Why is tourism seen as an important means of economic development in many less economically developed countries? To what extent are the benefits of tourism for these countries, outweighed by the costs?

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Why is tourism seen as an important means of economic development in many less economically developed countries? To what extent are the benefits of tourism for these countries, outweighed by the costs?

Tourism is often seen by the leaders of economically less developed countries as one of the best ways to promote economic development. This view is taken due to broadly five benefits tourism brings with it: infrastructure; employment; foreign exchange; investment; and the fostering of connections with the West. The extent to which the benefits outweigh the costs varies markedly from area to area, making generalization difficult. However, it can be seen that in most destinations, whilst there have been a number of problems, on balance, tourism has been a force for good.

Tourism often necessitates the building or upgrading of infrastructure, in order to provide basic amenities for tourists. Many LEDCs (less economically developed countries) suffer from a lack of sanitation, electricity, fresh water, and good communications links. However, in order to attract tourists, all these services must be provided. Thus, in countries such as Zimbabwe, the Harare airport had to be rebuilt in order to cater for mass tourism; Spain, when less developed, had to build the E340 motorway along the Costa Del Sol. This investment in infrastructure benefits the local inhabitants of tourist destinations in a number of ways. The necessary expenditure is often on ‘public goods’ – ie goods where the benefit can be shared by many people. For example, the recent building of a new motorway from Beijing to the city airport, has benefited both Chinese and local businesses. It helps to decrease the amount of traffic build-up, thereby increasing efficiency. This increased expenditure also creates many jobs, many of them unskilled. This boosts the purchasing power of ordinary citizens, thereby increasing their spending, and providing a ‘boost’ for the economy.

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Tourism also brings in huge amounts of foreign exchange for an LEDC to use. One of the recurring themes of the twentieth century has been that poor countries have often found that they do not have enough foreign currency to import the raw materials they need. For example, Tanzania suffered from such a severe balance of payments deficit, that it simply could not afford to import enough oil to industrialise. What tourism does is bring in foreign currency, which allows LEDCs to import machinery, in order for them to industrialise, and ‘kick-start’ economic development. Foreign exchange has been used in ...

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