Impact of Pro Poor Tourism on Nepal's Economy and Poverty Alleviation

This report delves into the effectiveness of Pro Poor Tourism (PPT) practices in Nepal. It begins with an introduction to PPT, its goals, and its relevance to developing countries like Nepal. The report explores the background of Nepal, its tourism industry, and the research questions guiding the study. ...Read More

Effectiveness of
Pro Poor Tourism
in Nepal

TABLE OF CONTENTS
INTRODUCTION..............................................................................................................3
Background of the Nepal..............................................................................................3
Tourism in Nepal.......................................................................................................... 4
Research Questions.....................................................................................................4
Research Aim and Objectives...................................................................................... 4
Hypothesis of the study................................................................................................ 5
Problem statement....................................................................................................... 5
Rationale of the study...................................................................................................5
Limitations of the study.................................................................................................5
Structure of the study....................................................................................................6
Literature Review............................................................................................................. 8
Concept of Pro poor tourism.........................................................................................8
Role of pro poor tourism in poverty alleviation..............................................................8
Impact of pro poor tourism on tourism..........................................................................9
Effectiveness of pro poor tourism on emerging countries...........................................11
REFERENCES...............................................................................................................13

INTRODUCTION
Pro Poor tourism is practiced in developing countries for the purpose of
improving the local conditions of the local people. It develops relationship between poor
people and tourism businesses so that poverty can be reduced. The main idea is to
make them participate towards the development of tourism within the society (Tolkach,
Pearlman and King, 2012). It can be in terms of offering the employment opportunities
and involving them in the decision making process. Pro Poor tourism is not another form
of tourism but rather it is used as an approach to remove poverty among the
marginalized communities.
This has to be noted that tourism is a massive and growing industry affecting
millions of poor across the globe. A marginal improvement can generate many
substantial advantages. With regard to poverty reduction, the industry has many
benefits as compared to other sectors. It has the potential to increase the scope for
wide participation (Trau, 2012). Tourism is more kind of labour intensive industry and
the services are often created on the assets owned bypoor people. Hence, it can be
said that there is a strong relationship between the industry and poverty reduction.
People may be considered as deprived due to their economic circumstances,
although they may be filled with social and cultural resources. Often, these resources
are of interest for the tourists which create many opportunities related to sources of
income for the communities. This kind of tourism helps in improving the living standard
of the poor within the society (Truong, 2014). It can offer net benefits for the poor
people. It is not a particular tourism product or sector or a category like eco-tourism.
Currently, it is acting as an overall approach to the development and for unlocking many
opportunities for the poor.
Background of the Nepal
Nepal is a small South Asian country between India and China with the area of
approximately 0.14 million square kilometres and population of 30 million (Nepal tourism
Board, 2016). It is ranked 147 out of 187 as per Human Development Index (HDI)
according to the income level. 25.2 percent of population is under poverty lines and
Gross National Income (GNI) per capita was $730 in the year 2014 (World Bank, 2015).
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The economy mainly depends on agriculture as the largest size of population is
engaged in it. Tourism has contributed NPRS 157.8 billion (8.6 percent of total Gross
Domestic Product) in the year 2014. It was 8.2 percent in 2013 and it is estimated to
grow to 9.9 percent by 2024 (World Travel and Tourism Council, 2015).
Tourism in Nepal
Tourism is the largest industry in Nepal (World Travel and Tourism Council,
2015). It has been a hotspot destination for rock climbers, mountaineers and people
looking for adventure. The country has many beautiful and magnificent places which
can attract tourists from around the world(COST OF LIVING INDEX IN NEPAL
“STATISTICS & GRAPHS OF NEPALESE CITIZENS ECONOMIC POWER. 2015). It is
a popular tourist destination for adventurous, religious and spiritual tourism. Economic
problems like poverty, unemployment etc. is very common in the country. Huge portions
of Nepal labour force areunemployed who are considered as burden of the economy.
Pro Poor tourism is the best suited in a developing or under-developed
economiesbecause it integrates the rural and integral people of the country in
productive and resourceful activities by creating employment for them. This study is
about evaluating the effectiveness of Pro Poor Tourism Practice in Nepal. It identifies
the benefits obtained by the economy of the Nepal with regard to this kind of tourism.
Research Questions
 Has pro poor tourism practice in Nepal been a success?
 What is the role of pro poor tourism in eliminating poverty in Nepal?
 How is tourism bringing changes in the lives of poor people in Nepal?
Research Aim and Objectives
The major aim of the research is to evaluate the effectiveness of Pro Poor Tourism
Practices in Nepal. In order to achieve the above aim, following objectives have been
established:
 To examine the economic relationship between tourism and poor people in
Nepal.
