Investment has become one of the main drivers of Bali’s economy, contributing an average of 30% to the region’s Gross Regional Domestic Product.
“From the expenditure side, investment contributes 26.97%, with the construction sector being the main driver,” said Erwin Soeriadimadja, Head of Bank Indonesia’s Bali chapter, in Denpasar on Wednesday (October 22).
At the Kerthi Bali Sadhana Investment Center, Erwin explained that BI data shows 96.79% of investments in Bali remain concentrated in the tertiary sector—particularly in tourism, hospitality, restaurants, housing, industrial zones, and office spaces.
Imbalance as a Challenge
Meanwhile, the primary sector contributes only 0.92% and the secondary sector 2.92%. According to BI, this imbalance poses a challenge in expanding Bali’s economic base.
“We need to open more investment projects in the secondary and primary sectors that offer high added value, such as processing industries and agricultural downstreaming. This is crucial to make Bali’s economic structure more balanced and sustainable,” Erwin explained.
Geographically, Foreign Direct Investment (FDI) in Bali largely comes from Australia, China, Russia, South Korea, and Singapore—countries that are also major contributors to international tourist arrivals in Bali.
“Most of this FDI is still focused on the tertiary sector, especially tourism. This shows a direct correlation between high tourist visits and increased investment in Bali,” he added.
However, Erwin highlighted the limited number of investment projects outside the tertiary sector that have a ‘clean and clear’ status, which remains a challenge for equitable economic development in Bali.
He believes Bali has several promising flagship commodities to boost real sector investment, such as seaweed, shrimp, salt, and coffee. The downstreaming potential of these commodities is seen as a way to increase added value and expand local employment opportunities.
Although tourism remains the main magnet for investment, BI sees several issues that need to be addressed. These include mismatches between investment types and land use, limited regional authority in business permit oversight, and business risk classifications that are not fully aligned with Bali’s tourism characteristics.
Erwin also encouraged greater involvement from local governments in the investment licensing and oversight process, ensuring that Bali’s economic development aligns with the Tri Hita Karana philosophy. This underscores the importance of balancing economic growth, environmental sustainability, and equitable cross-sector investment.
Sources: BisnisBali
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