Positive And Negative Economic Effects Of Tourism

Economic growth is an essential factor in decreasing poverty and improving the quality of life in developing countries, Economics is heavy influenced by the positive and negative effects of tourism and have been studied on how it occurs, this Literature review will use research papers and journals to see if tourism does actually have a Positive effect on a developing country and their economics. International travel has never been easier due to low-cost airfare in recent decades and thus countries have developed their tourism industries into key sectors of their economies, however the more dependant a destination is on tourism, the more effected they can be on impacts like terrorism, natural disasters and weather conditions, these can all negatively affect economics in the region. The references used in this literature review have all focused on developing countries mainly in South-East Asia as one of the region’s main income come from tourism.

Positive Economic Effects of Tourism

Tourism in a developing country can bring in many stable jobs that would not be offered otherwise. According to the World Travel & Tourism Council, the tourism industry produces one out of ten jobs worldwide, this growing pace has outperformed employment for the sixth consecutive year in the global economy. The Journal ‘Causality between Tourism and Economic Growth: Empirical Evidence from India’ is about the growth seen in India in relation to tourism and other factors, in this Mishra explains how the tourism sector has been “instrumental in generating foreign exchange, employment openings and household income for Indians, as it has in many other developing countries” (P K Mishra, 2011). Economic growth in developing countries powerful to help reduce poverty and to improve the quality of life in the region. The Department for International Development provides overwhelming evidence that ‘rapid and sustainable growth is critical to making faster progress towards the Millennium Development Goals (MGDs). The MDGs range from “halting the spread of HIV/AIDS to providing universal primary education and halving extreme poverty rates” (United Nations 2015).

In the country Rwanda located in Central Africa, the majority of the country’s revenue comes from safari tours and other tourism ventures, the natives in the region has welcomed tourism as a large supplier to their economy and an essential part of life. According to Sarah Coiro from the Borgen Project, Mukasinadere has been selling her homemade baskets to tourists and thus is able to pay for her family’s basic needs, the economy in Rwanda is flourishing, food is abundant and mortality rates have decreased.

Negative Economic Effects of Tourism

Despite the positives, there are parts of tourism that may be damaging to a tourism destination. For example, a country may suffer from the loss of its traditional culture. According to Bruno Phillip from SBS News “Bali could soon be unrecognisable as an idyllic location due to the cumulated effects of mass tourism” (Bruno Phillip, 2015). Unpredicted and unanticipated events such as, impactful weather conditions, natural disasters, and terrorism can also harmfully affect tourism for significant periods of time. The more reliant on a destination is on tourism, the more the impact will be suffered and the longer the recovery will take. The recent COVID-19 has shown harmful effects to all tourism around the world with self-isolation being enforced in a majority of countries.

Despite the constant efforts of developing countries to expand their exports, this often adds little foreign exchange to their finances and “have too often failed to prove effective in economic development and so tourism is increasingly seen as something of a saviour” (Ramesh Durbarry, 2004). Bali’s main internal airport closed in November 2017 due to a volcanic eruption which caused an estimated loss of $18 million a day due to the stop of tourism. This negatively affected the local area as Tourism is the biggest industry in Bali.

Sustainable Tourism in developing countries

As tourism is a rapidly growing phenomenon and has become one of the largest industries in the world (Department of Social affairs, 1999) the impact of tourism can be extremely damaging, the tourism industry is very resource and land intensive (Department of Economics and Social Affairs, 1999). The Tourism and Sustainable Development paper written by the Department of Economics and Social Affairs highlights the impacts that can affect countries due to tourism, problems such as environmental degradation, intensified utilisation of vulnerable habitats, increasing cultural erosion and disrespect for human rights can occur. In this paper solutions are mentioned to be able to keep these destinations sustainable for long periods of time.

Conclusion

Tourism is a positive effect on developing countries, however tourism destinations should also rely on other outports and ways to increase economic wealth rather than just tourism, with other financial recourses coming into the destination then unexpected and unforeseeable events such as the recent COVID-19 virus won’t have as big of an effect. More research towards specific countries needs to be made in order to completely see results on the question as there are many developing countries and every tourism destination has something different to offer, tourism for one country could be beneficial whereas another could be detrimental to their sustainability and damage their culture.