First published in Republica Daily
“I have never been to Nepal, but the first
thing that comes to my mind when I think of Nepal is tourism. I want to visit
there one day,” one of my German friends said over dinner as we talked about
Nepali economy. He further added that he assumed tourism sector made significant
contribution to Nepal’s gross domestic product (GDP). In reality, tourism
contributed a mere 1.8 percent to our economy in 2012/13. But my friend’s
assumption is not wrong, as our government has acknowledged that tourism sector
might help us maintain a healthy balance of payment (BoP).
Tourism’s paltry contribution to GDP indicates we have failed to tap the resources we have. The tourism sector—which neither demands large-scale investment nor requires significant policy reforms—can lead us out of underdevelopment. This sector can create job opportunities for all sorts of people—skilled and unskilled, educated and uneducated. Already, more than 160,000 people are employed in this sector in Nepal.
As our conversation progressed, we started talking about how, historically, no country has become rich without a foundation of industrialization. Nepal is not going to have an industrial revolution in the near future that will help it break the vicious cycle of underdevelopment. And even if it does, it cannot penetrate big markets in the world. Constraints like difficult geography and weak competitive edge will severely limit it. The services sector, especially tourism sector, is our only hope for prosperity.
Nepal can neither invest big to increase economic growth, nor does it have a competitive advantage in manufacturing sector. Our agricultural sector is still at subsistence level, remittance is not being utilized productively, and manufacturing is under pressure from long power cuts and trade unionism. In this scenario, focusing on the tourism might give it the impetus to economic development.
Additionally, the most beautiful part of focusing on tourism sector is that it gives us the incentive to preserve our culture, natural resources and customs. We can become an exemplar country by attaining economic growth without ruining the environment and natural resources.
In a recent report, Nepal Rastra Bank (NRB) stated that the country can accommodate around 7.44 million tourists annually. The report, based on field study, also highlights how Nepal’s failure on tourism promotion impacts tourist inflow. This was reflected in tourism’s decreased contribution to GDP: 2.8 percent in 2008/09 to 1.8 percent five years down the line.
We have had different programs in the past to promote tourism, but we could not achieve as much we wanted. Tourism’s contribution to GDP never reached higher than 2.8 percent. Given our comparative advantage in the sector, we could achieve much more. The economies of China and India are growing, and the emerging middle class of these countries are looking for short and reasonably priced holiday destinations. We could attract many of them.
We don’t have to build star hotels or construct multilane highways or invest billions to attract tourists. We already have many things tourists like. What we have to do is coordinate among ourselves, come up with different packages, and advertise them around the world. People make decisions based on the information they have at hand or receive easily. So we need to make our country’s name familiar across countries.
We need not focus too much on high-end tourists, though they are important. We can be a destination for tourists who seek places that are natural, calm and spiritual. Many such tourists are backpackers. If they venture into hidden nooks and crannies of the country, that will create jobs at the local level.
There are certain things, however, that we need to do to make tourism sector more productive. The first is to improve the quality of our international airport and create a smooth transportation system. We have to stop frequent bandas and our habit of making too much political noise, which spreads fear among potential tourists. If the government could ensure this, there are many local entrepreneurs who would be happy to serve tourists who come for short vacations.
The United Nations believes that sustainable tourism can contribute to achieving Millennium Development Goals (MDGs) in least developed countries. The tourism package program called KONSO Project in Ethiopia is an example of how this sector can help create small scale jobs and reduce poverty. The project was launched by World Tourism Organization (UNWTO) in 2007 in response to a request from the Ethiopian Ministry of Culture and Tourism. It was supported by other development agencies in Konso district in Ethiopia. Following the example of this successful project, we too can urge different agencies working in Nepal to help launch different programs to accelerate the development of tourism sector.
Our expenditure in the tourism sector is limited to 2.4 percent in 2012/13, which we can increase in coming years. Increased focus on tourism might encourage entrepreneurship among the youth who leave for the Middle East in search of jobs.
