Indonesia seeks Bali success in Lombok

Thu Jan 20, 2011 11:58am EST
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By Neil Chatterjee

MATARAM, Indonesia (Reuters) - Traffic jams are now common in Bali, a victim of its own success in pulling in swarms of tourists and using the money to buy cars and turn rice paddies into hotels.

Across a narrow sea channel lies Lombok, another volcanic island ringed by beaches, where in the capital Mataram the few foreign visitors are more likely to be slowed down by a horse-drawn cart than a tailback of Toyotas.

But authorities in Indonesia, a current emerging market investor darling, have big plans for the island.

A new international airport is expected to open later this year, and Qatar's sovereign wealth fund is leading a bidding race to develop an unspoiled southern coastline of white sand into a world class resort and luxury residential community.

Indonesia hopes such projects will overhaul its poor infrastructure, seen as both a hurdle to growth and a cash making opportunity, with Asia showing the most investment interest in a sign of new money flows between emerging markets.

Lombok's leading exclusive development so far, Indian-owned The Oberoi, an isolated and expansive resort of manicured lawns and infinity pools facing Bali, was chosen as the venue for a meeting of Southeast Asian foreign ministers this week.

"We brought the ministers here to show them how unspoiled it is ... and the opportunities," Indonesia's Foreign Minister Marty Natalegawa told Reuters on a stroll through the grounds.

Tourism contributes just 2-3 percent to the country's GDP, versus 6 percent for Thailand, and economists believe boosting Indonesia's service industries could be a new engine of growth for Southeast Asia's biggest economy.   Continued...

<p>A diver explores dead coral reefs in Gili Trawangan at Indonesia's Lombok island May 13, 2009. REUTERS/Nila Tanzil</p>