Essay title - ASEAN Economic Cooperation
1.0 Introduction
The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and lastly, Cambodia on 30 April 1999.
As of 2006, the ASEAN region has a population of about 560 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 1,100 billion, and a total trade of about US$ 1,400 billion. ASEAN's average economic growth rate was as high as 5.5 percent for the period 1980 to 1990, much higher than the world export growth of 10.8 percent.
ASEAN economic cooperation has not only deepened but also widened in the last five years starting with a degree of cooperation which was initially limited to only a few economic activities in the 1960s. This is evidence of the ASEAN Member Countries' strong commitment to making the region a strong and dynamic economic force. ASEAN tourism, which exhibits strong growth potentials, has contributed significant gains to the regional economy.
ASEAN cooperation in tourism is aimed to develop and promote ASEAN as a single tourism destination product with world class attractions, standards and facilities, achieve facilitation of intra-ASEAN travel and freer trade in tourism services, and promote sustainable tourism development. Joint efforts of the Member Countries shall involve policy coordination and/or harmonization in areas such as investment policy, tourism development planning, human resources and environmental and cultural preservation. The Tourism Ministers will henceforth organize formal meetings, to pave the way for developing coordinated and concrete strategies for tourism development and cooperation in ASEAN. The formation of the ASEAN Crises Team for Tourism (ACTT) has been also launched by the ASEAN National Tourism Organizations (NTOs).
In the First Informal Meeting of ASEAN Tourism Ministers and the ASEAN National Tourism Organizations Meeting Surabaya, Indonesia, 6-7 January 1996, The ASEAN Tourism Ministers, agreed that a network of centres of excellence for human resource development be established within ASEAN; recognizing that rapid tourism development in their respective countries had created a great need for intensive human resource development programmes, The Meeting also agreed that ASEAN National Tourism Organizations’ arrange a meeting on human resource development.
The ASEAN tourism performance in 2003 showed strong recovery especially in the last four months of the year. In the midst of negative issues affecting global travel, ASEAN attracted 37.5 million tourists by the end of 2003. This figure is, nevertheless, lesser by 14.7 percent compared to tourist arrivals in 2002.
Figure 1: Total International Visitor Arrivals to ASEAN (1992-2003)
Source: ASEAN Statistics
The ASEAN Tourism Forum (ATF) continued to be a landmark annual tourism event. The ATF 2004 as held in Vientiane, Laos from 30 January to 7 February 2004 with the theme: “ASEAN, the New Tourism Landscape.” The event brought 264 foreign tourism companies as buyers to explore business opportunities in tourism, about 1,000 sellers, 467 tourism booths and 210 media agencies. The ASEAN Tourism Ministers, at their 7th Meeting held on 3 February 2004 in Vientiane, Laos, agreed to work towards advancing the integration of ASEAN tourism. The third phase of the Visit ASEAN Campaign (VAC) was “soft launched” to further promote intra-ASEAN travel. ASEAN is actively cooperating with other countries and organizations in promoting tourism, particularly with China, Japan, Korea and India. A well coordinated and effective mechanism of information exchange through ASEAN Plus Three Communication Team for Tourism is being enhanced in order to effectively deal with any possible contingencies in the future.
In the 3rd Meeting of the ASEAN Tourism Ministers (3rd M-ATM), all the ASEAN Tourism Ministers exchanged views oil the role of tourism in sustained economic growth and agreed that enhancing investment in tourism facilities, the removal of barriers to tourism and complementary marketing programs for ASEAN tourism are important areas of cooperation. Among others, the Ministers agreed to exchange experiences and cooperate in the promotion of domestic tourism and to explore ways and means to further promote the growth of intra-ASEAN travel in a more focussed and urgent manner. The Ministers identified that relaxation of visa requirements, the promotion and development of cruise tourism, air services Liberalization, strong ASEAN presence in major travel marts are among the important areas to be looked into by the ASEAN NTOs and the ASEAN relevant coordinating bodies.
2.0 Tourism development and economics growth: ASEAN
2.1 Brunei Darussalam
Brunei, which located on the northern shore of the Island of Borneo, offers a wide variety of attractive places to be visited and experienced. Museum, monuments and landmarks are the most important places that attracts tourist. The majestic royal heritage, Istana Nurul Iman is the Sultan’s lavish home in the capital and is the largest residential palace in the world. Besides, the uniqueness of Brunei Darussalam also includes the magnificent mosques, the water village with traditional and historical houses on stilts, and Jerudong Theme Park.
The natural rainforest and national park possesses several adventurous options such as jungle hiking which attracts foreigners. There’s also beautiful sandy beaches which provides facilities for sporting and recreational activities. Besides, the largest shopping mall, the majestic Yayasan Sultan Haji Hassanal Bolkiah Complex; as well as old shop houses which sell traditional crafts are also places that tourists will visit. Last but not least, local food is also one of the Brunei specialities which attracts tourist from foreign country.
The table below shows the total international visitor arrivals to Brunei Darussalam from year 1999 to 2005. There’s an increase in the number of visitors to Brunei from year 1999 to 2001. Unfortunately, the number of visitors dropped from year 2001 until 2003. However, the government of Brunei manages to improve the tourism sector and make the number of visitors’ increases again. The increase of number of visitors to Brunei indicates the contribution to the growth of economy in Brunei.
TABLE 2.1: Total International Visitor Arrivals to Brunei Darussalam
Year |
Total Visitor |
1999 |
268 125 |
2000 |
283 624 |
2001 |
403 524 |
2002 |
349 168 |
2003 |
289 230 |
2004 |
532 255 |
2005 |
567 929 |
According to statistic, a total of 178, 540 tourists arrived in Brunei by air in the year of 2007, shows an increase of 12.9% compared to the year of 2006. This had contributed some USD93 million in direct tourism revenue. Number of cruise ships calling on Brunei also increases from 4 in 2006 to 24 in 2007 and is expected to reach 30 in 2008, this proven that several thousand additional tourists visiting Brunei during shore excursions. The tourism sector of Brunei contributes about 407 million Brunei dollars in the year of 2007.
In term of employment, the industry generates 5200 direct tourism jobs, which is equivalent to more 3% of the nation’s total employment. The Brunei Economic Development Board’s Strategy reported that Brunei will create at least 6, 000 new jobs by 2008. The strategy includes accessing and attracting investment to develop downstream and manufacturing industries and the development of foreign direct investment with growth potential for Brunei Darussalam. The four priority areas identified by the government in this strategy include business services, financial services, hospitality and tourism, and transportation services.
However, World Travel and Tourism Council (WTTC) 2006 forecast still shows that Brunei’s travel and tourism industry would be among the lowest in demand in the South-East-Asian region. It assessed that Brunei’s share of the world travel and tourism market is at 0.0% in 2006, with a future growth rate of 2.9% a year between 2007 and 2016. The report by the World Travel and Tourism Council ranked Brunei as one of the slowest growth rates in the world. After all, Brunei is still in an early stage in the tourism industry.
The government of Brunei is currently working towards economic diversification, in which tourism plays an important role, as well as encouraging foreign investment and developing education and human resources. They are now actively promoting tourism by making tourism as one of the main contributor to GDP. Brunei is now working with the World Tourism Organisation and World Travel and Tourism Council to determine an optimal level. The reason is because growing of tourism will generates strongly the expansionary on employment opportunities, incomes, spending and taxes.
2.2 Cambodia
Cambodia (13000’ N, 105000’ E) is located in Southeastern Asia, bordering the Gulf of Thailand, between Thailand, Vietnam, and Laos. The total area of the country is181,040 sq km. The economy of Cambodia has seen rapid progress in the last decade. Per capita income, although rapidly increasing, is low compared with most neighbouring countries.
Figure 2: Economic Indicators of Cambodia
According to Figure 2, the main domestic activity on which most rural households depend is agriculture and its related sub-sectors. Cambodia's main industries are garments, tourism, and construction. 2007 GDP (or gross monetarised product GMP) grew an estimated 9.6%, in line with the 2000/06 average of 9.5 percent. Garment exports rose almost 8%, tourist arrivals jumped nearly 35%, and construction activity doubled. Although risks have increased, economic prospects for 2008 remain strong. The projected 7.5 percent growth rate for 2008 reflects a mix of growth in services (mainly tourism) and construction combined with a slowdown in garment exports.
