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Private sector engagement with ldcs for tourism-led growth and inclusive sustainable development

  • World Export Development Forum 2011

    Private sector engagement with ldcs for tourism-led growth and inclusive sustainable development

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    The first plenary session focused on private-sector engagement with LDCs, and the commitment of LDCs for sustainable tourism-led growth. It was moderated by Ms. Valentine Sendanyoye Rugwabiza, the Deputy Director-General of WTO.

    Mr. Kemal Fahir Genç, Deputy Undersecretary, Ministry of Culture and Tourism, Turkey, was the first speaker. He said that considering that there were no more boundaries in today’s world, the tourism sector was the most integrated sector in every country. As a sector, it would steer and accelerate the process of globalization. He noted that UNWTO envisaged global growth to some 1.6 billion visitors and US$2 trillion in revenues. This was a clear indication that countries needed to develop their tourism sectors.

    Mr. Genç described how Turkey had developed its tourism sector over the past 40 years. He said that in the first decade, the State did almost everything, from planning and implementation to hotel construction. After 1982 the emphasis shifted, with the private sector being encouraged to become more involved by the State, which concentrated on investments in infrastructure. State lands and forests were allocated to private sector investors on no-cost 49-year leases. In the third period, after 2003, the State delegated its role to the private sector, retaining mostly a monitoring function.

    Mr. Genç said the Ministry attached particular importance to the quality and diversity of tourism. It carried out promotional and marketing activities and ensured the availability of a qualified workforce through the establishment of tourism and hotel management courses at universities. He stressed that environmental consciousness and sustainability were fundamental principles of the tourism strategy.

    Mr. Hasan Arat, Vice President, Tourism Assembly of the Union of Chambers and Commodity Exchanges of Turkey, asked the question: ’Who are the 29 million coming to Turkey and how do we get them?’ He said Germany, the Russian Federation and the United Kingdom were the most important sources of visitors, but countries such as Syria and Iran were also significant. He noted that Turkey had no visa restrictions for citizens of more than 50 countries, and had recently lifted visa requirements for Tunisia, Libya, Albania, Syria, Lebanon, Jordan, Pakistan and the Russian Federation.

    Mr. Arat said that 1.5 million people were employed in the sector, equivalent to 6.5% of total employment. Tourism was stimulating overall production in the economy by creating demand in more than 50 other sectors. In 2010, the services sector as a whole made up 73% of the country’s GDP and accounted for 54% of the total labour force.

    Mr. Arat stressed the importance of communications, noting that more than a quarter of the world’s population could reach Turkey in a flying time of three hours or less. As well as the flagship Turkish Airlines, there were a number of smaller private airlines operating, and private sector Turkish companies were operating more than 10 airport terminals. Mr. Arat’s key message was that without government the private sector could not do anything.

    Mr. Guy Johnson, Secretary-General, Ministry of Handicrafts and Tourism, Benin, said that African countries were keen to study the successes of other countries, including Turkey and the Maldives, as well as countries that had left the LDC category thanks to tourism. For him, the big question was how to attract investment. He felt the main constraint was a lack of political will and genuine intent to remove hurdles and increase professionalism. The first action should be to share good practices and build political will by encouraging a proper understanding of the issues. There was a need to improve professionalism through capacity building, with international cooperation. He welcomed the fact that United Nations agencies were working together to support tourism development, and spoke of projects that Benin was developing in three townships that were related to the tourism sector, and that these would ideally enable the producers to move up the value chain.

    Mr. Hiran Cooray, Chairman, Pacific Asia Travel Association and Chairman, Jetwing, Sri Lanka, endorsed earlier comments about the need for peace and stability. He had lived through a 25 year period of internal conflict in his country and it had been almost impossible to keep tourism alive. Nonetheless, they had maintained good relations with operators, and relied on repeat business from the United Kingdom, Germany and France. But income was barely significant and the government was not interested in supporting the sector. However, in the past two years, Sri Lanka had been seeing the fruit of peace and stability. People were returning and investors were interested, and there was a tremendous feeling of confidence in the sector.

