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What can Timor-Leste learn from Bali’s Tourism Industry to enhance its Economic Development? 

What can Timor-Leste learn from Bali’s Tourism Industry to enhance its Economic Development? 

Figure 1 A Photo of the Sunset in Dili (Credit: Ivo Ribeiro)

According to data from the World Bank, Timor-Leste attracted 74,600 international tourists in 2018, contributing $78 million USD to its economy. In contrast, Bali, a two-hour flight from Dili, the capital of Timor-Leste, welcomed 6.07 million tourists, generating approximately $8 billion USD for its economy in 2018 as per the Bali Province Statistics Office. This value is 10,256 percent higher than Timor-Leste’s tourism revenues. Both Timor-Leste and Bali are island destinations, but Bali has been much more successful in attracting tourists. What strategies has Bali implemented to boost its tourism industry so significantly? And what lessons can Timor-Leste learn from Bali to enhance its own economic development through tourism? This blog aims to explore the key strategies that have made Bali a tourism success story and how Timor-Leste can apply these ideas to improve its own tourism and economic sector.

Bali’s Tourism Successes

Bali plays a crucial role in maintaining Indonesia’s economic stability. Since 2003, the country’s tourism industry has experienced consistent long-term growth, averaging more than 3 percent annually and now contributing over $10 billion USD to the economy each year. According to an article written by Sakib Awan, Chairman of East Timor Trading, approximately 20 percent of Bali’s population – which is equivalent to about 66 percent of the population of Timor-Leste – is employed in or dependent on the tourism industry for income. From the Bali Tourism Sector Experience, it is worth noting that tourism brings about numerous benefits to the region’s economy and the well-being of its population. A study by Made Antara and Made Sri Sumarniasih on the role of tourism in the economy of Bali and Indonesia finds that the benefits of investing in tourism include providing job opportunities leading to lower unemployment rates, increasing community income, generating currency and creating a market of local food products and services, increasing tax revenues, and raising the general standard of living. Furthermore, tourism contributes to the preservation and growth of local crafts and cultural products.

Bali’s success in tourism can be attributed to several factors. According to the study by I Nengah Subadra et al, exploring the natural beauty of Bali, experiencing diverse lifestyles, immersing oneself in Balinese culture, interacting with local communities and visiting cultural attractions are highlighted as determining factors for the success of tourism in Bali. Additionally, the province benefits from great weather and well-developed tourism infrastructure that adheres to international standards, offering a range of accommodations from luxury resorts to more affordable options in a perceived safe environment.

The Balinese government has been instrumental in this evolution, implementing policies that bolster tourism infrastructure. This includes enhancing accessibility, upgrading public facilities, and prioritizing tourist safety. Moreover, research by Subadra et al highlights the pivotal role of social initiatives. Local communities actively engage in the tourism sector, preserving cultural authenticity and welcoming visitor involvement. These collaborative endeavors have led to a notable surge in international tourist numbers, consequently enhancing the economic prosperity of Bali’s residents.

Timor-Leste’s Tourism Industry: Context, Reflection, and Action 

Untapped Tourism Potential 

Timor-Leste, a half-island country in Southeast Asia, shares borders with Australia and Indonesia. The country boasts numerous beautiful tourism sites, characterized by green mountains, ocean surroundings along with diverse cultural and historical sites throughout its territory. Positioned in the biodiversity hotspot of Wallacea, Timor-Leste hosts globally significant ecosystems and endemic species. According to the Convention on Biological Diversity, this region harbors 76 percent of the world’s coral species and 6 out of the world’s 7 marine turtle species. Timor-Leste’s Ataúro island is reported to have the most biodiverse waters in the world. Tourism after all is Timor-Leste’s third largest economic sector after natural resources and agriculture.

 Enhancing Timor-Leste’s Tourism Industry

Timor-Leste can significantly advance its tourism industry by learning from Bali’s example. Key measures must be taken include the development of infrastructure that improves access to tourism sites and the international promotion of cultural festivals and events. It is crucial to invest in sustainable tourism practices that preserve both the environmental and cultural heritage. Additionally, establishing clear land and investment laws, along with ensuring political and government stability, is imperative to attract foreign direct investments. Above all, fostering collaboration among the stakeholders – government, local communities, and private sector players – is essential for building a robust tourism economy.

Economic Returns from Strategic Tourism Investments

The economic benefits of successfully developing the tourism industry in Timor-Leste could be significant. Drawing on 2018 data, Bali attracted approximately 6.07 million international tourists, generating $8 billion USD in tourism revenue. If Timor-Leste could attract at least 5 percent of Bali’s international tourist figures, that would be equivalent to around 303,500 visitors. This influx could potentially contribute approximately $400 million USD to Timor-Leste’s economy in one year, assuming spending per tourist remains consistent with Bali’s figures.

