Advertisement
Advertisement

Indonesia starts to shake off battered international image

As a tourism and investment destination, Indonesia's image has taken a battering in recent years as a result of political unrest, natural disasters and terrorist bombings.

However, the country is re-appearing on investor radars and gaining popularity as a holiday destination, according to property consultants.

In 1998, thousands died in anti-Chinese riots, badly denting confidence among Chinese visitors and investors. In 2002, a suicide bomb attack in Bali killed 202 people, including 164 foreigners, and injured 209.

Many of those who died were from Australia, which maintains a travel advisory warning that terrorist attacks in areas frequented by foreigners in Indonesia remain a continuing threat.

Three years after the attack, Bali came under the global spotlight again because of further blasts in the seaside area of Jimbaran Bay and the bar and shopping hub of Kuta that killed 20 people.

Then there was the deadly tsunami in 2004 that killed almost 80,000 people in Indonesia.

But the country had been recovering from these crippling blows, said Steven Tjen, an executive director for property consultant CBRE Indonesia.

Conflicts between ethnic Indonesians and Indonesians of Chinese descent had become almost unheard of since former president Suharto stepped down in 1998, said Mr Tjen. All ethnic minorities were now treated equally, which had improved racial harmony in the country, he said.

He added that foreign and domestic investors and tourists were returning to Bali.

From January to July, 1.11 million tourists visited Bali, an increase of 21.64 per cent over same period last year, said an official, who forecast foreign visitors would come to more than two million this year. Foreign visitors to Bali surged 32.1 per cent to 1.66 million last year, a rebound after two consecutive years of declines following the tsunami and bomb attacks.

'With six years having transpired since the bombings, the incidents have been largely forgotten by foreigners and local residents,' said Michael Broomell, managing director for Colliers International in Indonesia.

Also helping restore confidence was that Bali was not expected to suffer from further tsunamis, Mr Tjen said.

He believed home prices in the area would continue to recover because of the increasing difficulties of securing land in Bali - especially for the development of villas within a resort compound and managed by five-star hotel operators, which were favoured by foreign investors.

Nevertheless, year-on-year changes of housing prices in real terms in Indonesia were in negative territory between 1995 and 2008, except a short period from 1999 to 2001 and in 2006, according to data from Bank Indonesia.

Indonesia's house price index is still about 50 per cent below its 1994 peak in real terms, data from online property research house Global Property Guide shows.

Post