Fair Trade Tourism Industry - Essay Example

?Fair Trade Tourism (FTT) Fair Trade Tourism (FTT) College This research essay explores the economic effects of tourism industry, particularly through fair-trade tourism. It analyses the notion of Fair-trade tourism and how it encourages the employment, economic growth and infrastructural development in the host nations. It also analyses its positive side and darker side and leakages for the host nation thereby illustrating some examples of FTT around the world. It also criticises how South Africa is talking about its FTT when child labour and child trafficking is encouraged in its tourist industry. Introduction The tourism industry on the international level is booming. For instance, in the year 2012, total number of tourist figures reached a whooping figure of 1 billion and in the year 2013, the tourism industry anticipates to develop by three percent thereby contributing an aggregate of US$6.8 trillion or nine percent of the global GDP. Further, it is estimated that the tourism industry offers employment for more than 266 million around the world which connote that one in every eleven jobs on the planet is being offered by the tourism industry. While the significance of economic involvement cannot be refuted, many research studies have demonstrated that international tourism industry is not immune from inherent defects and could be the major contributor for the cultural, social and environmental issues. (Fairtrade Centre 2013). This research study will analyse how fair-trade certification helps the tourism industry of the respective nation helps to contribute the economy, society and social welfare in a detailed manner. Fair Trade Tourism – An Analysis As per research study carried over by Tearfund (2002,p.7) , the shoppers are eager to pay more for products that are manufactured or produced in a friendly way , which connotes that they benefit the nation in which they are manufactured or produced. A Fair Trade (FT) refers to a certified product with criteria and standards that are being constantly supervised. According to FITE, a Fair Trade is a trading affiliation footed upon transparency, dialogue and respect that search for greater equity in global trade. FT encourages sustainable development by creating a conducive trading atmosphere and safeguarding the privileges of marginalised workers and producers. Thus, FT main aim is to work with oppressed workers and producers, thus assisting them to recover from a condition of susceptibility to prosperous and economic self-sufficiency. FT‘s aim is to encourage the abolition of poverty and to enhance the dignity of workers and producers. FT offers high-quality product wide range and variety of quality products. FT currently offers a wide range of about 5000 to 7000 quality products all around the globe. Fair-Trade tourism refers to the process of sharing the advantages and disadvantages of tourism in a fairer manner observing ethical, economic and environmental features. (Avara & Matkailu, 2004). The chief aim of FTT (Fair-Trade Tourism) is to capitalize the advantages from tourism for the local beneficiaries mainly through equitable and mutual partnerships between international and national tourism stakeholders. (Tourism Concern, 1999, p.2). According to Pluss (2013), FTT is mainly focussed on the magnitude to which the application of fair trade as regards to consumer awareness , trading partnerships and certification which can elucidate tourism development in overseas and at tourism destination. FTT concept has materialised as a mean to readdress the inequality and sustainability issues that linger in the tourism industry. (Boluk, 2011, p.29). FTT attempts to establish cultural, social and economic advantages for local citizen at the respective tourist destination. FTT is to stick to local laws, create vibrant consultation structures, should be translucent, should include social accounting, sustainability and ecological safeguards and should revere human rights. The other key elements of FTT are as follows: Communities should have liberty to say no to tourism if they opt for. Small business and local communities should be encouraged to indulge in capacity strengthening. It should offer a viable tourism product There should be compulsion from consumer for ethical tourism Spotlight on both international markets and domestic markets Communities should have knowledge about the effects of liberalisation whereby cultural, social and environmental norms should not be considered as trade barriers. (Cole & Morgan, 2010, p.98). Cleverdon and Kalisch (2000) tried to find out whether price should be the main determinant of fair-trade tourism. It also pointed out that there was lack of coordination among tourism producer communities as in the case of chief commodity producers like coffee and chocolate. (Mowforth & Munt, p.99). Critics recommend that FTT label should be used to sort out the issues of injustice and inequality, especially in the international tourism in less economically developed countries (LEDCs). There is still debate over whether a FTT certified kitemark would be successful in addressing the core causes of inequality as decided by the International Network on Fair Trade in Tourism either as marketing mechanism or as a development tool. (Cole & Morgan, 2010, p.98). Examples of FTT As per MINKA Fair Trade (2011), Peru introduced FTT and named it as MINKA which offered prospects for tourists to visit textile producers and local communities and can stay with local families in certain tourist places to learn their way of living and cultures. According to Goodwin & Boekhold (2010, p.181), critics demonstrated that more than 3000 producers had been impacted by the MINKA FTT since 2005. Analogues FTT have been introduced in East Africa, and in Tanzania where several coffee farming communities have established a sustainable guise of coffee-associated tourism. Tanzania’s FTT has latter established locally managed and owned coffee tours, which yielded good returns to families, individuals and their communities. Makaibari Tea Estates in India is regularly offering FTT by way of paying guest facilities, and the profits generated out of it is utilised to meet computer educational expenses of children, to offer scholarships to community students who are pursuing horticulture education and to community loan fund and also take care of the communities’ housing, educational, small business development and livestock. South Africa is the only nation in the globe to