Example of a free economics essays: In this essay, tourism is considered a major economic player, citing its benefits and disadvantages, in less economically developed countries.
Why is tourism seen as an important player for economic development in developing countries?
Do the economic benefits outweigh the ensuing costs and damages?
Tourism is often seen as a major quantifier for economic development in many countries, according to their leaders. This was a conclusion made based on what tourism brings around – infrastructure, employment, foreign exchange and investment, among others – these, in addition to the continued connections with the West. The extent, to which the benefits outweigh the disadvantages of a booming tourism in a country, varies from one area to the next, making it difficult to arrive at a generalisation. However, we can see top tourist destinations coping with the associated disadvantages, and working on maximising the benefits.
Tourism often necessitates the building or upgrading of infrastructure, in order to provide basic amenities for tourists. Many LEDCs (less economically developed countries) suffer from a lack of sanitation, electricity, fresh water and good telecommunications links. However, in order to attract tourists, all of these services must be provided. Thus, in countries such as Zimbabwe, the Harare airport had to be rebuilt in order to cater for mass tourism. This investment in infrastructure benefits the local inhabitants of tourist destinations in a number of ways. The necessary expenditure is often on “public goods” – that is, goods where the benefit can be shared by many people. For example, the recent building of a new motorway from Beijing to the city airport has benefited both the Chinese and local businesses. The new construction has considerably helped in decreasing the amount of traffic build-up, thereby increasing efficiency. This increased expenditure also creates many jobs, many of them unskilled. As a result, there is a marked growth of purchasing power among the ordinary citizens, thereby enhancing their spending behaviour and providing an overall “boost” for the economy.
Tourism also brings in huge amounts of foreign currency for an LEDC. One of the recurring themes of the twentieth century has been that poor countries have often found that they do not have enough foreign currency to import the raw materials they need. For example, Tanzania suffered from a severe balance of payments deficit, so much so, that it simply could not afford to import enough oil to industrialise. What tourism does is bring in foreign currency, which allows LEDCs to import machinery, in order for them to industrialise and commence economic development. Foreign earnings have also been used in this way in Kenya, where $400 million a year in foreign currency comes in, to buy the products and services necessary for development.
Tourism is a huge provider of employment in countries that often suffer from high levels of unemployment. Not only does it create adequate, formal, service jobs in restaurants and hotels, but also large numbers of informal jobs. For example, in countries like Zimbabwe, there are many markets and street vendors, selling various merchandise to tourists, and in the National Parks of Kenya, the Maasai perform in front of tourists. All these seemingly minor activities provide a fairly stable wage to many people. Through the provision of both formal and informal jobs, tourism boosts the average purchasing power of ordinary people. With greater disposable income, greater consumption follows, thereby leading to the creation of additional local companies to cater for this demand.
Tourism also creates a stream of investment into an LEDC. In order to accommodate tourists with enough facilities, capital is transferred into these countries to pay for the building of hotels, restaurants, bars, vacation resorts and other facilities. Whilst most of the skilled jobs are taken by foreigners, the provision of raw materials such as cement, is often locally sourced. Furthermore, the construction work itself can often be done by local workers. Thus, investment helps “inject” money into the economy of the LEDCs, boosting orders for firms and creating jobs. This strategy has been applied by Uganda in order to rebuild their war-torn economy.
Lastly, tourism is seen as a contributory factor to the good image of a country. Large numbers of Western tourists going to a particular area means that the West’s perception and knowledge of that country rises. This often acts as a psychological impetus to would-be entrepreneurs to locate their ventures. It is thus not surprising that the growth of tourism has been so closely aligned with economic growth in countries such as Thailand and Indonesia.
The benefits of tourism are largely those described above: economic development. Tourism brings in foreign exchange, investment, employment, credibility and infrastructure improvement to the LEDCs. In addition, tourist schemes can be used to benefit the whole community, such as the “Campfire” agreements in the Zambezi River in Zimbabwe, whereby local communities lease lands to developers. Tourism can also act as a compelling reason to improve the environment. For example, in the African National Parks of Tanzania, Uganda, and Zimbabwe, revenues from tourists visiting these parks have been used to protect and manage the endangered species with habitats therein, since the locals have an economic incentive to do so. They also provide an important source of revenue for local schools and hospitals, as well as being a source of employment.
However, there are a number of drawbacks to tourism. Economically, tourism often provides many menial, low paying jobs to locals, whilst leaving overall control and profits to Westerners. For example, of the $400 million of foreign currency that flows into Tanzania every year, 40% leaves the country. In addition, the foreign control of many tourist areas leads to democratic control being usurped, for example in Hawaii. Socially, tourism can also be damaging. Many are unhappy at the cultural vandalism of traditional cultures – Hawaii in particular has had its distinct culture affected by worthless stereotypes. In addition, Western tourists often bring with them cultural differences and insensitivities that offend local norms and customs – Kenya has recently produced a guide advising tourists on the proper dress code.
The increased tourism activity on a certain area can also be damaging to the environment. In National Parks, such as Kenya, the wildlife are often disturbed and the fragile savannah and forest ecosystems are slowly deteriorating. Tourism can also leave large amounts of garbage and pollution that, in many LEDCs, is not addressed promptly and effectively. Moreover, the seeming lack of political will in handling the fragile environment, such as coral reefs, has often damaged ecosystems irreparably.
In conclusion, the LEDCs place such an emphasis on tourism for their economic development plans because it is an excellent source of revenue, employment and foreign exchange transactions. Nevertheless, tourism has had many negative effects on LEDCs, bringing with it environmental degradation, human resources exploitation and cultural relations issues. However, on balance, tourism is beneficial to LEDCs since it helps foster economic growth, and if managed properly and carefully, can actually be a force for improving the quality of their socio-economic and environmental concerns.
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