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Bank Indonesia urges Bali government to further development

Following his announcement on the above-average economic growth of Bali, Dwi Pranoto, Bank Indonesia's head in Bali and Nusa Tenggara region, further urges the provincial government to hasten development programs that are beneficial to the island's citizens.

Bank Indonesia

Numbers show that, from January to March 2013, Bali's economic growth reached 6.71%, while Indonesia's was 6.02%. However, according to Pranoto, the economy's vigour does not mean that development projects and public services are being carried out or reaching remote regions. He also stressed that banking services were almost non-existent in these regions during the first quarter of the year.

Pranoto also mentioned that the province's agriculture sector has not improved. He said that the community has to fully participate in any development programs. "The provincial administration has to create more community-based programs, village development, and an agricultural sector that directly benefits the people," said the Bank Indonesia head.

As a suggestion, Pranoto said that strengthening all sectors of the provincial government of Bali is necessary in combating economic challenges that may come in the future. One way to do this is by making financial assistance accessible to villages, farmers, and fishermen; for example, soft loans that are available from village-based establishments like Lembaga Perkreditan Desa (LPD), Village Credit Councils, and cooperatives.

The banker also enlightened that 73% of total bank loans are disbursed in only two areas, particularly Denpasar and Badung, the two richest regions on the island, where major banking institutions operate. Whereas, one of the poorest regions on the island, Karangasem, only has very few financial institutions to offer loans.

"In Karangasem, the number of small and medium enterprises represents 14 percent of Bali's total," said Pranoto. He added that Buleleng and Jembrana also have very few financial providers.

Gathering accurate data on the number of businesses in Bali is also important according to Pranoto. To date, there are 1,418 LPDs; 4,514 cooperatives; and some village-based financial providers in Bali, based from data collected by I Wayan Ramantha, a professor of economics at Udayana University. The professor said that these financial institutions have been very helpful in supporting economies in villages as well as farmers and small-scale businessmen.