UNIT 6 POLITICAL ECONOMY OF TOURISM REVISION NOTES

 Introduction to the Political Economy of Tourism

Importance of Tourism

• Global Impact: Tourism is the world’s largest industry, generating over US$ 450 billion internationally and US$ 3.5 trillion globally.
• Future Projections: Expected to generate up to US$ 2 trillion annually by 2020.
• Development Tool: Seen as integral to social and economic development, prompting many countries to adopt tourism development policies.

Benefits of Tourism

• Economic Gains:
  • Foreign exchange earnings.
  • Employment creation.
  • Economic diversification.
• Sustainable Development:
  • Optimizing benefits for host communities and tourists.
  • Minimizing negative social and environmental impacts.

Negative Consequences of Tourism

• Environmental Impact:
  • Pollution (e.g., plastic waste).
  • Overuse of natural resources (water, food).
  • Damage from activities like trekking and mountain climbing.
• Socio-Cultural Impact:
  • Potential disruption to local communities.
  • Loss of cultural heritage and identity.

The Shift in Tourism Policies

• Nineties Shift: Policies aimed to balance economic benefits with social and environmental sustainability.
• Challenges:
  • Balancing benefits with adverse impacts.
  • Developing a holistic understanding of tourism’s impact.

Political Economy Approach

• Need for Study: Scholars argue for a broader, more comprehensive view of tourism’s impacts, considering political and historical contexts.
• Key Scholars:
  • Stephen Britton.
  • Mosedale.
  • Bianchi.
  • Clancy.
  • Hazbun.
  • Steiner.
  • Williams.

Core Concepts

• Economic Dependency: Tourism often mirrors colonial patterns of dependency.
• Inequality and Marginalization: Tourism can perpetuate inequalities and social issues in developing countries.
• Power Hierarchies: Unequal exchanges between wealthy and less wealthy nations.

Key Points Summary

• Global Tourism Industry:

  • Generates significant revenue.
  • Major development strategy for many countries.
  • Expected future growth.

• Benefits of Tourism:

  • Economic: foreign exchange, jobs, diversification.
  • Development: social and economic improvement.
  • Sustainability: need to balance benefits with environmental and social impacts.

• Negative Impacts:

  • Environmental degradation: pollution, resource overuse.
  • Socio-cultural disruptions: community displacement, cultural loss.

• Policy Shifts in the 90s:

  • Focus on sustainable development.
  • Optimize benefits, minimize adverse impacts.

• Political Economy Approach:

  • Broader analysis beyond economic benefits.
  • Historical and political contexts are crucial.
  • Address inequalities and power imbalances.

• Scholarly Contributions:

• Examining tourism through the lens of political economy.
• Highlighting issues of poverty, inequality, and underdevelopment.

Political Economy Approach to Tourism

Definition and Origin

• Political Economy: Study of socio-economic forces and power relations in commodity production and resulting divisions, conflicts, and inequalities (Bianchi 2018).
• Historical Roots: Emerged during the Industrial Revolution and the development of capitalism in Western Europe (18th-19th centuries).

Founding Thinkers

• Early Economists: Adam Smith, David Ricardo, J. S. Mill focused on capitalism's impact on industrial societies, wealth production, and distribution.
• Marx and Engels: Shifted focus to wealth distribution across social classes, highlighting inequalities.

Evolution in Tourism Studies

• Early Studies: Focused on cultural, aesthetic, and economic dimensions, ignoring power dynamics.
• Critical Research (1960s-1970s): Shift to analyzing tourism through development and dependency theory.
  • Key Works: Young’s "Tourism: Blessing or Blight" (1973), de Kadt’s "Tourism: Passport to Development" (1979).

Dependency Theory

• Modernization Theory: Socio-economic development as an evolutionary path from traditional to modern society, rural to urban economy, agriculture to industrialized society.
• Dependency Theory: Critique of modernization, emphasizing the relationship between development and underdevelopment.
  • Core Concept: Developing countries (periphery) feed the developed countries (core) economy.
  • Economic Surplus: Siphoned from periphery to core, causing underdevelopment in peripheral countries.
  • External Factors: Political, institutional, and economic structures keep developing countries dependent.

