By Dr. S. Colombage
Economic growth has dipped to almost zero, according to the latest figures of the Central Bank. The GDP growth in the second quarter of this year is only 0.4 percent. All sectors experienced production setbacks. Agricultural production fell by 1.2 percent and manufacturing by 0.8 percent. The services sector, which made a significant contribution in the past, grew merely by 0.6 percent. The GDP growth for the first half of this year is only 0.9 percent.The growth slowdown is not a sudden event, but it has been there for some time. Who is responsible for this downfall? According to the Central Bank's press release on GDP, there are two culprits- (1) weather gods; they did not give us enough rains to cultivate our crops and to generate electricity, and (2) world economy; it did not buy enough of our manufactured goods. So, these external forces have wrecked our economy and therefore, no one at home is responsible. These factors may have dampened the growth. But is it fair to put the blame entirely on such external forces and wash our hands? We should not forget that so many impediments at home have hindered the growth process. They have emerged mainly as a result of policy lapses and institutional inefficiencies.
Several structural constraints have retarded production activities in recent years. These include low rates of savings and investment, high interest costs, labour market problems, and poor infrastructure. The present macroeconomic environment too is not conducive at all to boost the GDP and exports. The country is encountering severe macroeconomic imbalances like depleting foreign reserves, large budget deficits, and high inflation. These drawbacks coupled with the current political uncertainty and the prolonged North-East war have crippled domestic production.
Sri Lanka needs to grow at a faster rate to generate more employment so as to absorb the unemployed labour force and to reduce the poverty levels. This requires higher levels of savings and investments. At present, Sri Lanka maintains a gross domestic investment rate of 28 percent of GDP and a domestic savings rate of 17 percent. These are insufficient to sustain a higher growth rate, say 6-8 per cent. Such a steady growth path would require an investment/GDP ratio of over 35 per cent. A considerable increase in domestic savings is needed to bridge the resulting savings-investment gap. The present economic environment does not warrant such high levels of investments and savings.
Although the trade and foreign exchange reforms were introduced in Sri Lanka much earlier, ahead of many other developing countries, certain structural reforms needed to eliminate rigidities in the factor markets (i.e. financial, labour and land markets) have not been implemented yet.
These policy lapses have adversely affected exports as well as economic growth. The current political turmoil is likely to delay the reforms further.
Policy misalignments have obstructed the avenues available to boost the export sector using new technologies and management techniques. With its low productivity and weak export competitiveness, the country is unable to boost exports any more. Thus, Sri Lanka has missed the opportunities to accelerate the growth process following the trade liberalization. Economic mismanagement is the root cause for the present pandemonium. Instead of blaming the external forces like the weather conditions and the world economy, appropriate action should be taken to deal with delayed structural reforms, ailing infrastructure and macroeconomic instability. Until such time, the production setbacks will continue to haunt the economy.
By Anura S. Lokuhetty
The general perception with regard to the problems faced by tourism in Sri Lanka since 1983 is that this is due to terrorism in the north of Sri Lanka.
However recent research undertaken by Sri Lankan Tourism clearly indicates that the harassment experienced by the tourists who have visited Sri Lanka is a major threat to the development of tourism in this country.
This is also evident in the near 20 years that I have served in this industry, particularly in the resorts. It has worsened in the past few years particularly because of interference from interested parties who would not permit law and order to be maintained by the police.
Today, we have to contend with other factors. The main problem faced in Sri Lanka affecting tourism is not the Katunayake airport attack, but the initiative taken by US to eradicate terrorism in the world. The impact of this decision has created a situation, dissuading most of our tourist visitors from airline travel. Therefore, tourist destinations are now places where one can travel by other means than air, i.e. road, trains and cars.
The purpose of drawing attention to the research conducted by the Ceylon Tourist Board by them from July-November 2001 is to consider what positive measures we need to implement in order to lure more repeat clients to Sri Lanka.
Research carried out by Sri Lanka Tourism shows tourists are unhappy about the harassment faced by them from the time of arrival until they depart. The research shows that 65% of the guests were approached by various interested parties in selling some kind of service to the tourist. Even though the intention of our people who approach tourists is mainly to sell them something, the impression created in the minds of the tourist is harassment and this is chiefly due to the effect of poor selling. Furthermore, the perception created in the minds of the tourists by the so-called vendors is that they are either beach boys or touts.