A substantial increase in tourism could trigger a multiplier effect across various sectors of Timor-Leste’s economy. By attracting more tourists, the country would not only create direct job opportunities and boost government revenue through taxes and tourism-related services, but it would also promote growth in sectors indirectly linked to tourism. Industries such as agriculture and retail could experience significant growth due to the increased demand driven by tourists. Consequently, focusing on enhancing the tourism industry could serve as a catalyst for broader economic development in Timor-Leste.

Potential Challenges in Tourism Development

While the expansion of tourism offers significant benefits, it also presents challenges that require careful and effective management. Environmental concerns are critical as increased tourism can lead to pollution and resource depletion if not managed sustainably. Furthermore, issues such as congestion and overcrowding should be considered. When too many tourists flood into a destination, it can put a damper on fun due to traffic jams and excessive crowds. Furthermore, a study conducted by the Welsh government finds that the cultural and lifestyle changes that often accompany mass tourism can disrupt local communities and dilute traditional practices. Addressing these issues requires meticulous planning and the implementation of strict environmental conservation and cultural preservation standards. This approach will help ensure that tourism development is sustainable and respectful of both the natural environment and local cultures.

Bali’s success in leveraging its tourism potential to drive its economic growth offers a valuable blueprint for Timor-Leste. As the country works to diversify its economy away from its dependence on the oil industry, it is crucial that Timor-Leste designs and implements a comprehensive strategy to develop its tourism industry effectively. This strategy should include multiple approaches, such as the following.

  • Recognition and Utilization of Unique Assets: Timor-Leste must first identify and leverage its distinctive cultural and natural resources that distinguish it from other destinations. This involves promoting its pristine beaches, rich history, and vibrant local traditions to attract a diverse range of tourists.
  • Strategic Planning and Sustainable Practices: It is crucial for Timor-Leste to implement strategic planning that integrates sustainable practices. This will ensure that tourism development not only fosters economic growth but also conserves the environment and respects local cultures. Sustainable tourism will help maintain the very attractions that draw visitors, thus ensuring long-term benefits.
  • Overcoming Challenges: The development of tourism is accompanied by various challenges, including infrastructure development, workforce training, and maintaining safety and security. Timor-Leste needs to prepare comprehensive strategies to address these issues, ensuring that the infrastructure supports tourism growth and that there are ample training programs for local populations to benefit economically.
  • Collaboration Among Stakeholders: Success in tourism heavily relies on cooperation among various stakeholders, including government entities, local communities, and international or national partners both from profits and nonprofits A mutual collaborative approach with faith will undoubtedly help streamline efforts and pool resources productively, maximizing the impact of the tourism industry.

By adopting these strategies, Timor-Leste will not only replicate Bali’s achievements but also demonstrate that even a small nation can make a significant impact on the global stage. The development of tourism could offer substantial economic and social benefits, serving as a (new) transformative and sustainable solution for the entire country.

 

About the author:

Ivo Ribeiro is an Economics student at the University of Minnesota, Twin Cities. He can be reached at dacon004@umn.edu. The views and opinions expressed here are those of the author and not of any affiliated institutions of which he is a part.

 

References

Antara, M., & Sri Sumarniasih, M. (2017). Role of Tourism in the Economy of Bali and Indonesia. Research Gate. https://doi.org/10.15640/jthm.v5n2a4

Awan, S. (2019, December 6). Can Tourism Become the New Economic Driver for Timor-Leste? The Diplomat. Retrieved April 13, 2024, from https://thediplomat.com/2019/12/can-tourism-become-the-new-economic-driver-for-timor-leste/

Bank, T. W. (2018). International tourism, number of arrivals – Timor-Leste. The World Bank. Retrieved April 13, 2024, from https://data.worldbank.org/indicator/ST.INT.ARVL?locations=TL

Bank, T. W. (2018). International tourism, receipts (current US$) – Timor-Leste. The World Bank. Retrieved April 13, 2024, from https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TL

Diversity, C. O. B. (2015). Timor-Leste – Country Profil. Convention on Biological Diversity. Retrieved April 13, 2024, from https://www.cbd.int/countries/profile?country=tl

 Hwb. (2019). 7 Impacts of Tourism. From Welsh Government: https://hwb.gov.wales/api/storage/8e18c0d6-3393-42c3-ae62-09648421cc61/Section7-ImpactsofTourism.pdf

 Province, S. o. (2019). Number of Monthly Foreign Visitor to Bali. From Statistics of Bali Province: https://bali.bps.go.id/indicator/16/106/6/banyaknya-wisatawan-mancanegara-bulanan-ke-bali-menurut-pintu-masuk.html

Slezak, M. (2016, August 16). Atauro Island: Scientists discover the most biodiverse waters in the world. The Guardian. Retrieved April 13, 2024, from https://www.theguardian.com/world/2016/aug/17/atauro-island-timor-leste-the-push-to-protect-the-most-biodiverse-waters-in-the-world

Subadra, I. N., Sudiarta, M., & Arta, I. W. (2019). Investigating Push and Pull Factors of Tourists Visiting Bali as a World Tourism Destination. Research Gate, 254-264. https://doi.org/10.6084/m9.figshare.9916247

 

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