Work from Bali July 2021, Will it Be Effective to Boost the Island’s Economy?

As one of the world’s top travel destinations, the impact of COVID-19 on the Indonesian island of Bali has received intense media scrutiny — and speculation.

After foreign arrivals and transits were temporarily suspended on March 31, by mid-April most international media coverage had shifted from stranded tourists to those seeing out the pandemic in paradise.

In the third quarter of 2020, Bali’s economy experienced a decline of 12 percent. This situation makes the centre of government think hard on how to help Bali rebound as soon as possible. A lot of strategic ways are created from introducing nomad work environment until ask the public employee to running the government program which is called “Work From Bali (WFB)”

As reported recently, Indonesian Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan proposed a program called ‘Work From Bali’ (WFB) for public employees under his responsibility and seven other ministries to encourage tourism recovery in Bali. This program will send 25 percent of employees at the said ministries to carry out their work in Bali.

In response to this, public policy expert and UGM Public Policy and Management lecturer Professor Wahyudi Kumorotomo advised the government to prioritize necessary programs only and save the budget instead.

He assessed that the National Economic Recovery program was indeed a good step to anticipate an unemployment rise and boost economic growth that was heavily affected due to the pandemic. However, considering the state revenue remained weak, Wahyudi urged all government institutions to spend the budget wisely and think about this aspect when formulating policy. For information, earlier this year, the government decided to increase the stimulus package from originally IDR 450.1 trillion to IDR 677.2 trillion. As of May 21, 2021, the budget realization was IDR 184 trillion.

Seven ministries in Indonesia are signing on to support the Work from Bali program, as efforts continue to revive the province’s deeply battered economy.  Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan signed a memorandum of understanding (MoU) with hotels in the Nusa Dua complex, which will see them host employees from the seven ministries under his supervision for stays and events.

“This memorandum of understanding was made as part of an effort to support tourism in The Nusa Dua, Bali under the principles of good corporate governance and will apply for seven ministries and institutions under the Coordinating Ministry for Maritime Affairs and Investment,” Luhut said. The Nusa Dua refers to a tourism complex helmed by state-owned Indonesia Tourism Development Corporation (ITDC), housing more than a dozen hotels, conference and cultural venues, and a shopping center, among other facilities.

Up to 8,000 employees at seven ministries will likely be eligible for the program, which is being overseen by the office of the coordinating minister for maritime affairs and investment. They include workers at the energy ministry, the public works ministry and the transportation ministry. “This is part of the government’s efforts to create demand so that hotels and restaurants in Bali can survive,” Odo Manuhutu, deputy for tourism and creative economy at the minister’s office, told reporters at the weekend. “In line with the health ministry’s guidelines, Bali’s vaccination rate is currently the highest and fastest [among Indonesia’s provinces] to make sure that Bali is safe to visit.”

Manuhutu said the government is aiming to inoculate 2.8 million Bali residents aged 18 or older — or over 60% of the island’s population — by July. Officials had earlier said they wanted to launch some kind of a “work from Bali” program that month. With 80% of its economy dependent on tourism and related sectors, Bali reported the deepest contractions among Indonesia’s 34 provinces in 2020 and in the first quarter of this year — at 9.3% and 9.85%, respectively. Indonesia’s economy, meanwhile, shrank 2.07% and 0.74% in the two periods.

Manuhutu said many Bali hotels have been reporting just around 8%-10% occupancy rates along the pandemic, forcing them to furlough their workers. Assigning some civil servants to work from Bali is expected to encourage workers from the private sector to follow suit, thus helping Bali fill its 140,000 or so hotel rooms. “We’re hoping that our presence in Bali will create multiplier effects,” Tourism Minister Sandiaga Uno said on Monday. “We’re hoping [it] will trigger a herd mentality, followed by other sectors — the private sector, academic institutions and communities.” Most employees at government offices in Jakarta — except essential workers — are still working on a 50:50 basis, under which they regularly switch between working at the office and at home.

Even with the offer of working from Bali, the Minister reminded public employee to comply with health protocols in a disciplined manner so that they can be safer and more comfortable in carrying out activities. Sandiaga Uno, who will be based in Bali until Saturday 30th January, revealed that one of the reasons for him working in Bali is to hear direct experiences and motivate the tourism and creative economy market to stay enthusiastic and be able to bounce back after the COVID-19 pandemic.

Vinsensius Jemadu, director for tourism marketing at the tourism and creative economy ministry, said among the plans is to get half of those having their work-from-home shift to do it from Bali — including administrative work and virtual meetings.

“We can set a quota for each ministry or state institution. The civil servants will be able to work from Bali in turns until the end of the year,” he said. Jemadu added the government is still calculating the budget for the program, saying it will be “huge.” Accommodation alone is estimated to cost at least 3 million rupiah ($209) per month for each employee. They will be concentrated in the Nusa Dua resort area, which employs more than 7,500 workers directly and 10,000 more indirectly — around 40% have received their vaccine shots. “We’ve done various efforts before to support the tourism industry through grants, loan stimulus, etc. — but they’re still unable to boost demands,” Jemadu said.

Bali welcomed just around 350 foreign arrivals between January and April, down from 1.2 million in the same period of last year, according to data from state airport operator Angkasa Pura. Domestic arrivals, meanwhile, dropped to 417,000 from 993,000. Uno said Indonesia has been discussing potential travel corridor arrangements with several countries — including Singapore, Vietnam, the U.K. and Russia. He had earlier said that under the schemes, some locations in Bali and Riau Islands Province, which directly neighbours Singapore, will be designated as “green zones” — or COVID-free areas.

The minister added that the government is preparing policies and telecommunications infrastructure to help Bali catch up with the rising trend of digital nomads — a loose group of remote workers and freelancers who travel the globe and earn a living anywhere as long as there is fast and reliable internet connection. This includes a plan for long-term visa arrangements.

This appears to be the central government’s latest effort to revive tourism in Bali, which has been severely impacted during the pandemic. The Work From Bali program essentially encourages people to visit Bali even as they are working, making use of the widespread work from home arrangement currently in place.  “Hopefully Work From Bali can attract professionals from the government sector and business sector to make sure there is an increase in hotel occupancy,” Tourism and Creative Economy Minister Sandiaga Uno said.