This is a problem not only confronting Sri Lanka but most of the countries that are involved in tourism as a major foreign exchange earner. It is a very significant problem in developing countries due to unemployment.
This is a major setback to tourism and adequate and effective measures should be taken like educating the people of this country as well as providing direct opportunities for employment and other benefits to the local community.
In this respect, I have certain suggestions for the Ministry of Tourism and Sri Lanka Tourism on how to make tourism the biggest foreign exchange earner for Sri Lanka.
The tourist comes to Sri Lanka, a beautiful tropical Island amidst majestic coconut trees, golden sands and clear blue waters lies in the Indian Ocean, land with the sole intention of spending a peaceful and enjoyable holiday.
However this has been badly affected by those who are trying to make a living out of the tourist by pestering them. They believe that they are not doing anything wrong and cannot understand the predicament and annoyance of the tourist, who in turn finds it very difficult to understand why these vendors cannot leave them alone when they are so obviously not interested in buying their wares or services.
The Maldives
In countries like the Maldives, although they do not have all the natural resources that we have in this country, they still attract the tourists as their attractive feature is PEACE.
Here are some results of the research:
Awareness of the Security Problems in Sri Lanka
Question: Prior to visiting Sri Lanka did you hear or read about any problems in Sri Lanka regarding security?
Answer: Three quarters (76%) of the visitors had heard or read about the security problems in Sri Lanka prior to their visit.
Tourists approached by beach boys.
Q: While you were on the beach were you approached by beach boys offering various services?
A: 60 percent said yes.
Services offered by beach boys
Q: If approached by beach boys, what kind of services did they offer you (either for money or free)?
This question drew multiple responses and focused on three types of major service areas offered by beach boys - sale of goods, tours to various places and immoral services with 92 percent responding to sale of goods, 67 percent (tours to various places) and 13 percent (immoral services)
Harassment
Referring to these services, 44 percent said beach boys did not upset their holiday, 39 percent said it was harassment, 12 percent agreed that the beach boys were nice and appreciated their services while five percent perceived it as a threat to their safety.
Of the respondents, 55% said they were not approached by touts offering services.
The overall holiday experience
On the whole how do you describe your holiday experience in Sri Lanka? "It was an outstanding experience" - said 70 percent of the respondents, 28 percent described it as enjoyable but not outstanding while two percent said it was some
A further study has revealed that this problem is not confined to Sri Lanka alone, it is an international problem that is slowly destroying tourism all over the world and especially in developing countries.
It is therefore clear that this is a very important matter that must be addressed without delay. Another study done on the subject makes it evident that harassment is all to do with poor selling skills of some of the people who are trying to make a living out of terrorism.
Why do clients go to the Maldives? They go there so that they can have a relaxed holiday without any kind of harassment. A holiday means recreation - a time to relax and "peace of mind" for the body to completely unwind and relax. When holidaymakers book their holidays, they want peaceful and tranquil holiday no matter the distance. Harassment of any form, in any destination of the world would be a definite "NO" on their list.
In developed countries like Canada there is a law enforced against harassment and therefore, this problem is not significant. However, in developing countries where there is so much unemployment, this problem is evident. It is extremely important to safeguard the interest of the tourists in any destination of the world in order to create a trouble free peaceful holiday.
Solutions to alleviate the problem in the short term
1. Creating community awareness about the hazards of harassment to the tourist industry
To overcome the menace of harassment, it is suggested that the authorities directly linked to tourism, e.g. the tourist board, Travel Trade Associations should embark on a programme that educates the community at large on the importance of the industry as a major role as an income earner that contributes to the economy of the country.
To implement such an awareness program in the communities, a special committee should be appointed in collaboration with the Ministry of Tourism, Tourism Board or any other National body that is involved in the development of tourism such as the Tourist Hoteliers Association and Hotel Schools with the assistance of media channels. The committee should be empowered to:
(1) Immediately create a communication strategy that focuses on the benefits of tourism to the country as a whole and the community at large.
(2) Conduct meetings in regional areas to educate religious leaders in the Churches, Mosques and Temples etc. on the problems faced by tourism due to the harassment of tourists by touts. The reason for using the clergy in educating the masses is recommended because the people living in rural areas tend to heed their word very strongly.
(3) These communications should erase the perception that foreign tourists are affluent with no limits to their spending power.
