Countries / Territories

Plenary Session 2 Summary: Inclusive sustainable development led by sustainable partnerships, ethical investment and intelligent resource management in the tourism sector.

  • World Export Development Forum 2011

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

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    The second plenary session was moderated by Mr David Eades of the BBC.

    Professor Geoffrey Lipman, Chair, and Advisor to the World Trade Organization (UNWTO) Secretary-General, opened the session with the assertion that if the tourist sector could effectively leverage the ‘green growth’ era, the benefits to least developed countries (LDCs) would be massive and a new style of public-private partnerships would emerge that would be both pivotal and inevitable. He said that as the global green growth agenda took root, with renewable energy as a point of focus, trillions of dollars would be available over the next 40 years for transformation, and the tourism sector would be able to benefit.

    Professor Lipman said he preferred to talk about travelism rather than tourism, because the latter term often excluded the role of transportation, and particularly the airlines. Without aviation, there would be no tourism for LDCs. He was confident that the airline industry would solve its carbon emissions problems. He predicted that the importance of the BRIC countries (Brazil, the Russian Federation, India and China) to global tourism would be one of the features of the coming years: it would be important to encourage Chinese tourists to travel to Africa and to Asian LDCs. He predicted a shift in the balance between public and private sectors in tourism, with governments having less money and the private sector having to fill the gap. Old-style public-private partnerships (PPPs), where the government owned key elements of the market process and invited or incentivized the private sector to collaborate and bring finance had been good incubators, he said. But they would not survive the green growth course, except perhaps for major infrastructure or security-related PPPs involving, for example, toll roads and border services. ‘Governments don’t have the money or the management skills and the private sector needs the flexibility (with fair oversight) to make fast decisions,’ he said.

    He predicted that the public sector would progressively regulate more lightly, establish safety nets for market failure and rules for monopoly abuse and consumer protection. The tourism sector could be a key component of long-term climate change and poverty transformation income streams and capacity building in LDCs, he said.

    Mr. Alexander Barkawi, former Managing Director, SAM Indexes and Dow Jones Sustainability Indexes, said the key issue that needed to be factored into development planning was increasing constraints on resource availability. This would involve water and energy, and scarcities would need to be considered in planning infrastructure development, determining, for example, how many tourists could visit a particular region, and the price they would have to pay.

    He also discussed the problem of investment horizons and short-termism, with companies focused on reporting quarterly results. He noted that over the past 40 years, the average period for which New York Stock Exchange investors held shares had fallen steadily from more than eight years to less than one year. Obviously, tourism needs a long-term investment horizon and attention should therefore be paid to extending existing horizons.

    Mr. Barkawi said it was also important to note what large companies were doing through their lobbying activities, particularly where they impacted tourism. An example was deep-water drilling in the Gulf of Mexico, where the accident last year had clearly damaged the tourist industry, but now companies were lobbying to be able to resume drilling. Without discussing taxation levels in particular, he noted that governments needed to raise revenue to deliver what the tourism sector required.

    Ms. Amanda Ellis, Deputy Secretary for International Development, New Zealand Ministry of Foreign Affairs and Trade, provided a donor perspective on ethical and sustainable investment and the importance of PPPs. She said the steady and significant growth of tourism in LDCs showed that there was a huge opportunity for growth and development, but this needed to be managed in a way that was not just about revenues, but involved local communities and environmental protection.

    On the ethical side, she noted that there were potential negative results of tourism, including human trafficking and sex tourism, corruption in supply chains, degradation of the environment, exclusion of local communities and discrimination against indigenous communities. She welcomed the fact that the United Nations, at the global level, promoted environmental and socially sustainable principles and established an overarching set of global principles.

    On the positive side, she also welcomed the United Nations emphasis on the empowerment of women, including ITC’s global platform for encouraging sourcing from women vendors and proactive efforts on education and increasing understanding. This was not only the right thing to do, but the smart thing, she said.

    Ms. Ellis gave examples of how New Zealand worked with small Pacific island nations to promote local involvement in tourism projects, including sourcing and training, business mentoring and environmental protection.

    Mr. Patrick Ramonjavelo, Advisor to the Minister of Tourism, Madagascar, said tourism was of great importance to his country, accounting for 30% of GDP. The country would like to grow the sector, but the question of sustainability needed to be on the table. He said tourism was a meeting between local populations and the visitors, whether local or international. If that did not happen, tourism lost its raison d’être. It was important for local populations to be conscious of their natural and cultural heritages, but it was also important to be open and transparent with local populations in explaining the positive and negative impacts of tourism: opportunities in employment, potential negatives in inflation and sex tourism. It was vital to involve local populations when decisions on major investments were being taken.

    Mr. Ramonjavelo said that in seeking sustainability in tourism it was important to assure continuity, and this started at school, teaching children about their heritage, and also later about market requirements and how to match offer and demand. He recommended that tourist operators create funds for training. He noted the importance of realizing that no country was isolated and there was a need to think globally. Competition would bring risks, but national and regional networks could offer synergies.

    Finally he proposed that the traditional abbreviation PPP for public-private partnership should be extended to PPPP – public-private-population partnership.

    Ms. Dorothy Tembo, Executive Director, Enhanced Integrated Framework (EIF), briefly described the origin of the EIF as a partnership between LDCs, donors and implementing agencies set up in 1997 to address trade-related issues. Its key principle was inclusive involvement of stakeholders in development projects and programmes from conceptualization through to implementation. The EIF aimed to facilitate the process of bringing all stakeholders to the table, including civil society and the private sector. She said it was clear that the services sector had much to offer in export and trade development, and tourism was an important component of the sector. There was a need now to translate plans and strategies into action, to see how it was possible to move forward in a practical way.

    Question and Answer Session
    The statements of the main speakers were followed by a lively question and answer session, in which issues raised included:

    • Balancing the demands of renewable energy and protecting landscapes;
    • How to calculate baselines for taxation;
    • How to involve young people;
    • How to learn from models, transfer and share good experience;
    • How to get the required technical and financial assistance to develop the sector;
    • How to streamline visa processes;
    • How to ensure retention of profits/revenues in-country;
    • How to deal with pollution legacies.

    Recommendations from the panel included:

    • Since funding for tourism development may be lacking, try to leverage funds that are available for renewable energy development and the carbon credit system to kick-start underdeveloped markets;
    • Try to engage the private sector in long-term sustainability;
    • If projects are good and local populations are involved, funding should materialize: don’t always wait for international investors – money may be available in the country;
    • To avoid pollution damaging the attractions that bring tourists to a country, a regulatory framework is certainly needed;
    • On retention of revenues and combating leakage, it was noted that while in the past LDCs had negotiated from a position of weakness, in coming years this would change, with funds becoming available for climate change adaptation and poverty reduction.