Travel Impact Newswire

 

 Edition 38 - August 20-27, 1999

 

Distinction in Travel Journalism

 

From Imtiaz Muqbil, Executive Editor, Bangkok, Thailand

 

To read Past articles from Travel Impact Newswire please click HERE

 

To return to ASIA Travel Tips.com main menu please click HERE

 

 

In this dispatch:

 

1. MARKETING IN THE MIDDLE EAST: DISPELLING THE MYTHS (366 words)

 

Summary: The first study by the Pacific Asia Travel Association shows

how to tap the ready, waiting and willing Middle East market.

 

2. DEATH BY DEBT, AND CHILDREN FIRST (2,867 words)

 

Summary: Many of our august travel & tourism associations have taken

up the cause of child prostitution. That is only the surface

manifestation of a much deeper malaise.

 

3. MANY THANKS

 

Travel Impact Newswire has received its first contribution from a

reader who said he found it useful enough to pay for it, without even

being asked. If there are others like him out there, please reveal

yourselves.

 

-0-

 

1. MARKETING IN THE MIDDLE EAST: DISPELLING THE MYTHS

 

A critical lesson that Asia-Pacific national tourism organisations

learnt from the economic crisis is not to put all their marketing eggs

in one basket. Now, a powerful effort is underway regionwide to seek

out new markets and diversify the long dependence on the traditional

sources of visitors.

 

Perhaps highest on the list of new-market targets is the Middle East.

To many, however, the Middle East is an enigma, a region of numerous

cultural conundrums, political controversies and social idiosyncrasies

beyond the comprehension of most tourism marketers in the Asia-Pacific

region.

 

Not any more.

 

The Pacific Asia Travel Association is about to release its first

study of outbound travel from the Gulf Co-operation Council countries

and Israel. Currently at the printers, the study costs US$175 for PATA

members and US$500 for non-PATA members.

 

According to John Koldowski, director of PATA's Strategic Intelligence

Centre, the study has been designed to dispel the myths and

uncertainties of marketing in the Middle East, especially the Gulf

countries. ''The Asian economic crisis led Asia-Pacific destinations

to start better balancing their sources of visitors away from the

traditional generating markets," he said. "The Middle East is one of

the clear priorities as a new market. It is close by, high-yield and

family-oriented. For many PATA destinations, it is also a major source

of visitors in the low-season monsoon months."

 

Koldowski said the focus of the study was on helping marketers better

understand outbound travel patterns, market structure and cultural

nuances of the Islamic countries. At the same time, the study

highlights some of the major problem areas, like airline capacity,

hindering growth. He expressed optimism that the study will help

Asia-Pacific marketers enhance their product presence, create demand

and give airlines more of an incentive to increase flights.

 

In turn, the Israeli market is small but with strong growth potential.

"There are several PATA countries that do not require visas of Israeli

citizens, which is a good start,'' said Koldowski. ''The market is

more 'western' in approach and well worth building a profile in. If

the Middle East peace process moves forward strongly, the Israeli

outbound market to the PATA region will boom."

 

To order the study, please email <johnk@pata.th.com>.

 

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2. DEATH BY DEBT, AND CHILDREN FIRST

 

By Sir Shridath Ramphal, Co-Chairman, Commission on Global Governance,

and Chief Negotiator for the Caribbean on International Economic

Issues.

 

Editor's Note: Some months ago, a tourist in Thailand wrote a letter

to Thai Queen Sirikit expressing shock at seeing children as young as

8-10 on the streets of a beach resort selling garlands to tourists

into the late hours of night. A few weeks ago, the Queen marked her

67th birthday on August 12 by publicly raising the plight of

street-children in Thailand, specifically the garland-sellers.

 

Though the problem has long existed, it was a letter from tourist that

triggered action. If it does not make Thailand look good, what about

India, Sri Lanka, Indonesia, the Philippines and many others where

street-children hawking everything from cigarettes to newspapers is a

common sight. In many places, best left unnamed, children are forced

into selling themselves.

 

While tourists can help alleviate social-economic problems in

countries, even by writing letters to their leaders, the following

article by Sir Shridath Ramphal, co-Chairman of the Commission on

Global Governance, shows that street-children selling garlands to

tourists is only the tip of a huge global debt crisis that affects

children most.