offer a national certification scheme that applies the cannons of fair trade to the tourism industry and is continuously audited. South Africa established its trademark certification in the year 2002 called as Fair-Trade Tourism South Africa. (FTTSA). The main objective of the FTTSA is to contribute sustainable and equitable tourism development through capacity-building, awareness enhancement, promotion and the globe’s first tourism fair trade certification programme. South Africa’s FTT certification is footed upon identifiable yardstick concerning labour norm, including local employment, rational wages, treatment of people, purchasing chances for communities and families, creation of more employment for locals, AIDS/HIV support, empowerment of Blacks and environmental conservation policies. Advantages of FTT One of the main advantages of the FTT that it offers increased employment to local people. Due to FTT, there will be greater infrastructure development in the concerned tourist spot. Due to use of developed technology and to offer standards of high quality of product which the foreign students may demand, there will be a substantial increase in the imports. Due to high spending by foreign tourist, there GDP of the host nations will show a substantial surge. It will result in the development of regions, including infrastructure development and will not result in inequalities. It will not only result in supporting traditional activities but will also encourage regional development. For the host nations, FTT will offer higher forex income and increase in tax revenue. It will stimulate the entrepreneurial spirit and will widen the scope of services offered by the local community. (Krause, 2012, p.25). Fairtrade tourism will not only result in diminution of leakages but also enhances the scope for linkages. FTT results in the accomplishment of fair price which can be negotiated in association with local suppliers. FTT results in a fair competition between domestic and foreign investors to increase the chances for domestic competitiveness and investment in tourist infrastructures. It aims to result in fair distribution of income from the tourist industry to make sure that there will be a fair return from the utilisation of public assets for tourism purposes, and as it might offer either fundamental advantages, infrastructures or natural resources’ development and increases the social, environmental and public resources in the local tourist industry as the development of infrastructure of tourism industry might also automatically extend benefits to the local people. (Tiranutti, 2012, p.4). One of another main advantage of FTT is that it encourages community development as it integrates local cultural ecology and heritage preservation in the travel industry. Thus, FTT is an illustration of community-oriented tourism projects started by civil society, which intends to develop equal income distribution and sustainable tourism development in rural areas where the producers of craft merchandises that are exported internationally under FT logo. FTT resulted in nexus with the creation of job, generation of income for both the rural and urban poor residing in the impoverished provinces, empowerment of local communities and together with an enhancement in security in the provinces of health, food-self-sufficiency, enhanced the privileges of kids and women and offering guarantee to the land tenure. The FTT model of sharing of equitable benefit with local residents is followed by the coffee plantations in Lao PDR, which have Fairtrade certificate for their products. The export market for Arabica coffee variety produced in Bolaven Plateau in Southern Lao is managed by UKs Fairtrade NGO namely Oxfam. Oxfam pays them the double the price for their products than what they sell through an intermediary which helps the coffee growing community to maximise their revenue and ploughing back the increased revenue earned to develop tourist attraction centers in their coffee plantations. (Tiranutti, 2012, p.5). It is to be noted that FTT not only creates growth in the tourism industry alone but also broadens the development to other associated business sectors like transport, restaurants, hotels and communication sectors. For instance , Cambodia is the best example of attaining economic growth through FTT as it is relying more on tourism income , which enjoys a surplus in trade in services whereas Thailand and China have negative balances of trade in services . Cambodia can be said to be one of the nations in the world where it is able to alleviate the poverty through FTT. (Tiranutti, 2012, p.2). Obstacles to the Introduction of Fair Trade in Tourism There is a compulsion on the national government to repeal and transform their own national regulations to fit with needs of international trade agreements like WTO, GATTS, and OECD. Hence, they may not be in a position to offer incentives to local tourism industry and make it as a fair trade. According to Madeley (1995), tourism industry in UK is witnessing cutthroat competition as big companies like Airtours, Thomson and First Choice enjoy about 80% of all package tours offered. Instead, fair-trade demands increasing the price to the producers and introducing social and environmental code of demeanour, it would be very arduous to achieve fair trade in tourism in UK. The small and medium tour operators occupy a small percentage in the tourism industry and due to this, they are placed in less advantageous position in the tourism industry as they may not cope with the big players in the industry. Under this scenario, there arises a question, whether the advancement of FTT as a niche product could be possible at all? Criticism against FTT It is argued that FTT is a replica that has been nurtured in the West footed upon Western comprehensions and perceptions. Hence , FTT is being condemned for being present guise of colonialism thereby encouraging cultural re-production , civilising mission , conveying new guises of individualism , constructing new guises of wealth and offering enhanced value on money. (Boluk, 2011, p.32). Due to FTT, there will be only seasonal employment and there will be high fluctuations in prices of the products and it is alleged that will end up in inflation and migration. Further, it is alleged that FTT encourages imports of products to satisfy the visiting tourists thereby crushing the demand for the domestic products. It may result in enhanced regional inequalities and sudden disappearance of customary