Lace is not a traditional Balinese handicraft. Balinese women didn't need blouses because until very recently customary dress for Balinese women was a sarong around the waist and a bare top. But they always produced extraordinarily beautiful and intricate textiles for temple ceremonies and dance costumes.
One traditional Balinese textile is known as endek. It is produced by tie dying, but not of the whole cloth as made famous by the hippies in the 1960's. Bundles of thread for endek are tied off and dyed before weaving, and the intricate patterns appear as the cloth takes shape on the loom. Endek is used for sarongs, both for temple and for everyday wear.
Sometimes gold and silver threads are woven into the material on the loom. This fabric is known as songket and is used for scarves or sashes, or sometimes as a rich cloth to wrap an important relic.
The famous batik sarong is widely worn in Bali, but it is in fact produced in Java.
In the 1920's and 1930's, sewing machines began to appear in Bali. Not electric machines, of course, because there was no electricity. The village of Kuta, for instance only received electricity in 1978.
But foot powered machines became popular in the 1930's and are still widely used today. The most common early model was the Sinder, a Chinese copy of the Singer. More recently the Chinese Butterfly Brand has become popular, but the appearance and mechanism are identical to the old Singers that in most countries shows up only in antique markets.
With their foot-powered sewing machines, Balinese quickly learned to make lace and to master skills that were fast disappearing elsewhere in the world. And with the arrival of the Indonesian government in Bali in 1949, officials began to encourage the Balinese women to wear blouses. (The Dutch who had colonised the rest of the Dutch East Indies as they were then known, left Bali almost completely alone and interfered little with Balinese tradition.) Kebaya blouses soon became popular as garments to wear to temple, even if most women still went topless around the house.
So when the surfer girls in the early 1980's began to buy brightly colored lace tops, hundreds of home industries started up in Bali, with two or three or a dozen machines whirring away under thatched roofs while chickens ran in and out dodging the flying pedals.