(Footage of tourists on beach in Bali)
AUSKAR SURBAKTI, REPORTER: This is the side of Bali that many people are familiar with: rolling waves, sandy beaches, and endless sunshine.
In and around the tourist centres, you could be forgiven for thinking that you were in another country altogether, much of it is developed and westernised.
(Footage of inland village)
Drive a few hours inland and it's a very different sight. Tourism is nonexistent and the further in you go, the greater the poverty.
(Footage of mountains)
There are few paved roads, no running water or electricity, and contact with neighbouring villages, let alone the outside world, is almost impossible.
This is the side of Bali that tourists never get to see. Some three hours away from the holiday hotspots is the village of Ban which lies on the slopes of Mount Agung and Mount Abang. It's considered to be one of the most impoverished villages in Indonesia and it hasn't reaped the rewards of the tourism dollar which has seen the rest of the island flourish.
David Booth, a British engineer living in Bali, first visited the village of Ban in 1998. What he witnessed shocked him.
(Footage of children from Ban and people with goitres as a result of Iodine deficiency)
With the nearest hospital hours away, the child mortality rate was high. Malnutrition was widespread and iodine deficiency, which is easily treatable throughout the rest of Indonesia, was rife.
DAVID BOOTH, FOUNDER, EAST BALI POVERTY PROJECT: It was far more dire than I could imagine it and visualise. And so o after three months visiting until June, I realised it was a village that needed my help. And I just realised that I had never seen anything so bad in my whole life.
(Footage of children in school, digging in gardens and brushing their teeth)
AUSKAR SURBAKTI: Motivated by what he saw, Mr Booth set up the East Bali Poverty Project. Staff began educating residents about good nutrition and hygiene. Medical checks were conducted and medication was dispensed.
Soon enough, iodine deficiency and malnutrition were all but eliminated from the village and fewer children were dying. But 14 years later the area still lacks the most basic services.
(Footage of children in school)
Education here was nonexistent until a few years ago, even though primary school is compulsory for all Indonesian children. With the support of international charities, the Poverty Project has built three schools and staff say literacy has now reached 100 per cent.
This teacher, a former student, says education is the key to development here.
KETUT MADIR, TEACHER (translation): This school is important so that the children here can learn to read and count. I hope this village can progress and grow.
AUSKAR SURBAKTI: Despite signs of progress and development, there's still a long way to go for the village of Ban. The riches seen a few hours drive away just aren't dribbling down to rural areas of Bali, and some villagers are starting to notice.
NENGAH TUTUP, VILLAGE TEACHER (TRANSLATION): The local and provincial governments still aren't providing what we need. We need roads, electricity and running water.
AUSKAR SURBAKTI: David Booth says the divide between rich and poor is disturbing.
DAVID BOOTH: The contrast between the wealthy part of Bali and the east of Bali made me feel very sad, exceedingly sad. Basically it wasn't not fair.
There's not a lot of wealth returned from tourism taxes in the east and unfortunately therefore the government focused on the western areas where there is great sites of interest, rice fields and these kinds of things.
AUSKAR SURBAKTI: Bali's governor concedes that poverty is a problem that cannot be ignored. And I Made Mangku Pastika has even gone as far as saying that tourism is a disaster for the poor because the industry is raising the cost of living.
But he doesn't blame the tourists themselves for the problem.
I MADE MANGKU PASTIKA, BALI GOVERNOR (on ABC TV, MAY 15): Tourists is not destroying Bali. The greedy investors are destroying Bali because some of these investor are greedy.
Exploitation of the environment, exploitation of the land, exploitation of the people, exploitation of the culture, that is the problem.
AUSKAR SURBAKTI: He may be governor but he seems powerless to stop the onslaught of development by Indonesia's very powerful investors. Even so, he's pledged to reduce poverty from the current 4.5 per cent of the population to just 1 per cent, adding that it's the government's role to address the social gap.
But with tourism a vital part of Bali's economy, the governor admits that balancing the needs of the industry with those of the poor will be a challenging task.