 

As an industry, Travel & Tourism takes up many social, environmental

and cultural causes about which many of us feel very strongly and to

which we contribute actively. The debt crisis is one that has not been

given enough attention. Sir Shridath's views will give readers another

perspective -- which differs from that put out by the spin-doctors of

multinational companies -- about the causes of the crisis and its

impact on the global economy.

 

This publication believes that the Travel & Tourism industry spends

too much time dithering over treating the symptoms of problems or

alleviating their consequences. It is about time the industry starts

taking a stand on attacking their roots. If the industry is truly as

big and influential as its mandarins make it out to be, let it start

using that influence to demand action at the political level,

especially macro-economic and social issues that affect the broader

health of nations.

 

This issue is importance to us in Travel & Tourism both as individuals

and as an industry. We were all children once, are parents today or

will be in future. We have much to be thankful for. Even as we our

enjoy our profligate, ostentatious lifestyles, dozens of infants and

children are dying, working as slave-labour, or selling garlands in

the streets. As an industry, if we can help countries alleviate their

crushing debt burdens, that much more money will be available to

invest in education, services and infrastructure, all bedrock pillars

for the future growth of Travel & Tourism. - Imtiaz Muqbil

 

-0-

 

(Extracted from ''The Progress of Nations 1999'', produced by the UN

Children's Fund)

 

For nearly two decades, the debt crisis has had a crippling impact on

some of the world's poorest countries, hobbling economic growth and

draining scarce resources from health, education and other vital

services. Can the campaign for debt relief be translated into

effective action, ensuring that children of the new millennium are

freed from the chains of debt and poverty?

 

Inscribed on the pinnacle of the Sun Yat-sen Memorial, in the

Purple-Gold Mountains overlooking Nanjing in eastern China are the

words ''Tien xia wei gong'' (What is under heaven is for all). Sun

Yat-sen took these words from an ancient Chinese text as the guiding

principle for the movement that liberated his country from feudalism.

 

Feudalism -- part of the history of most nations, East and West, North

and South -- held people in permanent dependence, dividing them into

powerful and powerless, haves and have-nots, those who made rules and

those who had to obey them. To human society's great credit, we have

moved to systems less unequal and unjust, in which the earth's bounty

and the fruits of human toil are shared somewhat more fairly. But if

the concepts of sharing and of fairness have evolved, they have done

so only within States, and hardly among them.

 

The words on the memorial still have meaning for the work, especially

for our modern global society: What is under heaven has not been, and

still is not, for all on earth.

 

The debt bondage that ensnares hundreds of millions of the world's

poorest people provides clear evidence. As though bound to feudal

lords, their lives and labour have been mortgaged to rich country

banks and governments, often by leaders they did not choose, to

finance projects that did not benefit them. Debt, like an oppressive

political system, strips them of their rights. And its tyranny is

particularly painful now with sub-Saharan Africa in the grip of an

unprecedented calamity as AIDS spreads remorselessly.

 

In the cool corridors of financial power, the plight of the

debt-ridden may be spoken of the terms of capital flows, debt-service

ratios and credit ratings. In the heat and dust of real life, however,

debt is about lives, people's lives and - above all - children's

lives.

 

Children pay the price

 

Debt has a child's face. Debt's burden falls most heavily on the minds

and bodies of children, killing some, and stunting others so that they

will never fully develop. It leaves children without immunisation

against fatal, but easily preventable, diseases. It condemns them to a

life without education or -- if they go to school -- to classrooms

without roofs, desks, chairs, blackboards, books, even pencils. And it

orphans them, as hundreds of thousands of mothers die in childbirth

each year, die as a result of inadequacies in health care and other

services that poverty perpetuates.

 

Certainly, developing country governments that favour their own elite

over their poor also bear much responsibility. But debt's demands make

it hard for many governments to restructure their budgets towards more

child-centred priorities even when they want to, and make it well-nigh

impossible to succeed even if they do. Sub-Saharan Africa, for

example, spends more on servicing its $200 billion debt than on the

health and education of its 306 million children. The pattern is

economically senseless and morally indefensible.

 

Each baby in Mauritania begins life encumbered with a debt of $997, in

Nicaragua with $1,213, in the Congo with $1,872. The average for

developing countries as a whole is $417. Yet in 1990 nearly a decade

ago, 71 Heads of State and Government, meeting at the World Summit for

Children committed themselves to ''measures for debt relief'' as part

of a ''global attack on poverty.'' They said that it is essential ''to

continue to give urgent attention to an early, broad and durable

solution to the external debt problems facing developing debtor

countries.''

