Thoughts on 2020 and Beyond

Markit

2002 tourism died because of some bombs - Bali and tourism came back. 2005 tourism died because of some bombs - Bali and tourism came back. 2017 [SIZE=7][B]TripAdvisor names the world's top destinations for 2017[/B][/SIZE] Bali.... No. 1 :) 2017 tourism died because our local volcano blew up - tourism and Bali came back 2018 tourism died because of some earthquakes on a neighboring island killed a few thousand people. 2020 So this year it's just a little old virus - Bali has tradition and experience in bouncing back, can you say the same about where you live?

Markit

I disagree. I think the SE Asian model as typified by Indonesia is the only hope for billions. What does that look like? Happiness through low levels of education giving an acceptance of the realities of menial (if any) jobs, supported by an extended family (where someone will probably have a job) based on agrarian subsistence levels of food provision (small bowls of rice with some protein and vegetable). A life spent within spitting distance of where you were born with no idea about the wider world to make you unhappy or offer bad comparisons (American model). The future will be small brown people happily living on their warm islands in the sun with no interest in wider issues of String theory, Climate change, over population, nuclear fusion or stock market fluctuation. Lets see who's gonna be better equipped to survive, the stock broker in London with empty shelves or the fisherman in Candi Dasa. I know who my money's on.

mugwump

This post is so broad in scope it defies reasonable discussion here unless we are attempting expansive socio/political beliefs, and really doubt anything other than strongly held concepts will emerge. If as Market is directing we can focus on how Bali may handle this mess we do have some recent history to go by. Having been here when the first bomb went off in 2002, and heard the news on local radio (something rarely listened to) was of course shocked as was everyone else without any anticipation of such an event. That to a degree reflects a similar situation today and as such provides a glimpse into the future. People scattered out of here so fast it was unbelievable. It was said that a cannon could have been fired down Legian Rd. and never hit a soul. Things happened as a result of the loss of tourism such as an increase in criminal acts by many destitute folks without employment especially among those outside the traditional community. Expats were seeking means of enhancing security to property and homes, while some regencies suffered more than others economically and tragically reported residents with very little to eat. Once that stigma of Bali as an unsafe destination began it took about nine years for it to really come back. I can recall many businesses failing while others amazed me with their tenacity in shrinking down almost in hibernation to re-emerge as things gradually came back. So such as this is a bit of history to guide us feel that I am in alliance with Markit that Bali as a tourist destination and a strong economic gem in indonesia's crown will once again weather the storm and bounce back.

harryopal

Even before Covid 10 the critical emerging challenge for countries worldwide had become that of providing for ever increasing numbers of well educated graduates for whom employment prospects were becoming increasingly bleak. Massive unemployment rates were no longer a third world phenomena but demonstrations and rioting over unemployment were becoming increasingly widespread throughout Europe and in developed countries. In the midst of the Covid 19 crisis governments attempt to pacify citizens anxious about the future by talking of a return to "normality" in weeks, months or even a year. Yet it has become clear that the dislocation of trade and economies accompanied by the closing of businesses from small to large accompanied by lay offs and job losses has been a defining event. Having invented the wheel humankind set off down an often bumpy and ill-defined road of development and progress. While demand and growth precipitated ever expanding production and employment we lived in a world of hope despite economic and industrial crises. Yet by 2019 we had been struggling to deal with the ugly realities of increasing populations, unsustainability of resources and worldwide waste management problems. Until this point the creation of new technologies, automation and robotization have been seen as means for increasing profit by reducing labour costs and producing cheaper goods. This has also seen it useful to employers in finding advantage in casual and short term employment rather than permanent employment which created stabiity and a sense of future for the employed. The social consequences of these dynamics has seen an ever widening gulf between those with wealth, and those fortunate to have employment. and the unemployed. Crime and social disturbances, expanding prison systems are part of the cost of societal development that has been prescribed by profit opportunities rather than overall societal well being. The worldwide impact of Covid 19, apart from health issues, finds us at a crossroads. With the reality of increasing millions of unemployed to try and return to "normality" based on production policies of the past is to face a future of conflict and violence as the poor worldwide protest at their circumstances. We have come to accept that education for all is critical for the well being of our societies. We have come to accept that pensions for the aged are also an essential component of social harmony. We have yet to come to terms with other areas of social support such as unemployment relief where systems have been created to require applicants to jump through hoops in the hope that discouragement will save funds. We are at a pivotal moment where production and technology innovations and development need to have social equity not profit alone as a means of designing production for the way ahead. Instead of more efficient processes leading to cheaper products but fewer jobs a more socially equitable approach would be to reduce employment hours and increase employment positions. Basic minimum incomes for all members of society may yet be a means of developing a future with more social cohesion and less friction or even civil war. And so ends today's sermon.

Mark

I wrote here on 19 Feb 2020 that "the counterintuitive hotel/tourist gold rush phenomenon in Bali seems to mirror the crazy rise in asset prices around the world, with stock markets continually hitting all time highs despite crippling trade wars, coronavirus, slowing economies etc. It's like a world gone mad, where people are behaving and investing according to how they wish things to be, rather than how things actually are. The only thing I know for sure is that when the party does end, it doesn't end well, both here in Bali and elsewhere..." https://balipod.com/forum/threads/is-it-me.13116/#post-122772 That prediction from six weeks ago is unfortunately playing out. And, what is becoming equally obvious now is that we are on the verge of a massive dislocation in the world economy, including in Indonesia. Economic depression is coming - I don't buy the nonsense about a short global recession and V-shaped recovery. It's not just the economic and social impacts of the corona virus, which are massive in themselves and have hardly yet begun to be felt, but the dominoes that will fall as a consequence. Due to Central Bank low/zero interest rate policies over the past decade there is an unsustainable amount of debt in the world economy, much of which is owed by so-called 'zombie companies' that are barely afloat, and it's not difficult to anticipate the compounding effects of a major global bank failure (did someone say Deutsche Bank??), as well as hundreds (thousands?) of corporate bankruptcies. These will occur mainly in the US and European economies, but the effects here will be equally devastating since emerging markets like Indonesia are not well protected from external shocks and have few policy tools to deal with them. We've already seen the Rupiah decline from IDR13,688 per USD on the day of my 19 Feb post to 16,500 today (-20%), and that may just be the start. The finance minister recently warned the Rupiah could go to 20,000 per USD before the crisis abates. She may be optimistic in that assessment. In any case, with the weak Rupiah will come increasing inflation, which is not a good thing, especially for those without incomes or on fixed incomes denominated in local currency. In the meantime, I'm afraid that our local friends and neighbours here may experience more financial pain than the Bali bombings and Mt Agung disruptions combined. Some may be able to return to a subsistence lifestyle, or even back to a sub-normal, ie much reduced, tourist driven economy in a year or two, but not before experiencing the misfortune of losing their employment, and potentially having vehicles and in some cases land repossessed and their savings wiped out. And somehow I don't see the Instagram generation returning to farm the rice paddy, make sea salt, fish for a living etc. so there will be massive unemployment. At least with the banjar system of community support, people here in Bali shouldn't starve. Hang on for a long, rough ride.