View Point (Spotlight Weekly)

Sustainable Tourism - A Vehicle to Reduce Poverty

By Rabi Jung Pandey

Incidence of Poverty in Nepal : The Human Development Report (HDR) of 2004 produced by the United Nations Development Program (UNDP) has ranked Nepal 140th amongst 177 countries. The National Planning Commission (NPC) has estimated the incidence of income poverty at 38 percent (2000). The Nepal Human Development Report (2001) of UN agencies working in Nepal has shown that poverty is greater and more pervasive in rural areas (41.4%) compared to urban areas (23.9%). In the Mountains, Hills and Terai regions, people living below the poverty line are estimated to be as high as 46.1, 37.2 and 40.2 percent respectively. Thus, overcoming human and income poverty is the biggest challenge for Nepal, particularly in rural Nepal.

The Nepal Living Standards Survey (NLSS, 1996) estimated the head-count index of poverty at 42 percent at the national level using household consumption expenditure data. Poverty estimates tend to vary when a different poverty line is used. Based on the NLSS index, 44 percent of the country’s rural households and 23 percent of its urban households appear to fall below the poverty line.

The latest global HDR (2004) estimates Human Poverty Index (HPI) for Nepal at 41.2 percent with a rank of 69 out of 95 developing countries. The HPI value for Nepal is higher than for any other South Asian country other than Pakistan, indicating an even worse situation. By comparison, HPI for Bangladesh was 42.2, for Pakistan it was 41.9, for India 31.4, for Sri Lanka 18.2 and for the Maldives 11.4 percent.

The National Human Development Report, using the most recent data available, calculates Nepal’s HPI as 39.2. Significant improvements have taken place in recent years. Human poverty in rural areas (41.4) is almost two times higher than the urban areas (23.9) and, like income poverty varies widely across ecological zones. The HPI is highest in the mountains (46.1), followed by the Terai (40.2), and hills (37.2).

Development efforts

The policies and strategies of the Ninth Plan aimed at achieving broad-based growth and providing basic social services to address various aspects of poverty. Experience indicated that even this combination failed to reach large segments of the poor, notably the poorest of the poor and marginalized groups. The government has since, tried to tackle poverty through simultaneous strategies: broad-based economic growth; social sector development; and a set of targeted programs.

The Tenth Plan (2002 – 2007) charts a new directive in which the problems of endemic poverty, unemployment, regional imbalances and economic and social deprivation are to be approached with a long-term perspective and twenty-year growth targets. Its sole objective is to achieve a remarkable and sustainable reduction in the poverty level in Nepal from 38% of the population at the beginning of the Plan period to 30% by the end of the Tenth Plan, and to further reduce the poverty ratio to 10% in about fifteen years’ time. The policies and strategies enunciated in the Tenth Plan are designed to significantly reduce the numbers existing below the poverty line; each sector is to contribute to the overall achievement of this pressing need. Since the largest numbers of poor, depressed and discriminated people live in rural areas, the sectors, which deliver benefits to these areas, have been designated as priority areas for development action. Decentralization is therefore a central component of the Government’s strategy to tackle poverty alleviation.

Intervention Through Rural Tourism

To reduce the overall poverty rate through creation of income and employment generating activities in the key sectors, an overall GDP growth rate of 6.2% per annum at factor cost is also envisaged, together with a substantial improvement in tourism. The experiences demonstrated by various rural-based tourism activities in Nepal have already shown that it can contribute to the economic growth, provide benefit to rural populations and help in the protection of natural and cultural heritage.

Tourism has been significant in many poor countries and is already affecting the livelihoods of millions of poor people, both positively and negatively. However, poverty reduction is still not the core agenda of tourism in many countries. Present strategy adopted by the government through new budget plan (2061-62) in this sector seems to be outstanding. However, concerted effort is needed to maximize the contribution of tourism. Not only the Government, but also the private sector, NGOs, community organizations and the poor have critical and independent roles to play in sustainable tourism development. The roles of the poor are very significant, but they may need to be organized at the community level in order to engage effectively in tourism.

