Indonesia Plans Bali Tax Haven, Reviving Dutch Disease Fears

1 articles · Updated · The Australian Financial Review · Jul 13

Bali’s planned expat tax haven is drawing concern that a fresh wave of foreign money could distort Indonesia’s economy rather than broaden it.
Dutch Disease is the central risk: large capital inflows can push up the local currency, making other sectors less competitive and weakening the wider economy.
Indonesia’s proposal is framed as an economic opportunity, but critics argue it risks repeating a well-known pattern in which easy foreign cash undermines longer-term productive growth.
The debate reaches beyond Bali, testing whether Indonesia can attract wealthy foreigners without creating an enclave economy detached from national development.