Paradise Lost: Not a Heaven but Haven

Sumber: dokpri

In September 2025, a torrential downpour was brought upon the island that held a thousand temples and wielded the moniker as “Pulau Dewata.” The land was not left unscathed; a flood trailed soon after the torrent stopped. It was acclaimed to be the worst flood that the island of the Gods ever had in the last decade. The island is in mourning, casualties reported, the kind of tragedy that didn’t discriminate, with all kinds of people affected by it, the provincial government declared a week-long state emergency. But where does this flood fit in the large scheme of things? The flood wasn't just a representative of one thing; it was a portrayal of one of the many systemic faults of this island that presents itself as a paradise. Be it the surging prices of goods and land for locals, the pressing matter of water scarcity, the unsettling amount of waste that was generated by tourism, and many other things that don’t fit with the idealism that this island is of paradise reincarnate. 

All of this could be traced back to colonialism; we could always thank the Dutch for a large number of matters in this country, don’t we?  As all colonies do, Bali first served as a provider of agricultural products for the colonizer with barren lands. The Dutch first featured Bali’s magnificent culture to the world during an International Expo held in Paris, where each colonizer competed with each other, ironically, showcasing the cultures of their colonies. When the Indonesian government realized how profitable they could make of this land of paradise, many projects were kick-started to boost tourism and promote this island as a utopia people can escape to. 

In 1963, Soekarno’s move on Bali focused on putting down the foundations of a tourism spot, he issued an order to build a five-star hotel in Sanur and to expand a beatdown airport near Kuta into the highly modern and international airport we know as I Gusti Ngurah Rai. Then, during Soeharto’s reign, the development of Bali was included in the agenda of the Five-Year Development Plan (Repellita) as it was highly pushed upon by foreign consultants who helped the late president back then. In 1982, the Bali Tourism Development Corporation (BTDC) complex was created in Nusa Dua. This new appearance of these five-star luxurious resorts shifted the tourism industry. The development of mass-tourism models is highly encouraged, thus becoming more and more commonly seen, as we look at famous areas like Kuta, Canggu, Sanur, and Ubud. 

Dutch as They Came, Dutch as They Left

Although the Dutch popularized Bali to the world since before Indonesia gained its independence, tourism didn’t immediately become the main actor of this acclaimed paradise’s economy. Even until the mid-80s, Bali’s economy was mainly dominated by the agricultural sector, which contributed to almost one-third of the province’s GDRP. It only took a decade later for the tourism industry to become a dominant player, causing the rise of the service sector, with its proportion taking up more than half of the labor market. 

In turn, the agricultural sector took a huge blow, paddy lands were transformed into non-agricultural uses to boost the more dominant sector. From 1998 through 2007, it was reported that the decline in paddy fields reached 7% with an average of around 0.7% per year. The decrease in agricultural land directly affects the demand for labor in the industry. In 2017, the rate of decline in the agricultural industry reached a shocking reality, with the total jobs left being half of the total agricultural industry jobs during 2003 (Meydianawathi & Sunan, 2024). Even with the shock of the tragic bombing that landed on Bali during 2002-2005, the workers that have already shifted from the agriculture industry to the tourism sector were reluctant to go back.

The tourism boom led to discoveries of new uses for natural resources, as well as changes in relative prices and affecting the production structure of the economy. With the newly demanded labor in the booming industry, the labor market shifted from tradable and non-tradable goods sectors to the tourism industry, causing production in those two sectors to decline (Javier Capo et al, 2007). This correlates with the classical economic model developed by W. Max Corden and J. Peter Neary in 1982, the Dutch disease, where the non-tradable sectors and two tradable sectors are the booming sector and lagging sector. In Bali’s case, the effect seen could be argued as the spending effect; indirect industrialization happens where tourism brings in high revenue and inflates the non-tradable sectors (housing, land, services) for the locals. Foreign investment flows in, the cost of living for locals increases, and services dominate the labor market, while manufacturing or agriculture declines as it is less profitable. With other sectors becoming more unbalanced throughout the years, the tourism boom phenomenon is something that could be a threat in the long term.

One of the cases of a region having the most specialized tourism economies is the Balearic and the Canary Islands in Spain. The tourism boom gave a significant increase in wealth, thus the government shifted a higher focus on tourism, while manufacturing and agriculture were becoming highly downtrodden. Even with all the positive injections tourism gave to the economy, it is also worrying because the specialization of tourism in those islands has brought low levels of education and training, while also decelerating the rate of innovation and technological advancement (Javier Capo et al., 2007).

