particularly after a number of reported massacres during
the 1990s.
VII.
East Timor
. The failure of the Indonesian
military and police to control pro-Indonesian militias
active in East Timor after the territory voted for self-
government in August 1999 resulted in intervention by a
United Nation’s mandated peace making force. De-
monstrations against Australia’s leadership of the UN
force (Interfet) sent to secure East Timor were
prominently featured in the Australian media and were
the cause of strained diplomatic relations with Australia
from 1999 onwards.
VIII.
The Wahid Administration.
Elected to the
presidency as a compromise candidate in 1999 by the
Peoples Consultative Assembly (MPR) President Wahid
was frequently criticised during 2000 for his inability to
achieve economic stability and alleged softness on
corruption, particularly in relation to the Suharto family
and business cronies. President Wahid was subsequently
replaced by his deputy Megawati Soekarnoputri.
IX.
1997 El Nino Effect.
The El Nino climate shock of
1997–98 greatly weakened Indonesia’s agricultural
sector (
Sachs, 2002
) as drought reduced farm produc-
tivity and drove up food prices. While not as obvious as
the previous factors the conditions that resulted from
the impact of the EL Nino climate shock appeared to be
a significant background factor to the ensuing unrest.
X.
October 12, 2002 Night Club Bombing in Bali.
On
12 October 2002, an unidentified (at the time of writing)
terrorist group exploded a large car bomb in a popular
night club district in Kuta Beach Bali killing an
estimated 190 persons including approximately 88
Australian and 30 British tourists. The impact on the
Indonesian economy will be determined by the success
of the Government in arresting the perpetrators,
eliminating terrorist cells and convincing the Govern-
ments of Indonesia’s major generating counties that
security conditions have improved to the extent that
adverse travel advisory warnings can be lifted.
Combined, the factors described above generated
considerable and continuing adverse publicity in the
international media. Graphic images of rioting, killings,
destruction of commercial districts in Java and images
of mass air evacuations of expatriates from Jakarta in
May 1998 made the selling of pleasure travel to
Indonesia a difficult task for marketers. The ongoing
and multifaceted nature of adverse events has contrib-
uted to a picture of a nation in crisis, at least to the
outside observer. Terrorism and religious fundamental-
ism are evident in many of the recent events in
Indonesia, particularly in East Timor (terrorism and
nationalism), Bali (terrorism) and religious warfare in
Ambon where militant Muslim fundamentalist groups
declared a Jihad on the island’s Christian population.
Arguably, all the factors listed with the exception of
event nine, are the result of crises. However, given
Indonesia’s history of having to deal with rebellions in
disaffected provinces that were either ethnically or
religiously different from the dominate Javanese culture
and power structure events six and seven may also be
classed as trends. These events were not factored into
forecasts of tourism growth, thus confirming the need
for a new approachto forecasting that moves beyond
the manipulation of known variables to identification
and incorporation into forecasting of other factors that
may be country-specific. Unfortunately, incorporation
of these factors is unlikely to produce the apparent
precision achieved by contemporary forecast models.
5.2. Impact of the Asian financial crisis
The Asian financial crisis exercised the first major
shock on the Indonesian economy and, arguably,
provided the trigger for the subsequent political
difficulties that ultimately translated into reduced
tourism flows (
Prideaux, 1998
). Flowing on from the
Asian financial crisis was a series of events that
ultimately culminated in the overthrow of President
Suharto. These events received widespread coverage in
the international media. The anti-Chinese sentiment of
much of the earlier rioting in 1997 and the May 1998
riots was viewed withparticular concern by many Asian
markets and is the likely explanation for the decline of
inbound tourists from Hong Kong (47.3% in 1998) and
Taiwan (30.4% in 1998) (
Statistics Indonesia, 2000
).
Continuing political uncertainty, combined withpoli-
tical, religious and ethnic tensions during the latter part
of 1997–1998 appear to have had a cumulative effect
resulting in a substantial fall in inbound tourism
