The Tourism Industry with Regard to the Economic Development of the Local Population in the Region - Literature review Example

Ian Strachan argues that tourism is a neo-colonial enterprise that marginalizes blacks. Write a research based ARGUMENT in favor of this assertion Introduction: Economic development within a region should include improvements in the lives of all sections of the society. In theory, this can be brought about by gainful employment in industry and competent service sector coupled with a favorable environment for investment by business organizations. The type of industry that can be developed in a region depends on the natural resources, the level of expertise within the labor force, the attitude of the government regarding developing its assets, and the perception of private investors willing to invest resources. Tourism is considered to be the world’s largest industry and some regions are endowed with natural and manmade resources that are conducive to developing the economy based on these resources. But tourism or any other industry for that matter should not just be a money making endeavor for investors. It should benefit the stakeholders (including employees, the local population, and other ancillary industries) at all levels for sustenance and growth. The Caribbean islands are considered to be one of the prime tourist destinations in the world, primarily due to its natural resources. This paper is a review of the tourism industry with regard to the economic development of the local population in the region. It is based on an article by Ian Strachan, titled, ‘Paradise and Plantation’. The author is of the view that economic well being is skewed towards foreign investors at the cost of the economic development of the local population. Colonialism has caused many of its negative effects to continue in neo-colonial societies (after gaining independence and sovereignty). Research on this area tends to agree with what Strachan has stated from his research and studies. Strachan’s views of the effect of tourism in the Caribbean: Ian Strachan provides a powerful argument against the exploitation or neglect of the local population in the tourism industry of the Caribbean Islands. Effective advertising about genuine tourist attractions can naturally attract people to travel to destinations of their liking. It is extremely practical or prudent for governments and other agencies to promote a place attractive to visitors. The author states that even though tourism is a big industry, it has developed, to a large extent, at the cost of the local population. In Strachan’s words, “however distant this imagined, heavily promoted, and staged Eden may be from everyday experience of the majority of the Caribbeans, it is a fantasy that the regions’ nations encourage their citizenry to maintain for the benefit of tourists” (Strachan, 2002). The economy of the Caribbean nations had been agricultural during the colonial period. Even after independence, agriculture still forms a major part of the GDP, but the tourism industry is now beginning to have a significant share. The brochures promoting tourism in the region provides a rosy picture of beaches, luxury hotels, and excellent service (mainly through local employees). Strachan states that this tourism industry is mainly located along the coastline (beaches) and has not made many inroads into the interiors where most of the population seeks out a living. One notable feature of the tourism industry is that it is an extension of the plantation (agriculture) industry that dominates the economy of these island nations. The governments in many of the Caribbean nations now promote tourism and have many concessions and facilities provided for investors in this sector. But the end result according to Strachan is that tourism “reinforced the social superiority of whites, encouraged black subordination and servility, and fed white prejudice and narcissism” (Strachan, 2002, p. 10). Tourism and tourism industry: It will be pertinent to define two terms related to tourism here. One is tourism itself and the other is the definition of tourism industry. Elliot defines tourism as “the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes” (Elliott, 1997, p. 21). This is fine as far as defining what a tourist does. But the tourism industry encompasses a multitude of other players and factors. It can include the employees in the hotel and hospitality sectors and those who are engaged in or employed in ancillary sectors like transport, sightseeing, travel, and other guest oriented services. Unfortunately, definitions and perceptions of the tourism industry are heavily balanced towards a business perspective rather than as a provider of employment or for the development of the economy. Tourism Industry is defined as “an industry that would cease to exist or would continue to exist only at significantly reduced levels of activity in the absence of tourism” (Tourism Glossary 2009). While this is true in a technical and business perspective, most definitions ignore the economic and employment possibilities resulting in the development of tourism industry in an area. The study done by the ‘World Travel and Tourism Council’ (WTTC) on the social and economic benefits (or lack of it) of tourism in the Caribbean is relevant and is in agreement to what Strachan has said in his works. It is quite unfortunate to find that “the benefits from tourism in the Caribbean might not be reaching those who need them most and that, despite the impressive growth statistics, tourism is not doing as much as it could to relieve existing problems of unemployment, poverty and social dislocation” (The Caribbean: The Impact of Travel and Tourism on Jobs and the Economy, 2004, p. 9). According to the article, the industry should be a means not just to generate income for the government and businessmen, but a program where maximum employment is provided to the local population as a means to alleviate poverty in the society. The investors in the industry should also take into consideration the welfare of the local population where the tourism