Indonesia targets tourism growth to boost revenue

Indonesia is setting its sights on attracting more tourists from Australia, China, India, Japan and South Korea, to boost state revenue amid continued low commodity prices.

Key to its strategy is to open new air routes for these countries, as well as upgrade airports and air navigation facilities, said Investment Coordinating Board chief Thomas Lembong.

"Budget airlines would be important (to drive more traffic). We also need to upgrade our airports. Although the runways and terminal buildings are good, we have to also pay attention to the electronic navigation system, so that planes can operate even during bad weather," he added.

Mr Lembong said he received a letter from Korean Air that said its low-cost carrier unit, Jin Air, was ready to operate direct flights to Lombok using its wide-body Boeing 777 planes.

Lombok, located next to Indonesia's most visited tourist island Bali, is in West Nusa Tenggara province.

Foreign tourist arrivals in Indonesia numbered 11.52 million last year, a 10.7 per cent rise from a year earlier, according to data from the country's statistics agency, BPS. This compares with 32.6 million arrivals in Thailand last year, and 25.7 million in Malaysia in 2015.

Indonesia expects 12 million foreign visitors this year, and predicts numbers will climb to 20 million in 2019.

"Tourism is very strategic as it is a service sector that provides a lot of jobs, as well as drives the economy of the country's border areas," Mr Lembong said.

He pointed out that in addition to generating foreign exchange, tourism would help the country diversify its sources of economic growth, which is currently largely dependent on commodities.

Indonesia, the world's largest crude palm oil and thermal coal exporter, has been severely affected by low commodity prices that have yet to revive from the global economic slowdown .

Indian tourist arrivals in Bali rose the biggest in percentage terms last year, by around 60 per cent to more than 150,000 people.

Indian tourists ranked sixth in the number of tourists visiting Bali, after visitors from Australia, China, Japan, Britain and France.

Chinese tourists, the biggest spenders in Indonesia, have shot up to second spot only in recent years.

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A version of this article appeared in the print edition of The Straits Times on April 12, 2017, with the headline Indonesia targets tourism growth to boost revenue. Subscribe