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UNITED NATIONS CAPITAL DEVELOPMENT FUND Microfinance |
Issue 4 / July - August 2004 |
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News | Tourism, Poverty Alleviation and Microcredit: A First Glance
By Eugenio Yunis, Head of Department and Philippe Lemaistre, Programme Officer, Sustainable Development of Tourism Tourism has undeniably become one of the major economic activities worldwide. According to data collected by WTO, the number of international tourist arrivals have exceeded 700 million every year since 2000. These international movements generate annual receipts approaching US$ 500 billion, plus an estimated US$ 100 billion in international transport fare receipts. WTO forecasting studies, regularly updated to take into account changing factors and crisis (like terrorist attacks and epidemics), indicate that international tourist arrivals are expected to reach 1 billion by the year 2010, and just over 1.5 billion by the year 2020. These data do not take into account domestic tourist movements in each country, which often exceed the number of international tourist arrivals. Tourism and poverty alleviation Tourism can be harnessed as a significant force for the alleviation of poverty, as well as for the protection of the environment and traditional cultures, giving economic value to natural and cultural heritage, creating employment and generating foreign exchange earnings. WTO is already taking a number of strategic steps to improve the contribution of tourism to poverty alleviation, including engagement in world trade negotiations, promoting the concept of sustainable tourism to all policy makers and establishing a special initiative on poverty, called Sustainable Tourism – Eliminating Poverty (ST-EP), in partnership with others. There is much evidence to suggest that tourism is already important and keeps growing in many of the countries that suffer from poverty. In 2001, for example, international tourism receipts for developing countries amounted to US$ 142,306 million while between 1990 and 2000, the export value of tourism grew by 154% in these countries. Besides, tourism is composed of a wide network of micro, small and medium sized enterprises (SMEs) and can create further opportunities for many small entrepreneurs in an industry in which start-up costs and barriers to entry are generally low or can easily be lowered. Indeed, in the hotel sector for example, it is estimated that 80% of the bed capacity worldwide correspond to small and independent, non-chain establishments, including many family-owned enterprises, which are more labour intensive than big resorts. Similarly, small entrepreneurs provide many other tourism services, especially in developing countries. Tourism is also a more diverse industry than many others: it has the potential to support other economic activities, both through providing flexible, part time jobs that can complement other livelihood options, and by creating income throughout a complex supply chain of goods and services: furniture and furnishings, handicrafts, food items, agricultural products, guiding services, etc. Most of these are also produced and provided by small entrepreneurs. Also, leaving aside economics, it can bring non-material benefits such as pride in local culture and a valorisation of the surrounding natural environment in the eyes of local communities. Microcredit and tourism Nevertheless, it is often difficult for small entrepreneurs to borrow the relatively small amount of money needed to start their activity and to sustain it with the necessary operational funding. In developing countries in particular, there is usually a lack of opportunities for SMEs to borrow from the banking system, especially for young people and women. This is particularly visible in rural areas where most of the poor live and where there are very few development options other than tourism. The development of a microcredit system for tourism SMEs both for venture capital and operating costs, could be one of the missing links to allow tourism to bring more prosperity in many regions worldwide, principally in the poorest. The speed with which tourism SMEs can access loans is also essential in an activity often characterised by seasonality. For instance, if a tourism entrepreneur is not financially ready for the tourist season, he will probably suffer the loss of most of his year’s receipts. On the occasion of the International
Year of Microcredit, awareness campaigns addressed to different stakeholders,
in support of actions linking tourism and microcredit, should be put in place
to allow tourism to fully develop its potential as an economic driving force
in favor of the poor. These campaigns should intend to:
In the framework of the
Year of Microcredit, the World Tourism Organization will reinforce its efforts
and further pursue its actions to reduce poverty through tourism. At the same
time, WTO is encouraging the National Tourism Administrations of its Member
States to establish links with the Year National Committees in each country,
so as to ensure that the different national and international initiatives address
the issues of sustainable development of tourism and poverty alleviation in
a synergistic way. For more information on the World Tourism Organization, visit:
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