 

These world leaders endorsed the Convention on the Rights of the

Child, adopted by the UN General Assembly n 1989, and now ratified by

all but two nations, and they committed themselves to a series of

goals by the end of 2000. These included halving malnutrition among

under-fives and cutting their death rates by third, halving maternal

mortality rates, enabling every child to attend primary school and

immunising 90% of the world's infants.

 

Debt gravely imperils these goals. Solving the debt crisis will not,

of itself, mean that these targets are met: National policies are

absolutely vital. But without a solution of the debt problem there is

no chance that the right national policies can be implemented or that

goals can reached by the year 2000, or any time in the predictable

future.

 

Debt is not intrinsically bad. Indeed, money lent, borrowed and spent

wisely spurs growth and improves people's lives. Nor is there anything

new about debt crises: Ancient Greek city states defaulted after

borrowing from the temple of Delos.

 

The current crisis, however, because it affects many of the world's

poorest countries, makes their debt levels especially crippling.

 

The seeds of crisis were sown in the early 1970s, when OPEC countries

dramatically raised oil prices and deposited their increased earnings

in Western banks. With interest to pay on these deposits, banks

quickly embarked on a search for borrowers in developing countries.

They found that the developing world wanted cash to invest in

infrastructure and industry, and to pay for oil at its higher price.

 

So in a world seemingly awash with money, private loans -- often

unwise -- were touted around developing countries; rich countries and

international financial institutions, like the World Bank and the

International Monetary Fund (IMF), also extended loans to less

credit-worthy low-income countries.

 

Developing countries were tempted, also unwisely, by low interest

rates, often below the rate of inflation. Confident that their

commodities would continue to fetch high prices and that interest

rates would remain low, they gambled that repayment would be easy.

Must of the borrowed money went to inappropriate projects, to buy

arms, or even into private overseas bank accounts. The poor, women and

children, saw little of it.

 

Commodity prices instead fell sharply, interest rates increased and,

in 1979, oil prices rose again. As the cost of servicing their debts

escalated and their revenue plummeted, developing countries

frantically borrowed more to try to meet their obligations and stave

off ruin. But every percentage point increase in interest rates in the

1980s added more than $5 billion to what debtor countries had to pay

each year. Killing arrears accumulated.

 

In a mathematical construct that only lenders could embrace and find

just, between 1983 and 1990, indebted developing countries repaid the

staggering amount of $1,000 billion. Astoundingly, despite this

enormous transfer of wealth, their debt burden, which was some $800

billion in 1983, reached $1,500 billion by 1990 and nearly $2,000

billion by 1997 because of debt service arrears and new borrowing.

 

The crisis has been global, but it is gravest in sub-Saharan Africa,

which owed $84 billion in 1980 and now owes $200 billion, an

impossible drain on its fragile economics.

 

Africa overwhelmed

 

Africa has repaid its initial debt many times over in cash terms,

losing precious social gains in the process and strapping its

economics to the breaking point. Between a quarter and a third of

national budgets in sub-Saharan countries (and 40% in the most heavily

indebted poor countries) go to service debt. For the countries

enduring the calamitous impact of AIDS, such senseless misdirection of

scarce resources is especially cruel.

 

This massive resource shift costs children dearly. In Tanzania, four

times more goes to repay debt than to primary education and nine times

more than to basic health. Mozambique pays wealthy creditors more than

it spends on basic education and health combined. So, too, does

Zambia, which currently owes $7.2 billion in debt, five to six times

its export earnings.

 

To further deepen the crisis, official development assistance (ODA) is

plumbing record lows. The proportion of gross national product (GNP)

that industrialised nations devote to assistance now stands at 0.22%,

less than a third of the UN target of 0.7%. If it had remained at just

0.33%, its level as recently as 1992, developing countries would be

receiving $24 billion more each year.

 

And of the bilateral aid reaching poor countries, about one quarter

boomerangs back to donors as debt repayments. In Tanzania, one in

every three aid dollars, and in Nicaragua and Zambia, as much as one

in every two, is spent in this pointless way, instead of relieving

poverty or laying the foundations for future growth.

