Tourism Contribution to Poverty Reduction

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Table of Contents

Pro poor tourism (PPT)
Pro-poor tourism
Targeting the poor through tourism
Causes of poverty
Positive economic impacts of tourism
Positive impacts of tourism, which are not economic
Negative economic impacts of tourism
Negative non-economic impacts of tourism
Recommendations through policy process
Barriers for tourism as a tool for poverty reduction

This paper discusses the key issues on how tourism can contribute to the poverty reduction and how the initiatives on poverty reduction can be measured as well as how the indicators can be identified. Conceptual issues have also been discussed to determine current and future challenges facing tourism as a tool in reducing poverty.

In the past, the impact of tourism has been identified based on the growth of Gross National Product and creation of employment. Many analysts have perceived tourism development as positive when there are many tourists arriving in the country, the length of stay for tourist is long, increased occupancy of tourists in hotels and when the expenditure related to tourist is high.

However, these measures do not provide ways to establish the impact tourism has on poverty reduction. Most information about tourism focuses on a general development of a country and less developed areas through tourism but ignore how the industry can be used to reduce poverty.

Tourism development as a measure of development in economy in a country has been referred using general terms focusing much on growth and modernisation in economy. Economic analysts have always assumed that whenever there is growth in tourism the result is the poor benefiting.

While it is true that tourism generates employment for the lower and middle class economic and social classes, it is evident that much benefit of tourism goes to the expatriate companies both locally and internationally as well as local elites. The poor people employed in the industry earn low payments.

In addition, if the planning and management in the industry is poor, ecological system depletes uncontrollably, the cost of living goes up for the surrounding community and their cultural traditions are damaged. The officers entrusted with tourism management have failed to demonstrate how tourism can affect poverty alleviations.

Much attention has been given to macro economic impacts and the potential tourism industry has to cause economic growth to both the poor and marginalised people as well as the surrounding communities. They have failed to define measures and show demonstrations on specifics regarding how tourism can reduce poverty for the individuals in the community.

Regarding community development, the focus is shifting from impact of tourism on overall growth of economy in the society to specific impact on reducing poverty for individuals.

Managers in the tourism industry are currently experiencing growing trend in realising that poverty reduction does not always follow economic growth and that poverty can only be reduced through concerted effort and pro poor policies that are specific in improving the living standards of the poor in developing countries.

Identification of programs at various levels has been made possible by organisations such as World Health Organisations to reduce poverty through tourism. Such people have been defined as those earning less than $1 per day.

When individuals are poor, they are not able to acquire enough basic requirements and the general development as an individual is low. Mostly, they are excluded socially and do not have proper access to basic education, healthcare and social amenities accessible to people who are not poor in the society.

Poor people experience relative deprivation and are usually not consulted during decision-making, which make them marginalised. Poor people are usually unskilled and are therefore not competent in the prevailing markets. They are not able to spend and save as they lack capital to expand their small businesses.

Whenever the market conditions change, the poor are highly venerable. Such people leave below the average standards compared with the rest people in the society who are not poor. It is paramount to focus broadly on how tourism can reduce poverty because that would give more emphasis on the nature of poverty, which is multi-faceted.

Pro poor tourism (PPT)

Policy makers use this term to show distinction between general economic development and development that uplift the living standards of poor individuals in the society. The term is also used to mean interventions, which specifically address poverty alleviation.

Such measures should go beyond expectations that the poor would receive benefits through the “trickledown” effect. More focus should apply to uplift the standards of the poor individuals in the community. PPT is not a program on its own but a method focusing on reducing poverty through tourism policies.

Pro-poor tourism

Tourism can only reduce poverty by improving the economy through creation of jobs whether temporally or permanent. This can be through establishment of businesses where the local people can sell their goods and services.

Pro poor tourism should also provide access to water, infrastructure such as roads for the poor to transport their produce to the market and access their farms as well as improved education and healthcare system. PPT should create capacity and avenues to include the poor in decision-making processes, which would uplift their livelihood and expose them to tourists and enterprises related to tourism.

Direct benefits to poor people should be identified without expecting that when the industries and agencies around benefit the local individuals would also benefit indirectly. For instance, when analysing if the local community is accessible to the market, poor individuals should be indentified who have gained benefit and by what extent.

Management of tourism should therefore rely on concrete figures and not just on analysts who have specialised on economic development. This would help to give detailed reports on how the industry can reduce poverty for the local people around the tourist destination. When it is not possible to determine the positive impact of tourism using concrete figures, other quantifiable means should be used.

Such means help the financing agencies when allocating funds to boost tourism industry as evidence that there are direct benefits of the industry to the local people. Alongside assessing the benefits of tourism, tourism managers must also identify and make comprehensive reports on how tourism affects negatively on the society.

For example, initiative to expand a tourism destination or agency may result in a loss of grazing pastures and access to water as well as beaches that the locals may have been using for fishing. These negative consequences of tourism should also be considered and reported to the relevant agencies for effective accountability.

Targeting the poor through tourism

The major challenge in using tourism as a tool to reduce poverty is to accrue its benefits to the poor. Managers usually make targeting errors such as poor delivery of tourism benefits to the poor and accruing tourism benefit to the rich in the society. Any target is considered efficient if it is able equally to share the total benefits reaching the targeted group.