The textile industry continued to thrive in, constituting the most to the GDP’s growth regardless of the quota termination in 2005. Besides the giant garment industry, Cambodian economy depends in part on another foreign currency earner, tourism industry, whose rapid growth has brought about the positivity to the nation as a whole. The number of tourists surpassed more than one million in 2005 alone and is expected to increase continually throughout the following years. The potential lies on the fact that this little exotic land richly endows with a wide array of scenic, historical, and cultural attractions
Cambodia is at the frontier of tourism. It has a rich culture dating back many centuries when the Angkor Civilitation was the region's most developed. The 9th century Angkorian temples have intrigued archaeologists and fascinated tourists since being rediscovered in 1860. They remain one of the world's great ancient wonders and the jewel of them all, Angkor Wat, is the world's largest religious monument.
TABLE 2.2: International visitor Arrived to Cambodia, 2003-2007
Figure 3: International visitor Arrived to Cambodia, 2003-2007
Sources: Tourism Statistics Report 2008. 2008. Ministry tourism of Cambodia
As we can see from Figure 3, number of visitors increase every year. Mostly visitor are from Korean (329,909 people, 16.37%), Japan (161,973 people, 8.04%) and USA (137,539 people, 6.83%). The total number of visitors at 2007 increased 18.53% when compared to year 2006. For the first four months of 2008, visitor arrivals to Cambodia was 818,108; an 14.0% increase compared to the same period of 2007; Siem Reap Angkor arrivals had increased with 447,495 visitors, with a share of 54.7%; while Phnom Penh and other destinations had brought in a total of 370,613 visitors with 45.3% share. There are two international airports in Cambodia, Phnom Penh International Airport and Siem Reap International Airport. Most visitor enter the country through flight (63.34%) while the rest from land and water ways.
According to Dr. Thong Khon, Minister of Tourism of Cambodia, tourism is industrial, commercial and services which a system involved with direct and indirect stakeholder participatory. Tourism became economics priority and drive for social development of several countries in region and over the world including Cambodia. Economic growth can be promoted to establish and increase opportunity and income for population and to reduce poverty through the growth of tourism. He also stated that the government needs to look at how to ensure the development of tourism by developing the coastal areas when it was reported that tourism revenues are expected to grow by at least 20 percent in 2008.
2.3 Indonesia
Indonesia is a vast and beautifully diverse country consisting of more than 17,000 islands, of which only about 6,000 are inhabitated, stretching more than 5,000 kms between the Australia and Asia continental main island and dividing the Pacific and Indian Oceans on the Equator.
The main island of Java is the most populous and where the capital city, Jakarta, located. Just off East Java are the popular island resorts of Bali and Lombok. These tranquil islands are the tropical playgrounds of Indonesia with great beaches, resorts, nightlife, food, shopping and interesting cultural contrast. It is possible to experience Balinese dance and theatre in Ubud, Bali. The island of Sumatra, the word's fifth largest, is less settled and featured vast rainforest, orang utans, beautiful Lake Toba and commercial centres of Bukit Tinggi and Medan.
Tourism in Indonesia is being developed through two main programs, covering tourism and tourism products. The target for tourism set in Repelita VI is 6.5 million foreign tourists with US$9 billion in foreign exchange. Meanwhile 84.2 million domestic tourists are expected to spend nine (9) trillion rupiahs. Through various activities, tourism is expected to generate 900.000 new job opportunities.
Helped by heavy government investment in hotels and transport networks, tourism developed into one of Indonesia’s most important and fastest-growing economic sectors during the late 1980s. Between 1986 and 1995 the number of visitors increased by an average 24 per cent a year, to more than 4.3 million. Earnings from tourism brought in around US$5,200 million in 1995. The most popular destinations are Java, Bali, and Sumatra.
Foreign tourism is an integral part of the Indonesian economy. For the decade prior to the 1997 crisis, the industry experienced strong growth, with large increases in foreign arrivals, tourist spending, and investment. The growth of the former was more than 15% per year, contributing to an increase in foreign currency receipts as both foreign tourists’ expenditure and their length of stay increased. The number of arrivals in 1997 was 5.2 million, contributing around $6.6 billion to export income, or about 3% of GDP. In 2005, the number of arrivals from abroad is expected to be around 11 million, generating foreign currency receipts of over $15 billion. Tourism contributed 16% of total job creation in 1995, and in 2007 it is estimated that 1 of every 11 new jobs will originate from tourism. Despite short-term disruptions of tourism and criticisms of its adverse effects, tourism in Indonesia is expected to play a more important role in the longer-term future. The increasing dependence on tourism is also demonstrated by the government’s efforts to attract more international investment in the industry by allowing 100% foreign ownership, introducing a tax holiday, and welcoming non-national professional workers in this field.
Tourism may have declined in general in Indonesia, but it continued to rise in Bali following the slight slump of 1998. In fact the path was strongly upwards and it was not until the fatal bombings of 12 October 2002 that Bali experienced a major decline in tourism arrivals. To Bali’s woes were added the fears about the Second Gulf War and the SARS virus crisis, though tourism did revive after the initial plunge only to be severely devastated by the second round of bombings on 1 October, 2005.
Preliminary economic assessments following the October 2002 Bali bombings predict a modest economic slowdown. Current consensus is that Indonesia's GDP for 2003 could drop by a full percentage point to 3.0 percent. On November 1st, 2002, the Government of Indonesia and the House of Representatives formally agreed to slash the official economic forecast for next year a full percentage point from 5 to 4 percent. Tourism and related sectors such as transportation and restaurants are the most likely to be affected.
The economic impact of the Bali bombings blasts will likely be very serious for Bali but more manageable for the country as a whole. An estimated 4.3 million foreign tourists visited Bali in 2001, and tourism-related activities account for about half of Bali's economy. Occupancy rates at most Bali hotels, which were full before the blasts, are now at 20 percent or less. Although net bookings (cancellations minus new reservations) at some hotels have turned positive again, the World Bank estimates that tourist arrivals in Bali could fall by 20 percent in 2003 at a cost of approximately 350,000 jobs (Bali's total labor force is about 1.7 million). Handicraft producing areas in East Java will also be hard hit by the slump in tourists.
The impact of the bombings on Indonesia's economy should be more manageable. Bali's economy is about 1.3 percent of the national economy, and tourism and related industries nationwide contribute an estimated 3.5 - 4.5 percent to GDP. Tourism contributed about USD 5.3 billion to Indonesia's balance of payments in 2001. If tourist arrivals decline 20 percent in 2003, most economists expect GDP growth to fall by a full percentage point from four percent to about three percent. Indonesia's current account surplus in 2003 could fall by USD l - 1.5 billion. The Government of Indonesia has revised downward its official growth estimates, and submitted an updated budget to Parliament calling for an expanded monetary stimulus to counter the effects of the bomb blasts. The key question for Indonesia's future growth prospects will be the indirect effect of the bombings on consumer and business confidence.
Bali may have been experiencing a slump but Indonesia as a whole was starting to grow reasonably swiftly again, averaging 5.8 per cent per annum between 2002 and 2007. This improved performance was partly attributable to economic reforms in areas such as foreign investment, banking, port management and the import and export sectors. The overall objective was to reduce dependence on oil exports and to encourage foreign investment and manufacturing. Some measure of the loss of significance of tourism in Indonesia’s economy can be gauged from the WTO’s list of the top 25 tourism destinations, in which Indonesia does not make an appearance.
As a result, official forecasts for growth in gross domestic product (GDP) remain unchanged, at a healthy 5.5% for 2005. And growth in 2004 was 5.1%, at the very top end of the forecast range. Indonesian shares, which have performed strongly this year, have continued to hit a series of record highs since the tsunami hit. Hardest-hit in terms of loss of life and physical damage, Indonesia seems to have escaped the worst of the tsunami's economic disruption.
The main affected area, Aceh, is rich in resources but far from crucial to overall output. Aceh and North Sumatra are not major tourism destinations and as a result, the direct impact on tourism is not likely to be large. In 2003, Indonesia had 3.8 million visitors, of which only 76,000 (2% of the total) went through Medan (capital of North Sumatra) and even fewer to Aceh due to the conflict. There are concerns about a spillover impact on tourism due to residual fears but this may be offset by tourism shifting to Indonesia from other locations not impacted by the tsunami. Nonetheless, the immediate cost of reconstruction is high. The government has estimated that Aceh will require some $4billion over the next five years. The International Labour Organisation has estimated that some 1 million jobs have been lost in Indonesia and Sri Lanka.