As it was mentioned before, with the economy being overly reliant on tourism, a minor disruption to one of its elements affects all. One of the most catastrophic cases occurred during the pandemic. With restrictions on travel being imposed worldwide, the island’s decline in foreign tourists in 2020 reached 82.96% when compared to the year before. Bali’s economy saw the biggest contraction among other provinces in Indonesia, with the number being at 9.3%. Its main sectors recorded a negative economic growth that heavily impacted the transportation, warehousing, and FnB sectors. Many of those contractions could be attributed to the fact that there was a huge decline in both domestic and international tourists.  This trend continued on until the second quarter of 2021, when the economy went back to its positive growth, although at a much slower pace when compared to other provinces in Indonesia (Sanjaya et al, 2024). This shows that the economy would be in a very vulnerable position if tourism were to take a hypothetical huge blow. 

The Reality of Shangri-La Does Not Exist

The second quarter of Bali’s GDRP in 2025 saw a surge of 5.95% (yoy), which made it achieve the fourth-highest provincial growth. The reported economic growth was also higher than the national average, which is 5.12% (yoy). The land of the gods is usually present in the front rows of economic growth in Indonesia. Nuryanto (2018) states that increasing economic growth does not always go hand in hand with decreasing income inequality. One does wonder, do these results actually transfer to the life of the locals?

First, we start with the disparities that are, in fact, happening across the regions. The regional development in this paradise has significant gaps between areas, with most of the local government’s focus on development centered on South Bali, or more specifically, in Denpasar. Regencies such as Klungkung, Karangasem, and Tabanan are less noticed by the government and are categorized as the least developed (Raeskesya et al, 2019). Concerning Karangasem, the reality of this regency could be seen as a paradox, as it holds the achievement of being one of the largest paddy producers in the island, but is also the regency with the highest poverty percentage in all of Bali at 6.52% in 2024 (BPS, 2025). The disparities that Bali experiences do not only consist of regional development, but also education. The percentage of those who completed higher education in Denpasar differs significantly from those in Buleleng, with it being 18.6% for the former and 5.54% for the latter (Databoks, 2024). In Buleleng itself, there is an unsettling matter about literacy that over 400 students at the middle-school level are having difficulties in reading and spelling, with half of them still being unable to read (Kompas, 2025). If we dive deeper into examining the composition of the labor force by educational level in Bali, we discover a deeply worrying fact that the labor force is dominated by elementary school graduates and below, with it being at 29.9% (BRIDA, 2024). 

The number of tourists that increases, in fact, does not generate economic profits for all groups of people. The profits tend to be concentrated on a segment of people who already own a large business, such as luxurious hotels and restaurants or entertainment venues. The locals that has small businesses or work in the informal sector do not get the same share of pie as the previously mentioned owners (Saputra et al, 2024). This is an increasingly worrying matter because the proportion of informal workers in Bali takes up more than half of the labor market, at 52.35% (BPS, 2023). Saputra also revealed that the increase in restaurants or types of accommodations, while it creates the potential for new jobs available, it does not significantly reduce the problem of inequality in Bali. This phenomenon serves as a classic example of the failure of trickle-down theory. In principle, when the wealthy receive benefits, such as tax cuts, the resulting wealth is expected to trickle down to all levels of society. In Bali's case, tourism revenue has not generated broad spillovers for the local population

Those who are capital owners monopolize the surplus that this boom generates, while the working class lacks access to capital and can only receive wages. This reflects Piketty’s concern (2013) that when the return of capital (r) is bigger than economic growth (g), wealth accumulates faster than overall economic growth, concentrating economic benefits among capital owners. The situation could be more rightly defined by the Neo-Marxist theory. We see an unequal exchange, where one side (Bali) supplies culture, labor, and the beauty of its natural resources, while the value gets extracted by the foreign investors, international business chains, and the local elites who also benefit from it. The working-class locals get even more marginalized with increases in the price of land and goods. 

Days of Future Past

As cultural tourism is the unique selling point that is advertised by the government to the world, there is also another type of tourism that follows in the background. Especially nowadays, tourists don’t only visit Bali for its increasingly beautiful natural destinations, but also for its extremely lavish and globally acknowledged nightlife industry. As of May 5, 2025, there has been a 4.35% increase in nightclubs from 2023, with the total number being around 190. There is also a high influx of hotels being seen. The expansion of these industries means the need for more space, more land. 

Tourists go to beach clubs, ride ATVs, take pictures in Canggu’s famous coffee shops, and do pilates that sells for experience. Tourism stakeholders accommodate the demands of tourists; the demand is present, and the chance for them to reap its benefits is also present. So they expand their businesses, open up more options for recreation, and thus the two of them blissfully stay ignorant of the underlying issue of this island. 

A research conducted by Purba et al. (2025) states that the high-intensity tourism ecosystem Bali has tends to compromise ecological integrity. It led to worse conditions of water use, pollution, and conflicts over natural resources. There is a serious matter of water scarcity happening that is mainly caused by the high use the hotel sector generates of it, as luxury accommodation in Bali is known to use 65% of the total available water (Utama, I Gusti Bagus Rai et al, 2024). Although even with tourism being the main user of groundwater, they are not the ones directly affected by the water shortages their activity generates, it is the locals. These water demands already produce inequity, and would only worsen in future generations to come (Cole & Browne, 2015). 