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 To identify the changes in the lives of poor Nepalese people that tourism has
brought
 To find out the ways on which the poor Nepalese can get more benefitted from
Tourism
Hypothesis of the study
 H0: Pro poor tourism brings changes in the lives of poor people in Nepal
 H1: Pro poor tourism doesn’t bring changes in the lives of poor people in Nepal
Problem statement
Pro Poor tourism has been practised in several developing and under-developed
nations. This kind of tourism is very popular among the local communities. However,
this concept has not gained wide acceptance from the side of the government. Still
many countries are not concentrating on the development of the poor local
communities. They are not getting proper sources of income and livelihood
opportunities. Further, Nepal has recently suffered from an extreme pain of major
earthquake. It has destroyed the livelihood of many poor and below poverty line people.
Now, Nepal government is facing the problems in improving the lives of victims of
earthquake. In that case, practice of Pro Poor Tourism can prove to be an effective
approach. Hence, there is a need to do proper research on identifying the effectiveness
of Pro Poor tourism on the development of tourism. This study makes efforts to show
the effectiveness of Pro Poor tourism in an under developed nation like Nepal.
Rationale of the study
The research will be significant in evaluating the success of pro poor tourism
practice in Nepal. It will also find out the limitations and obstacles against it so that it will
be useful for the respective authorities and stakeholders. This study will also identify
some ways by which the local poor population can get more benefits from the tourism
activities in their area.
Limitations of the study
The research can face following limitations:
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Lack of time – Time is the biggest limitation during course of research. A lot of
time is taken in collection and processing of data. This limitation can hamper the quality
of study.
Lack of content – Another limitation is lack of appropriate content and information
for the research. It can be difficult for the researcher to collect data as it can be difficult
to find appropriate sources.
Sample size – Another drawback is the selection of sample size. This activity is
required to be done with care and focus. Selection of wrong sample size may lead to
unreliable outcomes.
Structure of the study
Chapter 1 – Introduction
This chapter offers a brief overview of the research subject which is to be investigated.
Chapter 2 – Literature Review
This chapter demonstrates the knowledge and theories about the literature which has
been developed with regard to the research subject
Chapter 3 – Research Methodology
This chapter talks about the research tools and techniques which are applied to collect
the data for the research.
Chapter 4 – Data Analysis
This chapter performs the analysis of the data which has been collected from various
sources. A suitable technique is used to interpret all the results
Chapter 5 – Conclusion & Recommendation
This is the final stage of the research. Under this chapter, different types of conclusions
are made on the basis of generated findings.
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EFFECTIVENESS OF PRO POOR TOURISM IN
NEPAL
7

LITERATURE REVIEW
Concept of Pro poor tourism
Pro- poor tourism is considered as a set up for developing countries with the
main aim of improving local economy for local people. The concept is typically linked
with tourism business entities and local poor people. Pro poor tourism aims to reduce
poverty and it also allows the poor people to participate more effectively in tourism
development (Pro-Poor Tourism: Harnessing the World’s Largest Industry for the
World’s Poor, 2002). It includes local people in decision making processes by
generating more opportunities of employment for them. Any type of business entity and
tour operator can be involved in pro poor tourism. The main aim here is to provide
numerous benefits to poor people from travel and tourism services; thus pro poor
tourism allows local people to get involved in decision making processes. Thus, it can
be said that pro poor tourism gives more opportunities to the local people to earn
benefits and money from tourism activities.
Pro poor tourism is beneficial for economic terms as well since it is not a specific
product or sector of tourism; but it is considered as the chief approach to the industry.
Numerous strategies are included in making the pro poor tourism effective and all such
strategies also unlocks opportunities for the poor people within tourism. Thus, the
concept do not emphasizes on expanding the overall size of the sector (Pro poor
tourism: improving livelihood opportunities for local people, 2015). Three major activities
are needed in such concept such as economic benefits to poor people, addressing the
negative social and environmental impacts associated with tourism and promoting
participation of poor people in decision making process of tourism industry. Hence,
overview of the concept depicts that pro poor tourism is beneficial for poor people
because they get numerous opportunities of earning more money. The economy of
Nepal is influenced by the earthquake which has reduced standard of living of people;
thus the concept is termed as beneficial for Nepalese.
Role of pro poor tourism in poverty alleviation
Pro poor tourism has emerged in parallel with thinking on pro poor growth. In
many developing countries, tourism enhances economic development through
contributing in tax revenues, export earning and service charges. Most of the
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approaches of tourism focuses on increasing the number of arrivals and according to
that the country assume that the benefits will assist poor people. However, pro poor
tourism takes a different perspective and it also focuses on changing the degree of
tourism development so that they can amend the flow of income to poor people through
augmenting their participation. Tourism is considered as labor intensive because ir
provides many opportunities of employment as well as it increases direct access to rich
tourists who more often prefer to buy local goods and services (CONTRIBUTION OF
TOURISM TO POVERTY ALLEVIATION, 2004). Many people assume that pro poor
tourism is the same like community based tourism where in chief focus is given towards
development of poor people; however, the concept is entirely contradict.