Issues and Constraints

Over the last 15 years, Nepal has attained an average annual economic growth rate of 5 percent. A closer look into the components of economic growth reveals that Nepal’s overall growth was derived largely from the growth of the non-agriculture sector including tourism – which contributes a big chunk of the GDP. This has transferred the economy’s structure. However, the structure of employment has not changed accordingly. About 80 percent of the Nepalese population still engage in agriculture, where growth has been erratic and has fallen below expectations. Consequently, income distribution has become far more uneven, with severe impacts on those whose livelihoods depend on land, rivers, and forests. Hence, the poverty is endemic in the rural areas. This raises the question of how pro-poor the country’s economic policies and growth have been.

Similarly, several critical factors have been found to be constraints for the progress of pro-poor tourism. These are limited access of the poor to the market, less commercial viability of their products in terms of quality and price, weak marketing strengths, lack of suitable policy framework, and inadequate knowledge on managing and implementing the programs at local level.

Effective Management and Implementation

Wide range of actions are needed to increase benefits to the poor from tourism. These go well beyond simply promoting community tourism, although work at the grass-roots level to develop enterprises and local capacity is one key component. Efforts are also required on marketing, employment opportunities, linkages with the established private sector, policy and regulation, and participation in decision-making processes. Strategies can be broadly grouped into three types: expanding economic benefits for the poor; addressing non-economic impacts; and developing pro-poor policies/processes/partnerships.

Sustainable rural tourism strategies require a diversity of actions, from micro to macro level, including product development, marketing, promotion, planning, policy, and investment. Involvement of other stakeholders, with broader mandates, is equally critical. Similarly, to ensure commercial viability, development of tourism products or services require close attention to demand, quality, marketing, promotion, business skills and inclusion of the private sector. Poverty alleviation through tourism should be incorporated into tourism development strategies of the government. Likewise, broader policy frameworks and initiatives outside tourism, such as on land tenure, small enterprise development, and other forms of financial incentives are also needed to be taken into consideration.

Pro-poor tourism being a long-term investment, expectations of the local poor people must be managed in such a way that to gain faith on the program, their short-term benefits are immediately comprehended. To run pro-poor sustainable tourism programs, external support may be required and justified to cover the substantial transaction costs of establishing partnerships, developing skills, and revising policies.

There is no doubt that to mitigate such intimidating poverty situation, tourism activities involving many local people could have tremendous potential. Despite the high potential of tourism to make a valuable contribution to the alleviation of poverty, the current structure, with an occurrence of business and commercial interest only in city centers, has delivered limited benefits at the rural-level. Similarly, with the exception of few local lodge owners in villages on the main trekking trails, there are poor tourism linkages with the rural communities. The rural poor are still heavily dependent on the fragile natural resource base. Moreover, there are not enough programs and activities to counter this predicament and develop policy guidelines to support rural-based and environmentally sound tourism initiatives.

However, to address these problems, as a pilot program Tourism for Rural Poverty Alleviation Program (TRPAP) has been designed to support His Majesty’s Government of Nepal (HMG/N) to formulate policies for sustainable tourism development and to create an enabling environment for poverty alleviation in rural areas through pro-poor tourism. The Program intends to serve as an appropriate vehicle to provide improvements in living standards and achieve sustainable tourism activity. It has focused primarily on the disadvantaged and discriminated sections of Nepal’s rural population especially women, lower caste groups and ethnic minorities who live below the poverty line. It has also hoped to provide assistance for the development of institutional mechanisms to ensure sustainability of tourism development through local ownership in terms of decision-making, implementation and operation of tourism ventures/activities.

For effective implementation of the programs against poverty, a number of policy issues need to be addressed. District Periodic Planning (DPP), which provides a framework within which the central and local governments can initiate and engage in partnerships for poverty reduction, should respond to the national priorities. Similarly, the national plan should be compatible with the DPPs. Likewise; local government should implement poverty reduction programs in close partnership with community organizations/users groups (COs/UGs), civil societies or institutions, and with the private sector, using social mobilization as a prime tool. It should be noted that social mobilization is a long-term process of education and awareness building to build the capacity of local communities to take action and to form effective functional linkages with local government and line agencies. In the same way, there must be an involvement of monitoring process, to judge the progress and performance of the communities and of social mobilization activities. Better understanding of social mobilization on the part of local representatives, policy makers, and other civil servants make it easier to implement the whole process of poverty alleviation.

(Pandey is with the Tourism for Rural Poverty Alleviation Program)