While Indonesia has been severely affected in terms of losses of human life, the overall Indonesian economy will be barely affected. The disaster has been concentrated in the provinces of Aceh (it is estimated that around two thirds of this province has been very badly affected) and North Sumatra (very limited damage). No major economic activity or heavy industry has been affected; oil and natural gas production facilities in Aceh and Northern Sumatra have survived intact. Moreover, the region is not an important tourist destination. Aceh accounts for around 2% of Indonesia’s GDP and population, and oil and natural gas contribute around half of Aceh’s GDP. This indicates that the damage to Indonesia’s economy should be slight, although the human suffering is, and will be, great.
The Statistics Bureau said that foreign tourist arrivals fell to 1.89 million in the January-June period this year from 1,049,487 in the first half of 2005. Tourism accounts for about 5% of Indonesia's gross domestic product. It is one of the country's largest sources of foreign exchange revenues, contributing $4.5 billion in 2005 from an estimated 4 million foreign tourists in the year, Reuters reported. Indonesia's tourism industry has been battered by a series of natural disasters such including the earthquake in the major tourist destination of Yogyakarta followed by an earthquake and tsunami in the West Java beach resort of Pangandaran.
The National Bureau for Statistics also informed that total international tourist arrivals through Indonesias 13 main gateways from January to June 2006 was down (-)7.54% compared to the same period of year 2005. Arrivals to Bali dropped by (-) 19.1%, direct arrivals to Lombok declined by (-) 13.58%; To Tanjung Pinang down by (-) 12.31%, and to Batam down by (-) 9.07%. On the other hand, arrivals to Jakarta improved by 6.31%, to Padangs Minangkabau Airport by 60.65%; arrivals to Manado improved by 18.65%; and through Solos Adisumarmo Airport increased threefold (334.70%), although from a low base. Nevertheless, largest share of arrivals is still held by Bali with 30.83%; followed by Jakarta at 29.82%; and Batam at 26.55%. Share of other gateways are below 3% respectively.
Table 2.3: Visitor Arrivals to Indonesia 2000-2007
YEAR |
VISITOR ARRIVAL |
|
AVERAGE LENGTH OF STAY |
TOURISM (Million US$) |
2000 |
5.064.217 |
1.135,18 |
92,59 |
12,26 |
5,748.80 |
2001 |
5.153.620 |
1.053,36 |
100,42 |
10,49 |
5.396,26 |
2002 |
5.033.400 |
893,26 |
91,29 |
9,79 |
4.305,56 |
2003 |
4.467.021 |
903,74 |
93,27 |
9,69 |
4.037,02 |
2004 |
5.321.165 |
901,66 |
95,17 |
9,47 |
4.797,88 |
2005 |
5.002.101 |
904,00 |
99,86 |
9,05 |
4.521,89 |
2006 |
4.871.351 |
913,09 |
100,48 |
9,09 |
4.447,98 |
2007 |
5.505.759 |
970,98 |
107,70 |
9,02 |
5.345,98 |
Source: Statistical Report on Visitor Arrivals to Indonesia
Visitor arrivals to Indonesia in 2004 increased by 19.12% compared to that in 2003 i.e; from 4,467,021 in 2003 to 5,321,165 in 2004. It showed that the Indonesian tourism has been recovered after experienced a high decrease in the last two years. Moreover, it showed that some events that happened in 2004 such as, the policy implementation of Visa On Arrival for some countries, the President election and bomb tragedy in Kuningan, Jakarta, did not give much impact to visitors arrival to Indonesia. The following two years, 2005 and 2006, saw a decreased in the number of visitors’ arrivals. It might due to the SARS outbreak, Bali bombing and also tsunami. But, in 2007, the number of visitors’ arrival increased rapidly from 4,871,351 in 2006 to 5,505,759 in 2007. This shows that the Indonesia government really worked hard to promote and to woo back their potential visitors’ and indirectly it will contribute to their country GDP.
2.4 Laos
Laos located at 17058’N, 102035’E and has a population of 6,521,998 citizens. The area of the country is 236,800km2. Laos is a single-party socialist republic. It decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking. However, Laos is still ranked among the lowest countries in terms of economic and politics.
Tourism is a growing industry and important source of foreign exchange. Laos only really opened its doors to tourism about a decade ago and remains one of the least explored and enigmatic countries in the world. While the country has abundant natural and cultural attractions, it is the people that make this destination so special and spending time in Laos is as much about soaking up the unique atmosphere as sightseeing in the traditional sense. The Laos country is mountainous, making travel difficult with limited internal flight and adventurous travel along Mekong River.
The Lao government has adopted a policy to develop and coordinate its tourist plans with neighboring countries in a bid to widen its international tourism markets. Especially during the last few years, National Tourism Authority of Laos (NTAL) has sought tourism cooperation agreements with neighboring countries including Thailand, Vietnam, Cambodia, Myanmar, China and even somewhat distant Singapore. In order for tourism to grow, NTAL realizes its limited human resource base coupled with modest budgets means it must work closely with regional NTAs to develop tourism products that promote tourism in the Mekong sub-region in general.
To focus solely on selling Laos would be difficult as Lao tourism is still too young and some Lao tourism products are not quite ready for exposure. At this stage, it is not enough to sell only Lao products. Laos is located in the middle of the region. Laos would not mind being used for passing through to other destinations as long as the country and their people gain benefits too.
Being landlocked in the middle of Indochina, Laos wants to promote overland travel between Thailand, Vietnam and China as a way to explore cultural and natural tourism in the region. Laos signed a tourism cooperation agreement with Thailand and Vietnam to develop tourism routes linking the countries. In accordance with these plans, several immigration-control points have been opened to facilitate land travel.
For example, four permanent checkpoints along the borders between Laos and Thailand and Laos and Vietnam are now open. They include Chiang Khong-Huay Xai, Mukdahan-Savannakhet, Vientiane-Nong Khai, and Savannakhet-Houng Hoa. Laos is also working on upgrading three more border checkpoints along Thai and Vietnamese boundaries, eventually making them permanent border entrances/exits. They include Lak Sao in Laos to Vinh in Vietnam, Nakhon Phanom in Thailand to Thakhek in Laos, Chong Mek (Ubon Ratchathani province) in Thailand to Champasak in Laos.
By establishing permanent border checkpoints, people with passports can easily move between countries without having to return to their starting point. Easing border formalities will not only encourage more international visitors to explore the countries through border travel; it will also boost regional travel by the citizens of Laos, Vietnam and Thailand.
Tourism is the fastest growing industry in Laos with Luang Prabang and Vientiane being the two major tourist destinations of the country. Since China began allowing its citizens to travel freely to Laos, there has been a surge in Chinese tourists. Chinese nationals are expected to account for 25% of the total number of visitors to Laos for 2006. Pressures to modernize tourist infrastructure, particularly to cater to package
The Lao government intends designating 1999 as "Visit Laos Year." It would follow "Visit Myanmar Year," which is being held from October 1996 through September 1997. By that time, Laos and Cambodia will have joined Vietnam in the ASEAN community. Such a national promotion would in all likelihood coincide with the building of a second bridge across the Mekong, this one entirely within Laos itself in Champasak province. The bridge would primarily benefit Pakse, a popular tourism center and burgeoning economic hub.
The Asian Development Bank forecasts that 30,000 tourists will visit Champasak annually by the year 2001, the main appeal being the splendid Khong falls on the border with Cambodia and the equally splendid Khmer-era ruins called Wat Phu. Tourist arrivals in Laos in 1995 exceeded 200,000 people for the first time annually, with the year-on-year increase registered at 44 percent. National Tourism Authority of Laos (NTAL) report the increase could be attributed to international marketing during the past two years.
NTAL recently participated in international travel shows held in Germany and France, leading to strong responses from European buyers. European buyers, especially French and German travel agents, are keen to sell Indochina. Therefore Laos received good feedback from these fairs.
