1 - 7 March 2001
Issue No.523
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Al-Ahram Weekly On-line 1 - 7 March 2001 Issue No.523 |
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Giving tourism a better deal
By Shaimaa Labib"The Economic Impact of Tourism in Egypt," written by Sahar Tohamy and Adrian Swinscoe and issued by the Egyptian Centre for Economic Studies (ECES) argues that more information is needed on the impact of tourism on Egypt's GDP and levels of employment and income.
As one of Egypt's four main sources of hard currency and accounting for over 28 per cent of foreign receipts, the tourism sector is vital to the country's economy. Although Egypt's coverage of tourism data is similar to that of other developing countries, more information and additional analysis of this is needed in order to develop appropriate policies for the sector and the economy in general, suggest Tohamy and Swinscoe.
Currently, detailed information is available on the number of tourists visiting Egypt and their nationalities while estimates are made regularly on their expenditures. This data is developed by the Ministry of Tourism which assesses tourists' arrival trends, their nationalities, and their length of stay, using information from the Passport and Immigration Authority.
Concerning the money spent by tourists, data is collected on the contribution of Egypt's hotels and restaurants to GDP, revealing that these account for about 1 per cent, which in turn supports less than 1 per cent of total employment.
Additionally the Ministry of Tourism conducts a bi-annual study of foreign tourism in conjunction with the Central Agency for Public Mobilisation and Statistics (CAPMAS). Using guidelines established by the World Tourism Organisation (WTO), the ministry's study includes information on tourists' average expenditures by nationality and the distribution of these across different items such as transportation, accommodation, recreational services and so forth. The Central Bank of Egypt then uses estimated tourist expenditures to calculate tourism receipts for use in assessing balance of payments figures.
But according to Tohamy and Swinscoe, these information-collecting efforts fail to present a comprehensive picture of the impact of foreign tourists' expenditures on the country's economy. They estimate tourist spending in 1999 at approximately $3.6 billion -- 4.4 per cent of the GDP -- and, adding other indirect revenues accruing from tourist activity, they suggest its total contribution to output reached $9.6 billion (11.6 per cent of the GDP) for that year.
As for employment, Tohamy and Swinscoe suggest that foreign tourists' spending directly supported 1.2 million jobs in various sectors over the past two years. The total number of jobs directly and indirectly associated with foreign tourists' spending was 2.7 million. And Egypt's visitors also contribute to state coffers, according to the report which estimates tax revenue from spending by foreign tourists to account for 5.1 per cent of total direct and indirect taxes.
To better assess the value of tourism to the economy, the report suggests applying a system known as the Economic Impact Analysis (EIA) to examine the contribution of tourism to specific sectors of the economy. The EIA follows linkages between tourists' expenditures on goods and services and demand for intermediate goods that are necessary to produce these goods and services, as well as consumption demands resulting from income earned by workers.
The report concludes that once tourism's major role in the Egyptian economy is recognised, efforts to develop a strategy for this sector will become a goal not just for policy-makers working in tourism, but, also for those working at the macroeconomic level as well. A concerted effort to develop Egypt's tourism, write Tohamy and Swinscoe, will allow the country to capitalise on its considerable tourism potential and the growing importance of tourism industry worldwide.
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