Africa's lessons on using tourism for development

Posted by CID sourced from Radio Australia on 11 July 2012

What can developing countries in the Pacific learn from how their African counterparts are improving markets like tourism? How Africa's using tourism for development is the topic of a conference being held in South Africa this week.

Presenter: Geraldine Coutts

Speaker: Professor Sumner Le Croix, University of Hawaii.

LA CROIX: Well I’m attending the World Economic History Congress, it’s held every three years, and it’s being held this year in Stellenbosch, South Africa, which is a small wine district right outside of Cape Town, which is a beautiful city on the coast of South Africa. Before I came to the congress I was in Namibia and was touring around and looking at the many great natural sights in Namibia. And being in Namibia really reminded me of the importance of tourism for developing countries. So the difficulty of using tourism as a development strategy, I really was reminded of the Pacific Islands that have some very similar problems. Tourism looks like a great strategy for development, but it’s a very capital intensive strategy for development. And looking around Namibia they have a population of about two-point-four-million people, there’s about a million visitor arrivals each year, it’s about half a million business arrivals, people who come there to visit family or to engage in business. There’s only about half a million tourists. It’s an incredibly beautiful country but it lacks infrastructure, and infrastructure’s very capital intensive, and capital is what developing countries lack.

COUTTS: And is that the key to it, development strategies have to be necessarily labour intensive, but if you’ve got a small population like Namibia and Honolulu, how does that work?

LA CROIX: Well yes, I mean Honolulu has a population of about one million people and there’s about seven million tourists a year that come through. But to get those seven million tourists a year through Honolulu has a very sophisticated airport structure, highways, it has a relatively large number of skilled people who are involved in staffing national park entrances, working on preserving the environment in national park areas. So essentially there’s a lot of very skilled people that are combined with an awful lot of capital to bring those seven million visitors a year. This is one of the problems that developing countries face, whether it’s the Pacific Islands or whether it’s Namibia, is they’re kind of short on some of that capital. In Namibia you have huge distances and so the tourism areas are relatively separated from each other, the road networks are poor, so you have relatively wealthy tourists flying from the capital of Namibia out to some of the tourist enclave areas. This also resembles some of what goes on in the Pacific Islands. It’s very difficult for a development strategy though, it’s very difficult to employ low skilled people in this type of industry. It’s interesting comparing those with here in Stellenbosch in this wine area where there are lots of very low income black Africans who live here, this is a very rich area, most of the rich residents are white, but there’s a growing rich black population also. But the road network which comes up here is used both by the very poor residents of Stellenbosch, the rich residents of Stellenbosch and the tourists. It’s an interesting case really of infrastructure benefitting not just the tourists, but also the local population whether they’re rich or poor. That’s much more difficult in the Pacific, the airports that fly in tourists are much less likely to benefit the local population. Same thing that went on in Namibia; it’s much difficult in that type of fragile environmental area that’s somewhat lightly populated to really come up with a very good viable tourism development strategy. It’s interesting watching Namibia struggle with tourism, very much like the Pacific Islands have.

COUTTS: But it sounds like tourism and its authorities in Hawaii have got the formula correct?

LA CROIX: I think Hawaii does have the formula correct. It really took it a while to get the formula correct. Some of it really is trying to figure out what that combination of environmental preservation, what capital infrastructure can be done that will benefit both residents and will also benefit tourists. In Namibia the main thing you see there is tremendous potential. It’s an incredibly beautiful environment, it’s an area the size of Texas and Louisiana, about half the size of Australia. So this is really a massive country and the road that basically goes from north to south in the country is just a two-lane road, one lane in each direction. Improving that could really have huge benefits for tourism, and yet there’s still the problem then of building new airports, which would bring in more tourists. But the natural beauty of the place is just incredible, and you can certainly see a lot of potential there, much as you see in some Pacific Island environments that are also incredibly beautiful, have potential for tourism, but struggle with really not having the capital to handle the tourists that would actually come.

COUTTS: Including reliable air services?

LA CROIX: Reliable air services is really critical. That’s one thing that I think is present here because there’s very strong air services, I mean both Namibia and in South Africa. It’s much less present in many of the smaller Pacific Island countries, that’s something that they really struggle with, it’s not just reliable air service, but air service that’s done on a frequent basis. There’s lots of places; Hawaii to Samoa that’s only three times a week. So it’s really quite difficult to plan travel back and forth just given the relative limited availability of air service. That’s a very similar thing I think from Australia to some of the Pacific Islands. While some of them have very good service, others have very poor service, and it’s very difficult for people to plan trips.

COUTTS: Now just can you encapsulate the conference that you’re attending; the World Economic History Congress, what’s that about?

LA CROIX: Yes, well the congress is really dealing with the really central question, that is why do some countries get rich and develop and why do some countries stay poor? And that’s really I think the central question that people are considering. And economic historians in recent years have moved to consider much more closely the impact of institutions on development. And I think the reason why economic historians are looking at this is people are realising that the institutions that were there in the past are very difficult to change, they really do tend to persist. That if you had bad institutions in the past it’s very difficult to impose good institutions on a society, a lot of the bad habits tend to persist. On the other hand there’s some really good examples of countries that have had poor institutions; South Korea, Taiwan, and have switched and moved to relatively stable societies with representative democratic institutions market-based economies. Other countries have really struggled to make this type of switch. So that’s really the focus of the conference, what really are the roots of development? Why are some countries getting rich and why are some countries remaining poor?

Listen to the interview here