2. Community participation in the tourism industry
The inhabitants of the tourist resort areas will require special education focused on enhancing their skills, so that they can actively participate in the tourism industry and gain meaningful employment. This would involve the setting up of Hotel & Tourism Training Schools.
(A) Tourism Training Schools:
School leavers from the tourist destination areas could gain admission to these schools where they would receive specialized training to find gainful employment in hotels in their own areas. This would then not require them to resort to other avenues for income such as selling goods and services in tourist destinations and other places that are frequented by tourists. Creating such an opportunity would result in the inhabitants having a positive image of tourism and would treat the tourists with more tact and courtesy, understanding that their repeat visits greatly adds to the economic contribution of their livelihood.
(B) Enhance communication skills to cater to tourist needs.
Another area of concern is the lack of communication skills that are focused on the needs of the tourist. If the vendors in tourist areas were to communicate in foreign languages, they would communicate more effectively with tourists as they would understand each other. This would definitely reduce to a great extent the communication barrier and harassment of tourists by the local community that normally speak only in their mother tongue.
English
Another important factor is that most people in rural areas don't speak in English and find it difficult to find employment in tourist resorts, etc and other tourist-related environments, and as such are directed to various other businesses. They tend to rely on the foreign guest to peddle their goods and services, resulting in tourists losing their peace and tranquility while on a much needed vacation. Steps should be taken so that more people find meaningful employment within the industry.
(C) Deliver marketing techniques and skills training programmes:
Marketing techniques and skills are essential to the success of such an initiative. Due to their lack of knowhow vendors pursue tourists aggressively which is interpreted as harassment. If they were more focused on marketing their goods in an appropriate manner, their behaviour would be less aggressive and therefore would not come across as a form of harassment.
Vendors
3. Creating a market place for vendors (fair concept)
A FAIR concept would provide a legitimate location for vendors to display their goods and services for sale. The FAIR would be advertised as the location for tourists to visit if they desire to purchase goods and services that are of interest to them. This would prevent the vendors and touts from lurking on the beach and other tourist attractions to harass tourists into making a purchase.
This is where government intervention is required for the local government administration to create a FAIR concept, where stalls are leased to the local vendors to display their goods. This intervention would assist in eradicating the necessity of selling the goods to tourist at the tourist sites. Law and order should be enforced at these sites. The vendors at the Fair should be registered and issued identity cards through an authorized body. Tourists can therefore then identify legitimate vendors and would help to streamline any complaints of forms of harassment.
Cultural
4. Creation of cultural centers with community participation
Most tourists if given the opportunity would like to learn more about the countries that they visit and therefore would enjoy mingling with the local community to learn about culture, life styles, living conditions, food and dance. Well organised cultural shows in a community centre would satisfy this need.
1. Central government to ensure no interference:
This is a common problem in most of the developing countries where people with different interests hamper the enforcement of law and order for their own benefit, which has led to deterioration of the law and order in the area.
Therefore the government should intervene and endorse and support these initiatives for the development of tourism.
Long term initiatives
(1) Tourism to be included as a subject in school curriculum
Tourism should be introduced as a subject in school curriculum so that future generations realize the importance of tourism to the country. The youth will be aware of what is required and how the country can derive the benefits from tourism. This would on the long run create an environment where the community appreciates tourists and cease to harass them.
(2) Creation of tourism related businesses
The government should be involved in identifying areas of businesses that are directly related to the tourist industry. A special fund could be dedicated for this purpose and studies and proposals put forward so community initiatives become a reality. Most of the time the vendors are small time entrepreneurs who eke out a living by selling small wares and services that are of no interest to the local community. If their needs were addressed through proper standards and given due recognition, the vendors and touts who harass tourists during their stay could be eliminated. If more individuals were involved in providing goods and services to tourists, more individuals would be gainfully employed and the need for harassing tourists would be minimized.
(3) Funds for community development in tourism areas
A percentage of the direct income from tourist industry should be allocated for the benefit of the community. These funds should be used exclusively for the purpose of building schools, hospitals and other infrastructure initiatives that make a direct contribution to the standard of living of the neighbourhoods. These visible contributions to the community will decrease the negative behaviour from the inhabitants who will see the positive effects of tourism. Eventually the long-term impact will reduce the need for aggressive marketing strategies as repeat visits increase and word-of-mouth advertising increase tourist travel.
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