Postcard from Bali

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Murdani Usman / Reuters

Tourists have not been deterred by Kuta Beach's atrocious water quality

The annual monsoon transforms Bali. Rain sweeps across slumbering volcanoes. Moss thickens on temple walls. Rivers swell and flush their trash and frothing human waste into the sea off Kuta Beach, the island's most famous tourist attraction, where bacteria bloom and the water turns muddy with dead plankton. "It happens every year," shrugs Wayan Sumerta, a lifeguard, who sits with his Japanese girlfriend amid the surf-tossed garbage. So why, in early March, did the Bali authorities warn tourists that swimming here for over 30 minutes could cause skin infections? The lifeguard tenderly strokes his girlfriend's naked leg. "I guess some people just have sensitive skin," he says.

Itchy ocean? Just add it to Bali's list of problems: water shortages, blackouts, uncollected trash, overflowing sewage and appalling traffic. And don't forget crime. In January, amid a spate of violent robberies against foreigners, police chief Hadiatmoko reportedly ordered his officers to shoot criminals on sight. You've heard of the Julia Roberts movie Eat Pray Love, which was partly filmed here? Get ready for its grim sequel: Eat Pray Duck.

Most of Bali's woes stem from a problem that rival resorts would love to have: too many tourists. In 2001, the island welcomed about 1.3 million foreign visitors. Ten years later — and despite bombings by Islamic extremists in 2002 and 2005 that killed 222 people, mostly Australian tourists — the island expects almost twice that number. There are millions of Indonesian visitors too.

Hotels and malls are springing up everywhere to accommodate them. The cranes looming over Kuta are building at least three malls and a five-star hotel. But the less glamorous stuff — roads, power lines, sewers — often remains an afterthought. The island's lack of reservoirs is a case in point, says Ron Nomura, marketing director at the Bali Hotels Association. "Can you believe there is this much rain and we don't have enough water?"

In January, Bali's Governor I Made Mangku Pastika issued a moratorium on new construction in certain built-up areas, but few believe that it will be effective. Bali's spiritualism might be a bewildering blend of Hinduism, Buddhism and animism, but the island's planning code is simple: if you build it, they will come.

And on the way, they'll get stuck in traffic. Complaining about the congestion around the airport or in Kuta is a new local pastime. Vehicle ownership is rising at an annual rate (12.42%) that far outstrips the growth in new roads (2.28%), according to government statistics. "Traffic will get worse and worse," traffic chief I Made Santha predicts.

Equally damaging to Bali's prestige is the perception among some expatriates that the island is increasingly unsafe. Lusiana Burgess, the 46-year-old Indonesian wife of a retired British pilot, was robbed and killed in her North Kuta home earlier this year and her murderer remains at large. An Australian woman awoke in her villa to be gagged and assaulted by four thieves. Then an American man was stabbed during a robbery attempt in Kuta. The statistics actually show a slight decrease in serious crime from 2009 to '10. But Chris Wilkin, a former oil executive from the U.K. who retired in Bali six years ago, remains uneasy. "It was very quiet when I moved here," he says. "Now, with the boom, word has got around that there are easy pickings to be had."

Expat anxiety hasn't dented Bali's popularity among its core visitors, the Australians. And why should it? Officially, the Australian government still warns of a "very high threat of terrorist attack," yet more than a hundred flights arrive from Australia every week. The dangers to new arrivals are those faced by tourists everywhere: dodgy food, motorbike accidents, and — as a sign at my Kuta hotel suggests (NO JUMPING FROM ANY BALCONY INTO POOL IS PERMITTED) — beer-fueled misadventure.

A new terminal at Bali's airport is due for completion in 2013. But unless other infrastructure is improved, this will serve only to channel more tourists onto a critically overburdened island. For now, however, such doubts are largely forgotten in the rush to cash in on the Bali boom. "Goodness shouts, evil whispers," runs an overused local proverb. But money talks.