Tourism as the Economic Driver

OPENING SPEECH

by

YB DATO` SRI AZALINA DATO` OTHMAN SAID

Minister of Tourism, Malaysia

“Tourism as the Economic Driver”

IN CONJUNCTION WITH THE

“GLOBAL EMERGING MARKETS SUMMIT (GEMS)”

Institute of Director, London, United Kingdom – 9.30 AM- 5 August 2008

 

 

*(Salutations: Check VIPs present)

 

SIR JOHN STUTTARD

Lord Mayor, Lucum Tenens

 

DATO` DR. MICHAEL YEOH

Chief Operating Officer

Asian Strategy & Leadership Institute (ASLI), Kuala Lumpur

 

Your Excellencies,

Distinguished Speakers,

Conference Delegates,

Members of the Media,

 

Ladies and Gentlemen,

 

1.         A very good morning to all

 2.         On behalf of the Government and the People of Malaysia, it gives me great pleasure to extend my warmest greetings to everyone here and to welcome you in the name of Peace and Solidarity. 

 3.         This occasion is memorable to me, especially as it marks my first official visit to the United Kingdom since being appointed as Minister of Tourism, this year.  

 4.         On that note, I am honoured and delighted to be speaking to such a distinguished audience and I am also pleased to note that this Summit provides me with an excellent opportunity to network, get acquainted with and make new friends, exchange ideas and learn from our distinguished Speakers and experts.

 5.         I have been told that today’s Summit theme is `Emerging MarketsA Promising Future a Managed Risk`.  This is utterly timely in view of the increasing focus on the global economic situation we face today.

 6.         Looking at the program, I feel confident that the next couple of days will be stimulating and productive one, especially with the intellectual discourse from the experts from around the world.

 However, I am not an economist and as such, will not delve too much into that area. I will share with you on Malaysia’s experience on how tourism, (which was once a bridesmaid, but never the bride) has today become one of the economic drivers to Malaysia’s development.

7.            Malaysia needs little introduction to the world being one of the few non-western countries that has successfully brought socio-economic development within just two decades of its independence and is perhaps the best example of a country in which the economic roles and interests of various racial groups have been pragmatically managed in the long-term without significant loss of growth momentum.

TOURISM’S ECONOMIC CONTRIBUTION

 Ladies and Gentlemen,

 The WTTC claims that travel and tourism is the world’s biggest industry in terms of global GDP and employment. It is forecasted that this year alone, tourism will account for US$ 5.9 trillion worth of economic activity or about 10% of the world’s GDP, and employing 238 million people.

 In Malaysia, tourism’s contribution to the economy is very much diverse and it can be summoned up in the following categories.

 

SUB-SECTORS

REMARKS

a) Tourism Receipts         

RM46.1 billion / USD 14 billion

b) Gross Domestic Product (GDP)

7.4% to the national GDP

c) Jobs / Employment

almost 50% in Services sector

d) Connectivity

emergence of AIrAsia, MAS Wings, Firefly

e) The Retail Sector

shopping contributes 13% to the national GDP

f) Economic Development Corridor

 

These are the Iskandar Development Region (IDR) Northern Corridor Economic Region (NCER) and East Coast Economic Region (ECER), plus the Sabah Development Corridor (SDC) and Sarawak Corridor of Renewable Energy (SCORE).

 

g) Education

 

65,000 foreign students studying in

Malaysia with a return of investment of

RM9 billion (USD 2.7 billion) to the

economy.

h) Accommodation

Up till today 2,360 hotels with 160,327 rooms.  Occupancy rate 70%

i) Medical and Health Sector

More than 341,288 foreign patients against RM253.84 million (USD 80.32 million in receipts).

                                                           

7.            Looking back, Malaysia’s success has become the envy of many neighbouring and other emerging markets. Among some of the successes and attractions include; South East Asia’s first and state-of-the art Formula 1 Races at Sepang, the world’s tallest twin towers – The Petronas Twin Towers and Asia’s first low cost carrier – Air Asia, just to mention a few.

 

However, there are others, who like Singapore would go at great lengths to emulate Malaysia’s success with their own copy of Formula 1 Night Race and the Republic State’s own low cost carrier – Tiger Air, which is a carbon copy of Air Asia.  

7.            Success in maintaining political and economic stability can be attributed to the government’s pragmatic approach formulating the country’s national policies.

10.       Tolerance and understanding among the nation’s 27.6 million population of diverse races and religions are the main contributory factors toward helping the government in perpetuating peace, racial harmony and progress. Even the World Tourism Organization has listed Malaysia as one of 30 emerging world destinations.

11.       Since independence (1957),and right through the formation of Malaysia in 1963 (Sabah, Sarawak and Singapore), Malaysia’s economic record has been one of Asia’s best. Real gross domestic product (GDP) grew by an average of 6.5% per year from 1957 to 2005.

12.       Performance peaked in the early 1980s through the mid-1990s, as the economy experienced sustained rapid growth averaging almost 8% annually. The government has taken an active role in guiding the nation’s economic development. Malaysia’s New Economic Policy (NEP), first established in 1971, sought to eradicate poverty and to enhance the economic standing of ethnic and other indigenous peoples. In April 2001, the government released a new plan, the “National Vision Policy,” to guide development over the period 2001-2010. The National Vision Policy targets education for budget increases and seeks to refocus the economy toward higher-technology production. The stated goal is for Malaysia to be a fully developed economy by 2020.