In 1995, NTAL statistics show 210,181 visitor arrivals in Laos. France was the biggest market with 6,180 visitors, up 14.6% from 1994. Thailand was second with 5,253 arrivals, up 12.4%. It was followed by 5,153 US arrivals, up 12.17%. There were 3,792 Japanese arrivals, up 8.96%; 2,423 United Kingdom arrivals, up 5.72%; and 2,379 arrivals from Germany, up 5.62%.
Most arrivals occurred in February when 22,337 visitors passed through Laos. October was the second most popular month with 21,345 arrivals. Some 13,843 visitors made September the least popular month. Regional tourists crossing the border to Laos increased significantly in 1995 and totaled 151,531. Thais registered 146,856 border-crossings while mainland Chinese visitors totaled 4,673. Visitor arrivals were expected to reach 250,000 by the end of the year.
In 1996, tourism strategies focus on the promotion of Laotian culture, overland routes linking Laos with Vietnam and Thailand, and Lao eco-tourism sites. However, eco-tourism development requires identifying primary areas of interest and devising comprehensive development plans. Training tourism professionals and identifying local staff to support such professionals are critical components of ensuring sustainable tourism.
Southern Champasak province will likely be the site of the first eco-tourism project. The government will apparently seek to implement such ecologically-sensitive schemes through joint ventures with private-sector investors. Laos will develop eco-terrorism on a small scale at first. Ideally, they want to create tourist activities such as trekking and elephant riding. Tourism, are expected to significantly impact the culturally significant Lao cities such as Luang Prabang, whether positively or otherwise
2.5 Malaysia
Malaysia is located in Southeast Asia and consists of the (1) South-eastern Asia peninsula
(Malay Peninsular), and (2) northern one-third of the island of Borneo, bordering Indonesia and the South China Sea. It was originally formed as Malaya (what is now Peninsular Malaysia) in 31 August 1957 and the Federation of Malaysia was only formed in 9 July 1963 through a merging of the former British colonies of Malaya and Singapore, including the East Malaysian states of Sabah and Sarawak on the northern coast of Borneo. However, Singapore left the federation on 9 August 1965 as independent country.
Malaysia also neighbours and shares it boundaries with other Southeast Asia countries such as Thailand, Singapore, Brunei, Indonesia and Philippines in a strategic location along the Strait of Malacca and the southern South China Sea. The Federation of Malaysia consists of 13 states (Negeri) and federal territories (three territories, which are Kuala Lumpur, Labuan and Putrajaya). Therefore, the Federation of Malaysia consist 14 capital cities of which Kuala Lumpur became the capital city of Malaysia.
Last year, 2007, Malaysia’s economy grew by an incredible 7.3%. An increase like that hasn't been seen in the country since 2004, but the growth is not a fluke. The service sector has helped stabilize the economy and is making property a profitable investment again. While the Gross Domestic Product is helped along by Malaysia's agricultural, mining and construction companies, the services industry has contributed the most to a solid year. The strong domestic demand is a good sign that foreign money isn't the only capital flowing through the economy. Private sector activities and increased public spending will continue to play their part in future economic growth.
The Malaysian Government provides dynamic support for the country's booming tourist industry, marketing the country as 'Malaysia, Truly Asia', with impressive results. 2007 was named 'Visit Malaysia Year' to celebrate the golden jubilee of independence, and has seen tourism grow by an impressive 21.3% for the first 3 quarters of 2007 in comparison to the same period of the previous year.
According to the World Travel and Tourism Council (WTTC), Malaysia's tourist industry is expected to contribute 4.4% to gross domestic product (GDP) in 2007, equating to US$7.6 billion. Forecasts for 2017 estimate the sector will account for 5.1% of total GDP, equivalent to US$19.3 billion. The World Tourism Organisation already puts the country in the top three of the fifty-three Commonwealth countries for tourism.
Tourism is fast becoming the second most important sector for Malaysian economy. Despite the scare of the September 11, 2001 attack on the United States and global economic downturn, over 12.7 million tourists visited Malaysia last year, generating over RM24 Billion revenue to the economy, an RM7 Billion jump compared to the figure of 2000. Prior to this, Malaysian tourism had enjoyed quite an impressive average growth of 9.26% between 1981 and 2000.
WWF Malaysia estimates that Malaysia gains RM655 million per year from ecotourism. This figure is rather small compared to the estimated RM24 Billion tourism brings into the economy (in 2001). As indicated in Table 2.4, the number of international arrivals to Malaysia showed a significant growth before reaching its first climax in 1990. Malaysia, in 1990 also recorded 54% increase in tourist arrivals from the previous year due to intense Visit Malaysia Year promotional blitz throughout the world.
After taking a dip in 1997 and 1998, Malaysian tourism sector recovers with a 53% increase in international tourist arrivals. If the projection by the Economic Intelligence Unit is still relevant, Malaysia can expect further annual growth of 8.5% until 2005. The figure mentioned above is very significant but is still regarded as low compared to those of other Asean nations such as Singapore, Indonesia and Thailand which enjoy greater success in term of overall tourism development. Statistics from Asean National Tourism Organization shows that Malaysia is number two in term of tourist arrivals after Thailand.
Table 2.4: Tourist arrivals in Malaysia 1981-2001
Year |
Tourist Arrivals |
% Growth |
1981 |
2533104 |
|
1982 |
2774698 |
9.537469 |
1983 |
2926550 |
5.47274 |
1984 |
2947314 |
0.709504 |
1985 |
3109106 |
5.489473 |
1986 |
3217462 |
3.485118 |
1987 |
3358983 |
4.398529 |
1988 |
3623636 |
7.878962 |
1989 |
4846320 |
33.74191 |
1990 |
7445908 |
53.64045 |
1991 |
5847213 |
-21.4708 |
1992 |
6016209 |
2.890197 |
1993 |
6503860 |
8.105619 |
1994 |
7197229 |
10.66088 |
1995 |
7468749 |
3.772563 |
1996 |
7138452 |
-4.42239 |
1997 |
6210821 |
-12.9948 |
1998 |
5200000 |
-16.2752 |
1999 |
7931149 |
52.5221 |
2000 |
10221582 |
28.87896 |
2001 |
12775073 |
24.98137 |
In the context of tourism receipts, the contribution from this sector has been very encouraging. For instance, the Malaysian economy registered RM17.40 billion in receipts from 10.22 million visitors in 2000 (just a year after implementing the three-pronged action). This constituted a 28.9 per cent increase between 1999 and 2000. With the exception of 2003 (SARS & Gulf War), this upward trend continued until today.
From the tourism receipts (tourism revenue) contribution, there exists a steady growth. For example, tourism receipts increased from RM17.40 billion in 2000 to RM24.20 billion a year later and then increased further to RM25.80 billion (2002), RM29.7 billion (2004) and RM32.00 billion in 2005. Last year, Malaysia received RM36.3 billion (USD10.4 billion) in tourism receipts.
Gross Domestic Product (GDP) Malaysia's services sector is the largest sector in the economy, contributing 52.4% to GDP and 48.6% to total employment in 2000. The government views the services sector as a catalyst for growth Last year, the national GDP was at RM1,098.3 billion or USD 313.8 billion (constant 1987 prices) with a growth of 5.9 % of which RM36.3 billion or USD 10.3 billion came from the tourism sector thus making it as the second economic contributor for 2006.
The Services Sector accounts about 54 % of the national GDP. Jobs / Employment Out of the total national workforce, 51% (2005) were in the services sector. This translates into almost 5.4 million out of the 10.73 million of the national workforce being employed either directly or indirectly in the tourism sector, be it in hotels, restaurants, travel agencies, airlines, transportation and others. By providing job opportunities, the tourism sector has played a role in keeping unemployment down to a low at 3.5% (2005/2006). Retail Sector With the introduction of the MEGA SALE Carnival in 1999, the economy received a boost from the retail sector.
The Malaysian tourism authority has undertaken efforts to position Malaysia as a leading international shopping destination. The Mega Sales Carnivals were held on a nationwide basis were successful in attracting more shoppers. Each Mega Sale has managed to attract additional half a million foreign visitors and day-trippers from the neighbouring countries, on top of the normal tourist arrivals. The effort facilitated the growth in tourism expenditure and consumer demand, which enhanced the growth of retail trade.
