Editorial»
Tourism and SAPTA ramifications
BY ADITYA BARAL, JAN 16 - The 12th SAARC summit has unveiled a new roadmap for the economic future of this region. The way unprecedented ratification of SAFTA took place at the summit, it will have far-reaching ramifications to the so-called Least Developed Countries (LDCs), mainly Nepal, whose economy is amply synonymous with tourism, more than any other dormant or non-
prolific sectors.
SAFTA had always been a subject of great contention in terms of complying with the duties and tariffs as a major source of income of LDCs. Cutting bread and butter at the hour of crisis, when the nation is in dire straits of funds to meet the spiraling threats, is obviously a painstaking challenge.
At a time when the economy is receding, unemployment is increasing, forex reserve is decreasing due to decline in exports, the balance of payment is neither in our favour nor is domestic and agricultural production up to the mark, how could the government comply with the ten year ultimatum to come to the point of zero to 5 percent tariff maintenance by the-year 2014? Though this might look a lofty issue, the compulsions are there for long-term benefits. Moreover, they are significantly meaningful to our tourism prospects.
If we view through the prism of reality, the consequences of SAFTA, mainly from the viewpoint of tourism, would usher in more merits than its demerits. The first and foremost advantage would be on the establishment of our regional identity and recouping our lost image. The much sought after identity would be deviation from the conflict-afflicted nation to an economically sound, bonhomie and tremendous potential vibrant zone.
As our history has always been preceded to precipitate the crescendo of all maladies to nuclear flash-point, beggars to bunkers, all in all happening in this region, irrespective of all bounties of unparalleled potential rarely available in the international market place. With all these rare products or species of South Asia, Nepal would be the premier country to have competitive and comparative edge and advantage in terms of commonalties, products and its consolidated marketing and promotion. As most of the tourism traffic would not involve the tariff or duties, hence there is a less chance of other complexities unlike other trades.
After the economic integration, the chances of peace dividends would cumulatively improve. This would also help the process of social knitting dramatically so that social cultural diversity and its perseverance would be further intensified. The peace drive achieved through the collective process of integration in this region would itself be a great Unique Selling Point (USP) for all the member-states as a promotional input for transiting from the erstwhile states in turmoil to states in tranquility.
Nepal has already exemplified its courtesy by acknowledging the spirit of regional free movement. The unilateral liberalisation policy adopted by the government through waiving off visa fees to more than 1 billion populace of this region should be considered as a gesture for consolidating SAFTA spirit.
If reciprocal arrangement is also made by the member-states of this region, the process of integration would be easier, and reaping the results from the tourism efforts would be easier than the ultimate year prescribed for complete compliance. Moreover, tourism would show light to all other remaining mundane trades to follow it as a precedent-setting industry. Likewise, if the region instigates the process of open sky policy, motor drive movement, these steps would stimulate pent-up demand for inter-and intra-regional movement. The sea, sand or the tallest Sagarmatha blend of products offer would be a recognizable jumpstart package to entice the European Union and North American states for further consolidation.
Many people are shaky with the imminent integration that its impact would breed retardation on the healthy growth of tourism. Nepal’s overall economy being small in terms of our export proportion to the region (without India) and our budget for promoting tourism being contingent upon the arrival numbers and the status of tourists, the consolidation marketing concepts and strategy would be beneficial for small countries like Nepal. Moreover, “co-optition” (cooperation of competitors) theory would gain ground at this stage, and this theory sounds more prolific to the smaller nations, which abound in greater diversity of tourism offers.
The ultimate descent by introducing a common currency would help Nepal more than any other countries. Nepal’s economy of scale in terms of offering the tourism products and services have been abysmally low, traders have felt and are in the process of revising it. However, if we put it at par with the South Asian standards, or with the Indian standards even, we are far behind in contemporary price index. The price elasticity being too high amongst the consumers of this region, Nepal can accommodate the entire range of consumers in tune with time.
When the trade was at its lowest ebb in the past, the industry had to offer the services at rock bottom price, which is obviously not a good trend, but the suspension practice of the industry is a praiseworthy exercise. In the short run, this, of course, would not provide them a breathing point, however, if the volume of trade is increased manifold, the self regulating practice of pricing against the backdrop of competition, would put our trade at competitive edge. And, the regional integration provides this prospect to our tourism trade.
Nepal will have special advantages with its climatic versatility, geographic, natural and cultural diversity, religious convergence, tolerance and coexistence importance (Hinduism and Buddhism), wide array of tourism products and its established history in tourism from the days of Hippies to today’s Happies. The two-thirds of the earth is enveloped by water, which is the most common resource of this region, however, the majestic Himalayas and lush green eco-friendly environments are rare on earth. Only Nepal and fortunate surrounding nations possess and ultimately derive benefit from the
Himalayas.Posted on: 2004-01-17 04:08
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