I. Identification

1. The Issue

For the past 40 years donors from developed countries have disbursed funds through low-interest loans and grants to assist countries in Sub-Saharan Africa (SSA) with issues such as poverty alleviation, lowering mortality rates, improving literacy, environmental conservation, infrastructure development, economic empowerment and improved governance. Sustainable development has come to be defined by its disbursement paradigms and borrowing countries have adapted to the paradigm to ensure ongoing disbursements. The potential to utilize tourism as a tool for sustained socio-economic development as well as the redistribution of developed-country wealth is increasingly considered in development strategies between donors and beneficiary countries.

However there are no consistent donor strategies and policies for financing of tourism development in sub-Saharan Africa and this is adversely affecting the effectiveness and performance of official development assistance (ODA)-financed tourism development investments, and ultimately the economic growth of developing countries. Sustainable tourism has been referred to as an adaptive paradigm (Hunter, 1999) that encompasses a set of meta-principles that can be legitimized by a range of different development pathways, according to needs and circumstances. This lack of definition and focus on tourism-specific issues and challenges is contributing to ongoing poor performance of tourism investments in the SSA region (latest World Tourism Organization (WTO) figures show that the tourism economy in SSA has shr unk by four percent during the last decade).

This case study concerns ODA policies in general, but will focus on one particular 5-year, US$ 30 million investment in Kenya called the “Tourism Diversification and Sustainable Development Program” (TDSDP) financed by the European Union.

The empirical evidence from this case study highlights the inadequacy of the policy environment to support the aims and objectives of the TDSDP investment. There are inconsistencies between the generic bilateral policy agreements—in this case the Cotonou Partnership Agreement signed in June 2000 between the European Union (EU) and all African, Caribbean and Pacific States—and official government policies, and also the smaller program-by-program implementation agreements (called financing agreements). 

These gaps and inconsistencies between policies and practices are not only reflected in the literature on development assistance, but also, as this case study will show, in real projects on the ground and in particular the results they produce.

2. Description: List of Acronyms:

COMESA	Common Market for Eastern and Southern Africa
CBTP	Community Based Tourism Products
CPA	Cotonou Partnership Agreement
DANIDA	Danish International Development Agency
EIA	Environmental Impact Assessment
EPA	Economic Partnership Agreement
EU	European Union
GNP	Gross National Product
GTZ	Deutsche Gesellschaft für Technische Zusammenarbeit
NEMA	National Environment Monitoring Agency
NEPAD	New Partnership Agreement for African Development
MDG	Millennium Development Goals
ODA	Official Development Assistance
PRSP	Poverty Reduction Strategy Paper
SSA	Sub-Saharan Africa
TDSDP	Tourism Diversification and Sustainable Development Program
USAID	United States Agency for International Development
WTO	World Tourism Organization

Sub-Saharan Africa (SSA) encapsulates the paradox of unrivalled tourism resource wealth juxtaposed with continued, and in some cases worsening, poverty. The World Bank reported that “sub-Saharan Africa as a region saw no increase in its per-capita incomes between 1965 and 1999” (World Bank: A Case for Aid, 2001). Many African countries have been carrying out reform programs for two decades now. While these have partially reversed the negative trend, the results have been disappointing. In the 1990s, while per capita GDP in the developing world as a whole grew by 1.7 percent, sub-Saharan Africa's fell by 0.2 percent per year. In the face of declining exports like agriculture (the region's share of global agricultural export value has declined almost continually from 8 percent in 1965 to 2 percent in 2000); tourism offers a significant opportunity by reducing the macroeconomic vulnerability that comes from developing countries' high degree of commodity dependence.

According the World Bank’s World Development Indicators 2004, tourism is an important economic activity in 70% of developing countries. In 28 of the 49 Sub-Saharan African countries tourism contributes more than 3% of gross domestic product (GDP). The potential to utilize tourism as a tool for sustained socio-economic development as well as the redistribution of developed-country wealth is obvious, yet somehow elusive. This irony could not be more emphatic in a country like Kenya, which has spectacular natural resources alongside equally shocking poverty.

Nevertheless, tourism is of major importance for Kenya’s economic development. A World Bank study in 2002 (“Background to the PRSP for Kenya” pp.9-11) quotes some key economic data: Tourism currently contributes 2.6% of Kenya’s GDP; 153,000 people employed in the tourism industry in Kenya; US$ 302, 631,000 earnings from tourism. The sector is an important foreign exchange earner with a lot of potential, but is currently facing multiple challenges including a limited base of tourism products, poor and dilapidated infrastructure, weak marketing and economic leakages caused by the predominance of foreign-owned tourism enterprises.

