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UNIVERSIDADE DO PORTO, FACULDADE DE ECONOMIA GLOBALIZATION AND TOURISM SECTORSUBMITTED TO : António Manuel FigueiredoSUBMITTED BY : 060400009 Meltem Lale ÜNAL 060400013 Ali Onur ARISOY 1
ABSTRACTThe main aim of this work is to introduce the interaction between the globalization processand the tourism sector. By discussing this mutual relation, firsly we explain how theglobalization have to be understood and in which ways influences the tourism, afterwardswithin the framework of these explanations, we will observe the position of Turkish Tourismand its place in Turkish economy. 2
CONTENTS1. INTRODUCTION2. GLOBALIZATION 2.1. TECHNOLOGY 2.2. ECONOMY 2.3. POLITICS 2.4. CULTURE 2.5. TERROR3. THE EFFECTS OF GLOBALIZATION 3.1. THE INEQUALITY OF INCOME BETWEEN COUNTRIES 3.2. THE FLUCTUATION IN THE PRODUCTION MARKET4. GLOBALIZATION AND TOURISM5. THE IMPACT OF TOURISM TO THE ENVIRONMENT 5.1. POSITIVE IMPACTS 5.2. NEGATIVE IMPACTS6. SUSTAINABLE TOURISM DEVELOPMENT7. CASE STUDY: GLOBALIZATION AND TURKISH TOURISM 3
1) INTRODUCTIONIn the end of 1970s, Turkey, like the other developing countries realised the weakness ofimport-substitution strategy and began with a more open economic growth strategy. In 1980s,Turkey began an fast reform process in most of the sectors of the economic system. Thisprocess of reform which began with the liberlisation of external trade regime and financialsector, reached to liberalisation of capital movements in the end of 1989, being a reformwhich could change all the caractristics of the environement of policy determination.Turkey, with policies that it maintained after 1980 ,gained a liberal economic image. Theseyears are also the years that the world economies also liberilized and opened to the worldmarket and generally these years can be designated like a rapid globalization period. One ofthe most important developments in this period is the rapid growth of the world tourism. Thissector which develops with a very high acceleration, was creating new employment areasfurthermore was differentiating the flow of income transfers between countries.Turkish tourism sector also with its attacts and developments began to have importantportions from this drawn. The investments done to Turkish tourism sector which passes today10 billion dollars and the initiatives to this sector, is increasing each year. The simultaneusapparence of this two trends, globalization and tourism, make observing their interactioninteresting and important. In this work we will emphasize mainly the influence of the periodof changes in the world economy to the Turkish tourism sector and its place in Turkisheconomy. 4
2) GLOBALIZATIONGlobalization is a process of changes which affects effectivement all phases of our lives fromeconomics to technology, from health to terorism. In other words, is a new world formationtried to be established after the World War 2 and which is especially effective after 1980. Themain aim of this new world formation is to provide the countries and the people to live withcloser relationship.And this can be obtained by taking up the barriers to increase the circulation of goods,knowledge, services, capital and people in the world. We catagorise the phases which are affected more by globalization in five: 2.1) Technology Technology and globalization have a complemantary web, because of this there is a bigeffect of technological developments to establish this new world formation. Globalization dueto the increasing colloboration and the opportunities of marketing helps the acceleration of thetechnological development. Technology also forms the infrastructures of all the phasesaffected by the globalization. New arms, credit cards, communication satellites and the otherdevelopments also underlie the defencial, financial and cultural globalization. 2.2) Economy The most important changes occure doubtless in economy. The liberal economies ;open toexternal markets, decreasing the state effects with the initiatives of competiton and the privateentrepreneurs; were increasing rapidly in the world. The other important development was infinancial markets. When the barriers of the mouvments of the capital are taken off, manyfunds circulating countires are formed. The other important relationship is the world tradevolume and the volume of the direct investments between counties reached to a very highdimension. 5
2.3) PoliticsWhen we look to the configuring the world poitics, we see important changes in the conceptsof “ independence” and “ dominance” . The contries now can not act with their decisions likethey want , as free as before. The balance formed in the world politics can affect the countrysinternal politics also the countrys decisions. Also the international organizations andorganisms are the importants actors of the globalize world. We see that in the scene of theworld politics, with the national countries there are also United Nations, European Union orNorth Atlantic Treaty Organization. The other change is the achievement of important roles ofthe non-governemental organizations in the world politics. Greenpeace or the similarorganziations can change the decisions of the countries. 2.4) CultureGlobalizaiton, in one way, give opportunies to every cultures to open to the world and to be apart of the world culture, in another way also provide the dominance of one popular culture –generally is American Culture- . It provides Indian, Africain culturas more awareness butthese cultures only stay like a sub cultures under effets of the west culture with one type offood, one type of clothing. 2.5) TerrorTerror is not a instrument brought by the globalization, but under the opportunities and theconditions that it provided , the terror entered a process of regeneration. Besides the localterror organisms which organise emphasis activities because of several demands whole overthe world, with globalization we are meeting with a new structure of terror consist ofmembers in different countries, with demands of a big number of companies and countriesand activities can be realised in whole over the world. The relation of this process withglobalization is based on two reasons. The first one is the creation of tensions and iniquitiesby globalization. The people who suffer from this process stay helpless and are far away fromthe devices they can search for their rights and they have the rich countries, the companies ofthe rich countires and the civils who stay quiet to this process as a target because they see thatthey are responsible of this process. 6
