The Important Agenda of Inclusive and Sustainable Growth in Malaysia
Ms Michelle Gyles-McDonnough
Malaysia has a clear vision of its future, propelled by the New Economic Model (NEM) and its three-pronged objective of achieving:
- a high income economy with a GNI per capita US$15,000–20,000 by the year 2020;
- an inclusive society that “enable[s] all communities to fully benefit from the wealth of the country”;
- growth and development that is sustainable, i.e., that “meet[s] present needs without compromising future generations”.
The United Nations team here in Malaysia is committed to support the country’s aspirations to achieve its NEM objectives and to make growth work for development. In this regard, the United Nations Development Programme (UNDP) has been increasingly working together with Government on issues of inclusive and sustainable growth as we support the Government to mainstream these development dimensions in all sectors of the economy.
From UNDP’s perspective, “inclusive growth is both an outcome and a process. On the one hand, it ensures that everyone can participate in the growth process, both in terms of decision-making for organising the growth progression, as well as in participating in the growth itself. On the other hand, it makes sure that everyone shares equitably the benefits of growth. Inclusive growth implies participation and benefit-sharing. Participation without benefit sharing will make growth unjust and sharing benefits without participation will make it a welfare outcome.” UNDP International Policy Centre for Inclusive Growth, Brasilia.
As for sustainability, the core idea is that development aspirations of humanity must be balanced with, and met within the natural limits of our planet. Placing human beings at the centre of the development discourse, it brings into consideration inter-generational equity, as well as stresses the need for a holistic, balanced and coherent approach in addressing the three development pillars of economic development, social development and environmental protection.
Tourism is a Key Contributor to Economic Growth Within this larger context, we can firmly place tourism as a key component of global economic growth. Tourism – business and leisure – is and will continue to be a vital component of the global economy, an important contributor to achievement of the Millennium Development Goals, and an integral, positive element in our society (UNWTO Davos Declaration 2007).
One billion tourists travelled the world in 2012, marking a new record for international tourism and cementing tourism’s position as one of the world’s largest economic sectors. The tourism sector accounts for 9% of global GDP (direct, indirect, and induced impact), 30% of the world’s services exports, and one in every 12 jobs. It accounts for up to 8% of the total exports of the world’s Least Developed Countries (LDCs), with international tourism receipts increasing fourfold from US$2.6 billion in 2000 to US$10 billion in 2010. In 20 of the 48 LDCs, tourism is often the primary or secondary source of export earnings.
To further highlight the importance of tourism as a source of foreign exchange revenue, foreign direct investments and opportunities for employment, and therefore one of the main engines of socio-economic progress for developing countries, emerging economies are projected to receive, for the first time, more international tourist arrivals than advanced economies from 2015. By 2030, more than half of international arrivals will be to emerging economy destinations of Asia, Latin America, Central and Eastern Europe, the Middle East and Africa.
In Malaysia, in line with the country’s economic structural change, where services have overtaken manufacturing as the biggest sector and contributor to the GDP, the tourism industry has also grown concurrently. In Malaysia, tourism provides the third largest source of national income from foreign exchange and represents 7% of Malaysia’s economy as of 2005. Employment in the tourism sector has grown at an average rate of 4.7% between 2005 and 2012, providing slightly over two million jobs in 2012, and estimated more than 15% of total employment. And the sector continues to grow. In 2013, Malaysia recorded 25.7 million tourist arrivals, a growth of 1.4% compared to 2011. UNWTO listed Malaysia as the 10th most visited country in 2012.
Incorporating Inclusion into Tourism
As the global economy expands, and tourism along with it, there is stronger evidence that tourism, if properly designed and managed, can contribute significantly to the global agenda of tackling poverty and fostering development in both urban and rural areas.
This can be achieved by designing tourism that enhances opportunities for local communities to leverage on their cultural and natural assets, benefit from employment in tourism activities, as well as the supply of services and goods to tourism businesses or directly to visitors, and in this way, securing livelihoods and empowering local communities.
As evident in the case of Malaysia, tourism is one of the sectors better positioned to deliver on jobs, perhaps the single most common concern for citizens in Malaysia and around the world post the 2008 global financial crisis. Tourism unleashes opportunities for entrepreneurship and provides millions of wage work worldwide to low- and middle-income households.
Besides its direct contributions to jobs, its multiplier effects on related sectors such as trade, agriculture, manufacturing, or construction further amplifies the employment impact of tourism. It is already one of the largest employment sectors in many countries and a fast entry vehicle into the workforce for young people and women in both urban and rural communities.
Embedding Sustainability into Tourism
Just as tourism growth can foster inclusion through the wide net it casts in job creation and across related sectors, tourism growth and sustainability can be mutually reinforcing. All forms of tourism have the potential to contribute to the transition towards a green economy through investments in energy and water efficiency, climate change mitigation through reduction in greenhouse gas emissions, waste reduction, biodiversity and cultural heritage conservation, and the strengthening of linkages with local communities.
Instead of viewing the sustainability effort purely as monetary costs, a sustainable tourism business will actually foster the industry’s growth, create more and better jobs, consolidate higher investment returns, benefit local development and contribute to poverty reduction, while raising awareness and support for the sustainable use of natural resources.
