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Tourism: For those looking for shovel ready projects

Omer Karasapan's picture
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World Bank | Dale Lautenbach | 2012Tourism is one of the world's largest and fastest growing sectors, making up 5% of the world's GDP and 30% of the global export of services (over $1 trillion). In 2010 alone, there were some 1 billion tourists worldwide, 60 million of whom traveled to the Middle East and North Africa (MENA) region. International Tourism receipts amounted to $900 billion - MENA's share making up roughly 6% of the total, around $50 billion. Overall, MENA tends to underperform slightly, not only in terms of the number of visitors and monetary inflows, but also in its potential to generate employment.   
In 2006, Waleed Hazbun wrote an informative and widely quoted piece on "Explaining the Arab Middle East Tourism Paradox." The article explored the seeming paradox of the rapid expansion of tourism across MENA following 9/11, other regional attacks and the Iraq war. The article makes a number of points, perhaps the most important being that tourism economies in the Middle East are not as fragile as experts and popular media have made them out to be. According to the UN's World Tourism Organization 2010 Annual Report, MENA was the region that rebounded the fastest in the wake of the 2008-2009 crisis; it recorded a growth of over 14% in tourist arrivals in 2010.

Hazbun noted that something has changed: "Most of the Middle East and North Africa finds itself enmeshed within networks of the global tourism economy that are increasingly more diverse and robust. The massive influx of petrodollars has helped to re-centre transnational tourism economies around the oil-rich Gulf. Tourists and capital from the Gulf continue to help support tourism projects, from Morocco to Oman. Clearly the region was no longer at the edge of the “pleasure periphery” (Turner and Ash 1975) but had established its own cutting-edge tourism hubs such as Dubai, with many destinations across MENA attracting a diverse range of visitors from Europe, Asia, and elsewhere."

According to the Arab Tourism Organization (ATO), in Egypt, tourism employs almost two million workers, generates 11 % of GDP, and is the principle source of foreign currency - accounting for 20% of the total. In Tunisia, tourism provides employment for approximately 400,000 Tunisians (15% of total employment) and makes up nearly 8 % of GDP. In 2010, before the uprisings, Syria generated more than $8 billion in tourism receipts largely due to a 40% increase in the number of tourists. It also accounted for slightly less than 15% of total employment. Tourism contributes to about one-fifth of total employment in Jordan and one-tenth of total employment in Morocco.

Today, while tourism is at a standstill in places like Syria and Yemen, the sector is already making a comeback in Tunisia and even Egypt. In the past, both countries have demonstrated their resilience and are hopefully on their way to surpassing the high numbers generated during 2010. In Morocco, the sector continued to grow at 4% with Arab tourists making up for the decrease in Western visitors. Dubai and other GCC destinations have not been significantly affected – except in Bahrain, although higher revenues are expected in 2012.

The sector is likely to maintain its resilience and recover rapidly as stability returns in the region. It will need to expand quickly to generate jobs and support economic growth - issues demanded by the Arab revolutions. Transparency, accountability and a level playing field – other key demands of the revolution – will also impact the sector. It would be naive to ignore the role of nepotism and cronyism in stifling the tourism sector in MENA. As a level playing field emerges, chances are  the sector will grow even faster than before with many projects in the pipeline and its potential for generating jobs both directly in the sector and indirectly in transport, agribusiness, advertising and other sectors.

Also worth noting is that eco-tourism as well as other variants can play an important role in regional development and employment and investment generation to laggard regions.  Tourism will also play a critical role in providing the jobs needed by youth and women – the latter being  a good part of the tourism workforce traditionally,  but now also vying for the higher skilled, higher paying jobs.

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