How ‘Digital Nomads’ Game the System to Work in Paradise

Visa scams and tax evasion are common as locals struggle with a low minimum wage

Credit: Made Widhana/Getty Images

YYou can’t throw a USB stick in Canggu without hitting a “digital nomad” — or whatever your preferred term is for someone working remotely from an exotic location. Westerners on their laptops are everywhere, taking up table space in coffee shops or set up in one of the six separate co-working spaces inside a two-mile radius. They might be a small segment of the more than 5 million people who visit Bali each year, but they’re overrepresented in Canggu. There are programmers, entrepreneurs, marketers, scam artists, and, of course, writers like me. If a job can be done on the internet, someone is doing it here.

Canggu, a small beachside village on the Indonesian island of Bali, currently holds the top spot on Nomad List, a website that ranks places around the world based on how easy it is for people to work remotely from them. It’s not hard to see why. The cost of living is low while the quality of life — and, crucially, the internet speeds — are high. For about $1,500 a month, you can live in a private en suite room in a villa with a swimming pool, hire a scooter to get around, surf every day, and eat out for every meal.

But this workers’ paradise in Indonesia leaves out one crucial population: Indonesians.

As of 2017, Indonesia has the sixth worst income inequality in the world. A 2017 report from Oxfam says that the top 1% of the country’s population control 49% of the wealth. Meanwhile, 8% of the population lives in “extreme” poverty (less than $1.90/day); 36% in “moderate” poverty (less than $3.10/day). The country’s economy is booming overall — but not equally.

Gonan Nasution, general manager of the Taman Nauli Boutique Rooms hotel, grew up in Canggu. He’s seen the area change from sprawling rice fields to a thriving tourist destination. “First the surfers came and then the yogis came,” explains Nasution. “And after the yogis, the fitness people came.” Now it’s the digital nomads, drawn to Canggu’s still-somewhat-authentic and affordable vibe.

Since 2012 or so, new hotels, cafés, restaurants, bars, shops, and beach clubs have opened up every month. Former farmers now lease their land to businesses, the vast majority of them owned either by wealthy Indonesians (many from Jakarta, the country’s capital, some 600 miles away) or foreign investors. Rice paddy plots are worth hundreds of thousands of dollars. Construction is constant. People at the top are clearly doing well, though the workers under them — the ones facilitating the businesses that digital nomads frequent — may not be.

“The first four months I was like, what the fuck am I doing here?”

Indonesia doesn’t have a single minimum wage. Each district’s is set independently based on its relative GDP. In Bali as a whole, it’s 2,297,967 Indonesian rupiah (IDR) per month, although it’s closer to 2.5 million IDR in Canggu. That’s less than $180 per month at today’s exchange rate. According to Nasution, the workers in the coffee shops and co-working spaces getting the minimum wage are “living on the edge.” It’s enough for them to rent a room, buy food — and not much more. They’re living month to month, paycheck to paycheck. “Most of them work their whole lives,” he says.

Bali’s hospitality industry draws workers from all around Indonesia, including Haren Tambi, the community manager at Dojo, which is the largest co-working space and cornerstone of the digital nomad scene in Canggu. While the membership numbers fluctuate as people come and go, Dojo normally has between 200 and 400 people paying monthly. The cheapest plan costs 800,000 IDR ($55) for 30 hours per month of access to the space, while the monthly unlimited plan costs 2.9 million IDR ($205). Tambi came to Bali about two and a half years ago from Sumatra after finishing his bachelor’s degree in accounting education. Within a few days, he was working the front desk in Dojo for a little bit above the minimum wage.

“The first four months I was like, what the fuck am I doing here?” he says. “I’ve just finished my bachelors and now I’m mopping the floor and cleaning out the fucking toilets. This is what I get after college?”

Despite the tough start, he’s only got good things to say about Michael Craig, Dojo’s Australian owner, and how he treats Dojo’s 43 Indonesian employees: “He’s a really good boss.” Dojo pays above the minimum wage, offers employees a big discount in the café, and helps them learn new skills, like coding. Within six months, Tambi was promoted to events coordinator. Six months after that, he got promoted to his current role as community manager. Things are a lot more comfortable for him now, although he still can’t afford to live the same lifestyle as some of his Western friends.

“I can’t go to restaurants every day,” he explains. “I’d be bankrupt in 10 or 15 days.”

A writer who works out of Dojo, who asked to be kept anonymous to avoid visa trouble, says he’s been living in Bali for almost three and a half years. He came for six months and just kept extending his stay. Despite being here for so long, he’s still on a two-month tourist visa — although he sometimes mixes it up and gets a six-month social or business visa. All he has to do is leave the country once one visa is up and re-enter a day later, very few questions asked. As a “tourist” in Bali he doesn’t pay income taxes — he’s officially a resident in Canada and declares there.

Other digital nomads I spoke with are in similar situations: They work from Bali on tourist visas, do visa runs to nearby countries as needed, and declare taxes in their home country. Not one had a KITAS, the official Indonesian work permit for foreigners.

“It’s just not fair for the locals. It’s so hard for us to get a visa to travel, and it’s so easy for them to come here.”

While digital nomads aren’t paying taxes to the government, both Nasution and Tambi stressed that they are contributing to the local economy. They’re the customers in all the new businesses. While a local might spend 20,000 IDR ($1.40) on a meal, digital nomads can easily spend between 100,000 and 200,000 IDR ($7 to $14). A lot of that money, of course, goes to the business owners, but some does go to the servers, cooks, and cleaners. They might not earn much in Canggu on the minimum wage, but it’s more than they would earn unemployed in their home villages.

Without the digital nomads — along with the more than 5 million tourists who come to Bali each year — many Indonesians would be significantly worse off. Bali’s new businesses present an opportunity, both to nomads looking for a cheap, comfortable country to work in and locals looking for a way out of poverty.

But the ease with which foreigners can work in Bali understandably annoys some locals. “These digital nomads are on tourist visas and they just have to leave the country every month or two,” explains Nasution. “It’s just not fair for the locals. It’s so hard for us to get a visa to travel, and it’s so easy for them to come here.”

Tambi echoes his sentiments: “It’s hard for Indonesians to go to the U.S. It’s really, really hard. Some of my friends have family there and they still get rejected. They try again and they get rejected again.”

Everyone agrees that something should probably be done.

“It’s not fair to us who are working. We’re paying taxes,” Nasution says. He feels that there should be some kind of more expensive visa with background checks for digital nomads. “They need to enforce some tax or some rules for digital nomads.”

No digital nomad I spoke to was against contributing more financially to Bali, and some believe it will inevitably happen. The writer gaming the visa system puts it this way: “We’re breaking brand-new ground. This movement is still only young. People are going to be working on their computers all over the world for many years to come.”

Part of the problem is that the Indonesian government has bigger issues to solve. It’s the fourth most populous country in the world in the midst of major economic and social development. For now, digital nomads are living in a gray area — slipping through the cracks of a broken system not designed to handle people who can work from anywhere.

Tesco Value @DanBilzerian. www.HarryGuinness.com

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