Address by Francesco Frangialli Secretary-General of the World Tourism Organization

to the Third UN Conference on the Least Developed Countries

International Trade, Commodities and Services

Brussels, Belgium, 17 May 2001

(Check Against Delivery)

Mr. Chairman,
Ladies and gentlemen,

I am grateful for the opportunity to address this 3rd UN LDC Conference on behalf of the 136 Members of the World Tourism Organization and, in particular, on behalf of the LDCs themselves - most of them being Members of our Organization. I should like to use this opportunity to emphasize the essential contribution tourism can make towards economic and social development and the alleviation of poverty, which justifies the fact that for the first time it has been put on the agenda of this Conference.

The reduction of poverty has become one of the most compelling challenges of our time. Poverty is more than a lack of income - it is a multidimensional and complex phenomenon with an intricate relationship to issues such as disease, illiteracy, infant mortality, environmental degradation and many other aspects.

The UN, the Bretton Woods institutions and the OECD have developed sensible targets for the reduction of poverty. They have requested specialized agencies within the UN family to coordinate their efforts in achieving these objectives. However, it appears that we are already falling behind schedule and that the targets will not be met. This Conference provides a valuable opportunity to enlarge our common action and to emphasize the significant contribution that tourism can make towards poverty reduction.

Tourism has, up to now, not been seriously considered in most of the poverty reduction strategies of international aid and development agencies. That is regardless o£ the fact that tourism has grown into the biggest and most ramified economic activity of our time.

The dramatic growth of tourism over the last 50 years is one of the most remarkable economic and social phenomena of that period. International tourist arrivals grew, in real terms, from a mere 25 million in 1950 to 698 million in 2000. That represents an average annual growth rate of 7% over a period of 50 years.

The receipts generated by these arrivals - excluding air fares and not taking into account income from domestic tourism - have increased at 12 per cent a year over the same period, well above the average annual economic growth rate. They have reached 476 billions in 2000. They represent today the number one item in world trade.

Reasonable and conservative forecasts by the World Tourism Organization indicate that this trend will continue and that tourism will grow steadily for the foreseeable future. International arrivals are expected to increase to more
than 1 billion in 2010 and attain over 1.5 billion by 2020.The question is
whether the power of this industry can be effectively harnessed in the fight against poverty. Available evidence provides a positive answer.

Annual growth of tourist arrivals in LDCs over the last 10 years has been higher than the world average. Demonstrating the existence of a competitive advantage in their favour , the growth of international tourism receipts in LDCs was significant during the 1990s. LDC's receipts more than doubled between 1992 and 1998. Tourism has became the primary source of foreign exchange earnings in 49 LDCs, apart from the petroleum industry which is concentrated in only three of them (Angola, Yemen and Equatorial Guinea). The combined tourism exports in 1998 actually accounted for more than 16 per cent of their non-oil exports, thereby exceeding the receipts of their second and third non-oil export sectors (cotton and textile products) by 39 and 82 per cent respectively. For many of these countries, tourism has become the major - or one of the major contributors to their GDP.

These selected but critical statistics clearly indicate the important position tourism has already achieved in the very poor countries. Our strong conviction is that, against the background of a fast-growing international tourism industry, the potential for tourism in LDCs far exceeds present performance. For many of them, tourism development represents one of the few options they have in their hands to diversify their economy and to replace a declining traditional agriculture.

Would not the situation of countries like Bhutan, Myanmar, Senegal, Tanzania, Sao Tomé and Principe, Maldives and many others be even worse without tourism? Where is the economic future of Cambodia, Nepal, Cape Verde, Vanuatu, Comoros, Haiti, Yemen and many others if not in tourism development?

Cross-country evidence demonstrates that tourism in LDCs is a labour intensive activity offering small-scale opportunities. It therefore has the capacity to create jobs - jobs for the poor, jobs for women and young people, jobs in the indigenous communities, unskilled as well as highly qualified jobs, jobs in seaside resorts as well as in remote rural areas and in eco-tourism activities.

The same cross-country evidence illustrates the major contribution that foreign currency receipts, generated by tourism, can bring to the balance of payments of most of these countries, reducing their external debt and avoiding dependency on a single export sector, usually raw materials. Tourism receipts prove to be much more important to LDCs than the leakages they can generate.

For these two reasons combined, tourism can play an important part in improving living standards and raising people above the poverty threshold.

However, their further tourism development is severely handicapped by a number of factors, in particular, the lack of - or deficiencies in - necessary physical infrastructure, communication systems, mastering of new information technologies and development of human resources.

At a high level meeting on tourism and poverty alleviation in LDCs, organized by UNCTAD and the World Tourism Organization in March 2001 in the Canary Islands (Spain), four critical areas for development of tourism in these countries were identified: strengthening the capacities of LDC governments and especially of their national tourism administrations, to enhance sustainable and competitive tourism; developing entrepreneurial capacities and managerial skills, especially in small and medium-sized enterprises, in order to improve the competitiveness of tourism products and services; promoting synergies between transport and tourism policies, with particular reference to air transport; and increasing national capacities to use relevant elements of the multilateral trade framework.

I would like to urge the Conference participants, international institutions and aid agencies, to give favourable consideration to national and regional projects that are aimed at strengthening the capacities of LDCs in these four areas.

WTO itself will set a good example by including poverty alleviation as a new priority in its budget for 2002-2003. A special programme will be implemented for sub-Saharan African destinations, which receive only 1.5% of world tourism receipts. However, this new WTO programme will be far from sufficient: our own resources are limited and we are not a financial institution.

In appealing to the international community to consider the value of tourism in the international fight to alleviate poverty, I should like strongly to emphasize that great care should be taken to ensure that the right kind of tourism is promoted - sustainable tourism.

We have to recognize the fact that unguided tourism development can have a profound and negative impact on the environment as well as a devastating effect on the social and cultural patterns of developing countries. Without an appropriate regulatory framework, efficient planning, sound management and clear sustainable development guidelines, tourism can do harm to the natural and social environment, endanger natural biodiversity and cultural heritage, lead to the exploitation of people - particularly women and children - offend traditional cultural values and customs and alienate local communities. These and other negative aspects of tourism are comprehensively addressed in WTO's Global Code of Ethics for Tourism, adopted in 1999.

However there is overwhelming evidence of the overall positive impact of tourism. I have already mentioned some of its most valuable benefits. The contribution of tourism to social and economic development in LDCs is of more critical importance than in developed countries. The narrow resource base of many poor countries makes tourism one of the few potential avenues for their growth and development.

Ladies and gentlemen,

I wanted to share with you this conviction and I thank all of you for your attention.

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