Will the budget help to recover the tourism industry?

Abir Hasan | Published: 21:40, Jun 24,2020

Abir Hasan, budget allocation in tourism sector, national budget for the fiscal year 2020-21

On June 11, the national budget for the fiscal year 2020-21 was proposed amid the COVID-19 pandemic. Abir Hasan argues that the budget does not put enough importance on the tourism industry

THE national budget of Tk 5,680 billion for the 2020-21 financial year has been proposed by the finance minister on behalf of the Bangladesh government. Unfortunately, Bangladesh has entered into the top 20 list in terms of being affected by COVID-19 which has a direct impact on the national economy. So, declaring a budget at this time is quite challenging for the government.

For the ministry of civil aviation and tourism Tk 3,688 crore has been allocated in the FY 2020-21 and in this budget their aim is to establish a world class aviation system as well as to turn the tourism industry into a developed and modern economic sector.

After a two-month of stacked economic activity in Bangladesh, efforts have been made to revive it since the first day of June. However, it is still not known when human life will be completely normal. The tourism sector has already suffered a lot along with the other sectors. Though the total gross domestic product of Bangladesh in the last few years was remaining above 7.5 to 8 per cent on average, but now the main challenge for the people is to survive in the world market by keeping all the activities in order.

Tourism is now the third largest industry in the world. Its position in Bangladesh is not behind. In 2019, tourism contributed 4.4 per cent to our GDP, or Tk 6,300 crore, created four million jobs and accounted for 3 per cent of the total economy.

In the same year, foreign exchange earnings amounting to Tk 2,600 crore, which were earned from tourism exports. Compared to 2019, the beginning of 2020 was quite good for tourism. According to the World Tourism Organisation, the number of tourists in January 2020 was two per cent higher than last year. However, due to the effects of the COVID-19 outbreak, there are almost no tourist in anywhere since February.

As the global lockdown intensifies, the number of tourists are decreasing. Although some countries have eased lockdowns since the beginning of June but the drought in tourism has not abated. It is unknown at this time when this pandemic situation will recover as well as how many days we have to keep ourselves inside home.

Three types of predictions were given by The World Tourism Organisation. If this trend continues till July, the growth will be about 58 per cent less than last year, it will be 70 per cent by September and it will be 78 per cent by December, which indicates a severe situation for the tourism industry. At the same time, it will have an impact on employment related to tourism.

According to various reports, about 100 to 120 million jobs will be lost during this time. Bangladesh is also in such an unfavourable situation. Keeping this reality in mind, the budget for 2020-21 has been announced in Bangladesh.

As we have seen, the tourism sector of this country has always been neglected in the budget. In the budget for the FY 2019-20, the ministry of civil aviation and tourism had allocated Tk 3,426 crore for the director and development sector. Allocations have increased somewhat this year.

Every year allocations are being made for this sector through the ministry of civil aviation and tourism. In this budget, only Tk 50/60 crore is allocated for tourism, while the rest is allocated for the civil aviation. Separate budget for tourism is the demand of the time. At least a large budget allocation is needed to bring the industry back to normal.

Finance minister AHM Mustafa Kamal has assured that the government will take active efforts to develop the country’s tourism industry, which has been hit hard by the COVID-19 outbreak. The minister said, ‘The government is taking various steps in the light of the directives of the prime minister Sheikh Hasina to develop and enrich the tourism industry as an economic sector.’

For example, plans have been made to set up separate tourist areas for foreigners in the country’s potential tourist destinations, eco-tourism parks, island-based tourist parks and hotels while preserving the natural beauty, and setting up international standard tourist centres with all facilities including tourist entertainment. But the budget does not reflect any guidance on how the huge workforce, which has been jobless for the past few months and has been laying off various hotel and resort workers will survive.

In the context of the current budget, member of the parliament AM Obaidul Moktadir Chowdhury admitted that the country’s tourism sector has been neglected in the proposed budget. He said, ‘This budget is very inadequate for the conservation of tigers in the Sunderbans, beach areas and natural tourism in Sylhet.’ He said he would advise the ministry to re-evaluate the budget before it is passed in parliament.

Lubna Yasmin, deputy chief (planning), ministry of civil aviation and tourism, said that the ministry has a gradual process in preparing the budget. For example, next year’s budget is made at the rate of 15 per cent of the money spent in the previous year. So the size of the budget does not increase suddenly. Moreover, the relationship of the ministry of tourism with various stakeholders of tourism is very weak, that is why the ministry does not know the details of tourism. She said, ‘Bring your specific development proposals, we will implement.’

All types of trade and commerce related to the tourism in Bangladesh are closed for COVID-19 pandemic. As a result, these businesses need special government incentives to survive. Moreover, the employment of many involved in tourism industry is under threat. And according to the forecasts of various organisations, the effect of coronavirus will last for another couple of years. As a result, the government needs to take well-planned or practical steps for this tourism industry.

The government has already announced incentives for various industries. Large industries like tourism have also remained neglected there. But there are almost half a million small, medium and large industries involved in the tourism sector. Most of the industries are at risk. These industries cannot survive without support. Millions of people will be at risk of becoming unemployed. Therefore, like other industries, the tourism sector needs short, medium and long term plans.

Human savings have declined. As a result, the standard of life has decreased and will decrease more. So people will travel less than before. For all these reasons, even if the COVID-19 effect ends by 2020, it may take another two to three years for the tourism sector to return to normal. So special allocations are needed to keep this industry afloat in this time of crisis.

The message of hope is that the industry will definitely change in the next few years. In the meantime, on November 2, 2009, the tourism sector was designated as SME and refinancing sector at the request of the Bangladesh Tourism Foundation. Subsequently, on September 5, 2019, Bangladesh Bank, through another circular, designated it as a service and priority sector. In this circular, tourism is ranked 5th among the 24 priority SME sectors announced by Bangladesh Bank.

However, traders are being deprived of credit facilities for not identifying all the sub-sectors of tourism. In that context, Bangladesh Tourism Foundation sent a proposal to the governor of Bangladesh Bank on June 14, 2020 through the Bangladesh Tourism Board. It has identified 10 sub-sectors in the tourism sector and in 125 cases under it, it has been proposed to provide SME loans to tourism.

Experts are assuming, once the pandemic is over, the housebound people will go on a world tour. Overcoming uncertainty, people will enjoy the joy of living once-again. Therefore, everyone involved in the tourism industry must survive this critical time. But the question remains as obvious that did we see the reflection of that plan in the national budget?

Abir Hasan is a student of the University of Dhaka. 

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