Travel Reference
In-Depth Information
competition between the North and South (see Chapter 2). According to
dependency theory, under capitalism, wealth is not equally distributed in the
global economic system and within the economic system of a nation. In
today's global economy, of the top 500 MNEs/transnational corporations,
132 are located in the US, 73 are in China and 68 are in Japan (CNN Money,
2013). In terms of market value, the world's biggest public companies (the
top 100) include 32 American companies, eight Chinese, eight German,
seven Japanese, six France and five British companies (Forbes, 2013).
Therefore, there is still a division between North and South today and, even
within nations, there is a visible gap between rich and poor. Many traditional
societies, or developing nations, have cooperatives or community-help
networks. As a traditional society is encouraged to copy a more advanced,
complex capitalist society, this old-fashioned system of more equal distribu-
tion of wealth is disappearing.
Most of the destinations in developing nations embrace tourism develop-
ment, as it is perceived as a quick foreign exchange earner with little over-
head investment, and it is often regarded as a smokeless industry. For
destinations that are rich in natural assets such as beaches, mountains, for-
ests, flora and fauna, history and heritage, but lack resources to industrialise
the nation, tourism seems to be an ideal form of economic development.
However, in reality, the construction of tourist areas, including hotels, res-
taurants and infrastructure (airports, roads, water and sewage systems, etc.),
requires large initial capital, often invested by MNEs. Unless tourism devel-
opment has been invested in by local entrepreneurs and individual busi-
nesses, which often means rather small-scale development, there is no
noticeable economic benefit for a destination's economy due to the high level
of leakage of profits back to MNEs. Alternatively, the money circulates only
through the local élite. The demand for the 'product' of tourism is also unre-
liable in comparison to tangible products such as minerals or automobile
parts. The trends and tastes in tourism products change quickly and disloyal
customers do not repeatedly visit the same destinations. Seasonality of tour-
ism products does not help to provide a steady income for various destina-
tions. In order to maintain the level of demand, many destinations use
pricing as a marketing strategy. Such a strategy does not help to improve the
current economic situation of these destinations. Tourism jobs are often
among the lowest-paid jobs. Many tour operators in developed tourist-
generating countries take advantage of exchange rates, Third World payment
rates and negotiating power to exploit businesses in given destinations.
Modernisation encourages socio-cultural changes, as economic growth
demands these changes as a foundational stage for further economic develop-
ment. Similar to imperialism and colonisation, tourism development can
offer, to a certain extent, improvements in health care and the supply of
potable water, better infrastructure and sanitation, and better housing
and education. While these benefits may be apparent within the tourism
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