Impact of Tourism on Countries Economies - Coursework Example

Impact of Tourism on Countries’ Economies Name: Institution: Course: Date: With the increasing level of globalization resulting from liberalization of markets, efficient flow of information and integration of markets, the level of competition in the market has increased tremendously (Tribe & Airey 2004). Therefore, each country is trying to diverse the source of revenue in order to reduce the risks associated with concentrating on a single market. On the other hand, people have started moving from one part of the world to the other. The entry of technology and internet services has led to growth of tourism sector. However, domestic tourism has become common as people look for destinations where they can spend their free time (Higginbottom, Carter, Moore, Rodger & Narayanan 2010). This aspect has seen the growth and development of the tourism sector in Egypt, Lebanon, and Syria. Tourism has been significant in creating jobs in the three countries. The weather conditions in these countries are not favorable for agricultural purposes. However, although the government has tried to mechanize the agriculture sector in order to increase the level of food security, majority of the food consumed in the countries is imported from other countries. Therefore, the chances of young people being employed in the agricultural sector are very minimal. Egypt, Lebanon, and Syria have rich historical sites (Jafari 2000). For instance, Egypt is known for pyramids and the history of the pharaohs. The sites where these historical sites are found have been attracting hundred of tourists from across the world. Many investors have therefore focused on the sector in order to take advantage of the increasing number of tourist. Furthermore, the governments of these countries have been putting more effort in advertising these sites. Therefore, many people are yearning to visit the countries, an aspect that indicates that the trend will continue even in the future. The tourism sector has therefore, employed thousands of people. Majority of these people work in hotel sector and transport sector while others are tour guides (Holland, 2013). This aspect has reduced the level of unemployment in the counties. As a result, the level of crime and drug abuse in these countries has reduced tremendously. Tourism increases government revenue. Although Egypt, Lebanon, and Syria has mineral resources which play an important part in enabling the governments to run their activities, the revenue collected cannot be enough to meet the demand of the citizens (Tribe & Airey 2007). The education sector and infrastructure have been the major consumers of the revenue collected. Tourism sector has therefore, been important in topping up the revenue, an aspect that enables the governments to support various services. Furthermore, the taxes obtained from the sector have made it possible for the governments to reduce the amount of taxation that it collects from the businesses (Mahmood 2007). As a result, the move has encouraged the growth of the business sector. In addition, it has attracted multinational companies to invest in the country. As a result, more people have been employed, thereby alleviating poverty in the countries. Syria, Egypt, and Lebanon have a rich Christian and Muslim history. As a result, the countries receive thousands of tourists from different parts of the world. The sector has been a foreign exchange earner for the countries. With the countries relying on imports from other nations, tourism sector has been instrumental in bringing in foreign currency in the countries. This has been playing a significant role in stabilizing the local currencies (Hassan 2000). Furthermore, the sector has been balancing the imports versus the exports, thereby preventing any cases of inflation. This aspect has enabled these countries to withstand the political turmoil which has been experienced in the past few years. Tourism enables Egypt, Syria and Lebanon to diversify their sources of income. With the current integration of economies and liberalization of markets, economic challenge in one country has an impact on other countries across the world. For instance, the depression in United States had a major impact on very many economies across the world. However, countries that have diversified their income to different sectors were not affected heavily. The three countries trade mainly with other Middle East countries. These nations face numerous conflicts, an aspect that affects their economic stability (Hall & Lew 2009). Therefore, constant flow of revenue from the tourism sector plays a significant role in supporting the governments’ operations when other trading partners are affected by political instability. Tourism in Egypt, Lebanon, and Syria has contributed immensely in generating value added job opportunities and enhancing the countries’ balance of payment. Furthermore, the sector has boosted the growth of tourism-related industries and activities through tourism multiplier. For instance, the tourism sector has seen the demand of some cultural products increase tremendously. In addition, some agricultural products which are consumed by the tourists have seen their demand increase sharply. As a result, the tourist sector has led to increased level of specialization in different parts of economies (Keyser 2002. This has increased the source of revenue for the governments. As a result, the governments have adequate resources to invest in agriculture education, electricity and other important sectors of the economies. This has made it possible for the governments to alleviate