But it is interesting to learn that over the past couple of years, the tourism sector of Indonesia has been playing an increasingly important role in terms of foreign exchange (forex) revenues. While forex revenues generated through Indonesia's traditionally biggest export products - namely oil & gas, coal, crude palm oil, rubber, and clothes - have decreased since 2011, forex revenues generated through tourism in Indonesia have increased over the same time (see table below).

Foreign Exchange Earnings Ranking Indonesia:

  2011 2012 2013 2014 2015
Oil & Gas
 41.5  37.0  32.6  30.3  18.6
Coal  27.2  26.2  24.5  20.8  15.9
Crude Palm Oil  17.3  18.8  15.8  17.5  15.4
Processed Rubber  14.3  10.4   9.3   n.a.   n.a.
Tourism   8.6   9.1  10.1  11.2  12.2

in billion US dollar
Source: Statistics Indonesia (BPS)

Rising foreign exchange earnings in the tourism sector come on the back of rising foreign visitor arrivals in Indonesia. Although Indonesia may not achieve its foreign visitor arrival target of 12 million people in full-year 2016, the number of foreign tourists in Indonesia will have nearly doubled over the past seven years. Ever since the last big radical Islamic attack (aimed at westerners) in Indonesia (namely the 2009 Ritz-Carlton and Marriott hotel bombings), the number of foreign tourist arrivals has grown quickly in Southeast Asia's largest economy.

The government's decision to allow visa-free access to Indonesia for 169 countries (through Presidential Regulation no.69/2015 on Exemptions of Visit Visa) is also regarded a good move to attract tourists. In fact, those entrepreneurs who are active in Indonesia's tourism industry urge the government to grant this facility to more countries. However, whether this would be enough to achieve the government target of welcoming 20 million foreign visitor arrivals by 2019 is uncertain.

Moreover, the danger of allowing visa-free access to citizens of most countries is that foreigners can easily abuse this facility. While foreigners are only allowed to stay in Indonesia for a maximum of 30 days under this visa-free facility (for example for tourism, visiting a seminar or business meetings), they can violate immigration laws by working illegally in Indonesia and by overstaying in the country. This mostly involves people from African countries.

Below we present the number of foreign visitor arrivals in Indonesia in recent years. Please note that Indonesia's Statistics Agency (BPS) adjusted the definition of foreign visitor arrival per January 2016. This explains the sharp increase in foreign visitor arrivals between 2015 and 2016.

Foreign Tourist Arrivals in Indonesia, 2013-2016:

Month Tourist Arrivals
        2013
Tourist Arrivals
        2014
Tourist Arrivals
        2015
Tourist Arrivals
        2016
January       614,328       753,079       723,039       814,303
February       678,415       702,666       786,653       888,309
March       725,316       765,607       789,596       915,019
April       646,117       726,332       749,882       901,095
May       700,708       752,363       793,499       915,206
June       789,594       851,475       815,148       857,651
July       717,784       777,210       814,233     1,032,741
August       771,009       826,821       850,542     1,031,986
September       770,878       791,296       869,179     1,006,653
October       719,900       808,767       825,818     1,040,651
November       807,422       764,461       777,976     1,002,333
December       766,966       915,334       913,828
Total      8,802,129      9,435,411      9,729,350


Foreign Tourist Arrivals in Indonesia, 2007-2015:

    2007   2008   2009   2010   2011   2012   2013   2014  2015
Foreign Tourists
(in millions)
  5.51   6.23   6.32   7.00   7.65   8.04   8.80   9.44   9.73

Source: Statistics Indonesia (BPS)

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