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PPPs to unleash tourism’s potential growth

Article - August 21, 2013
Overlooked for years, the untapped tourism sector is showing signs of growth ahead of a decade of expansion on the horizon
Tourism is steadily developing into a foreign currency earner for Bangladesh. According to the World Travel & Tourism Council (WTTC), last year Bangladesh generated 7.7 billion taka (£74 million) in foreign visitor spending, which is expected to grow by 3.2 per cent this year and rise 4.9 per cent every year to reach 12.8 billion taka in 2023. 
An estimated 391,000 international tourist arrivals are anticipated this year – a figure that is projected to climb steadily to 537,000 by 2023. Revenues generated by the domestic tourism sector far overshadow those by international visitors, with domestic travel spending generating 97.7 per cent of direct travel and tourism GDP in 2012, compared with 2.3 per cent coming from foreign visitor spending. 

This year, domestic travel spending is expected to grow by 7.3 per cent to 346.2 billion taka, rising annually by 6 per cent over the next decade to 619.4 billion taka in 2023. “We want to promote and show our tourism sector to the rest of the world,” says Muhammad Faruk Khan, Minister of Civil Aviation and Tourism. “People’s disposable incomes are increasing, so they want to travel more and see more. Also, it is very good for employment. Bangladesh has a very young and well-educated population. The impact of all this has to be absorbed and the tourism industry can do this. Right now we have tourism faculties in 12 of our universities.” 

Travel and tourism generated 1,281,500 jobs in 2012, representing 1.8 per cent of total employment in Bangladesh. By 2023, it will account for 1,785,000 jobs directly – an increase of 2.9 per cent per year over the next 10 years. If the tourism industry is to reach its potential, and hit the projected targets over the next decade, the country is going to need substantial participation from the private sector as the challenges of creating infrastructure and promoting Bangladesh around the world are too great for the government to do it alone. 

“The time has come to invite people to come and see Bangladesh,” says Mr Khan. “In Bangladesh we have PPPs (public-private partnerships), so any Bangladeshi or foreign company can come and join forces with the Government. I have 37 tourism resorts in Bangladesh which are under the Government. I am ready to do a PPP with anyone who is willing to come over. Right now I am working on a Japanese PPP hotel project. We have a number of companies with whom we are in discussions at the moment. 
“For the first 10 years, foreign companies will not have to pay any taxes on whatever they import for their projects. These kinds of incentives encourage companies to come over and invest.” He adds that the Government is also keen to limit the environmental impact of new developments to a minimum. “When we build anything, it is government policy that the environment will be taken care of,” he says. “We are focusing a lot on solar power. The hotels and motels need treatment plants so that they do not throw their water out. A proportion of new developments have to have green areas and trees. This is what we are doing, in order to take care of the environment. People are also becoming more environmentally aware.”