Other than water scarcity, the development of hotels is not accompanied by strong regulations in spatial planning. Thus, leaving it with future hypothetical problems of flooding, waste management, and damaged ecosystems (Widiatedja, 2022). When remembering the flood that happened not long ago, Hanif Faisol Nurofiq, Minister of Environment, states that one of the reasons for it to happen is the severe waste production. In 2024, the waste generated on the island reached 1.254.235,02 tons; however, the waste management has not kept pace with the intensity of waste produced. Tourism itself contributes 3.5 times more plastic waste per capita than locals (JakartaPost, 2023). 

When seeing the reality of this through the lens of intergenerational economics, the current tourism-dominated growth happening in Pulau Dewata could be perceived as “borrowing from the future” and more often than not, generating negative externalities either to the environment or the local communities. We suddenly thought of Hartwick’s rule, which states that the benefits reaped from non-renewable resources should be invested in reproducible capital to design a sustainable future. The question is, have they done that? With all these issues lying around without being properly mitigated by stakeholders, there could be another tragedy incoming, and there would also be a cost that the future generation needs to pay. 

Eat, Pray, Love

A paradise it is when we look at it through the lens of some influencer’s TikTok, a foreigner’s tourism blog that promotes to their fellow countrymen on why they should move to Bali when life gets too hard and how to enact it, a Hollywood movie that features this island as something “exotic”, or even when we ourselves open Traveloka to buy airplane tickets there to have a quick getaway. We need to stop looking at things as it is and see beyond the lens, acknowledge that the foundation is showing cracks, and this paradise is in a vulnerable position in the future. Trading long-term sustainability for short-term profits is what compromises the idea of paradise that this island presents. The locals shoulder all the burden, and future generations would carry it on, while hoping that it has not become even heavier than what their predecessors have carried before. The question is, would it not?

Works Cited:

BRIDA. “Webinar Ekonomi Makro Provinsi Bali Triwulan I Tahun 2024.” Badan Riset dan Inovasi Daerah Provinsi Bali, 2024.

Cole, Stroma, et al. “Making an impact on Bali's water crisis: Research to mobilize NGOs, the tourism industry and policy makers.” Annals of Tourism Research, vol. 87, 2020, https://www.sciencedirect.com/science/article/pii/S0160738320302632? 

Cole, Stroma, and Mia Browne. “Tourism and Water Inequity in Bali: A Social-Ecological Systems Analysis.” Human Ecology, vol. 43, 2015, pp. 439-450.

Meydianawathi, Luh Gede, and Agus Suman. “THE EFFECT OF DUTCH DISEASE VS NEW PARADIGM OF TOURISM DEVELOPMENT (Case Study of Changes in Bali's Economic Structure).” EKSIS: Jurnal Riset Ekonomi Dan Bisnis, vol. 18, no. 2, 2024, pp. 93-104, https://ejournal.stiedewantara.ac.id/index.php/001/article/view/1314/629.

Purba, Ida Bagus Agung Haridharma, et al. “Sustaining paradise: How tourism-driven growth affects environmental sustainability and community welfare in Bali.” Edelweiss Applied Science and Technology, vol. 9, no. 8, 2025, pp. 1547-1557.

Raeskyesa, Dewa Gede Sidan, et al. “Analysis on Growth Pattern and Economic Sectors in Bali Province.” Analysis on Growth Pattern, vol. 11, no. 2, 2019, pp. 45-56, https://journal.ibs.ac.id/index.php/jime/article/view/141/pdf. 

Sanjaya, Putu Krisna Adwitya, et al. “BALI TOURISM AND ECONOMIC TRANSFORMATION: TOWARDS ECONOMIC RESILIENCE AFTER THE COVID 19 PANDEMIC.” 2024.

Saputra, Wahyu Arya, et al. “The Effect Of Tourism On Bali Provincial Income Inequality: A Quantile Data Panel Approach.” 2024, pp. 953-964.

Speirs, Edward. “Designed to Last: Lessons from Bali’s Tourism History.” Now! Bali, 2025, https://www.nowbali.co.id/designed-to-last-lessons-from-balis-tourism-history/. 

Stryson, Eric. “Unlocking Bali’s plastic tourist trap.” JakartaPost, 2023, https://www.thejakartapost.com/opinion/2023/05/29/unlocking-balis-plastic-tourist-trap.html. 

Utama, I Gusti Bagus Rai, et al. “Assessing the Impacts of Overtourism in Bali: Environmental, Socio-Cultural, and Economic Perspectives on Sustainable Tourism.” TourismSpectrum: Diversity & Dynamics, vol. 1, no. 2, 2024.