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An export industry called tourism

Jun 21, 2009

Much debate has been generated about tourism in the island over the last few decades. In fact, it has dominated a large part of the discussion surrounding the Jamaican economy. While many recognise its existence, and others move a step farther to attempt to quantify its contribution, the discourse has primarily been rooted in two areas.

First, there are those who postulate grandiose and abstract arguments about the potential benefits to be derived without much consideration for how these may be operationalised. At the other extreme, however, are those whose views of tourism are steeped in frivolity and whose myopic lenses do not extend beyond hospitality offerings on a micro level. What is present, however, in both dispensations, is that this is certainly a crucial industry to Jamaica's economic performance.

There can be no deep understanding of what this really means, however, until as a country, we are clear on how we should treat such a vital industry. It is alarming how long we have taken to come to some common ground about how tourism fits into the overall economic puzzle in Jamaica. It is this lack of clarity that has rendered the Statistical Institute of Jamaica unable to report on tourism as little more than a footnote in its economic reports, or that has led to the perception that the industry only needs technical and not conceptual skills. The key here is that we put it all into perspective.

Tax exemptions

Many have agonised over the fact that tourism in Jamaica is not treated as the export industry that it really is. While the primary motive behind this argument appears to be a mere proposal for tax exemptions, it is important to analyse this debate on more substantive criteria. An export industry is one that sells a significant share of its goods or services outside of the country, thus bringing new money into the local economy. Tourism appears to meet these two tenets as the Jamaica Tourist Board reports that over 90 per cent of our tourists are international and the Bank of Jamaica reports that the industry contributed some US$1,975,519,000 to foreign exchange earnings in 2008. A major conceptual discourse, however, surrounds the movement of goods and services across borders as many argue that tourism cannot truly be an export industry since the goods and services are consumed right here on our shores. Opponents of this position argue that tourism is in fact an internal export which is characterised by consumption within the local economy by overseas consumers.

Of major importance, however, is an analysis of why industries are accorded export status. Many destinations such as Los Angeles, Mumbai and Sydney have treated tourism as an export industry as a result of benefits derived from the industry such as balance-of-payments benefits and foreign exchange contributions. As such the treatment of the industry is one that allows industry players to receive many incentives including importation tax breaks and low-interest loans. These are all extremely attractive to businesses and so it is not difficult to understand why our local industry players have been lobbying for this status.

The categorisation or label is important only to the extent that it will mean similar treatment to industries making similar contributions to the economy. In a sense I suppose it does not matter what we call it as long as tourism in Jamaica gets the respect that it deserves. In comparison to other export industries in Jamaica such as agriculture and bauxite, tourism's contribution of approximately 10 per cent to GDP and its role as an income generator is unparalleled, yet, it appears to be little more than an appendage in the minds of many Jamaicans.

Far-reaching issues

The discussions of the treatment of tourism should not be merely diluted to advocacy for the removal of the general consumption tax (GCT) by those with a vested interest, but rather a deliberation over broader and more far-reaching issues. The debate should extend to the development of an industry that is sustainable. This is dependent on adherence to principles surrounding economic, environmental and social sustainability.

In this paradigm the public good takes precedent over private interests and an industry is judged based on its contribution to nation building. If this approach is taken then industries such as tourism which contribute so much in terms of raw dollar amount to our economy would be handled more carefully and considerable investments would be made to ensure its future.

Neglected areas

A number of key strategic areas are neglected because of how we regard the tourism industry. Tourism education currently lacks the attention and investment needed to secure the longevity of the industry. In fact, many still do not even view it as a serious academic discipline and it is relegated to the background in such fora.

The integration of a serious community tourism approach where residents embrace and help to sustain tourism businesses and protect limited resources still only exists in small pockets. A serious redesign of the tourism product which attracts a higher-end market for the greater economic good seems to be on the back burner. All of these are features of destinations mentioned earlier in which tourism has been awarded export status.

In light of the activities and outcomes of Jamaica's tourism industry, it certainly meets the criteria of an export industry. However, while we argue vehemently over how private interest tourism entities should be treated, the treatment of tourism as a nation builder has hardly been brought to the fore. Tourism in Jamaica as flawed as it is today must be credited with maintaining an economic growth path even in the face of a global economic crisis. The emphasis therefore must be on preserving the life of such an industry through a more holistic view of its contribution and accord to it the importance that leading economic activities of the past were given.

An export industry called tourism
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