I have been using this very simple theory of business stability for many years to explain why I created four different aspects to my own business, but as we look at the serious challenges that Bali faces in its recovery from the pandemic, I thought “maybe we should apply the same concept to Bali?”
The idea is simple: have you ever tried to sit on a stool with just one leg? Well, unless you are a circus balance artiste or a regular mono-cyclist, you will find it very hard. Even with two legs, balance is impossible and comfort elusive! Stability, and therefore real usefulness, only starts with three legs on a stool and improves with four when you can sit back and relax. Aahhh, that’s better!
I think the same thing is true for businesses – and for island economies: you just cannot be comfortable relying on a single leg to support you, you spend all your time adjusting and adapting to the point that you may as well just stand up! Single industry economies are the same: Bali’s near total reliance on tourism being the current and inescapable parallel. How did the island become so mono-focused? Well that’s easy, it was just that: easy.
The business flowed in, the tax revenue followed, the coffers bulged and the risk managers yawned and snoozed. The disaster preparedness manuals were carefully filed away ready only for another Mount Agung eruption or perhaps a tsunami scare, but nothing, nothing, nothing, was said about the possibility of something bigger: an ebola, a war, a conflagration, an earthquake of gigantic proportions. It was simply far too easy to imagine the one-legged stool somehow staying magically upright. But it didn’t.
Bali needed at least two other legs; services, exports, education, trade or retirement homes, health and medical, digital nomads in their thousands, something to balance and stabilise. But nothing was done, no planning undertaken , no strategies hatched. The hotels hedged their bets by having multiple markets: Japan, China, Australia, Europe, USA . A few meetings for business, and some weddings, but nothing else. Still tourism. Now they – and the whole island- are suffering.
Singapore has lost its tourism, but it has massive financial, trading and manufacturing depth. Same for Hong Kong. Malaysia has a multifaceted economy even in Penang. Maybe only Thailand is suffering as much. But that is no comfort to the thousands who have been laid off in Bali. And now even with the government support funds coming through (for some, not all) the island is in deep despair. And although I have heard the words ”Build Back Better “a thousand times, I have yet to see the evidence. The stool still has one leg and that leg is broken, bent and twisted.
Maybe the new Minister of Tourism will have the magic formula for revival. I do hope so but there really is only one thing that must be done: diversify and do it now! Reemploy the laid off workers in new industries not the old. Set up renewable energy plants, and solar panel assembly units, get plastic recycling going, get the green economy kick-started now and be ready with a steady chair when the next disaster threatens.