Vincent Lingga, Jakarta | Opinion | Sun, March 22 2015, 6:36 AM
Bad times usually produce good policies because the government and politicians, jolted out of their complacency, can easily agree on reform policies to prevent things from worsening. This again is clearly reflected in the latest package of policy instruments launched early this week to shore up the weakening rupiah.
The reform package has been designed to bolster exports, reduce imports and reinvigorate foreign investment, thereby decreasing the current account deficit. The effect of all these measures are expected to strengthen the rupiah, which during the first 10 weeks of this year alone has depreciated by 6 percent against the strengthening US dollar.
Allowing the rupiah to be debased further by negative market sentiment will lead the economy into a crisis with spiraling inflation, eroding people’s purchasing power and increasing absolute poverty.
The package includes the waiving of visa requirements for tourists from 30 countries, including EU members, three Arab countries, as well as Canada, China, Japan, Mexico, New Zealand, Russia, South Korea and the US.
Tourism officials estimate that the visa-free facility, currently available to only 15 countries, including nine ASEAN members, will increase tourist arrivals this year by 1 million, from 9.4 million last year, bringing in an additional US$1.2 billion in foreign exchange revenues (assuming a tourist spends an average $1,200).
This policy drastically departs from the one taken by then president Megawati Soekarnoputri in early 2003, which abolished the visa-free facility for short-term visitors from 37 countries for the sake of what was then called “national interests and national pride”.
The government claimed at that time that a number of visitors, including drug traffickers, had abused the visa-free facility to do illicit business or work illegally in Indonesia.
The visa-free facility is one of the strongest policies to facilitate tourist arrivals. According to the UN World Tourism Organization, the number of international tourists grew by about 5 percent annually over the last five years until 2013 to reach 1.1 billion globally.
International tourism has been one of the world’s top exports, generating almost $500 billion in revenues in 2013, the bulk of which was in the Asia-Pacific region.
International tourism is known to be a resilient industry, never suffering a deep and lasting recession and able to recover quickly because the need to travel, whether for business or leisure, is too deeply ingrained in our societies to be easily effaced.
As a resource-based industry, tourism is also one of the most suitable businesses that Indonesia should develop because of its multiplier effects and the labor-intensive nature of its operations.
Travel-related businesses such as hotels, restaurants, transportation, handicrafts and cultural shows are all labor intensive, the very kind of enterprises needed to absorb the huge pool of job seekers.
As a vast archipelago country rich in culture, natural attractions and heritage sites, Indonesia has great potential to attract tourists from around the world.
Travelers are able to revisit Indonesia each year without having to go to the same tourist destination, as there are dozens of fairly accessible attractions in Java, Sumatra, Kalimantan, Sulawesi, Papua and the Moluccas, besides the world-famous Bali.
Yet, due to a lack of well-designed promotion programs and poor policy coordination, Indonesia remains among the less favorite destinations in ASEAN. This deficiency is quite damaging because the coordination of policies or activities in the sectors related to tourism has become one of the biggest barriers to wooing foreign tourists to Indonesia.
However good its promotion and marketing programs, the Ministry of Tourism and Creative Economy cannot do much to attract tourists, because the quality of Indonesia as a tourist destination is determined by factors outside the domain of this ministry.
A simple example. Smooth, expedient visa processing and an efficient customs inspection service at airports are more effective in attracting tourists than the distribution of tourist brochures. But these services are not under the jurisdiction of the tourism ministry.
In fact, the ministry handles only one aspect of tourist development and marketing and, unfortunately, not the most important one.
The more important pillars of the travel and tourism industry such as transport infrastructure, health and hygiene, security and regulatory requirements are completely beyond its control as they lie under the jurisdiction of other ministries.
The quality or image is determined not by promotional activities, but primarily and largely by how efficient, reliable and good our regulatory and physical infrastructure (customs, visa, health, transportation, hotels and other support services) are.
The 2009 Tourism Law stipulates the strategic importance and need for the strategic coordination of policies and activities in various sectors related to travel and tourism such as customs, immigration, quarantine, security and order, physical infrastructure, health and promotion.
But it does not elaborate how policy coordination will be institutionalized and managed on a day-to-day basis, only saying that the coordination will be led by the president and vice president and technical details on the coordination will be formulated in a presidential decree.
It is therefore most imperative that the visa-free facility should be supported by good policies to improve the regulatory and infrastructure framework in travel-related services and businesses.
