OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

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

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 (www.oecd.org/eco/surveys/economic-survey-indonesia.htm).


Keywords: tourism, sustainable development, vocational education and training, regional development, infrastructure, digitalisation, Indonesia
JEL: H54: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock; 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
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