Agung Alit
Ashoka Fellow since 2001   |   Indonesia

Agung Alit

Mitra Bali Fair Trade
Gusti Ketut Agung, known as Alit, is establishing a fair trade system for craftspeople in Bali, developing their business acumen while creating social and economic sustainability in their communities.
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This description of Agung Alit's work was prepared when Agung Alit was elected to the Ashoka Fellowship in 2001.


Gusti Ketut Agung, known as Alit, is establishing a fair trade system for craftspeople in Bali, developing their business acumen while creating social and economic sustainability in their communities.

The New Idea

Departing from popular opinion in the citizen sector in Indonesia, Alit sees that markets are the most effective way to transform the lives of exploited crafts producers in rural villages. Alit is introducing fair trade, a concept gaining international currency, to craftspeople in Bali through innovative community development programs.His Foundation of Balinese Partners has created a workable business model for small-scale crafts producers, which addresses both their everyday problems and weak position in the tourism industry. Because it empowers small producers to become independent producers, the model can be broadly applied, not just to craftspeople and not just in Bali. Alit, who makes transparency a priority, bridges the economic gap for small producers by opening access to market information and providing skills for them to become competitive. His work has several distinctive characteristics: the focus on the entire economic chain; skills training in design, quality control, business organization, and marketing; attention to lowering dependence on tourism by moving from souvenirs to more useful crafts; and a savings fund that acts as a mutual "insurance" policy against lean times. The Foundation's approach is to balance business and community. Central to its work is the social awareness program, which is changing attitudes on issues such as tourism land use, natural resource conservation, maintenance of communal traditions, and production sustainability. In this way there can be a paradigm change to truly "fair" business.

The Problem

Bali is one of the world's leading international tourist destinations, and certainly Indonesia's main tourist center. This identity has been vigorously promoted by the central government, so that most Balinese people have come to consider tourism as their one and only livelihood; anything outside this sector is less important. In reality, tourism has brought prosperity to only small sections of Balinese society. If tourism really provided prosperity, fewer Balinese would sell their land and rice fields. At this time, changes in land ownership in Bali is increasing rapidly, and each year about 10 percent of the area of rice fields is converted to other uses. Producing woodwork, silver, bone carvings, and bamboo, the handicrafts sector acts as a component that supports tourism, and approximately 40 percent of Bali's three million population is involved in handicrafts full-time or part-time. But the craftspeople are positioned only as producers, cut off from access to information, including how much their products are sold for and who the buyers are. The craftspeople are disadvantaged by a lack of direct links between them and their market. They can be likened to assemblyline workers who work outside factory walls but have little power and very low incomes. Middlemen and art shops earn the profits, while the producers remain poor. This exploitation is caused by many factors, including the producers' lack of capital, which means they are usually caught in a cycle of debt. Commissions to tourist guides who bring buyers to the shops are much higher than earnings for producers. They are entirely outside the business chain, and also do not have attention from government programs for "small and medium business," as they are too small for this category. This is precisely the problem of thousands of craft producers in many other tourist locations throughout the country.