Competition among Asean nations sees continuous efforts to enhance and develop new tourism products. As we can see, it is rather obvious, that many countries, including Malaysia gauge the success of tourism sector on the number of arrivals and the estimated income generated from the tourism sector. Malaysia for instance, is switching its focus to high spending tourists, regardless who they are. ‘Quality’ and ‘Responsible’ tourists are rarely becomes the target. And very seldom, the success of tourism is measured by the success of a destination in reducing the impacts of tourism or conservation of its environment.
Tourism in Malaysia, especially after 1990, continues to be popular. Most of the developments though are still focused on traditional resorts etc. Despite the call for more local participation in the development and management of the tourist sites, I feel that tourism is being developed further and further away from the people. The wave of alternative tourism like eco, agro and nature tourism is spreading into the hearts of Malaysians.
The tourism industry has come along way since its inception in 1959 with only a Tourism Department back then. Today, after 50 years and half of a century later, the industry has moved with such swiftness to become the second income spinner to the national economy whilst experiencing tremendous growth from year to year.
2.6 Myanmar
Myanmar, also called Burma is known as the golden land not only for her golden pagodas but also for her fertile land and the wealth of its agriculture, natural resources and precious minerals and stones. Myanmar has a variety of natural beauty, waterfalls, magnificent lakes, enchanting cages, natural sandy beaches, the unique culture of different ethnic groups and the famous thousand year old glittering golden pagodas. Myanmar also has flora and fauna, resorts to rest and make excursion. Traditionally, Myanmar is known as a cultural destination because of its numerous historical monuments, Buddhist temples and pagodas. There are other attractions for visitors who are specialized in Archaeology, Buddhism, Entomology, Birds, and Plants.
Furthermore, Myanmar is the only country in Southeast Asia with snow-capped mountains and Mt. Khakaborazi is the highest mountain in Myanmar. For eco-tourists, there are many new natural parks throughout the country. Myanmar tourism industry can be categorized by three chronological segments- parliamentary democracy period of 1948-62, socialist period of 1962-88, and market- oriented period since 1988.
Tourism in Myanmar has been growing since economic policies were liberalized to create a market-oriented economy. The Myanmar Tourism Law of 1990 was revised in 1993 to promote systematic development and encourage private sector participation. However, according to Pacific Asia Travel Association, Myanmar’s tourism industry (with 273,448 tourist arrivals in 2005) still lags behind even Cambodia and Lao PDR in terms of tourist arrivals, where the later two countries attracted about 1,089,771 and 886,034 tourists in 2005, respectively.
Table 2.5: Tourist Arrivals by Region
Year |
North American |
Latin American |
West Europe |
East Europe |
Africa |
Middle East |
Asia |
Oceania |
Total |
1992 |
3177 (11.90) |
16 (0.10) |
13570 (51) |
1064 (4) |
- |
- |
7982 (30) |
798 (3) |
26607 |
1993 |
5336 (8.50) |
184 (0.30) |
14720 (23.50) |
7293 (6.90) |
- |
1227 (1.90) |
35560 (56.90) |
1227 (2) |
62547 |
1994 |
7869 (8.50) |
88 (0.10) |
26524 (28.90) |
1768 (2) |
- |
2652 (2.90) |
51190 (55.70) |
1768 (1.90) |
91859 |
1995 |
9516 (7) |
422 (0.30) |
38333 (28) |
368 (0.30) |
137 (0.10) |
2865 (2.10) |
82590 (60.30) |
5652 (1.90) |
136883 |
1996 |
10270 (5.70) |
503 (0.30) |
56183 (31.30) |
431 (0.20) |
139 (0.10) |
2497 (1.40) |
106052 (59.10) |
3519 (1.90) |
179594 |
1997 |
10991 (5.80) |
574 (0.30) |
49400 (26.20) |
506 (0.30) |
321 (0.20) |
1972 (1) |
120864 (64.10) |
4064 (2.10) |
188692 |
1998 |
13041 (6.50) |
647 (0.30) |
52036 (26) |
754 (0.40) |
354 (0.20) |
1869 (0.90) |
126441 (63.10) |
5210 (2.60) |
200352 |
1999 |
12330 (6.30) |
538 (0.30) |
51230 (25.70) |
935 (0.40) |
298 (0.10) |
1358 (0.70) |
128542 (64.50) |
4146 (2.10) |
199377 |
2000 |
14691 (7.10) |
621 (0.30) |
53739 (25.90) |
1166 (0.50) |
304 (0.10) |
1263 (0.60) |
131165 (63.20) |
4716 (2.30) |
207665 |
2001 |
15864 (7.70) |
807 (0.40) |
55948 (27.30) |
1542 (0.70) |
312 (0.10) |
1416 (0.80) |
123904 (60.50) |
5069 (2.50) |
204862 |
2002 |
16953 (7.80) |
871 (0.40) |
63400 (29.20) |
2077 (0.90) |
430 (0.20) |
2022 (1) |
125547 (57.80) |
5912 (2.70) |
217212 |
2003 |
15775 (7.70) |
799 (0.40) |
58161 (28.30) |
2203 (1) |
390 (0.20) |
1148 (0.60) |
121392 (59) |
5742 (2.80) |
205610 |
2004 |
19260 (7.90) |
1191 (0.50) |
62901 (26) |
2510 (1) |
395 (0.20) |
1831 (0.70) |
146774 (60.70) |
7076 (2.90) |
241938 |
2005 |
19509 (8.40) |
1192 (0.51) |
64531 (27.79) |
3402 (1.46) |
488 (0.21) |
1920 (0.83) |
133894 (57.66) |
7282 (3.14) |
232218 |
According to Table 2.5, visitors from West European countries accounted for more than half of the total in 1992 but reduced to nearly 28% in 2005, while visitors from Asia increased from 30% to nearly 60% of total visitor during the same period. There is no doubt that Asia is a leading market for Myanmar’s tourism industry while Western Europe, North America and the Oceania are the potential markets. It can also be seen that among Europeans, French and German are the majority, while the Japanese, Taiwanese and Thai people form the majority among Asian visitors. The amenities of tourism industry in Myanmar are based largely upon border tourism rather than air gateways and it has increased gradually.
In late 1993, the number of Foreign Independent Travellers (FIT) was larger than that of Package Tour and Business Travellers, which means that they just come to Myanmar only for the purpose of pleasure, holidays and recreation. Because of the lack of TSA in accounting system, tourism income in Myanmar has not increased much. In that revenue, some incomes such as visa fees, entrance fees, handicrafts, and gems did not seem to be included. Tourism income in terms of foreign exchange is received mainly from the Yangon Gateways and the expenditure (especially in accommodation) spent by visitors. Therefore, the income of tourism is not complete.
According to Table 2.6, foreign exchange earnings, which were only US$ 19.86 million in 1992, increased to US$ 49.3 million in 2002. Except for the two years 1995 and 1999, foreign exchange earned from tourism business has increased every year as compared to its previous year. Expenditure correlates with length of stay, variety of tourism products including shopping and souvenirs and its comparative price.
Adequate tourist attractions and other tourism facilities can encourage international tourists in Myanmar to stay longer. In Table 2.7, we can see that actually, 7 days of average length of stay in Myanmar is not much less compared to 8 days of average length of stay in 2002 in Thailand, which is one of the world’s most favorite tourist destinations. In addition, the amount spent on average by each tourist ($90s) compares favorably with ($100) for Thailand for 8 days stays.
In Myanmar, tourism contributes about 3 to 4 percent of total export earnings as compared to over 11 percent for Thailand and less than one percent of GDP as shown in Table 2.8.
Table 2.6: Tourism Income in Myanmar
Year |
Receipts from Yangon Gateway |
Receipts from Expenditure by Visitors |
|
1992 |
6.79 |
12.9 |
0.03 |
0.13 |
0.01 |
19.86 |
- |
1993 |
10.88 |
9.62 |
0.39 |
0.48 |
0.02 |
21.39 |
7.7 |
1994 |
26.7 |
6.5 |
0.94 |
0.32 |
0.02 |
34.48 |
61.2 |
1995 |
27.23 |
2.86 |
1.95 |
* |
0.01 |
32.05 |
-7 |
1996 |
30.33 |
2.33 |
0.15 |
0.44 |
0.19 |
33.44 |
2.9 |
1998 |
32.97 |
1.12 |
0.21 |
0.33 |
0.54 |
35.17 |
3.7 |
1999 |
26.4 |
5.53 |
0.96 |
0.24 |
0.38 |
33.51 |
-4.7 |
2000 |
20.33 |
20.3 |
1.07 |
0.31 |
0.35 |
42.36 |
26.4 |
2001 |
18.6 |
27.8 |
1 |
0.47 |
0.29 |
48.16 |
13.7 |
2002 |
22.24 |
25.35 |
0.85 |
0.53 |
0.33 |
49.3 |
2.4 |
Source: Myanmar Tourism Statistics, 2005.