There are three methods used to determine benefits of tourism industry in reducing poverty. For example, administrative targeting determines eligibility of a specific benefit to a particular individual through data collection and interview method regarding his or her economic status if the individual is interested in participating in the tourism initiatives directed to poverty reduction.

However, this type of targeting consumes a lot of time and increases the cost of the project because a lot of paper work and data collection are involved. Therefore, it can discourage participation by the applicants.

The other type of targeting is called self-targeting, which ensures that tourism benefits are structured in a way that only the neediest would access initiatives to participate.

Whenever there are sponsorship programs in the community, the sponsors ensure that the return wages are low to ensure that only the poor people will be interested in them as their income is usually lower than the wages they offer, which encourages selective participation.

Geographical targeting concentrates on efforts that would uplift development in poor localities assuming that when such areas are developed the poor habitants are likely to benefit. The smaller the areas targeted through the method, the higher the efficiency and accuracy of the method are.

Reduction of poverty through tourism can employ all the three methods. For instance, employees working in a hotel industry can benefit from a self or administrative program. However, geographical targeting is the most applicable mechanism to general development efforts directed towards poverty reduction because it focuses on localities with high tourism potential and high levels of poverty.

Causes of poverty

Knowing the causes of poverty for the locals is important before using tourism as a tool for solving their economic and social needs. There are several primary causes of poverty such as low income, lack of adequate assets for clothing, shelter and food as well as poor access to basic education and healthcare.

When assets are not enough, the affected people lack good health facilities and are poorly equipped with skills required in the prevailing markets. They live in poor housing and the physical network connecting them to available markets as well as their homes are poorly maintained. Their borrowing power from the banks is low and cannot therefore expand their businesses or improve their social networks.

Another primary cause of poverty is when individuals perceive they are powerless and cannot be heard when they interact with other people in the social institutions. This is caused by sociological conditions that are not fair such as mistreatment, violence and poor protection against violence, the poor being intimidated and poor predictability in their interactions with officials in public institutions.

Being vulnerable to shocks and difficulty in coping with them are also primary causes of poverty leading to susceptibility to many health risks and hazards.

Whenever the poor fall victims they are not able to recover speedily emotionally, economically and physically. In addition to the causes that are immediate, global causes exist related to national and regional economic development, poor income distribution and unstable governance.

People believe that general economic growth always benefits the poor individuals but this is not always true. It is therefore wrong to assume that when the larger society receives impact economically the poor benefit as well. Poverty reduction requires implementing measures locally, nationally and globally.

Locally, manifestations of poverty are poor healthcare, low levels of literacy, unstable income, few formal employments, individuals being unable to choose desired lifestyles, poor housing because of poor land tenure and poor basic infrastructure.

Through tourism, poverty can be reduced, as there would be employment opportunities, which would result in better living standards. This employment can either be in formal or informal sectors.

Positive economic impacts of tourism

Tourism initiatives generate SME business opportunities, thus creating employment and increased income through better market of goods and services. Tourism also generates direct formal employment through businesses for the poor to benefit.

Other forms of benefits reach the members in the community when they charge fees for those who use specific routes that are within the area for tourist destination. When organisations donate in charity works the community benefits from the investments.

Positive impacts of tourism, which are not economic

Tourism enhances capacity building, quality education and acquisition of skills. Creation of healthcare through tourism results in improved health services, nursing education and high sense of well-being. The poor benefit from the positive impacts of tourism on environment such as accessibility to grazing pastures.

Tourism builds stronger socio-cultural status as the community is recognised, which creates pride and boosts their self-confidence. Such improvement can be quantified in concrete terms for purposes of reporting. Livelihood is diversified at homes and this reduces vulnerability for individual members.

Negative economic impacts of tourism

Tourism demands increased investment to reduce pressure on the existing facilities as well as services. The local people suffer from the high cost of living as the tourism related businesses are not selective and target on the tourists.

Negative non-economic impacts of tourism

Tourism transforms culture into a commodity to generate monetary gains and impacts negatively on the ways of life and traditions of the local people. The indigenous locals in the area developed for tourist destination are displaced and cases of crime increase.

Tourism also leads to uncontrolled population increase in the locality around tourist destination. Tourist related activities might also degrade the natural resources when manmade activities are introduced to make the tourist destination more attractive.

Recommendations through policy process

The poor individuals should be engaged in the processes of planning to empower them and the locality surrounding the tourist destination. There should be more involvement of the poor in planning regarding tourism and poverty reduction. Private sectors should also collaborate with the community to build a common market where the prices for the commodities are harmonised.

Barriers for tourism as a tool for poverty reduction

There are inadequate government programs to enable informal sectors in the tourism industry provide services and exploit their potential in poverty reduction in urban areas. In the Asian context, the potential of tourism agencies is not well recognised and therefore working with these agencies to alleviate poverty becomes difficult. Such agencies help in addressing issues about women trafficking, gender, poor infrastructure and improvement on healthcare.

The poor individuals do not have access to credit facilities, which would enhance their participation in tourist’s economic activities. There is little organisational capacity for the government and non-governmental agencies required adequately to respond to development opportunities in the industry. There is also poor access to tourism assets by the poor individuals in the society.

It has been difficult to create innovative services and programs because some of the regulations in place are outdated and there is a red tape before policies are implemented. Once these challenges are overcome through involving all the stakeholders and development policies, tourism will be an effective tool for reducing poverty at individual level.

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