Climate and the environment are key resources for the tourism sector and especially for the beach, nature and winter sport tourism segments. And we also know the sector is highly sensitive to climate variability and change and global warming, many impacts of which are already being felt. Changing climate and weather patterns at tourist destinations and in tourist generating countries can significantly affect the tourists’ comfort, their travel decisions, and tourism product offerings. At the same time, the tourism sector itself contributes to some 5% of global CO2 emissions.
Given tourism’s importance in the global challenge of climate change and poverty reduction, there is a need to urgently adopt a range of policies which encourage truly sustainable tourism that reflects a “quadruple bottom line” of environmental, social, economic and climate responsiveness, climate mitigation and adaptation must be central to strategies and plans for the sustainable growth and development of the sector. This is good business; at the same time, it contributes to inclusive and sustainable development.
By embedding sustainability strategies into tourism planning, additional tourism GDP growth is expected to be in the range of 3 to 7% above business as usual scenario, with a significant reduction in negative environmental externalities.
Increased growth and savings from better resource management can be reinvested in socially and environmentally responsible local activities such as local transportation and building staff capabilities and skills, multiplying the indirect and induced effects of tourism expenditure on local development.
Mainstreaming Inclusion and Sustainability as part of the MDG and SDG Processes
Harnessing tourism’s benefits, then, will be critical to achieving the sustainable development goals and implementing the post-2015 development agenda. Tourism makes a significant contribution to the three dimensions of sustainable development. Tourism means jobs, poverty eradication, gender equality, and the protection and promotion of our natural and cultural heritage, global development objectives encapsulated in the Millennium Development Goals, in particular MDG 1 – eradication of poverty; MDG 3 – gender equality; MDG 7- environmental sustainability; and MDG 8 – global partnerships for development.
As we move towards the Sustainable Development Goals (SDGs) post-2015, we echo the UNWTO commitment to demonstrate the value of the sector while promoting tourism development that is responsible, sustainable and universally accessible, in support of the inclusive and sustainable agenda in Malaysia.
Moving Forward on Tourism and Community Development
How, then should we move forward in promoting tourism and community development, inclusively and sustainably?
First, while it may not be possible to put forward a generic model for sustainable tourism development, there is a clear need to strengthen the knowledge base that builds evidence for policies, and to continue examining different patterns of community tourism and different paths to sustainable community tourism. International case studies have demonstrated that there are multiple types of community tourism, including, for example, government initiated poverty alleviation programmes in Iran, NGO and international donor agency sponsored programmes in Cambodia, national park initiated development in China and Mongolia, and community tourism development programmes initiated by outside business in China and multiple forces in Thailand.
What these case studies have shown is that each type of community participation has its own strength and weakness, reflecting the fact that local sustainability does not always guarantee global sustainability. Community tourism development is a new phenomenon in much of Asia and also Malaysia, and needs to be monitored for a longer time to be able to determine whether they are on a stable path to development. More studies are needed to develop models to better understand what sustainable community tourism means and how it can be achieved. Given UNDP’s work in Malaysia in supporting inclusive and sustainable growth and development, perhaps, at this stage, a few key prerequisites that underpin sustainable tourism development and the promotion of community development in tourism can be suggested:
- Correctly position tourism as a force for sustainable development, ensuring it is fully integrated in the development frameworks of the country and given due recognition across government.
- Policy coherence to reward sustainable investments and practices and discourage costly externalities associated with uncontrolled tourism expansion.
- Better coordination between tourism authorities and ministries responsible for the environment, energy, agriculture, transport, health, finance, security and other relevant areas, as well as with state and local governments.
- Provide an enabling environment for the development of small local enterprises, including improving the linkages between tourism and other sectors, such as agriculture, handicraft and other creative industries, and between businesses.
- Set quality standards, baselines and measurable targets with regard to sustainable tourism promotion and marketing and ensure that tourism products and services are in line with growth markets.
- Tourism is fundamentally a people based activity. Careful planning of human resources, with private enterprises and employee representatives, is needed to ensure that tourism can fulfil its employment creation potential and has a sufficient supply of suitably skilled labour to meet future growth. The decent work agenda, addressing income, working conditions, personal development, freedom of expression and equal opportunity should be backed by labour laws that are respected across the sector.
- As a labour intensive and diverse sector, tourism presents opportunities to benefit poor and disadvantaged people and a range of mechanisms already exist for increasing the proportion of tourism income that reaches and benefits the poor, from employment to working with informal traders, and the use of tourism charges, voluntary giving and collateral benefits from tourism investment. Particular attention should be paid to the needs of women, minorities, disabled people and the elderly and young people, all of whom can engage effectively in the tourism sector.
- Recognising tourism’s dependency on the appeal of unspoilt landscapes, accessible local and cultural heritage, and the importance of sustainable consumption of natural resources such as water and energy, policies and actions to conserve cultural and natural assets and biodiversity, to mitigate and adapt to climate change need to be in place and fully implemented.
- Evaluate success, not only in terms of “number of arrivals” or export earnings, but also in terms of broader economic, social and environmental drivers, as well as its impacts.
In closing, and in conjunction with HELP University’s celebration of World Tourism Day, I’d like to reiterate the message of the UN Secretary-General to encourage policy makers and businesses to commit to sustainable development policies and approaches and engage local populations in tourism development to unleash the sector’s “capacity to lift people from poverty, promote gender empowerment and help protect the environment” as a vital tool to build stronger and more resilient communities.