Table 2.7: Tourism Income, Expenditure and Length of Stay by Year
Year |
2001 |
2002 |
2003 |
2004 |
2005 |
Total Earnings (US$ million) |
90 |
99 |
116 |
136 |
153 |
Average Expenditure Per Person Per Day (US$) |
70 |
80 |
80 |
94 |
94 |
Average Length of Stay |
6.3 |
6.5 |
6.5 |
7.0 |
7.0 |
Source: Myanmar Tourism Statistics, 2005.
Table 2.8: Total Earnings of Tourism as percent of GDP and Exports in Myanmar (2001 to 2004) US million)
Year |
2001 |
2002 |
2003 |
2004 |
Total Earnings of Tourism % of GDP |
1.07 |
0.76 |
0.60 |
0.52 |
Receipts % of Total Exports |
3.69 |
3.23 |
4.92 |
4.64 |
Source: Ministry of Commerce, Nay Pyi Daw, Myanmar (at official rate of exchange) and Myanmar Tourism Statistics, 2005 and GDP data is from ASEAN Statistical Year Book, 2005.
2.7 Philippines
The Philippines, is an archipelagic country which comprises 7,107 islands with a total land area of approximately 300,000 square kilometers. The islands are commonly divided into three island groups: Luzon, Visayas, and Mindanao. The busy port of Manila, on Luzon, is the national capital and second largest city after its suburb Quezon City. The country has over a hundred ethnic groups and a mixture of races, beliefs and customs borne from centuries of foreign influences have molded a unique Filipino culture.
Considered as the third largest English-speaking country in the world, the Philippines has world-class facilities and services such as excellent accommodations, fine restaurants, modern shopping centers and communication services, efficient congress and exhibition organizers, and reliable tour operators.
The Philippines’ performance in tourism in recent years has been erratic. The country experienced steady growth in international arrivals for most of the 1990s hitting a high of 2.2 million visitors in 1997. The trend was reversed in the succeeding years, posting an average reduction of 5.1% from 1998 to 2001. In 2004, international arrivals grew by 20% with nearly 2.3 million arrivals. Recovery of the industry continued in 2005 with the country having 2.6 million arrivals (Figure 4). The jump in 2004 can primarily be viewed as a reaction to the generally depressed figures of 2003 due to the Iraq war and SARS. The continuing growth reflects the generally strong world economy coupled with the more focused and aggressive marketing campaign by the government.
Figure 4: Philippines International Tourist Arrivals
Income from tourism receipts reflects the pattern of tourist arrivals. In the Philippines, tourism receipts grew at an average of nearly 15% from 1991 to 1997. This is attributed to the increase in receipts from USD 1.8 billion in 1991 to as high as USD 2.8 billion in 1997. Tourism receipts then went to a period of decline, before picking up again to reach nearly USD 2 billion in 2004 (Figure 5).
Figure 5: Philippines International Tourism Receipts
Several studies show that tourism has an overall positive economic impact. A few of these studies have used Computational General Equilibrium (CGE) modeling to stimulate the impact of tourism in the country and have found tourism to have positive impacts on the economy particularly in terms of increased real gross domestic product (GDP), employment, welfare and exports, among others.
Philippines’ tourism industry is expected to contribute 3.9% to GDP in 2008 (PHP 285.2 billion or USD 6.8 billion), rising in nominal terms to PHP 646.6 billion or USD 10.9 billion (3.7% of total) by 2018.
Figure 6: Philippines GDP
Figure 7: Philippines Travel & Tourism GDP
Source: WTTC: Philippines – The 2008 Travel & Tourism Economic Research
The tourism industry, made up of various sectors – e.g. lodging, transportation, food and beverage, recreation and services, travel trade, et al, is basically a very labor-intensive industry. In 2008, Philippines’ 1,377,000 tourism industry jobs account for 4% of total employment and are forecast to total 1,564,000 jobs or 3.7% of the total by 2018.
Figure 8: Philippines Total Employment
Figure 9: Philippines Travel & Tourism Employment
Visitor exports, the expenditures by international visitors on goods and services within resident economy, play an important development role for the resident economy. Tourism industry in Philippines is expected to generate 9.9% of total exports (PHP 262.3 billion or USD 6.2 billion) in 2008, growing (nominal terms) to PHP 695.7 billion or USD 11.8 billion (7.0% of total) in 2018.
Figure 10: Philippines Total Export
Figure 11: Philippines Travel & Tourism Exports
Source: WTTC: Philippines – The 2008 Travel & Tourism Economic Research
Philippines’ tourism which is private sector-led has been heavily politicized through the years. Many secretaries of the Department of Tourism (DOT) had brilliant programs that were never sustained. Some policies of the government are not really tourist-friendly. The national budget does not have tourism among its priorities. Many tourist facilities in the country need upgrading. The presence of multinational companies especially in the hotel, airline and travel trade sectors keep the industry afloat.
2.8 Singapore
The Republic of Singapore sits only 137km north of the Equator, separated from Peninsular Malaysia by the Strait of Johor and from Indonesia by the Strait of Singapore. Singapore is made up of the main island – which is 42km long by 23km wide – and 63 other smaller islands. Singapore has a total area of approximately 693 sq km.
The total population of Singapore is 4.6 million (2007 data). This figure includes approximately 1 million foreigners. The three major ethnic groups within the local community are Chinese (77 per cent), Malay (14 per cent), and Indians (8 per cent). Singapore is a popular travel destination, making tourism one of its largest industries. In 2005, a total of 9.05 million tourists visited Singapore. Much of its attraction can be attributed to its cultural diversity that reflects almost 200 years of colonial history with immigrant cultures originating from Chinese, Malay, Indian, Eurasian and Arab ethnicities. The Orchard Road district, which is dominated by multi-story shopping centers and hotels, is the center of tourism in Singapore.
Today, tiny Singapore ranks second in Asia (behind unified Hong Kong and China) and eleventh in the world in terms of tourism receipts. Based on media reports and official government proclamations, it is estimated that today tourism contributes about US$10 billion a year to Singapore's economy, accounting for approximately 10 percent of Singapore's gross domestic product, and employing more than 200,000 workers (about 14 percent of the work force). Singapore's tourism-output multiplier is 1.97, significantly higher than the country's overall output multiplier of 1.38, indicating the relative importance of tourism within the local economy. Tourism in Singapore also has a high employment multiplier of 25, meaning that for every additional S$1 million spent by tourists, it creates employment for an additional 25 workers.
Tourism had been an important sector of Singapore's economy for more than a decade, averaging 16 percent of total foreign exchange earnings and 6 percent of GDP between 1980 and 1985. Tourist arrivals had dropped sharply in 1983, however, the first decline in over twenty years. The decrease resulted both from the regional and world economic downturn at that time and from travel restrictions instituted by neighboring countries to preserve their own foreign exchange. Observers noted also that Singapore was losing its "oriental mystique and charm." In its effort to build a modern city, it had torn down old buildings and curtailed traditional street activities, aspects considered by tourists to be part of Singapore's attraction.
In 1984 the government established a Tourism Task Force to recommend ways to attract more visitors, and the following year the budget of the Singapore Tourist Promotion Board was increased by 60 percent. Steps were taken to preserve areas of special architectural, historical, or cultural interest. Sentosa Island, off the southern coast, was developed as a resort and recreation center, complete with museums, parks, golf courses, lagoons, beaches, trails, and gardens, all connected by monorail.
Singapore also began billing itself as the "hub of Southeast Asia" and marketing sidetrips to destinations in neighboring countries. As with other economic activities, tourism was viewed as a high value-added industry. Although increasing the absolute number of visitor arrivals was the main target, a further aim was to attract the high-spending, business visitors attending conventions and trade exhibitions, which Singapore hosted in large numbers.