__________________
The writer is a senior editor at The Jakarta Post.
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Bad times usually produce good policies because the government and politicians, jolted out of their complacency, can easily agree on reform policies to prevent things from worsening. This again is clearly reflected in the latest package of policy instruments launched early this week to shore up the weakening rupiah.
The reform package has been designed to bolster exports, reduce imports and reinvigorate foreign investment, thereby decreasing the current account deficit. The effect of all these measures are expected to strengthen the rupiah, which during the first 10 weeks of this year alone has depreciated by 6 percent against the strengthening US dollar.
Allowing the rupiah to be debased further by negative market sentiment will lead the economy into a crisis with spiraling inflation, eroding people’s purchasing power and increasing absolute poverty.
The package includes the waiving of visa requirements for tourists from 30 countries, including EU members, three Arab countries, as well as Canada, China, Japan, Mexico, New Zealand, Russia, South Korea and the US.
Tourism officials estimate that the visa-free facility, currently available to only 15 countries, including nine ASEAN members, will increase tourist arrivals this year by 1 million, from 9.4 million last year, bringing in an additional US$1.2 billion in foreign exchange revenues (assuming a tourist spends an average $1,200).
This policy drastically departs from the one taken by then president Megawati Soekarnoputri in early 2003, which abolished the visa-free facility for short-term visitors from 37 countries for the sake of what was then called “national interests and national pride”.
The government claimed at that time that a number of visitors, including drug traffickers, had abused the visa-free facility to do illicit business or work illegally in Indonesia.
The visa-free facility is one of the strongest policies to facilitate tourist arrivals. According to the UN World Tourism Organization, the number of international tourists grew by about 5 percent annually over the last five years until 2013 to reach 1.1 billion globally.
International tourism has been one of the world’s top exports, generating almost $500 billion in revenues in 2013, the bulk of which was in the Asia-Pacific region.
International tourism is known to be a resilient industry, never suffering a deep and lasting recession and able to recover quickly because the need to travel, whether for business or leisure, is too deeply ingrained in our societies to be easily effaced.
As a resource-based industry, tourism is also one of the most suitable businesses that Indonesia should develop because of its multiplier effects and the labor-intensive nature of its operations.
Travel-related businesses such as hotels, restaurants, transportation, handicrafts and cultural shows are all labor intensive, the very kind of enterprises needed to absorb the huge pool of job seekers.
As a vast archipelago country rich in culture, natural attractions and heritage sites, Indonesia has great potential to attract tourists from around the world.
Travelers are able to revisit Indonesia each year without having to go to the same tourist destination, as there are dozens of fairly accessible attractions in Java, Sumatra, Kalimantan, Sulawesi, Papua and the Moluccas, besides the world-famous Bali.
Yet, due to a lack of well-designed promotion programs and poor policy coordination, Indonesia remains among the less favorite destinations in ASEAN. This deficiency is quite damaging because the coordination of policies or activities in the sectors related to tourism has become one of the biggest barriers to wooing foreign tourists to Indonesia.
However good its promotion and marketing programs, the Ministry of Tourism and Creative Economy cannot do much to attract tourists, because the quality of Indonesia as a tourist destination is determined by factors outside the domain of this ministry.
A simple example. Smooth, expedient visa processing and an efficient customs inspection service at airports are more effective in attracting tourists than the distribution of tourist brochures. But these services are not under the jurisdiction of the tourism ministry.
In fact, the ministry handles only one aspect of tourist development and marketing and, unfortunately, not the most important one.
The more important pillars of the travel and tourism industry such as transport infrastructure, health and hygiene, security and regulatory requirements are completely beyond its control as they lie under the jurisdiction of other ministries.
The quality or image is determined not by promotional activities, but primarily and largely by how efficient, reliable and good our regulatory and physical infrastructure (customs, visa, health, transportation, hotels and other support services) are.
The 2009 Tourism Law stipulates the strategic importance and need for the strategic coordination of policies and activities in various sectors related to travel and tourism such as customs, immigration, quarantine, security and order, physical infrastructure, health and promotion.
But it does not elaborate how policy coordination will be institutionalized and managed on a day-to-day basis, only saying that the coordination will be led by the president and vice president and technical details on the coordination will be formulated in a presidential decree.
It is therefore most imperative that the visa-free facility should be supported by good policies to improve the regulatory and infrastructure framework in travel-related services and businesses.
__________________
The writer is a senior editor at The Jakarta Post.
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