The topic of the impact of foreign investment in Bali is hot on everyone’s lips right now. As the incoming Governor and Deputy Governor prepare to start their term, there is a huge conversation happening around how best to control, and in some cases limit, the way in which international investors can operate businesses in the province.
Statements issued this week by the incoming Deputy Governor of Bali, Nyoman Giri Prasta, and the Head of the Bali Tourism Office, Tjok Bagus Pemayun, suggest that some big changes are on the horizon for foreign investors and developers in Bali.
This, of course, will have a knock-on effect on tourists and holidaymakers, for better or for worse.
The incoming Deputy Governor of Bali, Nyoman Giri Prasta, is presently the Regent of Badung. Badung is the region of Bali that sees the highest concentration of tourism activity and international investment.
Prasta is calling for foreign investors to go above and beyond their legal obligations when it comes to building properties and developing businesses in the province. He is calling for foreigners to ensure that they gain approval from local communities before proceeding with their plans.
At present, most large-scale business developments in Bali are granted permission through the Online Single Submission (OSS) System, which is operated by the central government. This means that, technically, huge tourism developments in Bali can be granted permission to proceed without anyone consulting neighboring businesses and communities.
Prasta told reporters “The permit can be done at the center through the OSS. Only investors must have communication at the regional level. Not only carrying out development activities.”
He suggests that the OSS system can grant international investors permits too easily and free from the requirement to consult local stakeholders. Prasta shared,” The important thing is that whatever the development is, at least the local government must know. At least the village government, sub-district, and traditional villages must also know.”
He concluded, “Don’t let later there be a building and be accepted in OSS. But the local community does not accept, automatically the investment cannot work.”
Other tourism leaders in Bali have been tabling their visions for better controlling what has often been described as ‘rampant’ tourism development in the central south of the province.
This rapid development has triggered a series of unintended consequences for local residents and tourists: overloaded waste management facilities and widespread traffic congestion, to name but a few.
The Vice Chairman of the Indonesian Hotel and Restaurant Association, I Gusti Ngurah Rai Suryawijaya, is calling for the minimum amount of investment to be raised for foreign-owned businesses seeking to operate in the province.
Suryawijaya told reports that the current minimum investment limit (PMA) is IDR 10 billion, a figure he feels is too low and, therefore, too accessible to mid-level investors. He wants to see the minimum investment limit increased ten-fold to IDR 100 billion. He also feels that this would give local entrepreneurs more of a chance in the market.
Suryawijaya outlined, “We must emphasize that starting from 2025, the rules are enforced vertically. So, I believe [incoming] Governor Koster and Prasta will do that.” He added, “We must discipline ourselves, industry discipline, and society to support the direction of quality, sustainable and dignified tourism policies.”
As a result of this week’s formal closure of PARQ Ubud, a prominent internationally owned tourist resort and residential complex, the topic of the impact of foreign investment in Bali has hit the headlines once again.
Speaking to reporters on the topic of the PARQ Ubud closure, Suryawijaya said that in addition to greater restrictions on investment, there needs to be more surveillance of foreigners who conduct businesses in Bali to ensure that these operations are being run by national and provincial law.
Suryawijaya explained, “It needs to be evaluated so that they don’t take jobs from local residents. Previousl,y we invited them to come and work in Bali, but as long as they follow the rules, it’s no problem. However, if they continue to violate the rules like this we will conduct surprise security checks.”
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