Bali Governor Calls for Economic Diversification to Reduce Tourism Dependency Amid Regional Disparity
Bali Governor Wayan Koster highlighted a stark economic disparity between South Bali (Denpasar, Badung, Gianyar) and the island's six other regencies, while noting that roughly 66% of Bali's economy depends on tourism-related sectors. He outlined plans to diversify the economy through organic farming and local garlic production to reduce reliance on tourism.
According to NusaBali, Bali Governor Wayan Koster has again pointed to a significant economic disparity between the three South Bali regencies of Denpasar, Badung, and Gianyar, and the island's six other regenciesāTabanan, Jembrana, Buleleng, Bangli, Karangasem, and Klungkung. The three South Bali areas generate roughly Rp 10.9 trillion in locally-generated tax revenue (PAD), compared to just about Rp 2.3 trillion combined for the other six regencies.
Koster made the remarks on 2 October 2026 during a working visit by the House of Representatives' Budget Committee (Banggar DPR RI) to his official office in Denpasar. He attributed the disparity largely to the concentration of tourism activity in South Bali and called for developing new economic growth centers elsewhere on the island.
In 2025, foreign tourist arrivals by air reached 7.05 million, with total visits (including domestic tourists) hitting 16.3 million. Bali's tourism revenue of approximately Rp 176 trillion accounted for 55% of Indonesia's total national tourism revenue of around Rp 319.9 trillion. Bali's overall economy grew 5.82% in 2025, the fifth-highest growth rate nationally.
However, Koster stressed that about 66% of Bali's local economy remains tied to hotels, restaurants, and related sectors, including small and medium enterprisesāa structural vulnerability exposed during the COVID-19 pandemic. "If tourism is thriving, Bali's economy automatically thrives, whereas if tourism performs poorly, Bali's economy suffers accordingly," Koster said.
As part of diversification efforts, about 70% of Bali's 64,000 hectares of rice fields have already adopted organic farming, with a goal of full conversion by 2028. The government is also pushing to expand local garlic production to reduce dependence on imports.
Deputy Chairman of the Budget Committee, Syarief Abdullah Alkadrie, noted that Bali's economy grew 5.78% year-on-year in Q2 2026, up from 5.58% in the prior quarter and above the national average of 5.29%. However, the accommodation and food & beverage sectors still contribute 21.91% of Bali's Gross Regional Domestic Product, underscoring the continued need for economic diversification to build resilience against tourism volatility.
Things to Consider
This announcement does not involve immediate travel restrictions, but tourists and residents should be aware that Bali's economy remains heavily tied to tourism performance, meaning future policy shifts (e.g., new taxes, fees, or promotional programs) could follow. Those considering long-term stays or investment should monitor government initiatives promoting agriculture and development outside South Bali (e.g., Tabanan, Buleleng), as these could affect regional development and land-use regulations over time.
Source: Bali Discovery | News on Bali Tourism & Life Since 1998