Major multilateral donors such as the World Bank and the European Union—who together account for 70% of official development assistance to Kenya (African Development Indicators 2004, World Bank)—have, in the past two decades adopted a strategy of mixing their lending or grant portfolio in an effort to attain increased, sustained and more broad-based growth. In this vein, the EU is supporting tourism development through the TDSDP to promote the diversification of new, innovative tourism products and to market Kenya as a tourist destination.

A major objective is to broaden the range of new and innovative tourism products in Kenya that are not only commercially viable and economically sustainable but equally benefiting communities and sensitive to ecological conservation. The program is expected to help to increase international, regional and local tourism, and thus create new income and employment opportunities that will contribute to poverty reduction and economic growth in Kenya.

Historically, Africa's tourism consisted largely of fragmented sets of game reserves and parks designed to serve the recreational needs and economic interests of settler communities, and foreign tourists in mostly Eastern and

Southern Africa. Although political independence for most African states in the late 1950s to early 1960s brought about measures of access control as well as opportunities for various forms of tourism development, the creation and sustenance of national parks systems and a tourism industry were not viewed as important priorities on the post independence agenda.

In terms of institutional arrangements, there is still uncertainty as to the role of tourism in Africa, as manifested by the variety of ways in which the industry is accommodated in government structures, such as various ministries. For example, in many West African countries, the tourism industry remains incorporated in or closely associated with culture, education, industry, natural resource, etc. Whereas, in countries like Kenya with significant wildlife and national park re- sources, independent ministries or departments have been created to oversee the planning, development, promotion, marketing and administration of the tourism sector.

During the last two decades, a number of major events in the global political and economic environment have prompted some African governments to reconsider their immediate post-independence thinking. First, since the mid to late 1980's many emerging nations in Africa have finally begun to operate under economic conditions that label international tourism both as a pivotal and ancillary industry in their development process. Experiences in previous decades have allowed for a more realistic appraisal of the characteristics and outlook of the industry.

Countries have now realized (a) that tourism is more capital intensive than initially presumed, (b) agriculture and other local linkages have not developed as anticipated, (c) domestic management and entrepreneurship have not been fully developed and (d) there is now greater awareness that international tourism can be a viable source of foreign exchange earnings and tax revenue as well as an industry that attracts foreign investment funds. Further it is recognized that domestic output and employment can only be increased when realistic and careful planning is involved. Over the past two decades, African governments have sought to work with the international donor community to invest in tourism development.

An increasing number of countries are embracing the notion that foreign industrial interests are crucial to their development strategies, and are developing congenial and liberal policy environments to foster and scale-up business cooperation. Apart from these interests in foreign direct investments (which have brought associated issues of economic leakage), there are a growing number of tourism policy formulations and re-formulations taking place on the continent specifically directed at indigenous tourism enterprises.

The stated program purpose for the TDSDP encapsulates many of these issues and objectives:

TDSDP Program Purpose:

The program aims at a diversified, equitable and environmentally sustainable tourism product base, in order to foster local economic development, provide incentives for continued environmental conservation and maximize opportunities provided by the development of new marketable assets. 

More specific objectives for the program include the following:

1.      A more cohesive, functional and supportive sectoral environment is established in the medium term, in line with public sector reform principles and guidelines, as well as with established best practices worldwide.

2.      An updated, user-friendly, efficient and sustainable tourism information and statistical data base is established and made available to public and private stakeholders.

3.      The country’s physical assets and natural capital base are preserved and enhanced, through maintaining the integrity and viability of the conservation areas network

4.      Innovative, sustainable, small-scale tourism products and business practices are developed and established, along with ecologically and socially sustainable technologies and practices

5.      The capacity of local operators is increased and the viability of small and medium and community-based businesses is improved, contributing to poverty reduction and employment creation.

6.      Kenya, as a tourist destination, is successfully repositioned and a series of new products receive long-term market validation.

3. Related Cases:

4. Author and Date:

Shaun Mann. Spring 2004.

The Department of Tourism and Hospitality Management, The George Washington University, Washington DC.

II. Policy Impacts

5. Social:

ODA interventions have changed dramatically during the past two decades. The EU for instance has adapted from the old-style Lomé Conventions (1975-2000) that suffered from a ‘democratic deficit’ as cooperation between the Sub-Saharan countries and the EU was managed in a highly centralized way, to the recent Cotonou Partnership Agreement (2000), which embraces the principle of participatory development (a cornerstone sustainable tourism principle). It could be argued that response to change has been slow, but on the other hand socio-political evolution and economic stability in the sub-Saharan countries has also been slow. January 2004 is the first time for 40 years that the year has not started with a civil or regional conflict somewhere in Africa.

