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Economic Report Offers Path for Bali Recovery - 2003-10-13

A group of international agencies has released a report showing ways the Indonesia's Bali Island can recover from the economic disaster wrought by the terrorist bombings a year ago. The report contains some depressing statistics, but gives grounds for hope.

The report came out a day after the first anniversary of the terrorist bomb that killed 202 people, mostly young western visitors. The event wrecked Bali's tourist industry, the engine of the island's growth.

The report was co-authored by the United States Agency for International Development, the World Bank, and the United Nations. It shows that after the bombing, visitor arrivals fell by 80 percent, incomes dropped an average of 40 percent, and tourist related businesses lost as much as two-thirds of their trade.

In the year since, arrivals have picked up, but statistics indicate people are leaving sooner and spending less.

"Going forward, I think we have to recognize that this has been a huge blow to the Balinese economy, that we are not there yet," said Kai Kaiser of the World Bank, one of the authors of the report. "Bali's tourism numbers would have been … anywhere from 50 percent higher in the year succeeding the bombing."

But the report also found some pleasant surprises. Unemployment has not risen as much as expected, which the report says is a tribute to the desperate steps taken by the island's business community to avoid layoffs.

Aid agencies feared large numbers of children would be pulled out of school by parents short of money for school fees, but the authors say this did not happened.

A flare up of tensions between the island's Hindu majority and Muslim minority was another worry, especially since Islamic militants did the bombing. But relations between the two sides have remained tolerant.

A number of countries still have travel warnings in place for Indonesia, and many in Bali believe the warnings are a barrier to improving their livelihoods.

The report gives partial backing to this. It strongly recommends that Bali improve security, a pre-requisite for lifting travel warnings. It also says that international donors should look to diversify Bali's economy to soften future blows to tourism.