Many countries have made linkages between tourism and poverty by
emphasizing mostly on macro economic growth such as through employment
opportunities, gross national product contributions, foreign exchange and private sector
investment. Hence, pro poor tourism is now proponent as a source of alleviating poverty
in developing economies. The framework has generated a lot of interest and promotion
in the realm of tourism (HOW PRO-POOR IS TOURISM, 2006). On the other hand, pro
poor tourism has received a fair amount of criticism that it upholds inequalities prevailing
in the society. Truong (2014) in such context argues that there are inherent structural
barriers influences against the involvement of poor in tourism activities. Since, pro poor
tourism is beneficial for poor and non poor both the categories; therefore sometimes it is
considered as unfeasible for the society.
Impact of pro poor tourism on tourism
As a sector of pro poor economic growth, tourism has several advantages such
as it allows the consumers to come to different destinations; hence it provides
opportunities for selling additional goods and services. The economy of Nepal has been
reducing because of economic, social and environmental aspects and this impedes the
overall development of the country. Therefore, at this stage, poor people needs to get
involved in tourism activities so that they can earn money through emphasizing on
tourism services (PRO-POOR TOURISM: PUTTING POVERTY AT THE HEART OF
THE TOURISM AGENDA, 2000). Pro poor tourism has social impacts as well in which
local residents often highlight the way tourism affects other livelihood goals and it does
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not consider positive and negative aspects. In addition to this, tourism can also increase
the value attributes to minority cultures by national policy makers. Hence, in terms of
overall cultural impacts of tourism it can be said that poor people needs to emphasize
more on development activities so that to enhance the level of earning.
The overall balance of positive and negative livelihood impacts will change
between situations among diverse people. Pro poor tourism is defined as beneficial for
poor because it includes numerous strategies that expands business opportunities for
the poor people. Moreover, it enhances collective benefits from community. This is a
new source where in poor people can get new sources of income and where in they can
also spread benefits well beyond the direct earnings (Pro poor tourism: improving
livelihood opportunities for local people, 2015). Pro poor tourism strategies involve the
development of new products according to the local culture of the country; however that
should be integrated with mainstream products if they are to be find in the market place.
This in turn further requires close observation to demand, product quality, marketing,
investment in different business activities and inclusion of private sector. From many
sources, it has been identified that pro poor tourism mitigates the environmental impacts
of tourism on the poor because tourism can lead to displacement of the poor from their
land on which the whole life of poor is dependent.
It is also useful in terms of dressing social and cultural impacts of tourism since
that often changes the demand for tourism it can affect many social issues including
health care and other facets. Pro poor tourism needs varied actions from macro to micro
level and it also includes product development, marketing planning, policy development
and investment. It moves in a significant way as it is an integrated and holistic approach
to the entire tourism system (Truong, 2014). However, a driving force for pro poor
tourism can be incorporated into tourism development strategies of government or
business entities. The subsequent concept also works in prominent manner where the
wider destination is developing well and where in effective networks can be developed
among community and mainstream elements of tourism. From many studies, it has
been evaluated that the poverty impact may be greater in remote areas, though tourism
itself may be on a limited scale. On the basis of past experience, pro poor tourism
strategies depicts as sources through which expansion opportunities is enhanced. Poor
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reduction through such aspect can therefore be considered as a significant move at a
local and district level. However, national impacts would definitely require a shift across
the subsequent sector and it will also vary with locations and the relative size of tourism.
Effectiveness of pro poor tourism on emerging countries
In order to maximize tourism's poverty reduction potential, numerous strategies
are required to be developed at national and international policy level. One organization
cannot operate effectively in all the stages; therefore views and opinions of local people
should be involved in decision making process. Emerging countries have been
participating more in tourism development aspects and for that they are increasing
efforts in tourism services. For instance- tourism of Nepal is getting affected because of
the incident held and to promote the tourism industry; people are trying to develop more
aspects of innovation and growth (HOW PRO-POOR IS TOURISM, 2006). Pro poor
tourism is beneficial for people since that allows them to deliver local information to the
tourists and visitors and as a result, they get indirect earning from the same activity.
