Time to Diversify Bali's Economy
In a Critical Cash and Credit Shortage Due to the COVID-19 Pandemic, Many Ask if the Time has Come to Diversify Bali's Economy?
Following the downturn in visitors to Bali following the extended eruption of the Mount Agung Volcano starting in September of 2017, Bali is now suffering an unprecedented decline as the world's economy is being shaken to the core by the COVID-19 Pandemic.
The Pandemic has brought Bali, together with many other parts of the world, to its knees economically. As reported by Balipost.com, Bali is now lined up to experience a recession when there are two successive quarters of declining economic activity.
Balinese economic observer, Viragoena Bagoes Oka, warns that Bali's overall economy is in fast decline because of novel coronavirus pandemic. Oka laments that the current challenging period has befallen Bali while it was still struggling to regain its economic footing following a series of national and international setbacks in the economic sector. Describing the current state of the Island's economy, Oka said, "I would term the current economic condition with the acronym 'TUA' – turbulence, unpredictable, and ambiguous."
He said the downturn is most acutely felt in the current slow rate of economic development that has fallen far below official targets. He complained that Bali is no longer able to achieve the 6% rate of economic growth it enjoyed in the recent past. Speaking on Tuesday, March 10, 2020, Viragoena said the coronavirus had struck particularly hard the Island's leading business sector of tourism.
Continuing, Viragoena said that if the economic crisis confronting Bali is not urgently addressed, the Island will sink into recession.
He said the severity of the current situation is most evident in the Island's banking sector's lack of liquidity. Banks are experiencing an increase in the number of non-performing loans (NPL), making it all the more difficult for banks to provide lending facilities to local businesses.
Viragoena expressed doubts that the reduction in interest rates introduced by Bank Indonesia would guarantee a definite upturn in Bali's currently downtrodden economy. He called on the Central Government to consider extending assistance that will aid the liquidity of banks and bolster their ability to lend money. Such supplemental funding, he said, would "become a blanket guarantee for the banking community."
Meanwhile, the chairman of the Bali branch of the Indonesian Chamber of Commerce (KADIN-Bali), Made Ariandi, confirmed that Bali entrepreneurs, especially working in the tourism sector, are beginning to suffer acutely. The sudden decline in foreign tourists is felt across the entire economy.
Ariandi said that assistance in the form of rescheduled repayment against current loans would help businesses struggling with debt weather the current crisis.
The chairman of the Prajaniti Hindu Council, Dr. Wayan Sayoga, said the current downturn in Bali's economy should serve as a lesson for the people of Bali. Sayoga noted that the economy of Bali in under-diversified and had become almost solely dependent on tourism. Concluding, "Now is the time to think of economic alternatives beyond tourism."