The second reason is with the liberalization of the circulation of the goods, the capital and theknowledge, the terror organisms can have the money and the ammunition easier. Alsointernet, satellite phones which provide communication faster and cheaper, help the education,the communication and the synergy of the terror organisms members. 3) THE EFFECTS OF THE GLOBALIZATION 3.1) The Inequality of Income Between Countries Globalization corrupts the distrubution of incomes in countries and also betweencountries. Figure 1) The Inequality of Income between CountriesSource: The World BankThe pink line shows the 20 richest countries and the blue line shows the 20 poorest countires.The vertical part of the graph shows the per capita income ($) . 7
From 1960s, like we see in the table, the per capita income in 20 richest countries reached16000$ with triplicating. By the way, there is not a important change in the increase of percapita incomes in 20 poorest countries.At the result of this, the bluff between 20 richest countries avarage income and 20 poorestcountries avarage income reached 15 multiple by triplating the increase of the avarage incomein 20 richest countries. The main reason of this change is the poorest countires like Afrika andthe East Asia dont have the infrastructure and the capital to profit from these benefactions ofglobalization. In these regions, apart from the services like internet or the telephone; the basicneeds like canalization, the drinking water or healthy alimentation not even be provided. 3.2) The Fluctuation in the Production MarketThe powers in the production theory are the demand and the supply. The equilibrium in themarket generally considered the intersection of these powers. The determination of salaries inthe labor market also consider this intersection point. The labor suppy of the workers isdirecly proprtional with prices but the demand of the employer is inversly proportional withprices. The intersection of these two curves give us the equilibrium price in the market.The effect of globalization on this relation is that it gets the capital fluid. The possibility thatit can be transfered to beyond of borders is an advantage for the capital. Because of this, thesupply in labor market is more elastic in markets; if not there is a threat that the investmentstend to another market. Under these conditions instead of the equal distrubution of theadditional tax to production and wages, these will be charged by the employees. 8
4) GLOBALIZATION AND TOURISMTourism is one of the most important areas that globalization affects. Even we can say that thetourism sector is established with globalization. Also we can say that tourism sector whichgrow rapidly cause results supporting the globalization. Besides it provide to meet differentcultures, also we observe important changes in the countries which try to attract tourists withaim to support the tourists demands and needs. Generally we can observe the effects of globalization on tourism in three captions: 1) The world economies which liberalized, the cultural and political relations increasing between countries and developing transport and communication , in one side were increasing the interests of people to new countries and also was facilitating the way to reach to new countries. The curiosity to the place where was passing a film on cinemas, sport tournaments, festivals, conferences and siilar activities attract people to new georaphies. The fast and cheap opportunities ways of communication like mobile phones, internet of the global world provide reachable the most far regions of the world. Also, the increasing relations between countires facilitated to pass beyond borders. Today, many countries offer easiness to tourists to entering in countries , also they encourage tourism by no demanding visa. 2) One of the important returns of the liberlisation in world economy was the perceptible process of growth. In global conditions, the economic growth attend faster growing behaviour. The effect of globalization doesnt have source from the increase of the production but the increase of the trade. 9
Figure 2: The Twin Globalization PeriodsSource: The World BankLike we see in the graph above, the variables that we can consider the indicators ofglobalization, the size of the world trade and the quantity of foreign capital entering indeveloping countries, with their incresing also there had been an increase in world economyand accordingly the real per capita income. The increase of the welfare of individuals, playedan important role in grow and development of the world tourism. 3) The other effect of globalization in tourism sector emanate that it produce theinequality of incomes between countries. Undergoing a change of countries in the world inlast 50 years, in other words, the rich more rich and the poor more poor, caused a flow fromrich countries to poor countries. Particulary, people who live in USA, Europe and Japan; thefact that their level of income is very higher comparing with other countries people offerthem very cheap tourism opportunities. It wasnt astonishing with the increase of the bluffbetween countries, is brought a tourism from rich countries to poor countries. 5) THE IMPACTS OF TOURISM TO THE ENVİRONMENT 10