“Achievement from tourism sector could not be made as expected despite abundant potential of this sector, as it could not be developed to its maximum,” reads the economic survey of 2012/13. Development and marketing of touristic commodities and services is our challenge. Let’s overcome it.
Tourism’s paltry contribution to GDP indicates we have failed to tap the resources we have. The tourism sector—which neither demands large-scale investment nor requires significant policy reforms—can lead us out of underdevelopment. This sector can create job opportunities for all sorts of people—skilled and unskilled, educated and uneducated. Already, more than 160,000 people are employed in this sector in Nepal.
As our conversation progressed, we started talking about how, historically, no country has become rich without a foundation of industrialization. Nepal is not going to have an industrial revolution in the near future that will help it break the vicious cycle of underdevelopment. And even if it does, it cannot penetrate big markets in the world. Constraints like difficult geography and weak competitive edge will severely limit it. The services sector, especially tourism sector, is our only hope for prosperity.
Nepal can neither invest big to increase economic growth, nor does it have a competitive advantage in manufacturing sector. Our agricultural sector is still at subsistence level, remittance is not being utilized productively, and manufacturing is under pressure from long power cuts and trade unionism. In this scenario, focusing on the tourism might give it the impetus to economic development.
Additionally, the most beautiful part of focusing on tourism sector is that it gives us the incentive to preserve our culture, natural resources and customs. We can become an exemplar country by attaining economic growth without ruining the environment and natural resources.
In a recent report, Nepal Rastra Bank (NRB) stated that the country can accommodate around 7.44 million tourists annually. The report, based on field study, also highlights how Nepal’s failure on tourism promotion impacts tourist inflow. This was reflected in tourism’s decreased contribution to GDP: 2.8 percent in 2008/09 to 1.8 percent five years down the line.
We have had different programs in the past to promote tourism, but we could not achieve as much we wanted. Tourism’s contribution to GDP never reached higher than 2.8 percent. Given our comparative advantage in the sector, we could achieve much more. The economies of China and India are growing, and the emerging middle class of these countries are looking for short and reasonably priced holiday destinations. We could attract many of them.
We don’t have to build star hotels or construct multilane highways or invest billions to attract tourists. We already have many things tourists like. What we have to do is coordinate among ourselves, come up with different packages, and advertise them around the world. People make decisions based on the information they have at hand or receive easily. So we need to make our country’s name familiar across countries.
We need not focus too much on high-end tourists, though they are important. We can be a destination for tourists who seek places that are natural, calm and spiritual. Many such tourists are backpackers. If they venture into hidden nooks and crannies of the country, that will create jobs at the local level.
There are certain things, however, that we need to do to make tourism sector more productive. The first is to improve the quality of our international airport and create a smooth transportation system. We have to stop frequent bandas and our habit of making too much political noise, which spreads fear among potential tourists. If the government could ensure this, there are many local entrepreneurs who would be happy to serve tourists who come for short vacations.
The United Nations believes that sustainable tourism can contribute to achieving Millennium Development Goals (MDGs) in least developed countries. The tourism package program called KONSO Project in Ethiopia is an example of how this sector can help create small scale jobs and reduce poverty. The project was launched by World Tourism Organization (UNWTO) in 2007 in response to a request from the Ethiopian Ministry of Culture and Tourism. It was supported by other development agencies in Konso district in Ethiopia. Following the example of this successful project, we too can urge different agencies working in Nepal to help launch different programs to accelerate the development of tourism sector.
Our expenditure in the tourism sector is limited to 2.4 percent in 2012/13, which we can increase in coming years. Increased focus on tourism might encourage entrepreneurship among the youth who leave for the Middle East in search of jobs.
“Achievement from tourism sector could not be made as expected despite abundant potential of this sector, as it could not be developed to its maximum,” reads the economic survey of 2012/13. Development and marketing of touristic commodities and services is our challenge. Let’s overcome it.
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