Indonesia needs to inject more funds to stimulate tourism growth

By TIN Media | Asean News Published 1 month ago on 8 June 2024
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INDONESIA:

Indonesia will need more investment in tourism-supporting infrastructure to balance the dominant hospitality sector, which currently accounts for 80 percent of total tourism investment.

This was the consensus reached at the International Tourism Investment Forum (ITIF) 2024, held in Jakarta on June 5-6. The forum was organised by the Indonesian Ministry of Tourism and Creative Economy and supported by UN Tourism.

Speaking at the opening of ITIF 2024, Sandiaga Uno, Indonesia’s minister of tourism and creative economy, said: “Indonesia recorded more than US$3 billion in tourism investment last year, surpassing our target of US$2.6 billion. However, 80 per cent of this investment has been directed towards hotels, restaurants, and cafés.

“We need more investments in the ecosystem, including the development of sustainable products and inclusive community-based tourism. We need between US$15 billion and US$20 billion (of investment funds).”

Accommodation has also taken up the largest portion of Greenfield FDI investment in Asia-Pacific, accounting for 46 per cent of total investment between 2013 and 2023, according to UN Tourism data.

Natalia Bayona, executive director of UN Tourism, noted: “This is a strong message that we need to diversify, to promote and work together with governments to create new incentives and regulations (to stimulate investment in supporting sectors).”

Meanwhile, Sri Mulyani Indrawati, Indonesia’s minister of finance, stated in her keynote address that despite global economic challenges, Indonesia continues to demonstrate relatively strong and resilient growth at five per cent.

Sound fiscal policies have been a strategic tool in maintaining economic stability, including leveraging the potential of the tourism sector to support inclusive economic growth towards Indonesia’s vision for 2045.

“For Indonesia to achieve its aspiration of becoming a high-income country by 2045, we need to grow by six to seven per cent or even eight per cent. Tourism and the tourism industry can provide a quality, inclusive source of growth,” Sri Mulyani said, adding that Indonesia’s abundant natural resources, rich cultural heritage, and renowned hospitality are significant assets.

However, several challenges need to be addressed, such as improving the quality of human resources and infrastructure development to support growth.


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