The bombs that killed at least 190 people in Bali last month have already left the Indonesian island's previously buoyant tourism industry reeling. Now Bali's garment manufacturers are waiting to see if they too will have to suffer the consequences of terrorism.

Buyers and suppliers may be deterred from doing business with Bali. Buyers may be reluctant to visit the island, while suppliers approached by Bali's manufacturers may insist on only the very safest of trade terms.

Demand

Manufacturers will have a good idea by the end of the year the extent to which travel warnings issued by the US, the UK and other countries will deter buyers who traditionally descend on Bali in December to place their orders for 2003 lines.

During the riots in 1998 that eventually toppled Indonesian President Suharto, many buyers cancelled trips. Some took their business to competing countries such as Vietnam, China, Malaysia and the Philippines. Some manufacturers said business fell during this period by 70 per cent, thus causing a spate of redundancies and layoffs in the industry.

Supply

On the supply side, garment manufacturers said that during the 1998 riots, suppliers of materials insisted on cash payments and refused to accept letters of credit. Manufacturers are also concerned about the availability and cost of insurance cover for their businesses and transactions.

Since last month's bombings, hotel occupancy rates in Bali have plummeted to less than 5 per cent according to the Jakarta Post. Garment manufacturers hope that their industry - which brings in US$400 million in export earnings and employs an estimated 400,000 of the island's 3 million people - will not be so savagely hit.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.