In general, ODA policies have aligned with Millennium Development Goals (MDG) since 2001. The effect on tourism development interventions has been the introduction of language to reflect this within the overall framework of projects and programs. At the national level, the Poverty Reduction Strategy Paper (PRSP) forms the basis for identifying programs for intervention. 

The stated overall objective of the TDSDP is:  “…to contribute towards poverty reduction and private sector growth in Kenya through the maximization of the economic and social benefits of tourism, while ensuring a sustainable use of natural resources and optimization of tourist satisfaction.” (TDSDP Financing Agreement, April 2001, European Union)

The policy intent is implicit in this program objective; use tourism as a tool for poverty reduction through private sector growth and sustainable environmental utilization.

The cause of the overall policy is to align the individual project with a macro socioeconomic paradigm (i.e. that of reducing poverty). The effect is that the TDSDP becomes accountable to the macro objective such that it has no chance of success in the five-year period of the program and the relatively limited finances (already 20% of the US$ 30 million funds a management unit that administers the money).

In other words, tangible social impacts are not measurably achieved. Donors and polices endorse and talk about issues and objectives, whilst projects and programs attempt implementation in a sociopolitical environment that is poverty-stricken. This paradigm is repeated throughout the developing world in most sectors.

6. Environmental

ODA policies and National Policies have unilaterally incorporated strong environmental impact statements and mitigation measures. These measures apply to most tourism developments. This introduces costly overheads and program delays while environmental mitigation measures are undertaken. National environmental agencies—in Kenya, the National Environment Management Agency – NEMA—take advantage of existing policies, such as the National Environment Statute to frustrate tourism development financed through other government agencies. During the early implementation of the TDSDP, small grants were given to community based enterprises to construct campsites and other tourist accommodation; in an effort to expedite fairly minor projects (with limited environment impacts) private consultants were hired to perform the Environment Impact Assessments (EIAs). NEMA found out and stepped in, citing the legislation and their responsibility for conducting EIAs in government sponsored projects (though this was a donor sponsored program, the government is still a partner through the CPA). The result was nearly one year of delay in getting a single campsite built and operational, while NEMA conducted EIAs and inspections that had to be paid for by the TDSDP. Meanwhile dozens of private sector construction projects pass EIAs in minutes, either because a bribe is paid or there is simply no financial incentive for NEMA to follow up with the same rigor.

Whilst NEMA is a critical government organization, it is totally dependent on donor funding for its operations. It, therefore, “takes advantage” of its mandated role to milk donor-funded projects that it knows have budgets for EIAs.

7. Economic

Macro economic reforms are well advanced in many SSA countries, and for the first time economic activities like tourism may begin to really show a return. However, as with other economic sectors, like agriculture, planning and subsidy are required to ameliorate the effects of inequalities that may develop or be inherent, particularly in still weak economies. Market forces cannot equitably distribute benefits and costs (Butler, 1993), hence the necessity for government policies and ODA-financed tourism development programs that attempt to redistribute some of the excesses of a market and private sector-led tourism industry.

Donor economic policies have been focused at the macro level for decades. This has had little influence over tourism development. Micro reform and micro policies however have had a huge impact on tourism development programs, particularly institutional reform, and taxation and investment incentives. The impact of increasingly centralized budget support policies currently being purused by ODA is that Governments in developing countries and their economies are not yet stable enough or possessed of adequate human resources to establish, in the case of tourism, sound policies for development. This is causing a gap to emerge between macroeconomic policies and micro reform, where the reform agenda is being dictated by available finances and not by desired functions.   

In the TDSDP the only explicit mention of economic impact is found in the project logical framework matrix where it mentions two numbers “66% increase in average daily visitor expenditure” and “100% increase in tourism contribution to GNP” (TDSDP Financing Agreement, Annex 2, April 2001, European Union). This is a classic example of a macro policy objective being inserted in a program because it looks good. The program lays out no strategy for specifically achieving these objectives.

8. Legal

Individual donor country policies of foreign trade and visitation (e.g. State Department Travel Advisory, visa regulations and foreign investment codes) have an enormous impact on the effectiveness of an individual program like the TDSDP. For example, one of the suggested areas of intervention in the TDSDP is investment in the development of the US market for tourists to Kenya. During the period for implementation of the program, the State Dept. Travel Advisory has been very negative concerning visitation to Kenya with significant adverse consequences for the TDSDP.

