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Making the most of tourism in Indonesia to promote sustainable regional development


  • Patrice Ollivaud
  • Peter Haxton


Tourism has boomed in Indonesia in recent years and is already one of the main sources of foreign-currency earnings. Indonesia has rich and diverse natural assets, whose tourism potential remains underutilised. The government has an ambitious target of attracting 20 million tourists by 2019, up from nearly 14 million in 2017. The main destination will continue to be Bali. Using Bali as the preferred development model, the government wants to develop other destinations, particularly through infrastructure programmes to improve connectivity, which is a longstanding challenge for tourism as well as for regional development more generally. Enhancing the tourism-related skills of local populations will provide them with expanded job opportunities. This calls for reforms to vocational education and training. Moreover, recent efforts by the authorities to improve the business environment need to continue, including through helping firms embrace digitalisation. Tourism may be growing too fast in some destinations without adequately taking into account sustainability issues, both for the environment and local communities. Better planning and co-ordination at all levels of government and across relevant policy areas can facilitate more sustainable tourism development.This Working Paper relates to the 2018 OECD Economic Survey of Indonesia (

Suggested Citation

  • Patrice Ollivaud & Peter Haxton, 2019. "Making the most of tourism in Indonesia to promote sustainable regional development," OECD Economics Department Working Papers 1535, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1535-en
    DOI: 10.1787/c73325d9-en

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    Cited by:

    1. Gayoung Choi & Jongmin Kim & Made Yaya Sawitri & Sue Kyoung Lee, 2020. "Ecotourism Market Segmentation in Bali, Indonesia: Opportunities for Implementing REDD+," Land, MDPI, Open Access Journal, vol. 9(6), pages 1-15, June.
    2. Christine Lewis, 2019. "Raising more public revenue in Indonesia in a growth - and equity-friendly way," OECD Economics Department Working Papers 1534, OECD Publishing.

    More about this item


    digitalisation; Indonesia; infrastructure; regional development; sustainable development; tourism; vocational education and training;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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