 

Debt increases dependence on aid, slows growth, inhibits foreign

investment, creates instability and soaks up money that could be spent

on health, education and other vital services. The debt crisis also

cost creditor nations an estimated 6 million jobs in the 1980s,

because money that debtor countries could have spent buying products

went instead to service debt.

 

A melange of capitals and countries have given their names to

initiatives intended to relieve this debt slavery: London, Lyons,

Mauritius, Naples, Toronto, Trinidad. But as far as the poor are

concerned, they might all have been launched in never-never land, so

meagre have been their results.

 

The approach now being followed is the Heavily Indebted Poor Countries

(HIPC) Initiative, designed to help 41 poor countries, 33 of them in

Africa. Their child mortality rates are one-third higher and their

maternal mortality rates nearly three times greater than the average

for developing countries. More than a third of their children have not

been immunised, and about a half of their people are illiterate.

 

The HIPC Initiative is the best hope yet to reduce, all debt to what

are supposed to be sustainable levels. But how slowly and grudgingly

does it confer its benefits! Only two countries have received relief

at the time of writing, despite the extreme urgency of their plight.

 

Countries must pass tough, often inappropriate, criteria to be

eligible for the HIPC Initiative, undergoing, for instance, three to

six years of harsh structural adjustment programmes that often deepen

poverty or widen inequality while failing to promote growth. The

initiative set the debt service to export earnings ratio at 20-25%,

although the countries could ill afford the 16% they were paying in

1996. They will thus be no more - and probably less - able to meet the

goals set for children than they were before.

 

Little money has actually been provided for this Initiative, which is

expected to cost about $12.5 billion, placing the appearance of

financial rectitude above any real relief to the poor. How unlikely it

is that the funding will materialise might be gauged from the

experience of Honduras. Although Honduras was devastated at the end of

1998 by Hurricane Mitch, it has received only a fraction of the help

promised by donors to meet $200 million in debt service due this year.

In contrast, of course, was the speed with which donors mobilised $100

billion in just a few months to bail out East Asia, where insolvency

threatened Western economies!

 

There has been a strong campaign to persuade rich country governments

to make the HIPC scheme less rigid and to offer relief more quickly.

This year, Canada, Germany, the United Kingdom and the United States

called for reforms to speed the pace, calling also for debt

cancellation for some severely stressed countries.

 

OXFAM similarly has proposed reforms, most notably to give earlier and

much deeper relief to debtor countries that wish to devote 85-100% of

the savings to programmes to reduce poverty. These would, of course,

have to be worked out through collaboration between lenders and

borrowers. And a commitment on the part of both borrowers and lenders

to protect an indebted country's capacity to deliver basic social

services to its people - before any debt repayments are made - is

another reform being proposed.

 

Uganda, the first country to get relief, is already educating another

2 million children; Bolivia, the second, is to help fund a national

programme to reduce rural poverty. OXFAM calculates that such relief

would enable Tanzania to enrol almost all of its children in primary

school, Mozambique to double health expenditure and rehabilitate

schools and health centres, and Nicaragua to achieve a wide range of

objectives, including universal free primary education, improved

primary education, improved primary health care for 1.2 million

people, and safe water for 600,000 more of its citizens.

 

Push to cancel debt

 

Immensely valuable as such reforms could be, however, they are not

enough. Unpayable debt exacerbates poverty, so some or all of the debt

must be cancelled for the poorest countries at least. The Jubilee 2000

campaign, which calls for a one-off cancellation of unpayable debt at

the millennium, has won both wide popular support and been endorsed by

many political and religious leaders. The precise date may be a matter

for debate, but the need for significant cancellation is now

unquestionable.

 

It is said that cancellation would set a precedent and make it less

likely that debtor countries would be lent money in the future. But,

as we have seen, there have been defaults in the past, and the poorest

debtors attract little investment anyway. Cancellation, it is also

claimed, would create a 'moral hazard' by rewarding irresponsibility.

 

But reckless lending helped cause the crisis, so the responsibility is

a joint one. Besides, the debtors have already repaid what they owe in

actual cash terms; clearly, a greater moral hazard is created by

continuing to insist on extreme financial stringency at direct the

expense of children's lives.

 

Cancellation is an opportunity for both creditors and debtors to

launch a war on poverty and direct resources to the most needy,

especially children, by concentrating on human development. It would

be consistent with the 20/20 Initiative - a plan for financing basic

social services from national resources and donor funds agreed upon by

all governments at the World Summit for Social Development in 1995 and

it is long overdue.