13.       Hence, under the able stewardship of the honourable Dato` Seri Abdullah Haji Ahmad Badawi, Prime Minister of Malaysia , the country is right on track to achieve its status of a developed nation, a model role to many under-developed and developing nations.

14.       In addition, Malaysia’s strong economic fundamentals will continue to provide opportunities for investments in the key sectors of the national economy, be it in the manufacturing, agriculture or tourism for that matter (Malaysia is also a very affordable destination for tourists

 

Ladies and Gentlemen,

15.       I believe that `Tourism and Economics` cannot be separated.  Governments in many countries have realised this and today are aware of this significant phenomena and the role tourism plays as a catalyst for economic growth. This industry not only opens up new job opportunities, but can also enrich the livelihood of the residents and the communities within a country.

16.       Tourism provides the basis upon which communities can renew their pride in heritage and upgrade their quality of life. At this juncture allow me to share with you the appointment of Malaysia’s two most recent heritage sites, the City of Georgetown in Penang and Melaka City. These two cities were selected by UNESCO as World Heritage Sites based on their outstanding universal value, unique architectural and cultural townscape, among others.   

17.       As Malaysia prepares a road map to eradicate poverty and provide a better environment under the 9th Malaysia Plan focus is given to Green Tourism, Sustainable Tourism and the conservation of the environment.

 

 

            ECOTOURISM & GREEN TOURISM

18.       Today, the Langkawi Geopark endorsed by the UNESCO Global Network of National Geoparks, is a result of the government’s effort and concern on the needs of the environment and local residents. This includes the introduction of home stay programs, village tours and workshops and seminars learning about the rural folks, their businesses and the environment they live in.

19.       As part of reducing the negative environmental and social impacts of tourism operations, the Government has adopted the National Ecotourism Policy to provide and developed guidelines in order to ensure environmental sustainability. The NEP identified;

  • 14 Broad Strategies
  • 37 issues
  • 21 Action Plans
  • 52 Potential Projects which are aimed to make Malaysia as an outstanding international ecotourism destination.

Malaysia is also concerned about issues pertaining to Green Audit, carbon emissions and climate change which all have a significant impact on the future of the tourism industry as an important economic contributor.

20.       For that matter, governments from most countries (whether emerging or emerged countries) often regard tourism as one the fastest growing economic sectors that bring in foreign exchange earnings to the country.  On that note, Malaysia’s tourism success is exemplary. The Malaysia Truly Asia brand which was introduced in 1999 was timely, (Asian Financial Crisis) and by chance it capitalized on the people of Malaysia, the multi-racial relationships between the people, focusing on Asia’s three largest civilizations, the Malays, Chinese and Indians plus the other ethnic groups. Today, the brand has prompted others countries look upon Malaysia as a `trend setter`.  (Thailand with Amazing Thailand, Singapore – Uniquely Singapore, India – Incredible India, Philippines –Wow Philippines, etc.)

21.       In the context of Malaysia, the last decade (1997-2007) witnessed the economy registering an average annual Total Factor Productivity (TFP) growth of 1.6%, contributing 32.0% to GDP growth of 5.1%.

 

 22.       Last year, tourist arrivals to Malaysia surpassed the target by registering a record high of 20.97 million visitors against RM46.1 billion (USD 14 billion) in receiptsFor the period from January to June this year, Malaysia registered 10.9 tourist arrivals. This is an increase of 2.6 % compared to the same period last year. The month of June alone registered 8.7 % growth in arrivals.

Today, it is the second largest foreign exchange earner to the national economy and employs a significant segment of the country’s total work force. 

 

CHALLENGES & UNCERTAINTIES

Ladies and Gentlemen,

The tourism industry’s contribution to the national economy is not without any challenges and uncertainties.

  • Political violence
  • Natural disasters
  • Distorted perception,
  • Green strategies (carbon emissions, deforestation etc…)
  • Global Issues (Avian flu, SARS, weak US dollar, fuel price hike etc…),
  • Acts of Terrorism,
  • Adverse Travel Advisories are some of the issues that can affect the tactical planning that goes into building confidence in the economy.

Challenges and uncertainties aside, the Malaysian economy is expected to expand faster this year with real gross domestic product (GDP) growth projected at between 5% and 6%. Inflation is projected to remain low, as output growth is below potential level.

Having said that, I believe that all these depend on how resilient the world economy is today, bearing in mind, the rising cost of fuel, high interest rates and cutbacks from airlines. All these serve as a motivation for us to work harder despite having to face various challenges, uncertainties, crisis and global upheavals all which affect our economy.

 

CONCLUSION

Ladies and Gentlemen,

I trust that every one in this room today will result to intellectual discourse, exchange ideas and find solutions to a promising future. 

With these words, I would like to thank the organiser for the initiative for hosting this Summit. My sincere thanks also to all Speakers and delegates, I hope you have a productive Summit and that you take a break during this holiday season and come and visit Malaysia soon.

 (Before I conclude, I would like to share with you a few videos, namely on; VMY, Global Campaign and on the target markets, Middle East, India & China).

Thank you.

 

 

 

 

 


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