It could therefore be argued that pursuing the US as a potential market is not the most effective use of scarce resources, however, because it is written in the guiding document (the Financing Agreement), it is followed as policy, regardless of the results. This paradigm of total reliance and dependency on the program documents is one that must change. Programs and budgets need an element of fungibility in order to adapt to changing political geographies.

9. Suggested Interventions

Donor policies regarding tourism development investments should be focused around ensuring the creation of a minimum infrastructure and institutional platform to facilitate sustainable tourism growth. These elements should be defined and elaborated in program financing agreements. They are currently not mentioned, or at best, glossed over in broad sweeping generalizations.

 III. Legal Clusters

10. Discourse and Status/Policy Issue:

ODA should have a specific and strategic policy towards sustainable tourism development. There should be a common shared vision of what tourism development is, who benefits, and who implements it. Current programs and interventions are not effective because of the absence of a common approach from different donor agencies when identifying and programming projects at the country level.

This point is well illustrated by the TDSDP, which is ostensibly competing in the same space as USAID, WORLD BANK, Danida, and GTZ programs that are also offering support to the tourism sector. The TDSDP documents make no mention of these other players (and perhaps they were not around when the project was designed, but they are now) and, consequently, there is neither common policy among the donor players nor any strategic thinking. Each is simply implementing their own programs and the Government and other beneficiaries are spending the resources. The absence of policy and strategic direction is a gaping void.

11. Forum and Scope/Existing Policy Framework:

For the TDSDP:

o       International – The Lome IV Convention (the predecessor to the Cotonou Partnership Agreement) was in force when the TDSDP was designed. That partnership framework gives specific tourism policy guidelines: “Specific tourism development measures shall aim at the definition, adaptation and development of appropriate policies at National, regional, sub-regional and international level”. The Cotonou Partnership Agreement (CPA), which is now in force is not specific about tourism, focusing instead on overarching principles for development, more in line with MDGs: Poverty reduction, governance, improved regional co-operation and support for the private sector. Market Access issues are specifically mentioned in the CPA. CPA also sets up a framework and provision for reciprocal trade agreements called “Economic Partnership Agreements (EPA). There are several mutli-lateral and bi-lateral trade and investment agreements including COMESA (Common Market for Eastern and Southern Africa) and NEPAD (New Partnership Agreement for African Development). NEPAD and CPA have a lot in common and represent an opportunity for the development of regional EPAs.

o       National – The Poverty Reduction Strategy Paper (PRSP) is the policy paper that predetermines sectors for bilateral and multilateral cooperation. It is the government interpretation of the MDGs and its own priorities for investment. Tourism is defined as a priority sector in this document, but very poorly described. There are 22 different existing laws or legislative acts that govern the operation of the different aspects of tourism products, services and resources. They are all legacies of colonial times and have not been overhauled since then.  

o       Regional – The Central Government Decentralization Act 2001 is currently implementing decentralization policies to the district and regional level. Capacity to accept this responsibility is non-existent, and, in the case of tourism the national level legislation has not yet been addressed. This is causing chaos in the industry as districts attempt to use 40-year old legislation to extract taxes and license fees that are stifling the development of small and medium scale tourism enterprises – one of the main supposed beneficiaries of the TSTDP.   

o       Local – Local Government policies are largely ignored because they cannot be enforced due to inadequate operational budgets.

12. Decision Breadth/Stakeholders/Policy Actors:

Donors (ODA) / Ministries of Finance / Planning /Economic Development / Tourism / Environment / Local Government / Private Sector advocacy groups / NGO actors / Private sector “elites” (individuals within the tourism sector that have access to Ministers / the President etc.)

13. Legal Standing/Legal Regulatory Framework/Suggested Policy Intervention:

International: ODA actors should develop a common strategy for tourism development interventions focused on auditing the progress of the following critical supporting mechanisms for successful tourism:

·        An enabling national policy that rationalizes outdated policies

·        An enabling minimum infrastructure platform

·        An enabling investment and incentive environment

·        Restructured and effective public sector support institutions

·        Support for private sector support institutions

·        A medium-term strategic plan

·        Market access strategies

National:  A National Tourism Policy is required, followed by a strategic plan for implementation of the policy.

IV. Trade Clusters

14. Type of Measure:

Economic Partnership Agreements

A strategic intervention policy that encourages and incentivises governments to take more responsibility for critical tourism infrastructure (e.g. public sector reform fixing roads where they lead to key tourism resources and fixing taxes and licenses so that encourage the growth of the tourism private sector,) is needed.

