********************* Dear Goanet Readers, With tourism considered the dominant industry in Goa, a critical evaluation of tourism's real earnings contribution is required. So too the outlay that Goa expends to develop and promote this industry. With the tourist season opening up, Goans need to reassess the impact of tourism. This is a reprise of the article previously published in O Heraldo online, 2nd October, 2006. I thank you. Sincerely I. Nunes ************* Goa’s tourism revenue is a myth I. Nunes 30th September 2006 A recurring conjecture from foreign tourists and retirees, in Goa, is their conviction that their business is crucial to the Goan economy. They characterize their expenditures variously as “repeat business” and a “major investment” in the Goan economy, and reprimand us for questioning their presence in Goa. Not high rollers by any means - these are after all, budget- and economy-minded tourists, and fixed-income retirees, many with a speculative eye towards increasing their finances and holdings in Goa - their choice to vacation/reside in Goa is precisely because the cost of living is low relatively, given the favourable foreign exchange rates. >From a myopic viewpoint, with anecdotal information at best, their food and >drink purchases would appear a “fantastic business”. That is, if you believe in trickle-down economics for a select group of owners of bars, beach shacks, restaurants and lodgings. The contention that tourism revenue keeps the Goan economy solvent is deceptive. While tourism is an acknowledged income earner worldwide, this does not hold true for Goa. UN studies of the economic effects of tourism in developing countries estimate about 80% of travellers' expenditures are paid to international companies in their home countries, by way of airline fares, hotel and tour reservations - the major expenses of a tourist‘s budget. This is before they even leave home. Therefore local businesses in Goa can not hope to gain from these revenues. Tourism revenues to Goa are further lost through ‘leakage’: either import (resort construction materials and equipment, consumer goods like food and drink which may all be imported if Goa cannot supply them) or export (when foreign or out-of-state investors who finance resorts, take their profits back to their country, or state of origin). A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand. Estimates for other Third World countries range from 80% in the Caribbean to 40% in India, with the World Bank placing leakage at about 55% or higher for the typical developing country. Note that cruises are the least revenue earners for developing countries at the ports of call. Every step in a tourist’s excursion from overseas to India to Goa, results in a progressive shift of expected tourism revenues out of Goa. Economic leakage means that treasury in Goa eventually earns only a tiny fraction from the purported ‘huge’ revenues of tourism. As most of the hotels are foreign, or out-of-state Indian concerns, these earnings do not remain in Goa. This does not benefit the Goan economy. Many of these tourist residents who invest in resorts and other similar ventures in Goa, insist that their profits remain a net plus for the Goan economy as the profits are not repatriated to their country of origin. However, it is a known fact evidenced in numerous websites, prior arrangements for payment of services, and apartment and land sales, are made in their home countries, aided by gullible and greedy Goan middlemen. You might say it is the western version of hawala. Goa once again can not gain from these revenues. Goa, consider this UN statistic: On average, only about US$ 5 of each US$ 100 spent by a tourist from a developed country on a vacation tour actually stays in a developing country. The figures for Goa are unknown, but one can extrapolate within reason and conclude that revenues projected from tourism, now a dominant industry in Goa, are paltry and never fully realised. The fact that the Goan economy has been running deficits for the past years attests to this. Tourism revenue for Goa estimated to be in the crores is a myth. Further deductions to Goa’s projected earnings from tourism occur as Goa uses her public resources to accommodate tourism with infrastructure improvements, and offers tax breaks to hotels and developers at the cost of much needed investment in critical areas - education, health, job development. The decision to forgo improvements in these critical areas has a lasting impact on the prosperity and earnings potential of future generations of Goans. By its single-minded focus on tourism and more tourism, the Goan economy over the past decade has failed to diversify, further eroding economic opportunities for Goans - the major reason why a large segment of the Goan workforce is abroad. The Central Government is as culpable as the Goan politicians are for abetting this situation. The rise in tourism in Goa has coincided with the rise in demand from tourists and foreign residents, for land, goods and services. Prices overall have sharply risen negatively affecting local residents whose income has not kept pace. This is leading to visible economic inequality. Tourist resorts and housing construction has swelled the number of migrant labourers, who become a welfare concern for the Goan people and the government in Goa. Not the developers, investors and land speculators, or the politicians. And we have not even factored in the long-term costs of socio-cultural and environmental destruction. Crime has risen dramatically, along with child labour, prostitution and sex tourism, all supporting the insatiable appetites and demands of the tourist. The presumption that the foreign tourists’ and retirees’ economic ‘generosity’ is what keeps the Goan economy afloat, that their foreign currency offers opportunities for the vast majority of Goans, is simply not true. Remittances, corruption proof as they are, sent home, by her emigrant workforce contribute more to Goa‘s economy. The remittance figures for India as a whole are in the range of US$ 30-40 billion annually, with a sizable amount for Goa. This is implicitly recognized in Goa’s decision not to tax interest earned on remittances. Can anyone please convince the Goans that tourism - this “fantastic business” - has positively affected the prosperity and standard of living of even one Goan family living in say, Caranzol or Mollem? Goa can and will survive, if her focus is on attracting industries driven by innovation and future needs of Goa, with job opportunities for the Goan workforce. Instead of the current mass marketing of hedonism, tax-free havens for foreign retirees, and money laundering opportunities for criminals. The incomes and standards of living of all Goans have to rise, not just those recipients of the trickle down business of tourism. I. Nunes