According to Figure 12, tourist arrivals recovered quickly from the 1983 downturn, reaching 3 million in 1985. In 1987 tourist arrivals reached 3.7 million, a 15 percent increase over the previous year. In 1988 arrivals rose another 14 percent to nearly 4.2 million. Singapore's top tourist-generating markets in 1987 were ASEAN (29 percent), Japan (15 percent), Australia (9 percent), India (7 percent), the United States (6 percent), and Britain (5 percent). Although a building boom had caused a glut of hotel rooms in the mid-1980s, by early 1989 occupancy was running at about 80 percent.
Figure 12: Tourist Arrivals in Singapore from 1985-2005
Lately, though, there have been concerns regarding the rapid growth of Singapore's tourism industry, Singapore averages 75 visitors a day per square kilometer of land, making it much more densely visited than other popular destinations such as the Caribbean Islands (58 daily visitors per square kilometer), Hong Kong (51), France (2), Italy (.8), and Spain (.4).
In Singapore, tourism was welcomed as a means to create the much-needed employment in a newly-independent nation with pressing needs to broaden and develop the fledgling economy and reconfigure its urban and industrial infrastructure. The formation of the STB was a conscious policy effort by the government to recognize the significance of the industry to Singapore’s economic and planning agenda.
The Singapore Tourism Board (STB) was established in 1964 to promote tourism and thereby develop the tourism sector as the key driver of economic development. The STB has helped the country to turn tourism as a cash cow of foreign money. It is estimated that more than 7.5 million tourists arrive in the county annually spending over S$12 bn. On January 11, 2005, the then Minister for Trade and Industry, Lim Hng Kiang unveiled STB’s bold targets to ensure that tourism remains a key economic pillar by doubling visitor arrivals to 17 million in order to triple annual tourist receipts to S$30 billion and create an additional 100,000 jobs in the services sector by 2015. These targets will drive future initiatives and catapult growth in the tourism industry over the next 10 years, catalyzed by S$2 billion Tourism Development Fund (TDF).
Tourism at present contributes about 3-4% of Singapore’s GDP and the government plans to raise this to 4-5% in the near future. To boost tourism industry, Singapore should try to brand itself as a tourism hub with advertisements and other means of publicity besides organizing various events. Tourism development, in addition to boosting the tourism figure, has to contribute to the development of economy to meet the challenge of globalization and nation-building.
Tourism will help develop leisure, food and beverage and retail industries. Singapore has the status of a major aviation hub of South-East Asia. Tourism directly affects the airline industry, which in turn affects the rest of the economy. Various airlines are planning to start conducted tours to Singapore in association with the STB. A decline in the tourist arrival thus directly or indirectly affects the economy. The government is trying its best to achieve its 2015 target by which time, the tourism industry will top the list of contributing sectors in the GDP of the country.
2.9 Thailand
Tourism has become Thailand's leading source of foreign exchange, and thus plays an unquestionably important role in the Thai economy. 5.3 million tourists visited the country in 1990, a figure that is expected to double in the next four years. In 1989 the industry generated 91 million baht or US$3.64 billion, and it is believed that figure will reach 800 billion baht or US$32 billion by the year 2000.
Tourism in Thailand is seen as being concentrated in small, specific areas such as the beaches of the South and the more mountainous region of the North. This has led to very intense exploitation of the resources within these regions. Development within these regions was neither carefully planned nor monitored, so that within ten years the beautiful beaches and picturesque villages of the islands of Koh Samui and Phuket have been overrun by concrete bungalows and hotels, video and 'girlie' bars, shooting ranges and golf courses. The influx of what has been termed 'mass' tourism has caused the more discerning tourist to look for more pristine, less developed spots, leading to the spread of the Koh Samui syndrome to other islands.
Koh Phi Phi, a national park, has within a very short time begun to follow the same path as Samui, regardless of its designation as a protected area. The island of Phuket has long been an upscale version of Koh Samui, for tourists with a larger budget and for wealthy Thais on vacation. The island is known for its fancy resorts and renowned yacht club and marina. Koh Samui offers an example of the negative effects that have been and will be visited upon the southern islands of Thailand due to tourism. Koh Samui is 250 square kilometers, with an estimated 1.1 million tourists visiting every year by the end of the century. The tourism boom to this island began at the end of the 1980s, and was aided by the establishment of a daily ferry service, the construction of a small airport with regular flights from Bangkok, extension of the road system, and the continued construction of bungalows and hotels which now number over 220.
Pattaya is a perfect example of how unmanaged, uncontrolled tourism destroys the environment and natural resources. Originally a small fishing village, Pattaya turned into an internationally known seaside resort in the short span of twenty years. At present Pattaya is second only to Bangkok in the number of tourists it receives. One in every three tourists visiting Thailand travels to Pattaya. The city's earnings from tourism in 1991 were 15,000 million baht, or 15 percent of the national tourist income.
The volume of tourists coming to Thailand may not compare to the 27 to 50 million people travelling to France, Italy or Spain every year. Yet, when compared to other high-volume tourist destinations around the world, the growth and development of the tourism industry in Thailand is impressive. Egypt receives approximately 2.6 million tourists per year, while India annually draws in approximately 1.8 million tourists. By comparison, Thailand now accommodates approximately 5 million tourists per year, one of the highest figures for Southeast Asia. The number of tourists coming to Thailand has steadily, and in some years, spectacularly grown—from 1.2 million in 1977 to 5.7 million in 1993. The income accrued from tourism contributes substantially to the Thai economy, now accounting for 5.4 percent of the country's GDP. This rate is higher than any other ASEAN country, except Singapore, whose tourism revenue accounts for 11.4 percent of its GDP.
Table 2.9 Numbers of tourist arrival
Year |
|
1998 |
7.76 |
+7.53 |
8.40 |
1999 |
8.58 |
+10.50 |
7.96 |
2000 |
9.51 |
+10.82 |
7.77 |
2001 |
10.06 |
+5.82 |
7.93 |
2002 |
10.80 |
+7.33 |
7.98 |
2003 |
10.00 |
-7.36 |
8.19 |
2004 |
11.65 |
+16.46 |
8.13 |
2005 |
11.52 |
-1.51 |
8.20 |
2006 |
13.82 |
+20.01 |
8.62 |
2007 |
14.46 |
+4.65 |
9.19/P |
According to Table 2.9, the number of tourist arrival has been on the increasing scale from 1998 – 2007 except in the period from 2002 -2003. There is a decreased of 7.36%. The Thai Government's Sixth National Economic and Social Development Plan (1987-1991) gave particular focus and attention to the development of tourism; the result was a substantial boost to tourism revenue—from 50,000 million baht in 1987 to 123,135 million baht in 1992. This was partially caused by the government's promotion of "Visit Thailand Year" in 1987, a marketing exercise which increased national tourism income by 34 percent in 1987 and by 58 percent in 1988. By 1991, income from tourism was equivalent to two-thirds of the country's agricultural export earnings, and was nearly the same as the country's income from textile and garment exports. The number of tourists coming to Thailand remained constant in 1991, despite the Persian Gulf Crisis and a military coup in Thailand. Although the industry initially suffered from the political turmoil in May, 1992, it soon recovered.
The tourism industry came to the fore when Thailand was changing from a resource-based to a labor-based economy, an adjustment which was well suited for tourism development. This was coupled with the fact that the training and material input for tourist services were not as complex or extensive as those required for other kinds of industries. It is important to note that the increase in tourism revenue since 1981 has mostly derived from greater numbers of tourists coming to Thailand, and tourists extending their stay, rather than from higher daily expenses.
Tourism continues to be a particular success story for Thailand. Following the economic collapse and the flotation of the Baht in July 1997, the government launched its 'Amazing Thailand' campaign, which saw a dramatic increase in the number of visitors, many of whom were keen to take advantage of the favorable exchange rate. However, SARS and travel advisories meant that tourist arrivals in 2003 were down to 9.7 million, over 10% lower than 2002. In 2004, visitor arrivals have increased although they have not yet reached 2002 levels.