activities. (Krause, 2012, p.25). One of the bad cultural fatalities of FTT is the impact of FTT on the indigenous people all around the world. Many inheritances and cultural traditions of varied indigenous peoples are in the peril of disappearance. Customary artifacts, ornaments, musical instruments created by the indigenous people from the rainforest’s areas for both cultural and spiritual festivals, and rituals are now copied erratically and being commercialised for maximisation of profits by FTT operators around the world. (Mathieson and Wall, 1992, p.87-88). FTT may result in a downtrend in economy as it can make themselves susceptible to changes in demand by tourists. It is to be remembered that tourist industry is more sensitive in nature and manipulated both changes in the international and domestic level. FTT can be impacted by the changes in political trends, price level, political unrest and availability of electricity. Countries like Libya, Syria and Egypt which witness Arab spring now might be witnessing leakages in tourist revenues. So as to prevent economic disorders in response to changes in demand, FT tourist destinations should develop a diversified tourist industry and strong economy. (Mathieson and Wall, 1992, p.87-88). The transformation in land-use styles by the tourism industry from that of agrarian society to that tourist oriented creates changed land-use styles as FTT enhances the prices of the land due to cut-throat competition. Thus, the land value in FTT centers might be increased many folds thereby making the availability of land to the middle-class people out of their range. (Mathieson and Wall, 1992, p.87-88). FTT may aggravate the inflationary trends in the FTT provinces as rich tourists are willing to pay high prices and as a result, local buyers are compelled to offer more high prices for the products . (Mathieson and Wall, 1992, p.87-88). Leakage Leakage can be defined as “financial procedures through which very little money gets back into the host nation economy. (Ratz and Puczko, 2002, p.8). When foreign tourists want standards that the host nation cannot afford, then import leakage happens. As per UNCTAD, import-associated leakage in tourism industry in less-developed nations is on average between 45% to 50% whereas in developed economies, it is only just 10 % to 20%. Export leakages happen when foreign investors who had invested in hotels, and resorts repatriate their incomes back to the home nation. Studies have demonstrated that nations that require foreign exchange badly make the lowest profits from tourism industry. The most extreme cases have demonstrated that about eighty to ninety percent of the foreign exchange that repatriated out before any advancement in the economy of host nations has happened. (Krippendorf, 1987, p.47). Whether FTT Value is non-existence in case of South Africa Though, South Africa established its trademark certification in the year 2002 called as Fair-Trade Tourism South Africa. (FTTSA), it has to address many child labour, child trafficking, and child exploitation issues in its tourism industry. As per Schyst Resande (2013), South Africa tourism industry has been condemned for how the kids are either indirectly or directly impacted by tourism and in particular , on how their privileges as children are impacted there. It is alleged that the majority of the children are working along with their parents in the tourism industry in South Africa. Though, the bureaucrat data on the magnitude of child sex tourism in South Africa is not available, but it is guessed that it is to be a problem for the nation. South Africa cannot boast itself that it is free from child labour. It is observed that significant economic and social inequalities create obstacles for children in South Africa. It is estimated that about 66% of the children in South Africa are living below the poverty line. As per the Department of Labour, South Africa projects that about 800,000 kids are impacted by child labour in South Africa. Child labour, in the guise of forced street vending and begging together with child performance on streets is either indirectly or directly a result of the tourism industry in South Africa. Further , for child sex offenders, South Africa has been regarded as a popular destination .Researchers demonstrate that sex tourism is prevalent in Port Elizabeth , Cape Town , Johannesburg and Durban. In view of the above, we can say that the value for FTT in South Africa is non-existent or restricted in nature. (Fairtrade Center, 2013). Conclusion We have seen that FTT is the process of sharing the advantages and disadvantages of tourism in a fairer manner observing ethical, economic and environmental features. Further, we have seen in Makaibari Tea Estates community in India is reinvesting its income earned through the FTT for paying guest facilities, and the profits generated out of it is utilised to meet computer educational expenses of children, to offer scholarships to community students who are pursuing horticulture education and to community loan fund and also take care of the communities’ housing, educational, small business development and livestock. This demonstrates that FTT is helpful in community development. As per research study carried over by Krause (2012, p.49) demonstrates that FTT impact to the host nation’s economy is positive and advantageous. FTT offers a fair bargained price which covers the fair wages, the cost of production and a good working atmosphere. However, the majority of the FTT tour operators reported that their main aim is to maximise their revenues and have a least concern over offering employment to local people or to save the environment where they operate. It is also apparent that FTT does not exert any sway on the economic effects of tourism until it is introduced on a large scale. References Avara Maailma & Matkailu, R. (2004). Onko Sita? Retrieved December 7, 2013 < http://www.avaramaailma.com/reilu.html> Boluk, K. (2011). In Consideration of a New Approach to Tourism: A Critical Review of Fair Trade Tourism The Journal of Tourism and Peace Research, 2(1), 27-37. Cleverdon, R & Kalisch, A. (2000). Fair trade in tourism. International Journal of Tourism Research, 2(3), 171-187 Cole, S & Morgan, N. (2010) .Tourism and Inequality: Problem and Issues. London: CABI. Cole, S & Nigel, M. (2010). Introduction: Tourism and Inequality. Tourism and Inequality Problems and Prospect. Cambridge: CABI. Fairtrade Centre. 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