poverty levels. Egypt has been faced by high inequality levels between the poor and rich in the society. This aspect has raised tension between the residents. However, the growth in the tourism sector has reduced this inequality by distributing income in different parts of the country. Majority of the tourist attraction sites in Egypt are located in remote areas of the country (Matias, Nijkamp & Sarmento 2009). Therefore, the local population has been able to use the opportunity to gain employment from the sector. Furthermore, they have opened up businesses in order to supply the basic necessities that are demanded by the visitors. This has improved their economic status. On the other hand, the government has been forced to improve the infrastructure levels to these areas in order to open up sites which are in the interior parts of the country (Fawzy 2002). As a result, the government has invested heavily in roads, electricity, and distribution of water in areas surrounding these sites. This has acted as a blessing in disguise for the people residing in these areas. This is because the intervention has opened up the areas for the external investors. In addition, good roads have made it possible for these people to get access to the markets. This has reduced the impact of the middle men who were taking a big chunk of people’s profits. Syria and Lebanon has been facing intensive political turmoil for a very long period of time. As a result, major infrastructures in these countries were destroyed (Higham 2007). Furthermore, the reputation of the country in the global mark has reduced tremendously. However, the increased investment in the tourism sector has seen the number of tourist visiting the countries increase gradually. This has increased the governments’ revenue. As a result, the governments are now able to reconstruct the important infrastructure that was destroyed. This move has been important in rebuilding the economies which were on the edge of collapsing. This is through improving the local production, an aspect that has increased the exports commodities. On the other hand, cities such as Apamea, Lakakia, and Safita had started to suffer after many businesses were shut down as a result of war. However, statistics that have been recently released which indicates that the number of tourists has started to increase has created confidence among the business community (Davenport & Davenport 2006). As a result, major businesses which had relocated to neighbouring countries have started to come back. This move is playing a significant role in supporting the economy. This is through increasing the source of revenue which is important in running the government. Tourism plays a significant role in encouraging sustainable development in Egypt, Lebanon, and Syria. Currently, the world is facing a huge problem of global warming. The three countries have extreme weather conditions (Fayissa, Nsiah, & Tadasse 2007). As a result, even as they concentrate on growth and development, environmental protection has become an important component towards this growth. Through the income obtained from the tourism sector, the economy is able to get resources which are directed towards the protection of natural resources. Furthermore, part of the money is used to rehabilitate the old tourism sites. This move is important in ensuring the countries continue to benefit from this growing sector of the economies. In an example, Egypt economy depends on irrigated agriculture (Teye, Sirakaya & Sönmez 2002). Therefore, the government spends a lot of revenue collected from the tourism sector to rehabilitate the Nile River. In addition, constant renovations on tourism sites are also important. Lebanon enjoys a variety of tourist attraction towns and sites. However, religious tourism acts as a major attraction for the tourists visiting the country. The town of Halissa, Our Lady of Mantara, Our lady of Bekaa, and Mar Sarkis Ehden are some of major tourist attraction sites. The tourist sector in Lebanon contributes 10% of the country’s GDP. The money is then diversified into other sector of economies. For instance, money from the tourism sector has been used to support the oil industry which faces frequent fluctuations. This protects the people from inflation. Furthermore, it ensures that the income of the government is distributed evenly in different sectors, thereby reducing the risks associated with concentrating on a single market. Moreover, the tourism sector in Lebanon is the largest employer in the country. Through the revenue obtained from the industry, the government has been able to invest heavily on the education system. As a result, majority of the young people are highly qualified. The sector has generated approximately 500,000 direct jobs and indirect jobs. According to Singh, Timothy, & Dowling (2003) majority of the money obtained from the tourism sector by the three countries has been used to provide high quality and affordable education to the young generation. As a result, majority of the young people in these countries have been able to integrate with the needs of the economies. For instance, these countries have been ranked among the top in releasing innovative ideas in the Middle East. In addition, these people have been spearheading growth in the industries. The industries have therefore increased the amount levied to the governments in terms of taxes. Moreover, some of the companies have invested in other different countries. As a result, this aspect has diversified the source of income, thereby making it easier for the governments to sustain their operations even in tough economic times. This explains