15. Relation of Trade Measure to Environmental/Tourism Impact

a. Directly Related to Product: “The products” in this case are tourism development projects that come out of the TDSDP. Improved donor policies for engagement in tourism development will improve the impact those projects and programs have on proposed tourism development outcomes.    

b. Indirectly Related to Product: Tourism contributions at the macro level (including employment) will be improved. Economies with effective tourism development programs will have more diversified economies.  

c. Related to Process: The process of improving donor policies with regard to tourism will have an effect on donor coordination and encourage a sector-wide approach to strategic tourism development.    

16. Trade Product Identification/Trade and Services:

Tourism, Service Sector, Transportation, Donor aid

17. Economic Data:

Key economic data for 2002:

·        Tourism currently contributes 2.6% of Kenya’s GDP (2002, PRSP background paper).

·        153,000 people employed in the tourism industry in Kenya (2002, as above)

·        US$ 302, 631,000 earnings from tourism (2002, as above)

·        Total 1,272 “hotels” in Kenya with 45,870 beds.

·        Total 20,000 tourist standard beds

·        International consolidated arrivals for 2002: 363,704

The above all have the potential to be used as indicators to measure the progress of the TDSDP.

18. Impact of Trade Restriction:

Impacts of this nature in the case of the TDSDP are very difficult to estimate. Some facts are evident though. Other parts of the world earn significantly more from tourism than Kenya. According to World Tourism Organization figures from 2001, the quoted 2.6% of GDP of Kenya compares with 8.2% in South Africa, 10.6% in Botswana and 9.8% in Namibia (all competing destinations).

Kenya also used to earn much more from tourism in the 1980s (Dieke, 1989) when tourism was its’ number one export earner (it is now relegated to number three). Tourism earnings in 1986 are quoted as US$ 650 million, compared to less than half that for 2002.  

Apart from economic impacts there are also environmental and social sustainability issues that arise out the absence of policy and strategic planning in tourism development. One key recorded environmental impact is that the Masai Mara Reserve, Kenya’s premier tourism resource, is heavily over-utilized by tourists who congregate in one particular area that is now becoming irreversibly degraded (like Amboseli National Park in the 1980s which turned into a dustbowl because there was no management plan for the park to restrict or control tourism use and developments) to the extent that tourists are making decisions to visit Tanzania instead. Revenues from the Masai Mara are half what they were in 1989, a recent African Wildlife Foundation (AWF Annual Report, 2002, pp.28) report quoted.    

This is also having a social impact on the Masai, the native people who live in this area. They are no longer getting the same revenues from tourism and are turning to grazing cattle in the reserve and moving away from the area. These altered demographic and behavioral trends may be difficult to reverse and will undoubtedly effect the long-term sustainability of the Masai Mara as a tourism resource. 

19. Industry Sector:

Tourism

20. Exporters and Importers:

Tour operators, hotels, cruise ships, travel agents and ground handlers, plus all the multiplier sectors such as transportation, construction, health, communications, technology and banking.

V. Macro/Environment Clusters/Tourism Policy Clusters

21. Environmental Problem Type/ Environmental Aspects:

The absence of policy is resulting in ineffective programs that bring no return on investments, and worse, no long-term protection of existing investments.

Kenya’s tourism product is primarily natural resource-based—particularly wildlife—and whilst there is a committed National Parks Authority (Kenya Wildlife Services), 75% of the wildlife in Kenya exists outside national parks, and hence outside the mandate of Kenya Wildlife Services. This means that tourism policies and land use policies have a big part to play in maintaining the integrity of wildlife populations and the habitats in which they live.

These environmental impacts are arguably contributing to the downturn in tourism as illustrated by the figures earlier. Perhaps one of the more damaging responses to tourism developments is the effect on the environment. Tourism generally increases the consumption and competition for critical resources like water, wood, land and marine. There are examples of this conflict for resources in pockets of tourism concentration all over Kenya. 

The absence of policy addressing these conflict areas continues to impact development objectives. There is a need to harmonize tourism, wildlife and land-use policies in order to achieve consistency between tourism development and environmental conservation, and to minimize resources conflict situations.

22. Resource Impact and Effect:

The stated project purpose for the TDSDP is: “To establish a diversified, socially balanced and environmentally sustainable tourism product base, in order to foster local economic development, provide incentives for continued environmental conservation and maximize opportunities provided by the development of new marketable assets.”