project is developed. The Caribbean tourism industry is accepted as an attractive destination for tourists worldwide, but unless the individual governments take into consideration the employment of the local population, the benefits that accrue from it will be primarily enjoyed by foreign investors. The WTTC study adds that the travel and tourism industry is labor intensive. This can be an ideal opportunity to provide employment and a means of livelihood to the local population. It is a creditable fact that the countries in the region have formed an organization called the Caribbean Tourism Human Resource Council (CTHRC) in order to coordinate tourism related activities aimed at benefiting the local population. But the organization has not yet performed to its full potential in spite of its efforts. What should be done in this regard is building practical and balanced partnerships with the major stakeholders in the tourism industry in the region. Factors that support Strachan’s views: Intellectual Capital: A country or region may be endowed with natural and artificial resources that are attractive to tourists. But management of the incoming tourist traffic is another matter altogether. There are factors in availability of accommodation, the logistics involved, transportation, and the support systems that facilitate a smooth movement of tourist traffic. Brooking in her book ‘Intellectual Capital’ states that there are four essential components in for intellectual capital to be effective. The four components are market assets, intellectual property assets, human centered assets, and infrastructure assets (Brooking, 1998, p. 13). Intellectual capital refers to the quality of labor available in a country. This is turn is dependent on the quality of education that a country is able to provide for its citizens. Lack of centers of higher education will result in the country being saddled with unskilled labor that is unqualified for technical and high level managerial work. As mentioned earlier, exploitation of natural resources requires more of unskilled labor than skilled. For example, the tourism industry needs a lot of workers to serve as service staff (waiters and room service staff for example) in hotels. Moreover, setting up institutions for technical and managerial learning involves long term investment and vision, and monetary returns for the same would take at least a decade to become a reality. This is evident when economies of countries like Korea and Japan are compared with those countries in the Caribbean. What this entails is that the top management and high paying technical jobs will have to be filled by foreign labor while the local population will have to be satisfied by lower management or worker posts. Tourism is an industry and all the stakeholders apart from the investors should benefit from it for it to survive. In this instance, market assets are quite visible in the form of natural bounty that attracts tourists to the Caribbean. The intellectual property assets are controlled by employers who are multinationals whose primary aim maximization of profits. Human centered assets are employees and other personnel essential for the success of the tourism industry. Infrastructural assets refer to those facilities that are essential in making the life of the tourist as comfortable as possible. Strachan’s observations about the tourism industry in the Caribbean indicate that that except for market assets and human centered assets, all the other aspects are controlled by external or foreign forces. Developing these assets will be expensive when compared to the development of human centered assets. The best way that governments in the Caribbean can improve the situation for the local population is to concentrate on developing human and intellectual capital. What they should do in this situation is to develop an infrastructure that can help in controlling and managing the tourism industry in the region. According to Muller and Jansson, “social and intellectual capital, including access to prior experience can therefore be used to maximize scarce capital available to some small tourism businesses, as well as to better leverage relations between businesses in different sectors, particularly with respect to tourism and the agricultural sector” (Müller & Jansson, 2007, p. 34). A paper published by the Food and Agriculture Organizations of the United Nations, presents the picture of lack of higher level education especially in rural areas in the Caribbean : “in the Caribbean region, the impact of poverty, HIV/AIDS and educational deficits is acutely felt in the rural context,” according to an FAO paper to be presented at the Saint Lucia meeting” (Education for rural people in the Caribbean, 2006). The economic and social consequences of low levels of education are expressed by Howe in his book, Higher Education in the Caribbean. Howe purports that “in a non-oil-producing country it is not sensible (even if easy) to train fewer doctors, engineers, managers, or teachers and it would be downright suicidal not to engage in serious research to build up indigenous fact-finding and intellectual analytical capabilities. Otherwise, continuing dependency of the hegemonic developed world is guaranteed” (Howe, 2000, P. 1). The author further argues that this situation will ultimately result in loss of jobs that could have been available to the local population in favor of foreign labor. The one solution according to him is to create a lot of intellectual capital to the extent of it being available in excess of current needs. In such a situation, the governments in the Caribbean will be in a position to dictate terms to foreign investors with regard to the composition of the labor force in favor of the local population. The positive correlation between availability of intellectual capital and economic development has been established by other studies also. Eduardo, in his paper titled ‘Intellectual capital, social policy, economic development and the world evolution’ states that “for a developing country to become a modern economy some facts have to