Role of Tourism on Economic

¶ … role of tourism on economic sustainability in Japan

Economic Sustainability

The syntax of economic sustainability is more and more commonly used nowadays - it has in fact become a new buzzword (D'Arge, Norgaard, Olson, and Somerville, 1991) within the business community and it is now being borrowed by other fields as well. There are various definitions of the economic sustainability, some of the most relevant ones being presented below:

Economic sustainability encompasses growth, development, productivity and trickle-down effects" (Clement and Kraemer, 2000, p.14)

Economic sustainability may be thought of as choosing policies or strategies that result in non-declining economic welfare (where welfare includes market / financial as well as non-market considerations)" (Adamowicz and Burton, 2003, p.185).

In a formal analysis, one could perhaps interpret economic sustainability as narrow focus on sustaining market production and consumption only" (Tietenberg, Oates and Folmer, 2003, p. 171)

However the formulations of the definitions for the concept of economic sustainability tend to differ at some points, in essence, they all revolve around a simple idea: economic sustainability is about growth and development, but this has to be achieved in a sustainable manner. In other words, the growth has to be real and sustainable in the long-term, not just generate short-term profits. In order to ensure they have a prosperous future ahead, organizations must develop plans that foster economic sustainability. Otherwise put, the purpose of the concept is to help the corporate managers best combine the short- and long-term strategies into a single approach that will generate the best results.

2. Economic Sustainability and Tourism

The touristy industry has been approached from different standpoints across the globe. There are the countries which exploited it to the maximum and registered significant gains from attracting foreign tourists, and consequently investors. There are also those countries which focused on other industries. As a general tendency in the contemporaneous society however, most emerging countries try to consolidate their touristy industry. "Tourism is one of the fastest growing sectors of the global economy and developing countries are attempting to cash in on this expanding industry in an attempt to boost foreign investment and financial reserves" (Pleumarom). And to make sure that the gains will also be present in ten or twenty years, the governments and the organizations develop and implement programs based on economic sustainability. Such a program is the Millennium Vision, which was developed by the World Travel & Tourism Council and has established the following goals:

Get governments to accept travel and tourism as a strategic economic development and employment priority;

Move towards open and competitive markets by supporting the implementation of GATS, liberalise air transport and deregulate telecommunications in international markets;

Eliminate barriers to tourism growth, which involves the expansion and improvement of infrastructure - e.g. The increase of airport capacity, construction and modernisation of airports, roads and tourist facilities" (Pleumarom)

In Japan for instance, the Overseas Economic Cooperation Fund has agreed to offer special loans to the touristy industry in the hope of reviving it, but also that of creating additional jobs, reducing the unemployment rate and helping the population get passed the general economic crisis affecting the world (Pleumarom).

3. Contributions of Tourism to GDP

The individual contributions of the touristy industry to the gross domestic product of each country vary based on numerous indicators, such as number of visitors, the quality of the services delivered, the hospitality of the national citizens or any cultural barriers, alongside with financial indicators (such as exchange rates) or legislative measures which limit or encourage tourism. In 2000 for instance, the Japanese tourism accounted for 2.2% in total GDP; Australia's percentage was of 4.5, the U.S.' was of 3.5, Chile's was of 3.8, New Zeeland's was of 3.4 and Canada's was of 2.4. "In particular, the ratio of tourism consumption by foreign visitors to overall tourism consumption has been remarkably smaller in Japan compared with foreign countries. [...] the ratio was only 6.2% in Japan, whereas the ratio was as high as 35.6% in France, 30.0% in Canada, 22.0% in Australia, and 20.9% in the United States respectively" (Organization for Economic Cooperation and Development, 2002).