The TDSDP is implemented through a trust fund that is controlled by a Board of Trustees. The rationale for creating a trust fund as opposed to implementing the program through normal bilateral instruments that fund governments or NGOs directly was that there was a perception that the political geography was very complex in Kenya, and, in constant flux. Particularly, the EU was concerned that the Government was in decline—in the late 1990’s—and not able to address poverty alleviation issues, and, where tourism was concerned, not doing much to promote its development or halt its declining importance and economic position in the Kenyan economy. It was felt that the private sector, and in particular indigenous community based enterprises, should be supported directly and over a longer period of time.

On the one hand, the EU wanted to provide the “means” to finance a range of activities through several different entities: some government  (to create an enabling policy framework), some NGOs (to deliver services related to micro-enterprise development and environmental certification) and some private sector (the individual businesses and the private sector tourism associations and institutions), that were all perceived, during the program design phase, to be critical stakeholders and justifiable “ends”.

On the other hand, however, the EU was concerned that normal financial instruments (i.e. financing a government agency, such as the Ministry of Tourism or the National Tourism Organization) for an envelope of this size would not be effective in spreading the expected results from the program to rural areas where poverty was worsening. More bluntly, they did not want to hand over US$ 30 million to an ailing government.

No one organization fitted the purpose and ambition of the program. Therefore it was decided that a professional management unit would be established to administer the funds and they would be answerable and accountable to a board of trustees composed of multiple stakeholders (as required by the legislation).

After two years of implementation (and already US$ 4 million spent) not a single project has been funded under the TDSDP that could potentially contribute to any of the above stated project purpose.

The reasons for the poor performance of this program are complex, but basically revolve around two key issues: the external political geopolitical environment and the broad scope of the program. 

23. Urgency and Lifetime/Urgency and Policy Review:

The TDSDP needs to be overhauled to redefine its objectives and purpose and develop a strong focus on achievable deliverables.

The external environment could be navigated with (a) improved strategic management from a much-strengthened board that minimizes the influence of government and protects the core technical team, allowing them to do their jobs and follow the work plans, (b) institutional reforms that provided for more efficient public sector organizations with narrower and more specific mandates, and (c) better cooperation between government and ODA players as well as the NGO sector.

24. Substitutes/Alternative Policies:

A strategic focus should be brought to the expected results described earlier: 

• The country’s physical assets and natural capital base are preserved and enhanced, through maintaining the integrity and viability of the conservation areas network.
• Innovative, sustainable, small-scale tourism products and business practices are developed and established, along with ecologically and socially sustainable technologies and practices.

• The capacity of local operators is increased and the viability of small and medium and community-based businesses is improved, contributing to poverty reduction and employment creation.

• Kenya, as a tourist destination, is successfully repositioned and a series of new products receive long-term market validation.

Funds for business development, eco-technology development, standards development, marketing, and capacity building should be happening collectively rather than on a project-by-project basis. Individual projects should still be supported with these specific inputs, but instead of only say one lodge receiving marketing support; that lodge will be supported to appear in marketing collaterals and media that feature a range of accommodation based CBTP. This strategy should be adopted for the entire CBTP range.

CBTP are notoriously very fragile and will generally be the first enterprises to suffer in a downturn of tourism because they don’t have access to markets and developed networks and their finances are usually vulnerable. It is therefore important to consolidate existing products before branching into new products—quality control and particularly the concept of reliable supply and supply chain management is critical in developing CBTP.

There is also potential for strategic partnerships in the development and consolidation of CBTP as several are already funded by NGOs and other donor projects.

More effective policies are required to ensure that local communities benefit from tourism and the presence of tourist sites in their neighborhood.

These actions require fundamental policy review, as the government and the EU will have to rewrite the program documents and redefine priorities.

The existing policies are not producing growth in a sector that has obvious potential for both reinvestment and fresh foreign direct investment. 

VI. Conclusion

25. Policy Implications

Kenya is endowed with unique combination of tourist attractions, comprising tropical beaches and abundant wildlife in natural habitats, scenic beauty and a geographically diverse landscape. The diversity of Kenya’s habitat is equaled by the remarkable variety of flora and fauna and world famous wildlife heritage. Kenya’s cultural history stretches back 4.5 million years, with some of the oldest known evidence of early man.

Essentially these assets represent inherited wealth for the nation and whilst their protection is enshrined in the constitution of the country, successive governments have a fiduciary responsibility to support the constitution. ODA has a similar responsibility to support governments in this endeavor.

