In recent years, Indonesia has embarked on a comprehensive strategy to stimulate its tourism sector, fostering substantial economic growth and job creation. This initiative, supported by the Indonesia Tourism Development Priority Program, has been instrumental in mobilizing significant private sector investment and enhancing the country's tourism infrastructure.
From 2001 to 2012, Indonesia experienced strong economic growth with an average annual rate of 5.6%, leading to a reduction in poverty rates. However, challenges such as high youth unemployment and limited female workforce participation have persisted. The country's tourism sector, which could drive inclusive and sustainable growth, according to the World Travel and Tourism Council, holds significant promise. Every $1 million spent in travel and tourism in Indonesia is associated with $1.7 million in GDP and approximately 200 jobs.
The program aimed to address several barriers that hindered growth in the tourism sector, such as poor government coordination, inadequate infrastructure, a lack of workforce skills, and a weak environment for private investment. To tackle these issues, the World Bank Group (WBG) incorporated various components focusing on infrastructure development, workforce training, and private sector investment planning.
The significant achievements of the program include attracting over $870 million in private investment, improving water access for over 570,000 people, and helping over 84,000 tourism professionals gain certification. Additionally, more than 18,000 participants were trained from 155 tourism villages. As a result, the program is estimated to have created better jobs for approximately 1.2 million people, with notable growth in sectors like accommodation and food services.
The project's multi-sectoral approach was pivotal in establishing a long-term vision for sustainable tourism. It included both soft investments like training and certifications, and hard investments like infrastructure, making tourism an inclusive business for stakeholders across various sectors.
Building on these achievements, new initiatives are set to be developed, including the establishment of the Indonesia Quality Tourism Fund (IQTF). This endeavor is expected to continue driving the momentum for sustainable tourism development in Indonesia.