Some good news for Indonesia tourism’s budget?


Jero Wacik, the ever-smiling Indonesian Minister of Culture and Tourism could not look happier a few days ago when announcing the possible allocation for its ministry in 2011. Following the meeting of Indonesian lawmakers (DPR), the name provided to the elected members of the People’s Representative Council (National Assembly). The present legislators agreed to raise national budget for the Ministry of Culture and Tourism for 2011 from US$ 177.7 million to US$ 229.3 million for next year.

This budget seems considerable compared to budgets from Indonesia’s neighboring countries. However, the calculation is rather tricky. This amount is for the entire Ministry. And culture naturally gets the biggest portion of it. In 2010, the budget for promotion at the Ministry of Tourism was approximately US$ 40 million, or 22.5% of the total allocation. Talking to media, Mr. Wacik declared that “I cannot whine with a budget of this size; I must be enthusiastic and use the budget effectively and efficiently”. Even by keeping the same percentage of budget dedicated to tourism activities and promotion, tourism would get for the first time more than US$ 50 million (exactly US$ 51.6 million).

In the past, Indonesia’s tourism has suffered from a lack of budget which made the destination rather “invisible” compared to regional competition such as Thailand, Malaysia or Singapore. Until 2006, budget rarely passed the US$ 15 million mark! However, the Indonesian government is now convinced that tourism is a valuable source of wealth for all people across the archipelago and is one of the top contributors in foreign exchange and GDP.

According to the latest figures provided by the WTTC, the contribution of Travel & Tourism to Gross Domestic Product is expected to rise from 7.7% (US$51.0bn) in 2010 to 7.9% (US$174.7bn) by 2020. Travel and tourism contribution provides some 6.8 million of jobs to the local population, representing 6.3% of total employment. WTTC estimates that this number will grow to 8,5 million jobs by 2020, or 6.5% of total employment. Tourism represents also 5% of the country’s total exports, the equivalent of US$ 7.5 billion. According to projections from the Ministry of tourism, tourist arrivals should grow this year in a range of 8% to 10% to overpass 7 million international arrivals compared to 6.45 million in 2009. Revenues from tourism would grow from US$ 6.3 billion to 7 billion. Bali will remain Indonesia’s largest destination for foreign visitors, with over 2.5 million travelers expected this year. From January to July 2010, total arrivals grew by 12.2% on a year-to-year basis.