Without Warning

Indonesia

Economic News

22 Jul 2010
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The US has recently removed its travel warning for Indonesia, a move that officials hope will provide a helping hand to the country's tourism industry.



On May 23, the US removed its eight-year travel advisory to its citizens wishing to visit the archipelago, saying that the risk of violence had been significantly reduced. In a statement, the US Embassy said it had "lifted the warning due to objective improvements made by Indonesia in its current security situation... Indonesia has not experienced a major terrorist attack since 2005, and the government of Indonesia has disrupted, arrested and prosecuted numerous terrorist elements."



The US alert had been in place since November 2000, following a series of bombings in Jakarta. The country had subsequently been impacted by significant bomb blasts each year until 2005, with the most publicised being the bombings in Bali in 2002 that killed 202 people.



In April this year, two senior leaders from the Al Qaeda-linked terrorist group Jemaah Islamiyah were sentenced to jail. The group is said to be responsible for the Bali bombings as well as an attack on the Australian embassy in Jakarta in 2004. Since 2002, Indonesia has arrested some 400 militants, a crackdown which is credited for severely limiting the group's ability to operate in the country.



Jero Wacik, Indonesia's minister of culture and tourism, said the US's decision to lift the warning would help increase tourism arrivals for the rest of 2008. Under the "Visit Indonesia Year" campaign, the government aims to attract 7m visitors this year, up 27% from 2007. According to the ministry of tourism, the sector currently represents the second-largest source of foreign capital for the country, amounting to 9% of gross domestic product (GDP).



While the US and Europe currently represent a relatively small market for Indonesian travel when compared to Asian countries, Dino Pati Djalal, a spokesperson for President Susilo Bambang Yudhoyono, said the government hoped that other Western countries would also lift travel warnings.



"A terrorist attack can happen anywhere, to anyone, at any time, so I think the lifting of the travel warning by the US is a confirmation of what we have been saying and doing and we welcome it," said Dino. "We certainly hope that those who still have the travel warning on Indonesia would follow suit."



Currently, the UK, Australia and New Zealand issue warnings against travel to Indonesia. The warning has been a sore spot with Australia in particular, which otherwise enjoys strong bilateral relations with the archipelago. During the 2002 Bali bombings, 88 Australian citizens were killed and the country has a strong alert in place, citing a "very high risk of terrorist attack". Nonetheless, with close geographic proximity and easy access, Bali has long been a prime destination for Australian holidaymakers and last year more than 300,000 Australians visited the island.



Indonesia has said the warning hurts both tourism and overall trade between the two countries. Mari Elka Pangestu, Indonesia's minister of trade, told the press last year, "We believe this travel advisory or travel warning could disrupt travel, not only for tourists but also investors and potential buyers." While many multinationals already do business in Indonesia, lifting travel warnings would help inbound investment as it would reduce insurance costs for operating in the country.



Australian Prime Minister Kevin Rudd is set to visit Indonesia this month and it is believed that the travel advisory will be an important issue on the agenda when he meets with President Yudhoyono.



According to the Indonesian Bureau of Statistics, in the first four months of this year, 1.86m foreign tourists have visited the country, up 12.7% on the same period last year. Should the number of visitors continue at this pace, the country would fall significantly short of the 7m target. However, officials hope that the upward revision of Indonesia's security status by the US, which is considered to be one of the strictest countries in terms of travel warnings, tourism arrivals will be up in the second half of the year and the country may meet its goal.

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