORAL case, BARRIER case, SRICORAL case, JAMTOUR case). This was not only a loss of a natural resource, but also caused severe beach erosion of about 2 centimeters a year, and loss of beachfront property during high seas. (22) There were severe trash problems along the beach, much of it from plastic bags and drinking straws. As Hussey points out,"[a]t low tide, the wet sand is now a slick morass of trash, and plastic bags and straws bob on the surface of the murky waters." (23) Tourism development in Bali also has had an adverse effect on some of its wildlife. The Sangeh Monkey Forest, one of the most popular tourist places in Bali, is home to the long-tailed macaque. Unfortunately, bad management of the site and uneducated tourists have caused a "twisted relationship" between the tourists and the animals. As researcher Meredith Small discovered, these "normally gentle and friendly animals had turned into beggars and thieves." The animals "stood up on two legs and yanked on clothes. They jumped on people, pulled hair, and rifled pockets." Tourists are warned not to wear glasses, hair ribbons, or handkerchiefs around the monkeys.(24) Food vendors and hawkers contribute to the problem. They encourage tourists to feed the animals. Also stationed near the entrance to a local temple are men who call themselves "guides," who sell photos of tourists feeding the monkeys. Small describes the typical scene: As a tourist enters, a guide tags along offering tidbits of information (mostly incorrect) about monkey behavior. At the first sight of a monkey, the guide pulls bits of food out of his pack and puts it on the tourist's shoulder. The monkey, of course, leaps up. The animal quietly munches away, and the Polaroid camera flashes. The monkey is then shooed off, often hit, and the guide demands 6,000 rupiah (about $4). (25) The guides also bolster stealing among the animals: when monkeys pilfer a nonedible item, the monkeys are rewarded with bananas or peanuts, which perpetuates the behavior. It is thus clear how uncontrolled tourism can affect animals behavior as well as the natural physical environment. (See KOALA case.) The pressure that tourism has brought to Bali's infrastructure and natural resources eventually forced the Indonesian government to impose a freeze on hotel construction in 1991 in order to control growth. (26) The government realized that the poor planning and rapid tourism development that Bali went through could in fact ruin the island s physical and cultural assets that were, and still are, its main attractions. The island's government also decided that Bali needed to diversify its economy in order to avoid dependency on the tourism sector. This policy divided the economy into three areas: agriculture, making up 32 percent of the island's gross domestic product; finance, industry and services, making up 35 percent of the GDP; and tourism, making up 33 percent. (27) By 1991 exports had jumped 17

percent, more than half of the US$ 225 million earned by small companies producing traditional fabrics, garments and handicrafts. (28) In fact, traditional exports from small, labor-intensive industries, such as paintings, batik, silver and wood carvings, have averaged a 20 percent growth. (29) The government is also looking for more balanced tourism development, since the southern part of the island is being strained by increasing tourism. The island's planners have solicited the help of a United Nations agency for planning a more balanced tourism development for the rest of the island, emphasizing cultural integrity and the environment. Part of the plan includes encouraging the Balinese to lease instead of selling their land to developers, and to assume new policies that "increase awareness of the need to avoid commercialism of the culture . . ." (30)

3. Related Cases
General Papers on Tourism See Analyis of Marine Coastal Tourism Cases See Analysis of Tourism Cases case Specific Tourism Cases See JAMTOUR case See MEDIT case See TOBAGO case See CANCUN case Key Words: (1): TOURism (2): TROPical (3): HABITat

4. Draft Author:
Stephanie A. Thullen

II. Legal Clusters

Bali's land-use statute is currently being revised, and it will set new parameters for tourism development. The government is promising public participation and consultation. (31)

5. Discourse and Status:

DISagree and INPROGress

6. Forum and Scope:

Indonesia and UNILATeral

7. Decision Breadth:
1

8. Legal Standing:
LAW

III. Geographic Clusters

9. Geographic Locations
a. Continental Domain: ASIA b. Geographic Site: EASIA c. Geographic Impact: INDONESIA

10. Sub-National Factors:

YES, BALI

11. Type of Habitat:

TROPICAL

IV. Trade Clusters

12. Type of Measure:

REGSTD [Regulatory Standard]

13. Direct v. Indirect Impacts:

DIRect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes, Tourism b. Indirectly Related to Product: No c. Not Related to Product: No d. Related to Process: Yes, Habitat Loss

