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1. What are some of the challenges that face the Philippines as they implement tourism as a major growth strategy for their economy? Why are they pursuing this? (10 points)

One of the challenges facing the Philippines as they look to use tourism as a growth strategy for their economy is the infrastructure of the country. It currently is not prepared for a continued economic expansion as they have bottlenecks from road and rail to ports and power generation.1 They want to have a world-class infrastructure, but an archipelago of 7107 islands presents a big challenge in transporting people to the different areas or tourism zones.2

Another challenge is in leakage of the revenue generated from tourism that does not stay in the country. Studies have shown that there can be a high amount of leakage especially when there is a large portion of foreign ownership within the country.3 With the Philippines‟ Entertainment City, this is a very real danger because the entire cost of the construction will be borne solely by foreign investors.4 They need to be careful to build up the infrastructure and the local industry in the area so that supplies and services can be obtained locally instead of having to bring these in from offshore. This will help keep money in the country.

The Philippines are a country with a high poverty rate, higher than any of the neighboring countries. In 2006 they had a 32.9% poverty rate and it is believed to be higher today5. Recent studies have shown that tourism has a potential as an anti-poverty strategy.6 The Philippines believe that have much to offer, so they want to use tourism as a means to jumpstart their economy.

2. Contrast the documents from Business Week and the State Economic Planning Office. These two documents are remarkably different. Explain the dangers in pursuing tourism as a development strategy for the Philippines. What are two socio-cultural issues that are negatively associated with the Philippines regarding tourism?(20 points)

The two documents from Business Week and from the State Economic Planning Office are different in the following ways. The Senate Economic Planning Office article is looking at tourism as a means for development strategy and economic growth. Their outlook is rather reserved and cautious in the chances of tourism being the answer. The Business Week article, however, is very upbeat on the chances of the Philippine‟s sustained economic growth. They are not talking about tourism as the development strategy but rather the building and modernization of the country‟s infrastructure as the basis for sustained growth.

There are dangers of the Philippines pursuing tourism as an economic development strategy. First, if the country‟s infrastructure is not ready, they will not be prepared for the influx of visitors that the tourism industry would bring. Tourists expect certain things when visiting a country; good transportation and a roadway system to support that transportation. This is a special challenge in the Philippines which is a country of 7107 small islands. Not only do they need ground transportation but they also require good waterways to transport tourists between islands. Tourists also expect to not have issues with utilities (water, sewage, energy) or with telecommunications (cell and land phones, internet). The dangers in not having this infrastructure are that people will not come back and they will also pass this information on to friends and colleagues. Also, as seen in Jamaica, not having the proper infrastructure can lead to pollution and harm to the countries environment and ecosystem.

Another danger is in not having sufficient long-term planning. There are many potential negative environmental, social, and cultural impacts that are associated with tourism. These necessitate understanding what they are and long-term planning with all the stakeholders; government, private/commercial businesses, and the local community.7

There are some socio-culture issues that are negatively associated with the Philippines regarding tourism.

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