    A major constraint to development that had been identified was the length of time it took to obtain government approval for tourist developments, which could be up to two years. Recently, after extensive negotiations, a one-stop shop bringing together all concerned ministries had been set up, which guaranteed a response to formal development proposals within three weeks.

    Mr. Cooray concluded by stressing the need for an exchange control regime that allowed foreign investors to be able to repatriate profits. It was right to focus on people and the planet, he said, but the private sector needed profits. ‘Communities cannot be supported if we don’t make a profit.’

    Mr. Ronald Hepburn, Founder, Chamber Member and Managing Director, Étoile Partners, United Kingdom, said his agency was a geopolitical consultancy that focused on strategic positioning and communication management – helping people and governments to position themselves on the world stage in the most advantageous way. He said it was remarkable how few people or organizations, when planning a development, asked the five key questions:

    1. Where do you come from?
    2. Where are you now?
    3. Where to you want to be?
    4. How will you measure success?
    5. How will you know when you have got there?

    He described the success story of South Africa in developing its tourism industry by making the most of its natural advantages and carving out a niche in the market. He cautioned that tourism could not be expected to solve all social problems or be a tool of social engineering. His key rules of thumb were:

    • Choose your market carefully    know who you are trying to attract. Initially, at least, go for quality not quantity, which requires major infrastructure investment.
    • Aim high – try to attract high net-worth individuals, whose footprint will also be less.
    • Get your positioning right   don’t try to be all things to all people.
    • Be unique.
    • Think about your brand – remember that people get information from the Internet and will make their own judgements.
    • Ensure that your communication campaign really does communicate your position.
    • Understand the importance of security and stability.

    Ms. Rosette Chantal Rugamba, Founder and Managing Director, Songa Africa, Rwanda, also drew on several years of experience as Director-General of Rwanda Tourism. She stressed the essential role of public-private partnerships in tourism development and said tourism had the capacity not only to be a driver of economic growth, but also to project the image of Africa. Rwanda had worked hard to create an environment of peace and stability that made it possible to contemplate developing tourism. It also put in place a legal framework and created incentives for private sector investment. In this context, she noted that 90% of investors were in fact local, and it was important that they should be treated no less favourably than international investors. A further important need was capacity development and vocational training: initially Rwanda found that because its people did not have the required skills, staff were being brought in from abroad. In response, the government set up a Workplace Development Authority to ensure that the human capacity would be available. Ms. Rugamba said that if Rwanda could be successful, other countries could too, but governments had to recognize and embrace the private sector as full partners.

    Open floor session
    In the lively question and answer session that followed the presentations, one issue raised was how to involve local investors, and how to ensure local communities benefited from tourism development. Ms. Rugamba explained how communities in the area of a luxury lodge, which was built to bring tourists to view mountain gorillas, were sharing in the revenues, which also gave them an incentive to combat poaching. There was also reference to schemes in Samoa and the Maldives under which thousands of local people became shareholders in tourist developments.

    A delegate from Bangladesh said his country had not been successful in attracting foreign tourists and asked for advice. Mr. Genç said, based on the Turkish experience, that the first essential was a belief in the importance of tourism in both the public and private sectors. Then governments needed to provide incentives for investment and promote the industry actively abroad.

    Summing up the session, Ms. Rugwabiza said there was clear agreement on: the importance of public-private partnership and collaboration; the importance of government leadership; the need for security and stability; the need for effective marketing; and the importance of capacity development and training, which could not be done by the private sector alone.

    Mr. Johnson said his final message was that they needed to share success stories to inspire each other. Mr. Hepburn underscored the need to match a country’s best tourist assets to the best tourist it could find. Mr. Cooray said that as tourism grew, governments should not succumb to the temptation to raise taxes. And Ms. Rugamba re-emphasized the importance of the public and private sectors working as partners.