- What has tourism to do with “national development?”
- How valid and accurate are claims about tourism contributing to development?
by Kusal Perera
“A major breakthrough” is how Tourism Minister Prasanna Ranatunge had proudly announced Sri Lanka recording nearly 200,000 tourist arrivals in 2021 amidst the pandemic, reported Daily FT on 03 January 2022. The news report said the Minister expects around 100 – 125,000 tourist arrivals during this month of January. Another news report two days later on 05 January said the minister has fixed a target of around 2.3 million tourists for this year (2022), with a 4.5-billion-dollar foreign income. Certainly, a remarkable target even if partly achieved. According to Daily FT, leading the list of countries with most number of tourist arrivals in Sri Lanka in the year just gone by was India, followed by Russia, UK, Germany and Ukraine, with a new focus on Mid East this year.
There is plenty of talking and loud promises on “tourism” bringing in much needed foreign exchange and tourism as “priority in development”. All these talks and promises take serious issues in tourism for granted and therefore are never focussed upon. First is the number of “tourists” calculated perhaps on arrivals on “tourist visa”. Are all who enter the country with a “tourist visa”, bona-fide tourists? Of the two major categories of visas provided to enter Sri Lanka, one is the “Visit visa” with 02 sub-categories. One for “tourism” and the other for “businesses”. A bona-fide tourist for purpose of visa approval is one, “who wants to enter Sri Lanka for sightseeing, excursions, relaxation, visit relatives or yoga training for a short period of time”, according to the Immigration Department web site.
It is not only such bona-fide tourists who enter Sri Lanka with tourist visas. There are many others who come to Sri Lanka for short stays to do petty businesses and usually do not travel outside Colombo city. Over the last decade or so, there is also a growing trend in bringing cheap labour for especially privately funded and contracted foreign projects. Labour for such projects brought on “tourist visa”, are mainly from countries like India, Nepal and Bangladesh. Over 05 years ago, the Chinese government through its embassy in Colombo had negotiated for a 05-year “work permit” for their labour brought in. Though not legally established, it is said the validity period agreed upon was 01 year, unless extended later. It is not known whether the government has taken a similar stand regarding nationals of other countries like India and Bangladesh.
Of the number of “tourists” quoted as 194,000 plus in the year 2021, how many fit in to the definition of a tourist is therefore worth looking into. There are reportedly around 7,500 Chinese labour, but could be far more, given the fact even the Labour Department is unaware of exact numbers of directly employed foreign unskilled and semi-skilled labour in the country. Of them, how many have entered Sri Lanka with tourist visa is not known. Strict monitoring of foreign unskilled labour in the country is not possible as the Immigration Department lacks resources for such regular checks at district level. Therefore, calculating incoming “tourists” on “tourist visa” granted, is yet a bloated muddle.
The other major issue that goes without mention is the amount of foreign money tourists bring with them and how much balance they take back on departure. In fact, what is important is not numbers coming in, but money brought in and spent here. While the BOI claims tourism and leisure industry is the third largest foreign exchange earner for Sri Lanka, calculations on foreign earnings are actually miscalculated for want of privilege and patronage in economy, as with the apparel industry earnings. It is not clear how “tourist income” is calculated in dollars when there are no clear declarations to check money brought into the country and the balance taken back. This has become far more difficult over the years with tourists using credit and debit cards for payments during their stay. Most also come with information about “everything cheap” to have the “cheapest stay” possible.
Annual income from tourists that can be calculated with accuracy comes from only the “visa fee” charged, apart from a few millions from archaeological sites like Sigiriya and botanical gardens as in Peradeniya. Rest of the billions announced as income are “assumed” calculations by State “Authorities”. On what basis the assumptions are made for calculations, are also very questionable. Yet another double-count comes from “cost of inputs, marketing and other benefits and concessions” not accounted for as expenses in calculating “earnings and profits”. Let’s ask, what the total value of tax concessions and benefits given to the tourism and leisure industry and the cost of food, beverage and material imported by them is in 2018, in earning USD 4.4 billion. Annually, there is big money spent on tourism promotion with SL Tourism Promotion Bureau (TPB) creating projects for marketing Sri Lanka that are not accounted for as expenses in calculating dollar earnings. In 2019 a total of USD 31.5 million was set aside for international marketing activities by the TPB.
