Issue 7 - Should tourism be promoted in developing countries?

Private Sector & Development

Issue 7 - Should tourism be promoted in developing countries?

September 2010

Editorial

By Luc Rigouzzo, Proparco's Chief Executive Officer

For over half a century now, tourism has been constantly expanding and at an even faster pace than international trade. This trend would today appear to be irreversible; the World Tourism Organization (UNWTO) forecasts there will be over a billion international tourist arrivals worldwide in 2010 and 1.6 billion in 2020. Although developing countries still only hold a marginal position in international tourist flows, their performances are improving at a faster rate than the global average. For these countries – where economic activity is often based on a handful of sectors of activity -, tourism provides real potential for diversification. It provides valuable foreign currency exchange and government revenues through taxation and can be a major source of employment as well as a vehicle of economic and social progress.

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An unconventional but essential marriage: pro-poor tourism and the mainstream industry

Pro-poor tourism has had a significant impact on the ‘tourism and development’ agenda, but is unlikely to become hegemonic. Its impact on broader development debates, the mainstream tourism industry, and the public has been more limited. There is an emerging conceptual framework, methodology and empirical evidence base to support the original claims of pro-poor tourism (PPT), that it can be pro-poor and can be made more so, that any type of tourism can be pro-poor, and that there are significant benefits for both the development sector and mainstream tourism industry of stronger links between the two. >>Download Jonathan Mitchell's paper

Unlocking the potential of tourism in Zambia

Although Zambian authorities recognize the importance of tourism, the sector suffers from preconceived ideas. It is underperforming and only attracts 3% of tourists visiting Sub-Saharan Africa. And yet a detailed analysis seems to indicate that financial leakages are overestimated, economic spillover effects are not clearly grasped and that tourism could make an even greater contribution to economic development and poverty reduction. To achieve this, the State must specifically encourage private sector intervention by improving the investment climate, developing infrastructure and scaling up its support for public institutions in charge of tourism. >>Download Kirk Hamilton and Jean-Michel Pavy's paper

Tourism: a risk for developing countries?

If all its impacts are not integrated and regulated, tourism may carry risks, particularly for least developed countries. Although “internal”, “external” or “invisible” foreign exchange leakages can weaken the economic and financial input that the tourism business provides, the latter can itself cause economic nuisances (strong dependence, competition with other business sectors), social nuisances (destruction of cultural habits) and environmental nuisances (deterioration of sites). These risks can be analyzed and managed within the framework of a sustainable development strategy. >>Download Jean-Jacques Nowak and Mondher Sahli's paper

Combining best practices and profit in tourism

In order to bring about economic growth, develop local human resources, as well as cultural and natural heritage – while reducing the ecological footprint of establishments to a minimum – the Serena Hotel Group relies on an ethical framework, in-depth risk analyses and a policy of constant innovation. The Group – set up and supported by AKFED – is banking on the assumption that very few locations are unsuitable for tourism activities and that it is often possible to combine developmental objectives with real economic profitability. >>Download Mahmud Janmohamed's paper

IFC’s approach to investing in tourism

Although tourism plays a key role for developing countries, investment projects in these countries carry a high level of risk. This risk can only be borne via a long-term com­mitment and rigorous project selection. The International Finance Corporation’s (IFC) investment analyses are based on its long-standing experience in the sector and allow it to integrate both economic and developmental objectives. IFC tailors its operations to the type and environment of a project and mobilizes a wide range of tools that enhance the value of its investments. >>Download Carolyn L. Cain and Anastasia Gekis's paper

What tourism for remote areas in developing countries?

Remote sites in developing countries often present a major interest for tourism. Although the difficulties to access them, the lack of infrastructure and skilled human resources may pose a problem, “pioneer” investors benefit from the low cost of real estate, labor and raw materials. Host countries benefit from jobs, land development and transfers (skills, tech­nologies, practices). An integrated development strategy and strict regulation can make tourism in these areas truly “sustainable”. >>Download Agnès Weil and Grégory Lanter's paper 

Tourism in developing countries: a neglected lever of growth despite its potential

As the negative impacts of tourism are clearly visible, they tend to dominate the spheres of debate and research and consequently eclipse its positive spillover effects, which are less visible and more difficult to gauge. And yet tourism makes a considerable contribution to the economies of developing countries and estimations indicate that this is on an upward trend. Despite this, States and donors do not lend much importance to tourism. They see it as a form of exploitation and are worried that if they finance tourism projects it may affect their image. They are also often deterred by the risks that are inherent to the sector. However, experience shows that it is possible to build partnerships that mitigate the negative impacts and foster the developmental potential of tourism. >>Download Denis Sireyjol's paper