Poor people must participate in tourism decisions if their livelihood priorities are to be
reflected in the way tourism is developed. In such respect, emerging countries are
acquiring greater benefits from the approach where in countries typically focuses on
opting for holistic livelihood approaches. Hence, in order to promote pro poor tourism,
concerned entities are required to analyze the distribution of both benefits and costs.
Along with the same, analysis should also be made regarding its influence.
Kenya, Tanzania and Nigeria are the most popular countries who faces issues
related to poverty and as a consequence, it directly impacts tourism industry. In all such
countries, pro poor tourism has been developed so that local people can also involve
themselves in tourism related activities. This is essential in terms of encouraging the
overall economic benefit of the country. For example- tourism is an integral part of
village life of Prainha do Canto Verde and the entire community is committed to an
environmentally sustainable lifestyle (Pro-poor tourism initiatives in developing
countries, 2001). Hence, education related to environment is taught in the classrooms
and as a result, the community has developed a garbage collection and disposal system
so as to make the place more clean and popular tourism place. Pro poor tourism
increases individual and collective dignity and autonomy through greater empowerment
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and land tenure. Thus, it contributes to gender and other forms of equality in the case if
the benefits and cots are distributed in equal manner. Further, it also contributes to the
development of human and social capital among the poor; hence it can aid in reducing
vulnerability to some economic and environmental shocks by promoting economic
diversification.
Tourism related activities needs to be managed adequately because it
contributes to the protection of the natural assets of the poor. Apparently, poor people
may not be able to take full advantage of the opportunities that tourism brings because
they still lie under the category where in income is highly distributed unequally. Hence,
there must be remarkable assets in the region where in poor live for tourism to become
an effective poverty reduction strategy (PRO-POOR TOURISM: PUTTING POVERTY
AT THE HEART OF THE TOURISM AGENDA, 2000). Local earnings are the key
measures of the financial introduction of pro poor tourism into poor households. These
comprises wages of the employed, casual earnings and community collective earning.
Local earnings are quite contradict from any profits of the enterprise itself; but they are
not a measure of direct impact on the poor. When identifying the positive impacts of
tourism initiatives on the life of people and welfare of poor people, the analysis must
identify and report on any negative impacts which are associated from initiatives of
income distribution. Tourism is a complex industry driven by the private sector and it is
often associated by large international companies. Governments have relatively few
instruments which aids in influencing this sector where in fiscal and planning
instruments captures non commercial benefits (Pro-poor tourism initiatives in
developing countries, 2001).
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REFERENCES
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through: <http://haroldgoodwin.info/resources/povertyalleviation.pdf>. [Accessed
on 9th February 2016].
Cost of living index in nepal “statistics & graphs of nepalese citizens economic power.
2015. [Online] Available through: <http://ekendraonline.com/nepal/cost-living-
index-nepal/>. [Accessed on 9th February 2016].
HOW PRO-POOR IS TOURISM. 2006. [Online] Available through:
<https://www.globalenvision.org/library/8/1132>. [Accessed on 9th February 2016].
Nepal tourism Board. 2016. [Online] Available through:
<http://www.welcomenepal.com/>. [Accessed on 9th February 2016].
Pro poor tourism: improving livelihood opportunities for local people. 2015. [Online]
Available through: <http://www.propoortourism.info/intro.html>. [Accessed on 9th
February 2016].
Pro-poor tourism initiatives in developing countries. 2001. [Pdf] Available through:
<http://www.tanzaniagateway.org/docs/initiatives_cs.pdf>. [Accessed on 9th
February 2016].
Pro-Poor Tourism: Harnessing the World’s Largest Industry for the World’s Poor. 2002.
[Pdf] Available through: <http://pubs.iied.org/pdfs/11007IIED.pdf>. [Accessed on 9th
February 2016].
PRO-POOR TOURISM: PUTTING POVERTY AT THE HEART OF THE TOURISM
AGENDA. 2000. [Online] Available through:
<http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/
2861.pdf>. [Accessed on 9th February 2016].
Tolkach, D., Pearlman, M. and King, B. 2012. Key Implementation Factors in Pro-poor
Tourism. Tourism Recreation Research. 37(1). pp.3-13.
Trau, A., 2012. Beyond Pro-Poor Tourism: (Re) Interpreting Tourism-Based Approaches
to Poverty Alleviation in Vanuatu. Tourism Planning & Development. 9(2). pp.149-
164.
Truong, V., 2014. Pro-Poor Tourism: Looking Backward as We Move Forward. Tourism
Planning & Development. 11(2). pp.228-242.
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World Travel and Tourism Council. 2015. Travel and Tourism Economic Impact 2014
Nepal, [online]. Available through:
<http://www.wttc.org/-/media/files/reports/economic%20impact%20research/
country%20reports/nepal2014.pdf>, [Accessed on 9th February, 2016].
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