Improved tourism development programs have the potential to contribute to the sustainable development of Third World countries. However, in Kenya, in the tourism sector, the reverse is currently happening, earlier figures have shown that poverty continues to worsen, tourism numbers continue to fall and the environment is becoming more degraded.  

ODA agencies have responded to this criticism by adopting sustainable tourism principles and supporting national and international NGOs to act as both watchdog and implementing agency. This strategy has resulted in a shift in power and policy making away from governments to a wide variety of NGOs with narrow agendas (e.g. conservation or community-based tourism). In several sub-Saharan countries (e.g. Kenya, Tanzania and Zambia) this strategy is backfiring, as governments do not have sufficient ownership of tourism initiatives, ownership that is critical to drive and support reform. “Pro-Poor” growth strategies have largely failed to be adopted in sub-Saharan Africa because political structures and ideologies do not yet allow for bottom-up decision making and reforms. 

26. Recommendations

Recommendations related to this case study fall into three categories:

(1)   Changes in ODA policies to address tourism related issues specifically.

(2)   Generic recommendations about tourism development projects and how they could better deliver effective results.

(3)   Recommendations related to the TDSDP specifically. 

(1) ODA policies: In the case of the TDSDP, the European Union is the financing agency. This case study advocates the adoption of a comprehensive but targeted approach in support measures aimed at stimulating sustainable tourism. Tourism is a complex and fragmented sector made up of several sub-sector allied to other sectors of the economy. In developing countries, different stages of development and different products raise a variety of problems that do not have one “fit all” solution. An overall approach should be adopted at the design phase that involves a comprehensive resource, infrastructure and market audit of the tourism industry. This will lead to the conditions specified below.   

(2) Generic tourism development projects: after three or four decades of tourism development, enough is now “known” about the critical factors for a successful and sustainable tourism industry. There are many lessons to be learned from published literature and empirical evidence. The model below, developed out of this authors’ literature review and personal experience, summarizes some of the critical players and issues to consider.

 

(3) The relatively limited finances of the TDSDP, and the enormity of the tasks in Kenya, hint towards an approach that brings a narrow focus to the program. The priority for Kenya is to develop a strong policy that creates an enabling environment for tourism development. In addition there is an urgent need—due to unsustainable environmental practices and social inequities outside national parks and the conventional private sector—to tackle community-based tourism as a sub-sector and give it some identity and credibility.

A strategic focus should be brought to the “Product quality, sustainability and market acceptability” component of the TDSDP program. All of the described results in the program logical framework under “Asset Preservation”, “Sustainable Technologies and New Products”, “Local Capacity and Training” and “Marketing Facility” are currently too vague in orientation. This is already leading to ad hoc project support that will inevitably have little impact on the purpose of the program.

Funds for business development, eco-technology development, standards development, marketing, and capacity building should be happening collectively rather than on a project-by-project basis. The creation of working and mutually beneficial linkages has been shown to be crucial to the sustainability of community based tourism products. These strategic relationships need to be carefully considered and planned. Ad hoc alliances on a project-by-project basis should be avoided.

The TDSDP highlights a persistent problem of inadequate program preparation. A critical part of the TDSDP program was the organization of the implementation arrangements through the Board and this was not given enough thought. Widmer (1993), in talking about role conflict, ambiguity and overload, mentions many of the internal problems confronted by the board, and the likely consequences. The issues of poor performance facing the TDSDP now could certainly have been avoided through a planned strategy of training and internal capacity development.

There has not been any effort to manage and perceive the TDSDP as anything other than a “blueprint” donor project. The TDSDP was conceived as a tool to promote Kenyan community based tourism enterprises, which has not been followed through; the mission has not been adhered to. There has been no effort to leverage the TDSDP to increase the flow of funds from local sources, while still taking advantage of opportunities to partner with international organizations in mutually beneficial funding arrangements.

The TDSDP’s unsystematic approach to developing the capacity of implementing agencies has been in sharp contrast to accepted best practice. Were the technical assistance to the management unit removed tomorrow the program would collapse in disarray. The absence of operational strategy has not built a firm foundation for sustainability of fund activities. No direct alliances have been with the public, private or civil society sectors, this will inevitably lead to ad-hoc interventions that dilute the possible impact of achieving the program objectives.

 

VII Other Factors

27. Culture:

The culture of “donor-dependency” is heavily engrained in both the Kenyan government and the minds of European bureaucrats responsible for drafting the relevant legislations that govern the cooperation agreements and the policies for program implementation.

Tribalism in Kenya plays a big part in the sociopolitical geography of asset and resource management.

