Wardhana: Indonesian tourism could serve as economic defence vs US tariffs

Indonesian tourism minister Widyanti Putri Wardhana has pointed out how the country’s tourism industry could serve as a buffer against the adverse impact of the reciprocal tariffs being imposed by the United States.

Wardhana explained that, as tourism is classified as a service industry, it is not subject to these tariffs; as such it will continue to generate foreign exchange for Indonesia.

In a statement issued on Sunday, 6th April, the minister declared: “Indonesia is able to optimise the great potential of the tourism sector as a major source of foreign exchange that is free from trade barriers.”

The statement was made as a response to concerns that barriers against Indonesian exports to the US could drive the weakening of its rupiah against the dollar.

According to the minister, the tourism sector, classified as a service industry, is not subject to such tariffs and continues to generate foreign exchange.

Wardhana subsequently asked stakeholders in the tourism sector to pay attention to three main strategies in the face of global trade dynamics.

Points to consider

According to Wardhana, the first thing that comes to mind is that tourism may serve as a balancing service export given that Indonesia has very high inherent tourism potential.

She did, however, point out that the distribution of 13.9 million foreign tourists in Indonesia remains concentrated in specific destinations like Bali, Bandung, Jakarta, and Surabaya, and other destinations within the country need to be amply promoted.

Second, the minister invited tourism businesses throughout Indonesia’s diverse regions to take advantage of opportunities from changing global dynamics. 

This is a necessary step towards pushing Indonesia as a world tourist destination.

Wardhana said: “The readiness of destinations, tourism products, tourism businesses, labour, and directed promotion needs to be pursued in an integrated manner, and supported by the government’s promotional and developmental efforts.”

It takes a village

Furthermore, Indonesia’s vast tourism potential should not strictly be limited to certain destinations but ought to begin at the village level. 

In which case, the Indonesian Ministry of Tourism remains committed to developing tourism villages and encouraging tourism-based economic activities throughout Indonesia.

As Wardhana puts it: “This step aims to distribute economic benefits evenly and reduce dependence on the manufacturing export sector affected by tariffs. We also invite tourism businesses to strive for attractive quality tourism experiences.”