Another disadvantage of primary production like agriculture is that their real prices tend to be very volatile. A change of more than 40% in real price for agricultural commodities is not uncommon.
Also poor countries also face unfair competition from other countries especially by EU Countries. It’s been EU’s practice to subsidise their Exporters for their exports in order to boost the export and penetration of foreign exchange into EU Countries.
Therefore this might also discourage investors to diversify and invest their money into Manufacturing in poor countries, where goods can be manufactured very cheaply but can not compete heavily subsidised Exporters.
“Diversification into mass international tourism can solve the problem of developing world!”
International tourism is playing an increasingly important role in the world economy, and is progressively being adopted by many Third World countries striving for development.
In general, people in many developed have more leisure time and disposable income to spend on tourism. Therefore many third world governments now encourage the tourism in their countries.
It is an invisible export industry where there is no tangible product. There is no direct transportation cost. Also tourism affects the economy as a whole in shape of hotels, motels, restaurants and other retail functions. In result government receive taxes, income is re-distributed among general public and so on which is beneficial for an economy. But its worth noting that tourism is affected by many external forces i.e. climatic conditions, political unrest and currency instability.
In developing countries, tourism is a new activity therefore it needs to be organised in order to attract more tourist in particular areas.
Industrialisation is the most common strategy adopted by third world countries for development. However, factors of production are limited in many LDC’s, such as small domestic markets, non-availability of latest technology and competition from abroad cause the slow progress or probably NIL growth for LDCs considering their problems.
Therefore in order to face population growth, high unemployment, an uneven distribution of incomes, dependence upon agriculture for income and occupation, tourism might be the ideal development tool for the Third World.
Economically, country enjoys that penetration of foreign exchange in a country due to tourism and it also improves the Balance of Payment situation. It also encourages investors to invest their money in infrastructure, tourist resorts, roads, airports, sanitation facilities and other development functions. It wouldn’t just attract domestic investors but international investors, who might invest for International Hotel Chains, restaurants etc which would improve the situation of employment.
It also helps increase in employment and higher incomes for the population in insurance companies, hotel caterers, and many other commercial institutions. It might also improve literacy situation in a country, as Literate staff would be needed for foreigners to deal with. Also working population can be trained for tourist
Finally, tourism might also improve the environmental conditions of a country if countryside would have been developed as a tourist attraction.
On the other hand, there are some drawbacks of tourism on the society and also it might not work as a development strategy in some third world countries. For instance, Somalia and most of the West Africa are very poor and striving for development, but there are no tourist attractions as far as Somalia and Djibouti are concerned. In some of poor countries there are no tourist attraction. Also the political and social unrest in most of the West Africa/Asia does not attract tourist in those areas i.e. Afghanistan and Iraq.
As mentioned earlier, tourism is a new activity for most third world countries therefore infrastructure, sanitation, access to clean water and other facilities are not yet available in those areas, therefore rich/posh population of developed countries might not choose to visit undeveloped holiday resorts due to unhealthy environment.
Also the distance between first world countries and third world countries is considerably long, which would discourage potential tourist to visit an undeveloped holiday resort at expensive price for example a person living in Europe might not choose to visit Ethiopia, Ghana, Niger etc due to several above reasons. There might be other reasons why might first world countries’ population travel to these countries i.e. Business Trips, or visiting friends or relatives.
Conclusion:
Adopting tourism as a development strategy might be good idea for third world at some extent but it is not a perfect tool of development. In the field of agriculture, revolutionised strategies needs to be adopted i.e. changing the ways of cultivation, or the Green Revolution (development if high yielding varieties of seeds) which increase the productivity the of crop and it is very beneficial for small farmers in poor countries.
Tourism might be a good idea if a country is not suffering from domestic political, social unrest, bad relations with other countries (Zimbabwe) and strive to develop gradually. Examples include Singapore, UAE, Saudi Arabia and Hong Kong where a country adopted industrialisation as a development strategy along with international trade and tourism or in the case of India/Pakistan/B’Desh still struggling to adopt industrialisation along with dependence on Primary Production at some extent.