 

The time for a joint assault on debt and destitution is not now it was

yesterday. For millions of children, tomorrow will be too late.

 

INTERNATIONAL AID PLUMMETS

 

Aid as a proportion of donor countries' GNPs -- a measure of their

ability to provide aid --  fell to an average of 0.22% in 1997, the

lowest point since 1970, when the world agreed on the aid target of

0.7% of donors' GNP. Only four countries - Denmark, Netherlands,

Norway and Sweden - consistently reach or exceed the target. Denmark

earmarked 0.97% of its GNP for aid in 1997, the highest proportion

among donor countries in the Organisation for Economic Co-operation

and Development (OECD). The United States gave the lowest proportion,

0.09%.

 

Denmark also led donors on the basis of aid per person, giving $311

per capita; Italy was the lowest per capita donor, giving $22. Japan

was the highest aid donor in dollar terms, allocating $9.4 billion,

followed by the United States with $6.9 billion, and France with $6.3

billion.

 

If all donor countries had met the aid target of 0.7% of GNP, total

aid would have been more than $100 billion above the 1997 total.

Maintained for 10 years, this amount would be more than enough to

ensure access to basic social services - basic education and primary

health care, adequate nutrition and safe water and sanitation - for

all communities.

 

LEAGUE TABLE: TOTAL EXTERNAL DEBT AS PERCENTAGE OF GROSS NATIONAL

PRODUCT (1997)

 

How to measure the levels of debt that can be sustained is intensely

debated. Some argue that many definitions of what constitutes

'sustainable debt' put the thresholds so high that unacceptable

sacrifices of basic social services, with great human costs, have to

be made so that debt service can be paid. This league table of

external debt-to-GNP ratios in the Asia-Pacific countries does not

include such economic or social sustainability factors, but it does

provide a useful perspective for examining and comparing countries'

debt levels.

 

East/South Asia and Pacific

 

Lao PDR                     132

 

Viet Nam                     89

 

Mongolia                    73

 

Cambodia                   70

 

Indonesia                   65

 

Thailand                     63

 

Papua New Guinea    56

 

Philippines                 53

 

Malaysia                    51

 

Sri Lanka                    51

 

Nepal                          49

 

Pakistan                     47

 

Bangladesh                35

 

New Zealand              34*

 

Korea, Rep.                33

 

Bhutan                        27

 

India                           27

 

China                          17

 

·Regional average     11

 

Australia                      9*

 

Japan                           0*

 

Singapore                    0*

 

Korea, Dem.                No data

 

Myanmar                     No data

 

* Central government external debt only.

 

HIPC countries:

 

Angola, Bolivia, Burkina Faso, Burundi, Cameroon, Chad, Congo, Cote

D'lvoire, Equatorial Guinea, Ethiopia, Ghana, Guinea, Guinea-Bissau,

Guyana, Honduras, Kenya, Lao PDR, Liberia, Madagascar, Mali,

Mauritania, Mozambique, Myanmar, Nicaragua, Niger, Rwanda, Sao Tome

and Principe, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Central

African Rep., Uganda, Viet Nam, Yemen, Zambia

 

-0-

 

WHAT THE TOURISM INDUSTRY CAN DO TO HELP

 

Get angry, and start pushing for change. If you say there is nothing

you can do, nothing will get done.

 

Get it on the agenda of tourism associations: Prepare position papers

and start firing off letters to your members of Parliament.

 

Work with UNICEF, not only in raising more funds for kids but also

brainstorming ways to help reduce the debt crisis.

 

In industrial countries, tour operators should lobby governments to

reduce the crippling conditions for wiping out debt. The writing off

of those debts is under terms and conditions that are nothing short of

blackmail.

 

Put more money into orphanages, slums and other homes for children.

 

Get the US Government to pay its long-overdue dues to the United

Nations system.

 

-0-

 

3. MANY THANKS

 

May thanks to Anthony Wong, managing director, Asian Overland

Services, Malaysia, for his unsolicited contribution of US$200 for the

time and effort I put into Travel Impact Newswire. More such

contributions will be welcome. Paying readers of Newswire in future

will get, in addition to the free dispatch, authoritative reports on

the range of Asia-Pacific trade shows, travel marts and conferences to

be held over the next few months, as well as one other very unique

service that I will announce soon.

 

========================

 

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