happen. Those facts are: a process of stable political democratisation; a process of economic stabilization; a process of economic and political integration; a process of investment in development tools, like physical capital and intellectual capital” (Tomé, 2004). This is exactly what is happening in the region and the findings by Strachan are probably reflective of the above factors. Only the low level or possibly middle management jobs are provided to the local population. The technical expertise and the top management is sourced from other countries. What happens in such situations is that the government and the local population are unable to have a real voice in the management of the tourism industry in the region. Entrepreneurism in the Caribbean: According to Dana, “entrepreneurship has a positive effect on society, creating jobs, economic expansion, a larger tax base, and more consumer well-being” (Dana). It appears from studies on this area that local entrepreneurship in the Caribbean could be much better than what is seen today. In other words, many of the businesses in the island nations are done by foreign investors. The author had conducted a study with regarding to government role and attitude of people towards entrepreneurship in the Caribbean. Some of the relevant factors are mentioned here with regard to selected countries. In Anguilla, being a businessman is not given much social value even though the government is supportive with a hands-off approach and low or no taxation. In Antigua and Barbados, steps have been taken to develop industries other than tourism. But real returns on the above have not yet materialized. Barbados is similar to Anguilla in respect for social value towards entrepreneurship. Government intervention on business is very high in the Dominican Republic resulting in lack of initiatives for becoming entrepreneurs. The government in Granada appears to be indifferent in promoting individuals to become businessmen. Social value towards entrepreneurship is similar to what is seen in Anguilla and Barbados. The atmosphere in St Kitts is conducive and the government promotes light manufacturing industries. St Lucia is also focused on promoting industries that can tap its forest wealth. But overall focus on entrepreneurial development is not apparent. The attitudes and approaches of different governments are diverse regarding development of entrepreneurship. Some countries have low taxed and a laissez faire approach while others have high levels of intervention. Lack of an entrepreneurial culture due to low social value is also a factor that discourages the local people from becoming entrepreneurs is new areas like tourism and industry. Boxill, in his paper titled ‘Unearthing black entrepreneurship in the Caribbean: exploring the culture and MSE sectors’ states that whatever levels of business activity by locals that exist in the region is traditional in nature (Boxill, 2003). This indicates reluctance on the part of the local population to set foot in newer areas like tourism and industry. The need for higher levels of entrepreneurial activity by local population has been stressed by other authors as well. Meeks and Lindahl are of the view that “no programme for the modernization of the Caribbean economies can succeed without being led by an entrepreneurial group with national and regional roots that is technically and socially equipped to lead the region” (Meeks & Lindahl, 2001, p. 139). On the whole, local entrepreneurship in the many diverse sectors within the tourism industry (and other areas as well) will be helpful to the society. Increase in intellectual capital will also go a long way in providing employment in technical and managerial levels within the industry. Growth in local entrepreneurs can also help in this regard. They can see to it that the bulk of the labor force is from the region itself. Poverty: According to Professor Compton Bourne, President of the Caribbean Development Bank, “Poverty has multiple negative effects, many of which have been referenced already. They include levels and standards of consumption inadequate for nutritional and physical health, for safe and healthy living, for accumulation of knowledge and skills, and for child care and protection or advancement of the welfare of future generation” (Bourne, 2005). Poverty can stand in the way of lack of capital for entrepreneurship and accumulation of intellectual capital. Bourne states several reasons for the state of affairs in the region. Lack of qualification and opportunity has resulted in most of the labor force being employed in low paying and menial jobs that primarily require unskilled labor. There exists inequality in distribution of wealth within countries and also among the different countries in the Caribbean. Thirdly, the professor feels that the economy is volatile and unstable. Globalization and prices of certain commodities like petroleum has had an adverse effect on the economy of most Caribbean nations. Another factor, according to Bourne, is the absence of ‘personal coping mechanisms’. This is compounded by the fact that very little of government funded safety nets are in place. In case a person looses his or her job for some reason, there is no social security scheme to support the individual and his or her family. Bourne also agrees that lack of education and technical qualification is a factor in low quality of employment. As mentioned earlier poverty stands in the way of availability of capital and obtaining intellectual capital. Higher studies in areas like engineering and management can be costly and the lack of financial resources prevent many youth from pursuing such fields. Protection of labor in the Caribbean: With the tourism industry dominated by foreign investors, it would be worthwhile to review the level of protection of labor by individual governments of some countries (as mentioned by Strachan in his article) in the Caribbean. The information that is given here is provided by the Heritage Foundation as a part of their Index on Economic Freedom of different countries around the world. According to the