15. Trade Product Identification:

TOURISM

16. Economic Data 17. Impact of Trade Restriction:

MEDium

18. Industry Sector:

Services

19. Exporters and Importers:

AUSTRALIA and INDONESIA

V. Environment Clusters
20. Environmental Problem Type:
HABITat

21. Name, Type, and Diversity of Species

MANY

22. Resource Impact and Effect:

MEDium and SCALE

23. Urgency of Problem:

LOW and 100s of years

24. Substitutes:
ECOTR [Ecotourism] Ecotourism and socially responsible travel are part of a trend called sustainable tourism. This notion evolved from the new paradigm of sustainable development that came out of the Brundtland report. This alternative to mass tourism requires managing all resources so that social, economic, and aesthetic needs are met, and simultaneously maintaining cultural integrity and well-being, fundamental ecological processes, biological diversity, and life support systems. (32) It would provide visitors with a high-quality experience while maintaining the quality of the environment on which these goals depend. (33) Sustainable tourism should uphold the culture and environment of the host community, its economy, and its traditional lifestyle, indigenous behavior, and patterns of local and political leadership. Local people should be involved in planning and approval. There should be just distribution of the costs and benefits, including effects -- positive and negative -- on future generations. (34) According to Geoffrey Wall of the Department of Geography at the University of Waterloo in Canada, "If tourism is to be sustainable, it will be necessary to devise a typology of tourism which will permit the matching of tourism types to resource capabilities." (35) Wall uses Bali's Sustainable Development Project of 1991 to devise a tourism typology for the island based on four elements: attraction type, location, spatial characteristics, and development status. Attraction type can be cultural, natural, or recreational. (36) Location can be the interior or the coast. (37) Spatial characteristics can be nodal, linear, or extensive resources. Nodal resources are specific sites that attract tourist to localized places, such as waterfalls, temples, and viewpoints. Most of these sites are fragile and have cultural significance, thus there needs to be caution in their development. Linear resources, such as coasts or

excursion routes, are more tolerant than nodal resources, but can be deteriorated through "unilateral linear development,"which are, for example, unbroken stretches of seashore development. (38) Extension resources, such as cultural landscapes like the sawahs, or national parks and other natural areas, are very fragile and cannot sustain large numbers of tourists. (39) Finally, development status can be divided into highly developed, developed, and developing areas. In highly developed areas, new developments should be limited and there should be more emphasis on upgrading and remedial actions. In developed areas, there should be care in avoiding the creation of "unbroken linear developments" and should have more emphasis on the upgrading of infrastructure. In the developing areas, "only developments which are compatible with resource characteristics and capabilities should be permitted." (40) These four elements have been used in Bali to identify sites to be intended for development and to suggest what type and amount of development is suitable for each site. But in order to assess whether developments based on these principles will be sustainable, there must be a preset definition of sustainable development for that particular area. The Bali Sustainable Development Project did just that. (41) Bali's definition of sustainable development encompasses the "continuity of natural resources and production," "the continuity of culture and the balances within culture," and "development as the process which enhances the quality of life." (42) Sustainable tourism has admirable goals, but it is not always easy to achieve them. Both travelers and those working in the industry, foreigners and locals, should be made aware of issues related to consumption, culture and power. Ecotourism needs great planning and sensitivity in order for it to work, and its application is sometimes limited. It can be, however, a feasible way to transfer part of the "financial wealth of the developed world toward protecting the biological wealth of the developing world." (43) One of the major problems of mass tourism has been keeping the money inside the developing countries where it is spent. Normally only about 45 percent of the revenues stay in these developing countries, although some economists believe that the number may be as low as 10 percent. (44). But since one of the requirements for ecotourism is "to hire and buy locally," it can be a sound alternative for many of these countries. (45) The willingness of travelers to pay considerable amounts of money to visit ecologically valuable places around the world can be a source of great revenue for the host country and its conservation efforts. Sustainable tourism can also change people's conception of their land and property. If implemented successfully, ecotourism can give local people living in an area threatened by deforestation or overfishing an economic reason to seek other means to a livelihood. (46) In an island off Bali itself, Halmahera, home of a rare bird in danger of extinction, a farmer who owned the forested land where the bird lived was persuaded to refuse the offer a Japanese logging firm to buy the land to clear

it. He chose instead to cooperate with the ecotourism developers, who convinced him that he would earn more money through tourist fees than from the one-time sale of his land to the Japanese. Presently, the entire community is profiting by providing lodging and transportation to the tourists. (47) Even though sustainable tourism is not perfect, it can make a difference, especially when tourism is becoming the largest industry in the world. At least it can be a resource to the host communities to help them decide what kind of development their residents want to pursue.

