The Economy of Croatia - Coursework Example

The economy of Croatia is a service-based economy, with the service sector accounting for roughly two thirds of the country’s Gross Domestic Product.Most of the service sector income, in excess of 7 billion GBP, is generated from tourism. Every year Croatia is visited by over 10 million foreign tourists, mainly during the summer months, but, lately also during the winter due to the growth in popularity of skiing. Croatia is constantly ranked among the top 20 most popular tourist destinations in the world and, therefore, it is not hard to conclude that tourism plays a prominent role in Croatia’s present and, especially, future. In that regard Croatian Ministry of Tourism vision reads: “Tourism significantly contributes to the economic growth of the Republic of Croatia and the prosperity of its citizens. It is based on a sustainable use of natural and cultural-historical potential, an active role in its preservation and development, and creating an environment attractive to investors.” (Ministry of Tourism of Croatia 2003) The commitment of the government of Croatia to sustainability is along the lines with the rest of the world, as sustainable tourism gained momentum in the least few decades. Based on the work of the United Nations Commission on Sustainable Development, World Tourism Organization and its Global Code of Ethics and, also, Rio Earth Summit on Environment and Development, all of which emphasize the need for sustainability in practices of tourism, the World Summit on Sustainable Development held in Johannesburg, South Africa in 2002 dedicated a significant portion of its agenda to sustainable, responsible tourism. According to a declaration adopted by delegates from 20 countries from all continents, sustainable tourism should “minimize negative economic, environmental, and social impacts, generate greater economic benefits for local people and enhance the well-being of host communities, improve working conditions and access to the industry, involve local people in decisions that affect their lives and life chances, make positive contributions to the conservation of natural and cultural heritage, to the maintenance of the worlds diversity, and provide more enjoyable experiences for tourists through more meaningful connections with local people, and a greater understanding of local cultural, social and environmental issues.” (International Center for Responsible Tourism 2002) Clearly, sustainable tourism deals with more than just monetary, economic impact tourists will have on a local community. It calls for a wider approach, in which the emphasis should be on the environment and social issues. It calls, as UK Department for Culture, Media and Sport states in the Guidance on Local Sustainable Tourism, for neutral, balanced and integrated Local Sustainable Tourism Indicators. In that regard, Abraham Pizam (1978) has attempted to determine empirically the existence of negative impacts of tourism with the hypothesis that heavy tourism concentration on a destination area leads to negative resident attitudes toward tourists and tourism in general. His study seems to confirm the hypothesized relationship between an individual’s economic dependency on tourism and one’s overall attitude towards tourism. It was found that the more dependent a person was on tourism as a means of livelihood, the more positive was that person’s overall attitude toward tourism in the study area. For effective community-based indicators we need to translate the things people want to measure into a manageable form. The purpose of measurement is to make values more precise, to compare and evaluate one thing against another (Lee-Smith, 1997) In the case of Croatia, it was already established that governmental agencies are, at least on paper, committed to the principle of sustainability in tourism. Given the fact that tourism in fact is Croatia’s most valuable source of money that is not a surprise. Croatian Ministry of Tourism, in all strategic documents repeatedly insist that protagonists in this field, from local to national level, “protect and renew the natural wealth, as it is a primary resource of Croatian tourism”.( Croatian Ministry of Tourism) That, however, is not all, as the agency calls on the government as a whole to create framework, infrastructure and legal grounds for sustainable forms of tourism. Furthermore, the Ministry in collaboration with Ministry of Environmental Protection did develop and is, slowly, implementing projects related to sustainable tourism. Projects such are “Authentic Souvenirs”, “Rural Tourism” and “Under Hundred-Year-Old Roofs” are the best examples. Ministry of Environmental Protection, on the other hand, already conducts regular annual sea quality measurements on beaches along the coastline, works on climate change projects, places bans on substances that destroy or compromise the ozone layer and runs the KOS, a multidisciplinary project on sustainable development of inshore regions of the country. The main goal of these efforts is to be competitive in the ever-growing tourism industry and, also, to be able to follow the best examples of sustainable tourism in Europe, examples like Fiskars Village in Finland, Pielach Valley in Austria or Cairngorms in Scotland, all of which won prestigious awards for sustainable tourism from United Nations World Tourism Organization. (WTO) In October 2008, Roland Berger Strategy Consultants, Hungarian Adriatiq Group and the Croatian Ministry of Tourism co-sponsored a conference with the working title “Sustainable Tourism in Croatia and Beyond”. As part of the conference, Roland Berger presented a study in which the company recognized and underlined that there is a sizable awareness for sustainable tourism in Croatia, however, not followed by planned, coordinated action and measurement of results. The same study promoted two of the programs in Croatia that are identified as best practices of sustainable tourism in the country. (Roland Berger Consultants) First one is Maistra in the cities of Rovinj and Vrsar located on the west coast of the Istrian Peninsula. The project so far achieved a lot. A sewage treatment system was built on the nearby Red Island which reduced fees for waste water in the excess of 80%. Cleaned waste water is then diverted to the sea or used for watering lawns. Also, the city of Rovinj is currently a leader in Croatia when it comes to waste separation and treatment, as 25 types of waste are sorted daily. Both cities installed waste separators in