Another is the projection of “direct employment”. This direct employment is not permanent as in other industrial sectors. Security of employment is therefore not guaranteed to a large majority of “direct employees” with the two tourist seasons on the two coastal belts in the West and the East. Thus 169,000 direct employment the SL Tourist Development Authority’s “Annual Statistical Report 2018” calculated, are not “permanent” employment though “direct”. It only means they were employed directly by hotels as indoor staff, by tourist authorities and offices as guides, tour operators, drivers and salesgirls and boys in their souvenir and handicraft shops. Most in hotels, guesthouses and lodgings are laid off during the “off-season”, except minimum maintenance staff while other direct employees are compelled to shift to the informal sector in search of income.
Nor is environmental havoc ever calculated when promoting and expanding tourism. Whole beaches in West, Southwest and East in particular are ruined with massive illegal constructions and encroachments in coastal and beachfront areas. The beachfront stretch along the marine drive from Dehiwala bridge up to the Dehiwala railway station is ample proof how illegal constructions mushroom with all State institutions providing services like electricity, pipe-borne water, telephone services etc. officially. The “Coastal Zone and Coastal Resource Management Plan 2018” valid till 2023, says “Expanding tourism industry” is the third of the 07 factors in coastal pollution. “The development of tourism sectors has led to an increase of structures along the coastline and increased pollution of beaches and coastal waters.” it says, adding, “The coastlines of Hikkaduwa, Beruwala, Unawatuna and Arugam Bay have been severely affected due to the expanding tourism sector in the region.” How are these devastations valued and audited with tourism income?
Wildlife sanctuaries and national parks are also exploited with destruction to fauna and flora. Everything illegal in hotel trade and tourism stays with political patronage and heavy corruption. Politically controlled and managed tourist agencies of the State, obviously keep no tabs and counts of these violations.
Call it “development”? As with forex crisis we are in right now that grew continuously over 04 decades, tourism and hotel trade has merely swallowed all concessions and privileges fostered on it within growing corruption and political patronage very much at provincial levels. All governments since JRJ as Minister of State established the “Ceylon Tourist Board” in 1966 along with the Ceylon Hotels’ Corporation, have been adding more muscle into them at taxpayers’ expense. With all concessions, privileges and benefits annually added by every government on the premise “tourism contributes to national development with foreign exchange earnings”, what have we honestly gained during the last 55 years, since 1966?
Fifty-five years of State patronage at the expense of public funds creates only around 150 – 175,000 “direct but temporary” employment. Solid calculable foreign income being “visa fees”, the rest in dollar billions are assumed calculations, to claim importance for tourism in gaining continued State patronage and numerous concessions and privileges. Pollution and devastations to coastal zones, beachfronts, mangroves, forestry, national parks, and wildlife have unbearably increased with no serious and genuine efforts at controlling and managing disruptions and devastation.
Even otherwise, tourism contribution to GDP has not provided a guaranteed diving board for prosperity. No country can claim decent and disciplined national development with tourism. On the world map in 2019, there were “15 destinations” with annual GDP contributions above 15 percent. (https://www.statista.com/statistics/1100368/countries-highest-gdp-travel-tourism/) Of them, only countries like Maldives, Seychelles, Bahamas and Grenada are worth any look. Yet they still remain as tiny developing countries hardly noticed. Maldives is politically struggling for democratisation and stability with only 550,000 population in one of the vastly dispersed island nation States in the world. Seychelles has less than a million population in a less dispersed island nation State. Bahamas is similar with many islands constituting the small island nation State with only 390,000 population. Apart from tourism, offshore banking is big time business in Bahamas. The other is Grenada, another island nation with only 112,000 population, caught in a forex crisis and listed as poor and almost at the bottom of the list.
It is therefore time we focus on tourism with realistic targets and with a new eco-friendly approach. Time we discard this utterly absurd unmanageable approach of increasing numbers of tourists to provide fictitious annual incomes. Time, we thought of dollars coming in, instead of people coming in. With more environmental damage in the offing with more numbers targeted, it is time we demand the SL Tourist Development Authority to publish their 05 year tourism and hospitality trade development plan in detail, for public scrutiny. We need a plan and a clearly spelt out plan at that, for any development.