Application to Tourism

• Uneven Development: Tourism development driven by capitalist structures, leading to visible inequalities (Britton 1982).
• Interdependence: Raw materials from periphery converted into goods at the center, exported back to periphery (Frank 1967).
  • Leakage: Flow of capital from periphery to center.

Key Points Summary

• Political Economy: Socio-economic forces, power relations, inequalities in commodity production.
• Historical Thinkers: Smith, Ricardo, Mill (capitalism), Marx, Engels (wealth distribution).
• Tourism Studies: Shift from cultural/aesthetic focus to development and dependency theory.
• Dependency Theory:
  • Development vs. Underdevelopment.
  • Periphery vs. Core economies.
  • External factors causing dependency.
• Impact on Tourism:
• Capitalist structures driving development.
• Economic surplus siphoning (leakage).

Tourism and Core-Periphery Dynamics

Core-Periphery Relationship in Tourism

• Core (Tourist Generating Centers): Predominantly Western countries with economic, political, and commercial control over the tourism industry.
• Periphery (Tourist Destinations): Developing countries entering the international tourism market, becoming dependent on external forces for economic benefits, job creation, and quality of life improvement.

Dependency Theory in Tourism

• Key Concept: Developing countries promote tourism for economic gains but become dependent on and controlled by developed countries.
• Britton’s Enclave Model: Highlights exploitation of Third World destinations by metropolitan centers controlling tourism development.
  • Tourist Experience: Shaped by metropolitan enterprises.
  • Products and Services: Owned and provided by metropolitan firms.

Britton’s Analysis

• Commercial Practices: Developing countries must accept practices from developed countries, as these pioneering firms define and supply the new industry.
• Structural Dependency: Tourism industry, dominated by foreign ownership, imposes a development mode reinforcing dependency on developed countries.
  • Comparison to Colonialism: Similar to historical colonialism, where First World powers kept colonial regions in subordinate positions.

Example: Tourism in Rajasthan, India

• Western Orientation: Facilities and services cater to Western tourists.
  • Continental Breakfasts: Staff trained in Western mannerisms.
  • Fusion Cuisine: Combines Indian flavors with a Western palate.
  • Decor and Shops: Oriented towards Euro-American tourists.

Domestic Core-Periphery Dynamics

• Weaver’s Study: Examines dominant and subordinate relationships within countries.
  • Example: Dominant islands (Trinidad) vs. subordinate islands (Tobago) in tourism development.
  • Control: Dominant regions control tourist arrivals, foreign investment, and tourism policy for subordinate regions.

Domestic Context in India

• Metropolitan Tourists: Dominant tourists from cities visiting smaller, less prosperous destinations.
  • Exploitation: Local people try to please city dwellers, sometimes for financial gain.
• Criticism of Dependency Theory:
• Deterministic and Pessimistic: Suggests inevitable exploitation by the core.
• Local Ownership: Some accommodations are owned by local companies, not just developed countries.
• Pragmatic Goals: Efforts to please tourists often have practical financial motivations.

Tourism, Globalization, and 'New' Political Economy

Evolution of Tourism Studies

• 1980s: Dependency and underdevelopment theories in tourism reached a deadlock.
• Shift: Third World countries pursued state-led tourism for economic self-reliance, challenging the passive periphery paradigm.
• 1990s: Liberalization and free market policies promoted micro-level interventions for poverty alleviation and sustainable development.
• Pro-Poor Schemes: Redirected tourism revenues to impoverished rural communities.
  • Example: Local villages in Himalayan foothills providing tourist accommodations and guiding services.

Rise of Transnational Corporations (TNCs)

• Partnerships: TNCs collaborated with local communities for resource exploitation.
• Critique: Scholars like Brohman (1996) and Mowforth and Munt (2009) criticized neoliberal globalization and corporate dominance hindering development.
• Sector Domination: Transnational hotels, airlines, and tour companies exerted control over tourism infrastructure.
  • Investment: Minimal local investment; infrastructure funded by local resources or foreign loans.