The Strategy

In 1991, Alit was introduced to the fair trade system as a field worker in Bali with a national organization working on fair trade. Alit saw that existing efforts has not managed to resolve some of the systemic unfairness that put craftspeople at a disadvantage. Generally, organizations working towards fair trade helped small producers to market their products but did not deal with their everyday problems, especially those that arise during production. A guide during his student days, Alit knew about the daily needs of small producers, and about issues such as trickery by buyers, and lack of capital and market information.With these issues in mind, Alit invited thirty small producers to discuss ways of linking directly with buyers. Only thirteen attended but these thirteen gave rise, in 1993, to the Foundation, also known as Yayasan Mitra Bali. He began to establish marketing links with Oxfam and some individual buyers through a tour operator, and he succeeded in getting a donation of eight million rupiah ($3500) from a Japanese woman he met through the tourist link. From the beginning, one of Mitra Bali's basic principles was self-sufficiency and independence, and Alit is proud that they started off without reliance on the usual funding agency grants. The fall of the rupiah in 1998 has also benefited their cash flow, as they are paid in dollars for the crafts they export. Alit is sometimes criticized by fellow activists for being too capitalistic, but he believes that small producers must understand capitalism and be able to compete, so Mitra Bali is largely concerned with making the playing field more level. Alit's organization was therefore a unique type in that from the outset it was designed to be self-sustaining, before the introduction of the community development services that support the economic aspects.Today, Mitra Bali has established sixty producer groups throughout all regions of Bali, each with fifteen to thirty members, and the organization has a staff of twenty-one (sixteen in the trading and packing section and five community workers). When Mitra Bali begins to work with a group of craftspeople, they meet regularly three times a week to establish trust and provide input. Once a relationship is established, they meet once a month for discussion and to work out problems that may have arisen. They teach the producers how to calculate real costs. For example, in the past, the wood carvers would cut trees from their area without calculating these costs for their labor. Mitra Bali has taught them to mark up 20-30 percent for net profit for themselves. They have also set up a company, P.T. Teduh Mitra Utama, a not-for-profit export company, which invests its profits back into Mitra Bali programs. Complementing its work in marketing crafts, Mitra Bali takes a "community development" approach to working with producers. Mitra Bali acts as a facilitator between craftspeople and buyers as well as working closely with groups of craftspeople to raise their awareness about the importance of working together. He has tried to unite traditions and social awareness with the business world, which tends to encourage individualism. Craftspeople who receive orders through Mitra Bali receive down-payments of 50 percent to help release them from the stranglehold of the art shops and middlemen. All financial matters are completely transparent, so that the producers learn how the whole system works. They calculate prices together, and understand that the mark-ups, which run as high as 30 percent, are necessary to cover all operating costs. The program includes a type of insurance mechanism and an attention to quality control.In the next few years, Alit's aim is for groups of craftspeople to become independent and develop into healthy competitors. This idea can be achieved as long as Mitra Bali is also able to maintain good relations among the craftspeople. These relations have always been carried out in "a family manner," with the help of staff members who understand the problems and basic ideas of fair trade. A key component of Mitra Bali's program is the organization of regular workshops that address such topics as design, trading, quality, community issues, and comparative studies. Foreign buyers are included whenever possible, to give their input on design, color, quality. Alit also has a long-term interest in setting up a "People's Campus" at Mitra Bali, a type of training center and think tank, where all the group members and people from other parts of the country can share their knowledge and learn from each other. The community development programs of Mitra Bali are varied, and are related to socio-cultural issues and the provision of alternatives to the established dependence on tourism. Since 1994, they have had a reforestation program in which tree seedlings are given to groups for planting on communal lands in their villages. The aim here is two-fold, to replenish the wood stocks for the wood carvers and to convince the people that tourism can be based on nature and maintenance of their own lands, instead of just being a proliferation of luxury hotel and entertainment complexes. Alit sees that people have just gone along with the local and national governments' notions about what is best for Bali, instead of thinking for themselves and applying traditional knowledge to planning. The tree planting is therefore symbolic as well as useful. Alit has started to spread his ideas and network to other areas. Apart from the crafts' networks, Alit has also joined the nongovernment Forum of Small-scale Producers and he is the Bali representative on the presidium. His role in this organization is very crucial to the spread of his business model and ideas to a much wider circle of producers.

The Person

Gung Alit's father was a teacher who was killed in 1965, when his son was only four-years-old. His mother remarried, and Alit was raised by his grandmother who would always advise Alit against his tendency to fight or oppose others because of his desire to rebel against the injustices to his family. But his family was proud when he was accepted at Udayana university in Bali, as the competition was stiff. He chose the to study law because he felt it would help him become clever at speaking and he could oppose anyone, and he majored in adat (traditional) law, which combined the study of law and anthropology. While still a university student, Alit founded a discussion group called Forum Merah Putih meaning red and white–the national flag colors. The first activist group in Bali, it spread all over Bali. Many members are still consistent with their original concerns in fields such as the environment, education, culture, art, politics, law and others. Upon completing his law degree, Alit worked at the legal aid society in Bali, but he found that there was too much corruption involved in the legal profession, and became interested in activities with citizen-led organizations. Nevertheless, he still does some free consultation services on litigation cases with LBH. While he was a university student, Alit also worked as a freelance tour guide and saw some of the unfair treatment which craftspeople faced, and understood the commission scheme at art shops. Alit has created a rather unique place for himself in the civil society world as a "social capitalist" or "democratic capitalist." Additionally, he has gained acceptance by other social activists by making most of his ideas a reality.

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