TOURISM DEVELOPMENT AND INCLUSIVE ECONOMIC GROWTH IN BALI PROVINCE

TOURISM DEVELOPMENT AND INCLUSIVE ECONOMIC GROWTH

IN BALI PROVINCE

By:

Made Suyana Utama (FEB Unud)

Email: suyanautama@unud.ac.id

Made Agung Raharja (FMIPA Unud)

Email: made.agung@unud.ac.id

INTRODUCTION

The role of tourism to the Indonesian economy is as the third largest foreign exchange earner after CPO and coal, so that the potential for the future is very large to reduce the current account deficit (Bank Indonesia, 2018). Besides that the tourism sector also has an impact on inclusive economic growth. According to Birdsall (2007), inclusive economic growth is economic growth that is free of increasing employment opportunities, decreasing poverty, and the more even distribution of income. Some writings on the impact of tourism development on economic growth can be seen in the writings by Cohen (1984), Bull (1991), Ave (2006), and United Nation (2017).

According to the supporters of dependencia theory such as Samir Amin, Paul Baran, Cardoso, Gunder Frank, Prebishch, Dos Santos (Kuncoro, 2003) an area where development is largely using foreign investment will not have much impact on economic growth, especially in the long run. In this regard, this study aims to analyze the impact of tourism development on inclusive economic growth in the Province of Bali. This paper will be discussed descriptively.

DISCUSSION

The development of tourism is the visit of foreign or foreign tourists, abbreviated as tourists, domestic tourists visit abbreviated as wisdom, as well as added value from the trade, hotel and restaurant sectors. Foreign tourist arrivals and domestic tourist arrivals, as well as added value from the trade, hotel and restaurant sector in the Province of Bali during the years 1980 - 2018 fluctuated somewhat, but experienced an increasing trend. Foreign or foreign tourist arrivals increased by an average of 11.04 percent per year during the period 1980 - 2018, from 147,000 people in 1980 to 6,060,500 people in 2018. Domestic tourists increased from 198,000 people in 1980 to 45,496. 000 people in 2018 or with an average annual increase of 11.23 percent. The added value generated by the trade, hotel and restaurant sector which is calculated based on constant 2010 prices also increased. In 1980 the contribution of added value to this sector amounted to Rp 1.68 trillion rupiah, while in 2018 it increased to Rp 45.50 trillion, or with an average increase of 9.51 percent per year during the period 1980 - 2018.

Indicators of inclusive economic growth in this paper are the rate of economic growth, unemployment rates, poverty rates, and income inequality. The rate of economic growth, unemployment rate and poverty rate during 1980 - 2018 slightly fluctuated, but has a declining trend. The rate of economic growth in Bali Province experienced a contraction or negative of -4.00 percent in 1998 when there was an economic and political crisis in Indonesia. In 1980 the poverty level in Bali Province amounted to 14.79 percent had a declining trend, in 2018 it became 4.01 percent. The unemployment rate in the Province of Bali in 1980 was only 4.18 percent, which was lower than the theoretical recommendation of 5 percent and continued to decline 1.37 percent in 2018. The unemployment rate had experienced a quite high increase in 2003 after the Bali Bombing I and II tragedy occurred in Kuta. Other indicators of inclusive economic growth are decreasing income inequality or increasing income equality. The Gini Ratio of the Province of Bali from 1980 - 2018 is highly fluctuating every year, but has a tendency to increase. In other words, during this period income inequality increased. The lowest level of income inequality occurred in 1982 and 1984, namely with the number 0.19, while the highest occurred in 2012, amounting to 0.42 or with the category of "quite lame".

Based on the above data the development of tourism is related to inclusive economic growth in the Province of Bali. This can be explained by the development of the tourism sector in the Province of Bali causing an inclusive economic growth or quality economic growth which is also followed by a decrease in unemployment and poverty, although there is an increasing income inequality between income earners. This finding is in accordance with Cohen (1984) said that tourism has an impact on the economy, namely (1) the impact on people's income, (2) the impact on employment opportunities, (3) the impact on the distribution of community income, and (4) the impact on development in generally. These results are consistent with Ave (2006) that tourism development in addition to causing increased income also increases increased employment opportunities, both directly in the tourism sector such as hotels, restaurants, travel agencies, and tour guides (guides) and other sectors that provide input to the sector supporting tourism. This paper is also in accordance with the 2016 UNCTAD (United Nations Conference on Trade and Development) 2016 report in Nairobi which concluded that promoting tourism has created economic growth in less developed countries (LDCs). The results of this paper also support the 2016 report from APEC (Asia-Pacific Economic Cooperation) in issue paper no. 11 which concludes that there is a link between tourism sector development and inclusive growth. This paper is in conformity with the United Nations report (2017) entitled: Tourism for Transformation and Inclusive Growth ", in the Economic Development in Africa report 2017, concluded that the tourism sector is a sector whose growth is very fast seen from the growth of tourist visits, tourist spending, revenue foreign exchange from exports. The tourism sector is also a major economic driver in several small islands, which accounts for around 43-62 percent of the DGP.

CLOSING

Based on the discussion it can be concluded that the development of tourism has an effect on inclusive economic growth in the Province of Bali. This can be interpreted that by increasing visits and an increase in income in the hotel and restaurant trade sector, there has been an inclusive economic growth with indicators of rising GDP, decreasing unemployment and the poor population, although income inequality has increased slightly.

REFERENCES

APEC. 2016. "Tourism Arrival and Inclusive Growth". Paper No. 11. Singapore: Asia-Pacific Economic Cooperation Tourism Working Group.

Ave, Joop. 2006. "The Strategic Role of the Tourism Sector in National Economic Development". Paper presented at the ISEI-focused Seminar and Discussion: Service Sector as a Regional Economic Driving Engine, 18 May 2006, Denpasar.

Bank Indonesia. 2018. Panning Foreign Exchange Through Tourism. Jakarta: Info Outlet 73th year VIII.

Birdsall, Nancy. 2007. Reflections on the Macro Foundations of the Middle Class in the Developing World. Center for Global Development Working Paper 130, Washington DC.

Bull, Andrian. 1991. The Economics of Travel and Tourism. Melbourne: Longman Cheshire Pty Limited.

Cohen, Erik. 1984. "The Sociology of Tourism: Approach, Issues and Finding". Annal of Tourism Reserch 30: pp 336--66.

Kuncoro, Mudrajad. 2003. Development Economics: Theory, Problems, and Policies. Yogyakarta: UPP AMP YKPN.

UNCTAD. 2016. "Promoting Tourism As An Engine Of Inclusive Growth An Sustainable Development in Africa". Report on the High-level Panel Discussion, 21 July 2016. Nairobi: United Nations Conference on Trade and Development 14.

United Nation. 2017. Tourism for Transformative and Inclusive Growth. In Conomic Development in Africa Report 2017. New York and Geneva: United Nation