Inequality and Dependency

• Unequal Trading Relationships: Developing countries provide infrastructure at their expense, while TNCs reap profits.
• Transnational Tour Operators: Negotiated tourism packages, impacting local suppliers and economies.
• Political Economy Perspective: Highlights distortions and imbalances in global economic system.

Case Study: India's Tourism Sector

• Attractions: Geographical and cultural diversity with numerous world heritage sites.
• Government Initiatives: Schemes like Swadesh Darshan and PRASHAD for tourism infrastructure development.
• Economic Contribution: Significant GDP contribution and employment generation from tourism.
  • Growth Forecast: Expected rise in international tourist arrivals and economic benefits by 2028.

Changing Global Dynamics

• Emerging Players: Countries like China and India becoming prominent in global tourism.
• Tourist Behavior: Increasing Chinese tourists in Western destinations; Indian tourists influencing European hospitality.
• Dynamic Center-Periphery Relationship: Not static; involves movement and shifts in global power dynamics.

Visual Representation

Flowchart: Globalization and Tourism

1. Evolution of Tourism Studies

   • Dependency and underdevelopment theories
   • Shift to pro-poor schemes and micro-level interventions

2. Rise of TNCs

   • Collaboration with local communities
   • Critique of neoliberal globalization

3. Inequality and Dependency

   • Unequal trading relationships
   • Impact of transnational tour operators

4. Case Study: India's Tourism

   • Cultural and geographical attractions
   • Government initiatives and economic contribution

5. Changing Global Dynamics

• Emerging global players
• Influence of Chinese and Indian tourists

Constraints of Political Economy in Tourism

Influence of Transnational Companies

• Dominance: Large transnational companies (e.g., Thomas Cook) exert significant influence locally, regionally, and nationally.
• Impact: Shape tourism development and policies in developing countries leveraging natural resources for sustainable tourism.

Globalization and Tourism

• Increased Movement: Open economies and advanced communication technologies facilitate rapid tourism growth to even remote destinations.
• Unfulfilled Promises: Globalization and liberalization were expected to bring economic growth and poverty reduction, but evidence suggests otherwise.

Social and Economic Conditions

• Labor Issues: Semi-skilled or unskilled workers in tourism often face low wages and poor social conditions hindering full participation in the global economy.
• Profit Distribution: Transnational companies reap major profits without adequately addressing environmental concerns of destinations.

Environmental Concerns

• Overexploitation: Tourism often leads to stress on destinations, depleting natural resources like water and forests.
• Long-Term Impact: Ecological imbalances due to infrastructure development (e.g., coastal regions in Kerala) pose risks, especially during natural disasters.

Sustainable Tourism Challenges

• Product Life-Cycle Model: Butler’s model highlights overexploitation of tourism products without sufficient consideration for social and environmental impacts.
• Government Role: Policies needed to balance market economy benefits with social and environmental concerns in tourism development.
• Community Participation: Encouraging local community involvement in tourism projects can mitigate polarization and benefit sharing.

Future Outlook

• Ecological Sustainability: Emphasize reduced energy consumption, pollution control, and ecological sustainability in tourism practices.
• Community Empowerment: Support community-driven tourism initiatives to ensure equitable distribution of benefits and sustainable growth.
• Inclusive Growth: Aim for inclusive growth where all sections of society benefit from tourism’s economic opportunities.

Visual Representation

Bullet Points and Flowchart: Constraints of Political Economy in Tourism

• Influence of Transnational Companies

  • Shape local, regional, and national tourism policies.
  • Exploit natural resources for economic gains.

• Globalization and Tourism

  • Facilitate tourism to remote destinations.
  • Unfulfilled promises of economic growth and poverty reduction.

• Social and Economic Conditions

  • Challenges faced by semi-skilled and unskilled workers.
  • Unequal profit distribution in favor of transnational companies.

• Environmental Concerns

  • Overexploitation of natural resources.
  • Long-term ecological impacts.

• Sustainable Tourism Challenges

  • Butler’s Product Life-Cycle Model.
  • Need for balanced government policies and community involvement.

• Future Outlook

  • Focus on ecological sustainability and reduced environmental impact.
  • Promote community empowerment and inclusive growth in tourism.