VI. Other Factors

25. Culture:
YES Even more than the environment, most of the research that has been done on the impact of tourism on Bali has been on the cultural effects. The Balinese consider themselves a distinct ethnic group within Indonesia. In Bali, Hindus make up 93 percent of the population, but they are only 2 percent of the Indonesian population. Additionally, Hinduism is unique in Bali, as it is intertwined with art and nature, and is less involved with scripture, law and belief. It is a blend of Hinduism, animism and ancestor worship, thus it is more concerned with local and ancestral spirits than with the traditional cycles of rebirth and reincarnation. Temples are associated with a family house compound, rice fields or geographical sites, and each Balinese belongs to a temple through descent, residence, or "some mystical revelation of affiliation. (48) The Balinese people see life as a "never-ending dance between the powers of good and evil, order an disorder." (49) Their religion tries to find a proper balance between these opposing forces, and thus it fills their entire lives and, thereby, the entire island. Their offerings and rituals are performed in order to soothe the gods, scare away demons, entertain the faithful, and to fill their days with a common purpose. As Don Lattin describes in his article "The Trouble with Bali," Balinese religion is the tiny offerings of rice and flower petals placed daily in doorways, at crossroads,and on countless outdoor altars. It's in the architecture and the orchestras, in the metal tinkling of gamelan music drifting across vibrant green rice paddies.It's in the art and the stone gargoyles, in the Hindu epics brought to life through the play of shadow puppets, and in the supple brown bodies of Balinese dancers. (50) Culture has always been the island's strongest attraction, ranging from the beautiful Hindu temples to the dances and traditional arts. Tourism will inevitably have some influence on the cultural traditions of any host community, and this has also happened in Bali, even when its culture is considered its strongest asset.

With the need to improve the economic welfare of the people, the government decided to develop cultural tourism as part of the National Development Plan. Yet, there were no concerns at the time with any type of cultural impact assessment (and evidently no environmental impact assessment either). As a result, there has been a commercialization of Balinese culture to meet the tourist demands. Sacred temples are overcrowded by foreigners; dances normally performed only every 60 years are now requested and organized by hotels on a weekly basis; many masks, costumes and jewelry used for religious rituals are in great demand in antique shops, and thus handicraft workshops are promoted to produce copies, which upsets many Balinese. (51) One of the most recent controversial issues concerning the impact of tourism on culture was the building of a resort area near one of the most sacred temples of Bali, Tanah Lot. Many Balinese felt that this resort would threaten the temple's "cosmological primacy." (52) The resort will house a 300-room luxury hotel, an 18-hole golf course, 156 villas, 380 resort homes, and even a spa. (53)Bali's highest Hindu body, the Parisada Hindu Dharma Indonesia, decreed in 1989 that any development not related to spiritual needs must be at least two kilometers away from a sacred temple; however, the regulation was never truly enforced. (54) The resort's plans definitely violated that rule; nevertheless, after much protest from the local Balinese, the government of Indonesia allowed the project to go ahead in mid-1994. (55) The PHDI ended up accepting a compromise that included changing the resort's logo, which used to be Tanah Lot's silhouette; relocating small family temples displaced by the golf course at the firm's expense; and erecting a hill of earth planted with trees to block the view of the hotel from the temple and vice-versa. However, the resort was allowed to remain within the two-

kilometer area. (56) At any rate, the area around Tanah Lot has not been a pristine site in recent years. The spectacular sunsets attract enormous crowds, some dressed in "the briefest of shorts and halter-tops," and nearby there are rows of dilapidated shops and small restaurants, waiting to cater to the 600 daily visitors to the temple. (57) Local people, however, do not see these small- scale and locally owned operations as intruding on the spiritual sacredness of the temple. The resort, on the other hand, was to be owned and managed by outsiders, and therefore would "upset the harmony among man, god and nature." (58) Many Balinese, however, feel that their culture is staying alive and well despite the tourism influences. According to I Made Bandem, an ethnomusicologist from the

island, tourism is a major source of support for dancers, musicians and artists on the island. (59) The arts are not considered a profession, rather they are used for religious occasions, like temple festivals and other ceremonies. Bandem believes as well that culture needs change, not seclusion, to survive. He sees the Balinese culture accepting influences from other cultures, modifying and transforming them, "making a new art but always based on the old Balinese forms. That is what is unique about Balinese arts." (60) Raymond Noronha seems to believe as well that the Balinese have responded to their advantage to the opportunities that tourism has offered them. With a "resilience that amazes . . . [t]hey have seized every economic opportunity offered them, adapted styles of art and dance to suit the tourist, crated a new kind of tourist accommodation, the home-stay,as an alternative to the staid and costly hotels, introduced the 'bemo' a three- or four- wheeler and the motorcycle in areas where transport is minimal . . .(61) The Balinese have accepted new forms and styles of arts introduced by foreigners. Even though some crafts and ancient dances are dying out, like tortoiseshell work, bone and horn carvings, and terracotta figures, new arts are being adopted, such as batik from Java, furniture styles, woodcarvings and masks. These developments, of course tend to offend many purists. (62) Inevitably, there are negative impacts as well. Beggars are now very common. Beach vendors are pervasive and a nuisance. Some of the best sawahs have been replaced by art shops hoping to profit from tourism. Prostitutes are in evidence, especially in Kuta, although the Balinese say they are immigrants. (63)

26. Trans-Boundary Issues:

NO

27. Rights:
NO