the reasons why the economies of Syria and Egypt were least affected by the uprising that were experienced in the past few years. On the other hand, the young people have migrated to other parts of the world (Richter & Steiner 2008). However, they send money and invest back in their countries. The money has been important in maintaining the balance of payments. Although tourism sector has been associated with positive impacts, the sector has some drawbacks to the economy. For instance, it has led to heavy dependence by the three countries. In the past few years, the income from the tourism sector has led to complacency. Constant flow of income from the tourism sector has made the governments in Syria, Egypt, and Lebanon to fail in investing in other sectors of the economy (TV Choice Productions 2002). As a result, during economic depressions in other countries, the economies of these countries are negatively affected. This has made some dents in the growth and development of these countries. Egypt, Lebanon, and Syria economies have been affected heavily by leakages. Although they record a high number of tourists every year, these countries are yet to fully exploit the resources from the sector due to high leakage level. These governments spend a lot of money to maintain the tourist sites (Shaalan 2005). The direct income that is obtained from an area is the amount the tourists leave back in the country after taxes, profits, and wages paid outside the area. After the subtraction of the imports, the remaining amount is the leakage. Approximately eighty percent of the tourists’ expenditure goes to the airlines, hotels, and other multinational businesses. These firms have their headquarters in their home countries. Majority of these businesses have imported some workers to work in their firms (Ryan, Page, & Aicken 2005). As a result, the workers keep on sending their income back to their countries. In addition, the businesses send their revenues back to the headquarters. Therefore, a significant amount leaves the countries, an aspect that leaves the economy with less to boast of. Therefore, despite the sector having the potential to spearhead growth in these countries, it has been draining the money from the economy (Mishra & Parida 2008). This is affecting the other sectors which require government revenue for existence. Tourist sector in Egypt, Lebanon, and Syria has increased the infrastructure costs. Investors in the tourism sector put pressure on the government to improve the airports, roads, and other related infrastructure. Furthermore, sometimes they request the governments to provide tax breaks and other financial advantages. These are very costly activities for the local governments (Candela & Figini 2012). The public resources which are spent in developing these areas and providing tax breaks have played a significant role in reducing the government investment in other critical areas of economies such as health and education. This has increased the poverty levels in these countries. Tourism sector specifically in Lebanon has increased the prices of goods. The high demand of basic services and goods leads to hiking of their prices by the business people (Daher 2007). This has a major impact on the living conditions of the local population whose income does not increase proportionally. Therefore, the governments in these countries spend much of their money trying to support the local population. As a result, the economic growth is very slow. In an example, Egypt real estate has grown tremendously over the years. However, the major beneficiaries of the sector are multinational companies which have invested heavily on the booming business. This has forced the local people to live in shanties. This is because they cannot afford good houses. The prices of land in the prime area have also escalated. The economies are therefore, held hostage by the external investors (Rogerson 2007). This forces these governments to entice the investors in order to remain in the country. This aspect puts the economy of the country at a risk especially in case any of the major investor withdraws. Majority of the jobs in the tourist sector are seasonal (Asia 2012). People in these countries enjoy the benefits of the tourism sector only during the high seasons. This is very dangerous especially when a high population depends on seasonal jobs. This means that the economies of these countries perform well during a certain period of time. Therefore, in case any of the government is hit by the emergency, it can only rely on aid from outside. Therefore, the tourism sector has affected the economic diversification of Egypt, Syria, and Lebanon. In conclusion, the economic success of the three countries can be attributed to the growth of the tourism sector. The sector has been instrumental in creating employment; it acts as a foreign exchange earner, and has been instrumental in supporting other sectors of the economies. However, there is need to diversify the resources obtained from the sector in order to reduce the level of economic dependence on the sector. References Asia, D. I. 2012. Regional Economic Outlook, November 2012. Washington: International Monetary Fund. Candela, G., & Figini, P. 2012. The economics of tourism destinations. Berlin: Springer. Daher, R. 2007. Tourism in the Middle East: Continuity, change and transformation. Clevedon: Channel View Publications. Davenport, J., & Davenport, J. L. 2006. The impact of tourism and personal leisure transport on coastal environments: A review. Estuarine Coastal and Shelf Science, 67(2), 280-292. Fawzy, S. 2002. 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