the local hotels for oil and grease. As a result approximately 20% of total waste is being recycled annually and the majority of hotel kitchens in the area received appropriate certificates for installation of oil separators. (Roland Berger Consultants) The ongoing Maistra project is guided by a long term plan that ideally would result in the radical increase of tourist capacities and quality of stay for guests, while, at the same time, reducing the overall numbers of tourists, especially during the peak season from May to September. Second good projects identified in the study done by Roland Berger Consultants is the association of Small and Family Hotels in Croatia. Croatian government as a whole believes that developing small businesses is the best possible way to create high quality jobs for the future. Along those lines, the Association, in cooperation with the Ministry of Tourism is intensely working on defining building standards for small, family hotels. Based on those standards around 300 hotels were already built on the Croatian coast. Also, the Association is constantly educating small hoteliers about guidelines of sustainable tourism. The major project done together with Croatian Clear Production Center is testing the use of renewable energy sources in dozens of hotels and has already cut down costs on power by installing solar panels. Finally, another project is helping small hotels in obtaining eco-labels for implementation of environmentally safe and sustainable practices. In the future, the Association hopes to fully implement sustainable tourism development in the country, participate pro actively in crafting all strategic documents and laws, all while strongly advocating interests of local populations. (Roland Berger Consultants) With millions of tourists visiting the country each year, small communities on the coast of Adriatic are often facing enormous strain on their infrastructure and, also, have to deal with increasing pollution and degradation of natural resources. Based on successful example from the Balearic Islands in Spain and the island of Dominica in the Caribbean, some places in Croatia are trying to alleviate those kinds of problems by imposing so called eco-charge on all the visitors. City of Hvar on the island with the same name is one of those locations. Hvar is the largest island in Croatia with most sunny days year around and a very pleasant climate. The island has some of the most beautiful coastline, protected landscapes and cultural monuments, as well as, numerous archeological sites of great importance. (City of Hvar) During the years of former Yugoslavia many large tourist facilities were built, some illegally on the internationally protected land, some not being in harmony with the landscape. As much as being a generator of income for local residents, tourism presents a great burden for the city of Hvar and its waste collection, waste water services as littering, air and sea pollution are on the increase. The city in the early 2000’s proposed to install an eco-charge to cover for costs related to environmental problems caused by tourists. The idea was, from the beginning, very controversial and raised many unanswered questions such are how to collect the charge, how to keep it locally and how to stay competitive with other destinations. A group of scholars from, both, Croatia and abroad conducted a study aimed to answer how willing the visitors would be to pay the proposed charge. The study showed that vast majority of them agreed that there are problems with the environment on the island. Many expressed willingness to pay the eco-charge, even in the higher amount than suggested. (Taylor et al. 2005) The results of the study were released in a book “The Economics of Tourism and Sustainable Development” and were one of the deciding factors in actual implementation of the eco-charge in the city of Hvar. These three examples, together with other projects and initiatives mentioned previously show clearly that Croatia, its people and its government are aware that the country’s most precious industry should be conducted in a more responsible way. There is a general understanding that tourism cannot and must not be only about economic impact. As United Nations Division for Sustainable Development summarizes, it should also be about “creating high-quality employment for people, promoting the quality of life of local communities, getting local communities involved in planning and management of tourism, reducing pollution and environmental degradation and enriching uniqueness and diversity of the cultural heritage.” (UN Division for Sustainable Development) The overall approach should be a holistic one, with long term planning instead of gaining short term monetary gains. As of today, Croatia is still behind the rest of Europe in that regard. However, new projects and initiatives are being brought on constantly. The process is slow, but, as supporters of sustainable tourism claim, it should be that way. Long term planning and perspectives, slow, qualitative and controlled development are among key principles of responsible tourism. In the end, after all is said and done, the ideal scenario at play here is a visitor fully enjoying the stay away from home, leaving as small as possible impact ,so that the local resident can fully enjoy life in his or her home. Lanza, A., Markandya, A.,Pigliaru, F. 2005. The Economics of Tourism And Sustainable Development . Fondazione Eni Enrico Mattei. Taylor, T., Fedotovic, M., Povh, D. 2003. Sustainable Tourism and Economic Instruments: The case of Hvar, Croatia. Sustainability of SAP: Development of Economic Instruments for the Sustainable implementation of the Strategic Action Programme to address marine pollution from land-based activities in the Mediterranean. University of Bath. Lee-Smith, D.1997. Community Based Indicators. The World Conservation Union. Cambridge. Pizam, A. 1978. Tourism Impacts: The social costs to the destination community as preceived by its residents. Journal of Travel Research. Vol. 16. Pp 8-12 Croatian Ministry of Tourism. 2003. Croatian Tourism Development Strategy Report. Eurostat Press Office. 2009. GDP per inhabitant of the EU27 member states. Lonely Planet. 2006. Top Destinations for 2005. Available at www.lonelyplanet.com [accessed March 13, 2011] Roland Berger Consultants. 2008. The concept of sustainable tourism in Croatia. Available at http://www.rolandberger.hr/media/pdf/rb_press/Roland_Berger_TourismCroatia_20081127.pdf. [Accessed March 11, 2011] Read More