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Troubles with tourism: does it help or hinder a developing nation?

By Clayton JonesStaff correspondent of The Christian Science Monitor / April 28, 1981

Bali, Indonesia

Tourists of all stripes and guidebooks discovered Asia in the 1970s, whether it was the wanderlust traveler to China's Great Wall or the sun-lust idler on Bali's beaches.

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Most of the region's developing nations popped over the 1 -million-visitors-a-year mark, creating a boom "industry" welcomed by officials for its easy income and new jobs. But it also generates a certain wariness over the foreign footprints left behind.

In the next decade, what with ascending airline prices and a possible prolonged economic slowdown in developed nations, most of Asia's travel spots will have to compete more aggressively for a less-open tourist wallet.

Western travelers are expected to stick closer to home while Japan's increasingly wealthy tourist flocks, growing at an estimated 15 percent a year, will fly further afield from the already well-marked sky trails to neighboring Asian nations.

Is tourism worth the trouble and investment?

On three scores, Asia's travel trade has come under fire: (1) its actual cash balance and economic uncertainty; (2) it societal side-effects; and (3) its increasing use by the state for political purposes:

* Economics -- "The benefits of tourism on economic development are not as large as assumed -- they're actually quite modest," concludes Robert E. Wood, a University of Massachusetts tourism expert.

The questionable return on tourism, say many economists, should convince developing nations to go slow, avoiding a boost in inflation or diversion of needed investments in agriculture or industrial areas.

The Philippine government's estimated $410 million in fast-paced financing of high-rise air-conditioned hotel enclaves, for example, and its $150 million for a convention center have been attacked as funneling money away from needed agrarian reform.

Just how many tourism dollars end up in local economies is disputed. The new Asian Institute of Tourism in the Philippines calculates that only 20 to 25 percent of that nation's tourist spending goes into the hands of foreign investors such as multinational hotel developers.

But some items are not included in the balance books. The Phillippines spends an average $10 a tourist just for promotion and advertising. Moreover, foreign tourists to some degree spur Filipinos themselves to travel abroad, taking with them foreign exchange. Also, not calculated is the money paid back to foreign travel agents. And what are the foreign exchange losses from tourist purchases of imported gifts, necessities, or hotel items such as American steak or Russian caviar?

The World Bank, after backing tourism projects to help developing nations earn foreign exchange, all but dropped its support several years ago because of this dubious value and because of the self-sustaining commercial viability of the trade. One exception for international aid is Nepal, where lack of development alternatives leaves it little choice but to draw visitors to its once-forbidden mountain kingdom.