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photo by: Ni Komang Erviani

Ni Komang Erviani, The Jakarta Post, Denpasar | Fri, 12/16/2011 8:04 AM

While Bali has experienced healthy economic growth recently, reaching 5.83 percent in 2010, the island faces economic inequality problems resulting from the growing gap between the haves and have-nots, the governor says.

“We fear that this inequality will cause social jealousy, which could lead to social unrest,” Bali Governor Made Mangku Pastika said on Thursday.

The provincial statistics agency’s data from 2010 shows that the island’s high-income earners, who account for only 20 percent of the population, have enjoyed a growing share of the expanding economy. The remaining 80 percent of the population, meanwhile, has had to face a steadily shrinking share of the pie.

The remaining population includes middle-income earners (40 percent) and low-income earners (40 percent).

Around 42 percent of Bali’s revenue is enjoyed by its high-income earners, while 37 percent is distributed to middle-income earners and only 20.75 percent goes to low-income earners. This means the results of Bali’s economic growth have been enjoyed largely by high-income earners.

However, Made added that the widening economic gap was a common phenomenon among countries experiencing rapid growth, and assured that the government was working to reduce this gap.

The inequality of development between the south of Bali and other parts of the province has greatly contributed to this economic gap. Tourism development, for example, has been largely concentrated in the south of Bali, particularly in Denpasar, Badung and Gianyar. A survey released last year by the Indonesian Hotels and Restaurants Association shows that Bali has 2,260 star-rated hotels, 88.5 percent of which are situated in the south of Bali.

“Therefore, I reiterate that there should be a moratorium on the development of hotels in Bali’s south, and the focus should be moved to other areas so we can have equality in development,” the governor said.

The moratorium has in fact been in place since early last year. However, it has not always been strictly adhered to by regency administrations.

“I can’t prevent regency administrations [from approving hotel developments], because I don’t have the authority, but I have asked the investment agency to divert investment to other areas,” Pastika said.

He emphasized that one of the solutions to address the gap was to select investors and only provide permits to those who could make meaningful contributions to the island.

The government has various programs aimed at reducing the economic gap, including its pro-poor, pro-growth, pro-job and pro-environment programs.

Pastika cited Simantri, an integrated agriculture program that has helped hundreds of farmer groups in Bali.

“We also provide programs for health and education to improve the quality of our human resources.”

Despite the widening economic gap, people in Bali still have better welfare than the populations in other provinces across Indonesia, such as East and West Nusa Tenggara.

http://www.thejakartapost.com/news/2011/12/16/bali-struggles-reduce-economic-inequality.html