One of the most important sector of today’s, tourism, has lots of impacts,such as;economic,social and cultural impacts.Sometimes,this impacts operate between eachother.That’s why it is so difficult to search generally.First of all, we can observe the positiveimpacts of tourism. 5.1 Positive Impacts of TourismEconomicWe can certainly say that;tourism has one of the most important source of economy.We cansee it’s big impacts on economy.- Strengthen the economy by bringing in foreign currency,attracting touristic investment andbeing as a tax.And this impact also creates to raise employment in the short-run with lowcosts and helps to be removed the interregional imbalance.Phsical - Help to protect the natural and structural sources.It also helps to enforce these resources - Provide to access to the natural resources and quality standards which are accepted in the international level - Foster to the quality physical enviroment arrangement that can be achieved by the local people - Create to the opportunity for using the unusable sources from the past cenuries such as; railroad,harbor,shelter,…etc.Socio – Economic 11
- Form to the economic value of composition that hasn’t the direct contrubition from the economic side to the local people - Create opportunity for small businesses - Create encouragement for other promoter activity - Help to increase the income of local people and their life standards - Increase local people’s life quality by presenting the use of restaurant,sport organization,…etc to the local people.Cultural – Educational - Appreciate the value of art,festival and theatre’s quality by supporting activity and creating sources for sustaining - Create the market for local art and handwork - Enforce some of the region’s local identity and provide an increasing of local honour. 5.2 Negative Impacts of TourismEconomic - Country sources can be created the opposite side effects to economy by the currency loss and profit transfers.For example, and increasing the price of land and allocating of limited resources for the touristic profit can increase the alternative costs and cause “ colonisation” by the allocation of foreign capital. - The dependenceto abroad,an artificial price increasing and capital condensation will be the main economic problems.Physical 12
- Establishing of airport,marina and other holiday complex erodes the earthen - The excess visitor flow can damage the structure of natural enviroment and creates the excess of voice and garbage - Water and earthen sources are orientated by the situation trend of tourism improvementSocio – Economic - Tourism becomes the enviroment as a commercial tool - The imports of good that depends on the tendency of tourist consumption provides,transferring the local sources of this region to the abroad. - Create unhealthy market and causes the increasing of blame - Cause to vanish the traditional worths - Temporary immigration that the result of tourism,can cause the negligence of agriculuture.Cultural – Educational - Foster to reform of local worths and art builds for going profit - The transformation of culuture to tourist attraction and misappropriating of natural hospitality can damage to the local worths and local identity of region. 6– SUSTAINABLE TOURISM DEVELOPMENT 13
Sustainable Tourism Development is the relationship between the owner of the house in tourism sector and tourists that meets the needs of present without compromising the ability genertions to meet their own needs . If and only if ,sustainability in the tourism should be with long-term strategies.Thus,it can be more effective and meaningless.Other wise,next generation will not benefit from the roots of tourism.The entrepreneurs who correlate the tourism with the green elements can gain around from the tourism. There are some principles of sustainable tourism.These are; - Enviromental protection as an integral component of economic development - Public participation;that means we all have responsibility for sharing a role to play - Inter - generational equity, social justice and poverty abatement - Dealing carefully with risk and uncertainity - Accountability about setting clear standards, ensuring monitoring and enforcement In principle,there are lots of people to support sustaiablity. But in techincs,it has beendifficult to success. Because it is so complex and general. SUSTAINABLE DEVELOPMENT Sustainable Tourism is a tourism which leads to management of all resources in such a way that economics, and social needs can be filled while maintaining cultural integrity, ecological process and life support system. We can summarize sustainability in 4 categories. Economic, Cultural, Community and Ecological Sustainability. Economic Sustainability 14
- Provide financial incentives for businesses to adopt sustainability principles- Promote among clients an ethical and environmentally aware behaviour- Use internationally acceptance and reviewed guidelines for certification and training- Conduce some of the income generated to assist in training,product development and ethical marleting Cultural Sustainability- Educate tourist about preferred and acceptable behaviour- Educate tourism industry about preferred and acceptable behaviour- Protect cultural diversity- Education and training programs to improve and manage legacy and natural resources should be established. Community Sustainability- Improve local human resources capacity- Provide financial incentives for local businesses to enter tourism- Tourism should provide quality employment to community residents- Community should maintain control over tourism development Ecological Sustainability- Monitor and observe research on the actual impacts of tourism- Promote responsible tourism behaviour- Provide tourism in protected areas such as; national parks- Identfy acceptable behaviour among tourists 15