Foundation, “for over a decade, The Wall Street Journal and The Heritage Foundation, Washingtons preeminent think tank, have tracked the march of economic freedom around the world with the influential Index of Economic Freedom” (The Link Between Economic Opportunity & Prosperity, 2009). The section on ‘Labor Freedom’ shows the level of protection that is provided to both employers and employees individual countries. all information provided in this section is obtained from the online publication of the Index of Economic Freedom of the countries in the Caribbean. In the Bahamas, notice of termination is not necessary as per statute. In other words, employers can fire their workers if they deem fit. Severance pay is not mandatory even though most employers provide some money when they dismiss their employees. The situation is slightly better for employees in Barbados. They are provided with a guaranteed two week annual leave with pay. They are also covered by unemployment insurance. Even though trade unions exist, employers have the choice of not recognizing it officially and legally. The Dominican Republic does not have statutes for minimum wages, but dismissing employees can be costly for employers. There are also strict laws regarding working hours. On the whole, it appears that labor laws in the Caribbean are more favorable to employers than employees. According to Gmelch, job seekers in the Caribbean are keener on becoming economists and lawyers rather than find an opening in the tourism industry. They feel that there exists a glass ceiling which prevents locals from staffing top positions in the industry, which is a legacy of colonialism. For many job seekers in the Caribbean, employment in the tourism (especially in hotels) is seen more as servitude rather than service (Gmelch, 2003, p. 57). Whether tourists especially Westerners, expect servitude or service is not made clear here. But the perception of the educated job seeker is that service is seen as servitude. This definitely is a leftover of colonialism where the white masters used the service of locals for housework and other menial jobs. The concept of service in the tourism industry might have been mistakenly perceived servitude that existed during colonialism. Due to this factor, many educated youth prefer to stay away from the hotel and tourism industry. Their qualification and attitude might have landed them jobs in middle or even top management in the industry. But their reluctance which is the result of the psyche of servitude (whether correct or not) prevents them from seeking jobs within the tourism industry. In other words, the youth of the Caribbean prefer for some qualification that is not related to tourism and hotel management and would rather prefer to work in some other area. Neo-colonialism: Many neo-colonialist societies have exhibited the factors mentioned above. The colonialist attitude for bringing up a work force aimed at providing basic labor like workers and clerks have contributed to the many of the factors mentioned above. In most cases, facilities for basic education where the educated can be employed in the above positions are characteristic of colonial attitudes. This has resulted in a situation where centers of higher learning in business and technology are absent in many such societies. Intellectual capital is negligible in many cases. In instances of neo colonialist societies where there is a large proportion of intellectual capital, it had come about after independence from colonial rule (for example, India). The attitude of servitude continues or is distorted as is seen by the perception of job seekers regarding the tourism industry. What should be noted here is that it is not just the after effects of colonialism that has caused the current situation in the tourism industry of the Caribbean. But the other factors are secondary and the main culprit is the neo-colonial attitude imprinted on the minds of the people in such societies. As a nation of slaves during the colonial period, the psyche of servitude still pervades the mindset of the people especially among the poorer sections. The attitude of the population (even after freedom or emancipation) has been illustrated in the review of the book ‘Africa in America: Slave Acculturation and Resistance in the American South and the British Caribbean’, by Michael Mullin. Mullin states that the “Afro-American culture was forged in everyday situations, some of them in struggle. Individuals thrown together in shared suffering find each other, and cope with their oppressors as best as they can. The slaves had no time for debates about cultural purity or finding roots; it was hard enough staying alive” (Mullin, p. 327). The economic, social and mental residue left over from colonization is a major factor in the tourism sector and the general economy of the Caribbean nations. Conclusion: The Caribbean islands are considered to be tourist paradise. Tourism should benefit all sectors of the society and economy, but in this instance, the local population has not yet been able to reap the full potential of the industry. The residues and the effects of colonialism have had a major impact on the state of affairs. Strachan has written brilliantly on this area. It is apparent that the after effects of colonialism are one of the main factors responsible for the situation. The disadvantages faced by a neo-colonial society in terms of economic development have been discussed and analyzed in this paper. It can be concluded that tourism has not been able to make a marked change in the lives of the local population in the Caribbean. One major factor, according to Strachan, is the colonial rule these nations had endured. References Bourne, Compton. (2005, March). POVERTY AND ITS ALLEVIATION IN THE CARIBBEAN. Retrieved 24 June 24, 2009, from: http://www.caribank.org/titanweb/cdb/webcms.nsf/AllDoc/20A2B5DCFD56F79E0425740F0068F1EB/$File/BournePoverty.pdf Boxill, Ian. (2003). Abstract. Unearthing black entrepreneurship in the Caribbean: exploring the culture and MSE sectors. 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