28. Trans-Boundary Issues:

Relations with neighboring countries and issues in neighboring countries affect tourism in Kenya. Specific examples of events elsewhere that affected tourist numbers to Kenya: Coup d’etat in Uganda (1986), the first Gulf War (1991), genocide in Rwanda (1994) and the second Gulf War.

The border between Tanzania and Kenya was a difficult crossing (time consuming and inconvenient) for tourists for a period of several years in the 1990s, as both countries were competing for the same tourists but Kenya had better international air access. There was a 20% increase in tourists to both countries in the year following the policy to ease restrictions.

29. Rights:

Land reform laws are not yet in place to allow ownership of title for land outside urban areas. This hampers small and medium scale business development by denying them the possibility of leveraging loans from even commercial banks. This means that tourism competes unfavorably with other industry sectors that use city-based infrastructure

30. Relevant Literature

Bates, R.H. (1981). Markets and States in Tropical Africa, Berkeley, University of California Press

Bennett, O. (1984/6/8/9). Tourism Master Plan Final Reports for Uganda, Gambia, Kenya and Cape Verde, UNDP/WTO.

Britton, S.G. (1982). The political economy of tourism in the Third World. Annals of Tourism Research, vol. 9(3): pp. 331-358.

Brohman, J. (1996). New Directions in Tourism for Third World Development. Annals of Tourism Research, vol.23, no.1; pp. 48-70.

Bryden, John. (1973). Tourism and Development – A Case Study of the Commonwealth Caribbean, London, Cambridge University Press.

Butler, R. (1993). Tourism development in small islands, chapter in Sustainable tourism in island small states (pp.11-49) Routledge, London.

Christie, I.T. & Crompton, D.E. (2001). Tourism in Africa. Africa Region Working Paper Series, Number 12. The World Bank Group, Washington DC.

Curry, S. (1990). Tourism Development in Tanzania. Annals of Tourism Research, vol.17: pp. 133-149.  

Devarajan, S, Dollar, D and Holmgren, T. (2001). Aid and Reform in Africa, The World Bank, Washington.

Dieke, P.C (1994). Tourism in Sub-Saharan Africa: Development Issues and Possibilities, in Tourism the State of the Art, Wiley and Sons, London.

De Kadt, E. (1979). Tourism: Passport to Development, London, Oxford University Press with the World Bank.

Dieke, P.U.C. (1991). Policies for Tourism Development in Kenya. Annals of Tourism Research, vol.18: pp. 269-294.

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Gordon, A and D. (2001). Understanding Contemporary Africa, Reinner, USA.

Harrison, D. (1992). Tourism in Less Developed Countries, Belhaven, London.

Honey, M. (1999). Ecotourism and Sustainable Development; Chapter 9; pp.293-337. Island Press.

Inskeep, E. (1991). Tourism Planning an Integrated and Sustainable Approach, The Hague, Van Nostrand Reinhold.

Jenkins, C. (1991). Government Involvement in Tourism in Developing Countries, Annals of Tourism Research, 9 (3): pp.499-521.

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Lindberg, K., A. Molstad, D. Hawkins, and W. Jamieson. (1999) Sustainable Tourism and Cultural Heritage: A Review of Development Assistance and its Potential to Promote Sustainability.  Nordic World Heritage Office, Oslo.

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Mclaren, D. (1998). Rethinking Tourism and Ecotravel: The Paving of paradise and What we can do to stop it, Kumarian Press.

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Tourism Concern. (1992). Beyond the Green Horizon; Principles for Sustainable Tourism, WWF, UK.

UNDP/WTO. (1984). Tourism Masterplan for Uganda, Final Report.

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USAID. Ecotourism Business Incubator. Washington, DC. Website Www.raise.org/tourism. December, 2003.

Wade, D.J. & Mwasaga, B.C. (2001). A History and Market Analysis of Tourism in Tanzania. Tourism Management, vol.22: pp. 93-101. 

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Wahab, S and Cooper, C. (2001). Tourism in the Age of Globalization, New York; Routledge.

Wanhill, S.R.C. (1982). Evaluating the Resource Costs of Tourism, Tourism Management 3 (4): 208-211.

Wanhill, S.R.C. (1988). Tourism Multipliers under Capacity Constraints, The Service Industries Journal, 8(3): 136-142.

Widmer, C. (1993). “Role Conflict, Role Ambiguity, and Role Overload on Boards of Directors of Nonprofit Human Service Organizations.” Nonprofit and Voluntary Sector Quarterly. Vol. 22, No. 4, pp.339-356.

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1/2001;4/2004