Columns - The Sunday Times Economic Analysis

Tourism on the move: Don’t kill geese that lay golden eggs

By the Economist

The revival of the tourist industry is one of the significant economic advantages of peace. Tourist arrivals have increased sharply up to now this year and there is every expectation that this trend would continue. What must be prevented are government measures that could hamper tourism. One such measure that was envisaged and fortunately dropped, and hopefully never to be implemented was the policy of requiring all incoming tourists to obtain a visa before their arrival from Sri Lankan embassies in their countries. This policy would have killed tourism that was once again reviving and contributing much to the country’s foreign exchange earnings. Sober second thoughts have prevailed.

The envisaged policy change was to be a quid pro quo of foreign countries imposing the need for Sri Lankans to obtain visas. This quid pro quo policy is no doubt politically correct. Several countries follow this policy. Among them are Brazil and India. However what is politically correct is not economically advantageous. In fact had the government pursued this policy, tourist arrivals would no doubt have dropped drastically. An economy such as ours that is weak and seeking tourist earnings cannot take such measures, however correct they may be from the point of view of national self-esteem and dignity. At present most foreigners could obtain their visas on arrival, for a period of one month.

Our foreign policies must keep an eye on economic fallouts. We have already lost the GSP plus status due to insensitiveness to economic issues and a lack of tact and negotiation. We need diplomacy in international relations so as to not lose economic advantages. Let us not kill geese that lay golden eggs. International diplomacy must keep an eye on economic advantages to the country.

It is well known that obtaining visas from several embassies is a tedious process, almost amounting to harassment. Many bona fide Sri Lankan travellers have refrained from travelling to countries they have been to several times before, owing to this difficulty. However the countries that make it difficult for Sri Lankans to travel to their countries are not dependent on Sri Lankan tourists and are also protecting their countries from unwanted potential immigrants. Sri Lanka is also different as a tourist destination. It is one of the many countries that tourists could choose. It is not an obligatory destination. India, China, Egypt are quite different as there are compelling reasons for people to see these countries. Economic necessity and realism should guide our policies.

Tourist earnings last year amounted to US $ 326.3 million. Given the current increasing trend in tourist traffic, it is most likely that this year’s earnings would be more than US$ 700 million making it one of the important contributors to the country’s balance of payments. The earnings from tourism that began to rise in the latter part of the year, after the end of the war, have continued. Tourist arrivals increased by 48.7 per cent during the first seven months of the year from January-to July 2010, with a total of 341,991 arrivals to the country in comparison to 229,952 arrivals during the same period last year (2009). The increase in tourist arrivals have been mainly from India and other South Asian countries, East Asia, Western Europe, North America, Australasia, West Asia, and Eastern Europe.The reasons for the inability of tourism to gain momentum in the last two decades have been the security situation.

No one wants to come to a tourist destination where lives are in danger. Other countries have suffered the same fate, notably Egypt and Indonesia. As long as there was an overhang of terrorism and danger to life, the capacity to develop tourism was limited. The security situation has been the biggest enemy of tourist development in the country. It all began with the July 1983 ethnic riots that sent the rising tourist industry into a downturn. There have been recoveries and setbacks since then, most of which have been related to changes in security conditions. The best years have seen around a half million tourists. This is hardly a figure to boast about.

The fortunes of the tourist industry have been fluctuating. Consequently the already built infrastructure of the hospitality trade has been neglected in recent years. In 2000 the number of tourist arrivals reached a little over 400,000. Then it dipped in the succeeding year to about 337,000 and increased somewhat to around 393,000 in 2002. The up-trend continued into the next two years. In 2003 it rose to 500,542. The highest ever tourist arrivals were reached in 2004, when it increased by a further 13 per cent to reach over 566,202. The increases in tourist arrivals in these years were due to the improved security situation after the Cease Fire Agreement. In 2005 statistics of tourist arrivals was much improved at over 500,000, but the earnings from tourism declined by about 20 per cent due to many arrivals classified as being related to Tsunami related work.

Tourism has a strong potential for earning foreign exchange and generating productive employment opportunities. The key precondition is a peaceful and safe environment. That has been largely achieved. Nevertheless to view the potential for tourism purely from the perspective of the security situation is inadequate. There are other reasons too why the tourist industry has not taken off to the promise it holds. We have not got many things that matter, right.

The roads leading to many hotel destinations resemble jungle paths; the garbage all over the roads is disgusting even to Sri Lankans. Then there is the related fear of contacting dengue. The recent incidents of Indian cricketers suffering from Dengue were not a good advertisement. There are dangers of fevers and other communicable diseases. Toilets in some tourist destinations are disgusting. All these deficiencies add up to making tourism not as attractive as people tend to make it out to be. When will they be corrected for the good of those who live in the Island as well as those who visit? When we improve the environment we can expect the full potential of our natural and historic attractions. Let’s improve the natural environment we are blessed with rather than degrade it, if we are serious about increasing the much-needed foreign exchange from tourism.

The target of a million tourists in a few years is a realistic one. However it is vital that we do not create fresh obstacles and that we improve the environment to ensure a hospitable climate to tourists.

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