7- CASE STUDY GLOBALISATION AND TURKISH TOURISMTurkey, which is developing or less developed country, entered the important process ofglobalization since 1980’s.Tho most important part of this process is “opening of trade to theworld” and “ passing to the market economy.” But the process of passing to the marketeconomy is really difficult in less developed countries such as Turkey, Argentina ,…,etc.Globalization has some positive and negative impacts like any other concepts. In economicside, it has positive some positive impacts. For instance, an increase in financial resources, arise in competition in the world and producing more and quality goods with less costs. Alsoglobalization has negative impacts.For example, in global area, local producer doesn’t stand up to hard competition and can faceto disappear from the market. And also, in the process of globalization, the country that hasn’tfinished to pass to the market economy, like Turkey, can not benefit from this positiveimpacts. If they want to gain some benefits from globalization, they will have to take someprevention about their negative impacts. At this point, the most important problem thatcountry has to be faced is” balance of payment deficit.” That means, export is smaller thanimport. The country can faced to devaluation by the result of balance of payment deficit.Above, we talked about the globalization around the developing or less developed countries.After these information , we can talk about the Turkish Tourism in Global Area.Tourism is one of the most important sector for the less-developed countries. That’s why theWorld Bank and IMF always recommend to the less developed countries for improving thisector and due to this, country can faced their exchange needs. Tourism has 300 millioncapacity in the world. And 65% of this capacity is owned by the less-developed countries.Theincome of the tourism signs 10% of export capacity of these countries. 16
Tourism has been an important place since 1980’s in Turkey. In 1982,”Tourism StimulationLaw” was accepted by the government. With this law, the stimulated the tourism to theTurkey. The share of tourism in our GDP was 0.8% in 1983 and in 1984, it was 2 times biggerthan 1983 which is 1.7%. In this process, this share increased till now.In 2001,the share of tourism in export was 7.2% in 1983 and in 1984 it increased such as11.8% and 18.6% in 1985.In 2002, this share increased till 33.9%.As we can see ,the share oftourism in GDP and export increased continuously. According to some researchers that, if theincome, that comes from tourism, forms 5% or more of GNP, this economy partly willdepend on the tourism.In recent years, Turkey’s situation is like that.The most important yield of tourism is admittedly to provide exchange entrance. According toForeign Trade Balance side, an increase of net exports has 2 ways; - Increase export - Decrease importThe advantage of tourism can be seen at this time. When we compare tourism sector with theothers, we can see the advantages and facilities of tourism sector. Because, country canachieve the exchange in a short time with less source and with less efforts. That’s why,lots ofcountries demand the tourism sector for meeting their exchange needs.In addition, tourism sector has some opportunities for creating employment. The share oftourism in the total employment was increased from 3.56% to 5.10% in the period of 1993-2001.In the current transaction balance side, tourism has an important role .In this figure. Wecan see the share in Current Transaction side. Between 1984-2004 current transaction givesdeficit. The deficit in the current transaction balance without tourism income, raised 5 timesmore in 2002,in 2003 nearly as 2.5 times more and in the first 6 months of 2004 raised 1.4times more. 17
We show the other economic indicator that is called; “The Rate of Closing Foreign TradeDeficit with Tourism Income.” According to this figure, the tourism income closed the bigpart of foreign trade deficit. In recent years, this rate increased in 2002 and 2003,it reached till79%. 18
8) CONCLUSIONDuring the work, we can see that, globalization, which has negative and positive impacts,shows its positive effects on tourism and provides an improuvment in tourism.But globalization is not just only reason of the improuvment of the tourism. We need to assessin the whole cycle. In this absolute, tourism is not also just only reason for closing currentdeficit and sustainable development. Governors should consider that, there are only othersectors such as service, industry etc that provide efficient economy with the tourism sector.Right along with these informations, Turkey needs to make some little regulations in thetourism sectorto remove the negative impacts, also Turkey should not depend upon thetourism, the country must improuve the other sectors. 20
References: • http://www.tcmb.gov.tr/ Last Access: 25/06/2007 • http://www.worldbank.org/ Last Access: 25/06/2007 • http://en.wikipedia.org/wiki/Globalization Last Access: 25/06/2007 • http://www.radikal.com.tr/haber.php?haberno=3277&tarih=24/05/2001 Last Access: 25/06/2007 • http://www.tcmb.gov.tr/yeni/evds/yayin/kitaplar/kuresel.pdf Last Access: 25/06/2007 • www.ceterisparibus.net Last Access: 25/06/2007 • http://www.ekodialog.com/ Last Access: 25/06/2007 21
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