In late December 2004, a major tsunami took 4,500 lives in Thailand and caused massive destruction of property in the southern provinces of Krabi, Phangnga, and Phuket. Potential tourists would have lost a sense of security in visiting these countries, thus leading to a loss of tourism revenue. People would also refrain from visiting the countries for fear of being affected by similar incidences due to this lack of protection. Furthermore, few people would want to visit a site ravaged by the forces of nature, where countless died, for the time being, either out of respect for the dead or due to its pure creepiness itself. The governments of the affected countries would hence lose massive amounts of money which could have been otherwise used for improving the general standard of living of the people.
The Tourism Authority of Thailand (TAT) was continuing its efforts to make Thailand recognized globally as the Tourism Capital of Asia, even though it languished well behind China, which was in 5th place in terms of visitor arrivals. According to the TAT emphasis was going to be placed on quality services in tourism in its marketing drive of 2006 and in order to achieve this goal the TAT set a target to increase the number of international tourists to 15.12 million in 2006, which would earn the country an estimated 533 billion baht. The TAT had predicted that tourist arrivals would reach 12 million, generating 450 billion baht, a reasonable estimate given that Thailand attracted 11.6 million international visitors in the previous year, bringing in 380 billion baht.
As is the case in Indonesia the domestic market is of growing importance and in 2006 Thais were expected to make 79 million domestic visits, yielding 380 billion baht in local tourism revenue. In 2007 it was estimated that Thai would make slightly fewer trips, though it is not clear why, with numbers falling by 3 million and the income by 40 billion baht. To underscore their commitment to boosting tourism the TAT claimed that it would step up its promotional campaigns to explore niche markets, especially among high spending groups, and to tap emerging markets such as Russia, Ukraine and India, with special attention being paid to the Middle East and Africa.
As such a major source of revenue, the tourism industry is very important to Thailand. The continued degradation of the environment, however, will in the long run cause the tourists to choose other destinations that are more pristine, depriving Thailand of valued tourist dollars. Thus, to promote tourism into the future, greater efforts must be made to implement environmentally sustainable tourist policies and programs.
2.10 Vietnam
Vietnam covers a 2,000 kilometer long narrow strip along the South China Sea. This country includes riverine detals, cool upland mountains, untouched coastal stretches, thriving cities and the relaxed capital Hanoi. Hanoi is more reserved than Ho Chi Minh City and features preserved French-style architecture, recreational lakes, stately monuments, galleries and busy street life. Halong Bay, as World Natural Heritage, to the north is a perfect holiday destination with inspirational limestone crags and islands.
Cholon, known as Saigon's Chinatown, is nearby and there are interesting pagodas, shops and streets. In and near the Mekong Delta there are several tourist attractions including the Cu Chi Tunnels, Cao Dai Cathedral and untouched farming villages like Long Xuyen. The city has museums and grand public buildings. The markets are good places for shopping and there is a lively entertainment and dining scene in the city.
According to the Pacific Asia Travel Association (PATA), tourism arrivals into the region will continue to grow from 275 million in 2007 to 350 million in 2010, with China accounting for over half of all international arrivals. While domestic tourism will dominate in China, India and Japan, intra-regional travel is likely to be a force across Asia over the next three years, accounting for 86% of arrivals. Malaysia, Macau, Hong Kong and Vietnam are all forecast to record strong growth.
Vietnam attracted 4.2 million foreign visitors at last year (2007) and it expects to draw in five million this year. The figure is expected to go up to six million in 2010. Tourism revenue is estimated to reach $6-$7 billion in 2010. “Tourists have long been familiar with Thailand and Malaysia and they want to look for new destination like Vietnam,” said Michael Bischof, vice president of Swiss-belhotel International.
The number of foreign arrivals in Ho Chi Minh City reached more than 2.7 million in 2007, including 2.1 million coming by air, up 14 percent from the 2006 figure. According to the Ho Chi Minh City Department of Tourism, last year’s total revenue from tourism activities hit VND24,000 billion, an increase of 45 percent compared to 2006.
Visitors from Russia mainly came to Ho Chi Minh City for business conferences or seminars. Despite not being listed among the top ten tourism markets, the Russian market continues to grow at a high rate of 75 percent. Economic experts say that despite the growing number of tourists to Ho Chi Minh City, their length of stay remains short, only one and a half day with a spending level of US$100 per person. The figure is lower than in other regional countries such as Thailand and Indonesia. The city aims to receive approximately 3 million foreign tourists in 2008, up 11 percent from the 2007 level with total revenue of VND29,000 billion.
Table 2.10: Number of Tourist Arrivals
Year |
Number of Visitors |
1999 |
1,781,000 |
2000 |
2,140,000 |
2001 |
2,330,000 |
2002 |
2,627,000 |
The Table 2.10 shows that the tourism has been growing rapidly in Vietnam in recent years. It showed the number of visitors to Vietnam (rounded off to the nearest thousand) per year. In the course of only three years, from 1999 to 2002, tourism has increased by almost 1 million visitors.
The Table 2.11 above shows the number of tourists and population for the year 2001 of some major tourist destination of every country. Tourism in Vietnam still less well developed than tourism in many other countries. These figures also suggest that the possibilities of tourism increasing rapidly in Vietnam are considerable.
Table 2.11: International Tourist Arrival
Country |
Number of Visitors (million) |
Population (million) |
France |
75.2 |
58 |
Spain |
50.1 |
40 |
United States |
44.9 |
270 |
Italy |
39.0 |
57 |
China |
33.2 |
1280 |
United Kingdom |
22.8 |
58 |
Mexico |
19.8 |
100 |
Austria |
18.2 |
8 |
Thailand |
10.1 |
61 |
Vietnam |
2.3 |
77 |
Vietnam has enjoyed strong economic growth since the mid-1990s and rising international tourist arrivals. Their real GDP growth averaged 7.5% per year during 2000-2006. This is among the best economic performances in Asia. The total number of international tourist arrivals increased from 3.6million in 2000 to 3.6 million in 2006. The incoming tourism receipts increased from US$1.2 billion in 2000 to US$2.4 billion (3.9% of total GDP) in 2006. The tourism sector employs around 250,000 people directly whilst an additional 500,000 people work in tourism-related businesses and industries. Vietnam's major markets include China, Japan, South Korea and Southeast Asian countries. The government has waived visa requirements for visitors from these key markets as well as a number of European countries.
The tourism sector is striving to receive 6 million foreign visitors by 2010 to earn US$4.0 billion in total incoming tourism receipts. It also aims to attract US$5.5 billion in foreign direct investment for the industry's development during this period. Also by 2010, the total number of workers in the tourism sector is expected to reach 1.4 million. Vietnam's travel and tourism sector is projected to have the world's sixth-highest growth rate between 2007 and 2016 (based on a projected growth of 7.5% per year).
3.0 Conclusions
Tourism is now believed to provide a force to the economic progress of developing nations and its importance is gaining widespread recognition. For many reasons, the non-traditional exports of developing countries have too often failed to prove effective in economic development and so tourism is increasingly seen as a better choice to help the country development.
ASEAN countries have been eagerly promoting tourism though their main economic growth has been a consequence of an export-oriented economy but the tourism industry has also been deemed a major contributing factor. The rapid growth of tourism led to a growth of household incomes and government revenues directly and indirectly by means of multiplier effects, improving balance of payments and provoking tourism-promoted government policies. As a result, the development of tourism has usually been considered a positive contribution to economic growth.
Tourism, like any other force for economic development, potentially has both positive and negative influences on communities and their residents. Generally, the positive contributions that tourism can make include the provision of hard currency, which may help to ease a gap in foreign exchange and finance imports of capital goods, increases in personal income, higher tax revenues and additional employment opportunities. Beyond this, tourism expansion also affects the demand for certain goods and services (Syriopoulos, 1995), including transportation facilities, such as roads and airports (Eugenio-Martín & Morales, 2004), much of which is specific to tourism as opposed to a more general use. Apart from this, tourism expenditure by foreign tourists can enhance domestic tourism construction as well as bring about an accumulation of physical capital, and the needs for skilled labor in the tourism sectors will cause human capital investment to increase. Thus, the tourism sector may contribute significantly to economic growth.
Therefore, while tourism has been growing at an impressive rate in the ASEAN countries, and while it plays an increasingly pivotal role in most of these economies, its deleterious social, congestive, and pollution effects must be controlled. The newly emerging destinations of Vietnam and Brunei can also benefit from the experience of the other ASEAN countries in striving for rapid but sustainable growth in the tourism industry (Var et al., 1998).
4.0 References
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