Impact of Upcoming Indonesian Elections on Tourism Industry

17th April 2019 will be a monumental day for Indonesia. For it is the day when both presidential and legislative elections will take place simultaneously in the world’s 3rd Largest Democracy Indonesia . A population of over 193 million will be choosing from amongst 2,45,000 candidates for 20,000 seats. The votings will happen for both the upper and lower houses of parliament as well as the district and provincial legislatures. This is for sure to be a monumental election process.

The Scenario

To put it simply, there are two main men pitted against each other for the presidential elections this year, as was the case for the previous term. President Joko Widodo (aka Jokowi) would be battling the presidential seat against Prabowo Subianto. Same was the scenarios 5 years ago, and evidently, Jokowi swept the votes back then. Jokowi focused his policies on infrastructure, tourism and more. His approval rate seems to be high still. Subianto did try to sway his supporters by pointing out Jokowi’s failure in providing quality jobs and letting food prices get too high. This, however, failed to work.

Subianto, on the other hand, has a background that puts him at a disadvantage. Being married to former dictator General Suharto’s daughter, he is perceived as closely related to the traditional elite. This too was suspected to be a reason for his defeat in 2014, albeit, it was a very close defeat. So this indicates Subianto’s popularity in Indonesia is still strong. His 2014 campaign was aimed at pro-poor policies of reducing unemployment and creating new farm jobs.

How this will impact Tourism Industry

Since 2015, Indonesia’s tourism has been wildly expanding. This did not happen with the blink of an eye. From the very beginning, Jokowi’s government was clear on wanting to expand tourism from a whopping 9 million visitors to 20 million by 2019 and that clearly happened. The government had developed a multi-pronged approach for it. Along with the extensive marketing of Government schemes the central bank allowed for the weakening of currency Indonesian Rupiah which made it cheaper for incoming tourists thus boosting tourism industry.

Jokowi’s claim to fame may have been a result of strategic planning but there was a slight element of coincidence too. As soon as he was elected, the world witnessed a drop in commodity prices. This took a toll on Indonesia’s export-heavy commodity driven (like Palm Oil, Rubber) economy so the president expertly maneuvered around the situation by focusing on the non-export sectors like tourism. The wheels were set in motion and a 5-year plan in 2014 to 2019 whose objectives were to

Increase tourist visitors to 20 million from 9 Million

Attracting foreign exchange of Rp. 240 trillion (USD 17 Bn +)

Employing 13% of the local population in Tourism sector

Taking the tourism sector’s contribution to GDP to 8%.

Last government also invested a lot in tourism infrastructure. To make it a more prominent tourist spot, government brought about strategic moves like

Visa Relaxations – Indonesia made relaxations with visa free entry for about 169 countries

Restructuring of Tourism Ministry – Earlier , tourism development and promotion were grouped as Ministry of Tourism and Creative Economy, which meant that Tourism budget also spilled over to financing and producing films related to art, music, culture and society of Indonesia. In 2015 this ministry was restructured as tourism ministry which is dedicated to the development and marketing of tourist destinations.

More Govt Budgetary Support for overseas marketing of Indonesian Tourism – Budget for overseas marketing of Indonesian Tourism in 2016 was at Rp. 1.777 trillion , which is more than the entire ministerial budget for 2014.

Development of other Marquee Tourist Destinations – Marketing of four other priority destinations namely

Labuan Bajo, known for Komodo Islands Borobudur, famous for UNESCO World Heritage site aof 9th century Buddhist temple Mandalika Central Lombok – World-class resorts are being developed here on the lines of Nusa Dua Bali Lake Toba, the world’s largest volcanic caldera lake in North Sumatra.

A counter to this argument is the lack of focus on local tourism. While Jokowi maybe doing great in bringing in foreign direct investment, developing tourist Infrastructure through marquee road-airport infrastructure projects but he is getting flak for neglecting for the local tourism market. Chasing the foreign investors have potentially meant overlooking the vast and varied domestic market which will be huge as Indonesian middle-class increases.

About Queen’s

Queen’s is Indonesia’s Biggest and Most well-established chain of Indian Family Restaurants and we have been welcoming discerning diners to the TRUE FLAVOURS of India since 1986. When it comes to Indian Food in Bali, Indian Food in Nusa Dua, Indian Food in Ubud and Indian Food in Seminyak our quality and variety is unmatched. Queen’s is a recipient of BALI CUSTOMER SATISFACTION AWARD for many years running and is a champion of the Indonesian Tourism industry. All the views presented in the blog above are factual and we are a politically neutral organization. We want our Indonesian Brothers and sisters to celebrate this election as the festival of democracy and expect any incoming government to support Tourism Industry.