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The Future of Bali

Rudi Limas surveys his new restaurant, R. Aja’s, in the upscale town of Seminyak, on Bali. The airy, second- floor space stretches more than half a football field in length, and on this April night, at the beginning of tourist season, holds just a few dozen diners. He allows himself a weary smile. On October 1, 2005, a suicide bomber destroyed Limas’s original R. Aja’s, an institution on Kuta Square, southern Bali’s retail hub. Three of his staff were killed that night, and the attack, along with other bombings, crippled the island’s tourism-dependent economy.

"I had to reopen," says the native of Surabaya, Java, who kept his 40-plus workers on the payroll while he built the new outpost of his restaurant. "I couldn’t leave my staff."

"Business is not good," Limas continues, offering me fermented tapioca steamed in banana leaves. "But I’m not thinking about profit now."

Like the hundreds of thousands of other residents of this battered, beguiling island, who rely for their livings on a healthy influx of visitors, Limas can only hope that travelers will steel themselves against lingering concerns after the terrorist attacks of October 2005—which revived memories of similar attacks in 2002—and return to one of the world’s iconic vacation destinations.

"When one bomb goes off, it’s seen as an isolated event," says John O’Sullivan, general manager of the Four Seasons Resort Bali at Jimbaran Bay. "When two bombs go off, it’s perceived as a target. People are trying to determine: Is Bali safe?"

Attracting more than 3 million visitors annually, Bali is the engine of Indonesia’s $5 billion-per-year tourism industry, which, after oil and gas, is the country’s second-largest foreign-exchange earner. That distinction, and the fact that most of Bali’s 3.4 million inhabitants are Hindu, has attracted Islamic jihadists looking to sow unrest in the world’s most populous Muslim nation.

"Bali is like a bowl of sweets," one restaurateur says, "and the ants come from everywhere."

There’s no question that the 2002 bombings that killed more than 200 people at two Kuta Square clubs devastated Bali’s then robust economy. The SARS outbreak in 2003 and the American invasion of Iraq only exacerbated travelers’ fears. A 2003 World Bank study reported an average income decline of 43 percent among residents. Yet idyllic Bali rebounded: in 2004, foreign arrivals reached a record 1.46 million, and the first three-quarters of 2005 shaped up even better. Then, in the space of 10 minutes on a Saturday evening, attacks at R. Aja’s and a pair of seaside restaurants in Jimbaran killed 26 people and sent Bali reeling once more.

"No more bookings," laments a clerk at the Lokha Legian Hotel. "Only cancellations."

One of Bali’s best restaurants, La Lucciola, reports a 40 percent drop in business since the October bombings. Declining orders have driven 70 of the island’s 120 garment businesses into bankruptcy, leaving an estimated 15,000 workers jobless. In the north-shore town of Lovina, a glum tout tells me one sun-splashed afternoon that just five prau outriggers carried tourists to view the famed dolphins that day; last year, 40 or 50 boats would have made the same trip.

The economic aftershocks have rippled far beyond the tourist trail. In the misty central highlands, farmers who supply hotels and restaurants have seen produce prices collapse. With less income, many Balinese have had to cut back on their own spending. Before 2002, gong-maker Made Budiana worked 10 months a year to fill orders for new gamelan sets; last year, he had enough work for only three months.

"When there are no tourists," the father of four says in his overstocked showroom near Sawan, in rural northern Bali, "Balinese cannot buy new gongs. Most will just repair their old sets.

"I’d love to see my children continue this tradition," adds the sixth-generation artisan, "but they may have to learn a different skill."

In the face of tragedy, many Balinese Are inclined to introspection, to ponder whether they’ve somehow upset the gods. After each attack, hundreds of Balinese spontaneously congregated at the bombing sites to perform cleansing and rebalancing rituals.

"We don’t blame others; we blame ourselves," says Agung Rai, who oversees a cultural foundation in the up-country town of Ubud. "We always try to be in balance between the good and bad, the positive and negative energy."

But many beleaguered islanders also looked to the central government. Declaring terrorism a threat to national stability, President Susilo Bambang Yudhoyono quickly assigned Indonesia’s military the role of assisting local police. The Badan Intelijens Nasional, the country’s equivalent of the U.S. Federal Bureau of Investigation, opened an office in Denpasar. Because the suicide bombers were non-Balinese, off-island Indonesians must now register within 24 hours of arrival with the banjar—the highly organized local community that is the heart of tightly knit Balinese society. The police also sweep boarding houses to check identity cards and job status; unemployed immigrants are deported.

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