Renowned Harvard economics professor Robert Lawrence
acknowledged the vital role of manufacturing to address inequalities
within society, but very concisely and coherently dismissed the
possibility of manufacturing providing a silver bullet for the
labour-rich South African economy.
At a seminar hosted by Deloitte and Wesgro, the Cape tourism agency, Lawrence also emphasised that whereas reindustrialisation is vital to an emerging economy, it has to be accompanied by increased productivity and a focus on exports — as opposed to import replacement. But job losses in manufacturing are still inevitable as a result of technology and business efficiencies.
He expressed a great deal of concern that, other than in the Western Cape, SA — which he categorised, along with Brazil and Russia, as a diverging economy — has not as yet transitioned into being service sector-driven in a world that is increasingly services-orientated.
The seminar took place, coincidentally, on the morning of the announcement of the extremely disappointing performance of the South African economy in the first quarter of 2018.
While this led immediately to comments in the media about "Ramaphoria" waning, in truth, the foundations for this underwhelming performance were laid during the end days of our failed recent presidency.
An economy has often being likened to that of a giant oil tanker — it appears to have a momentum of its own and takes some time to turn around; but turn it around we must, and arguably tourism has to be at the forefront of that turnaround.
President Cyril Ramaphosa’s support for tourism in his state of the nation address was reprised with a greater degree of substance in Tourism Minister Derek Hanekom’s recent budget speech. However, the reignition of SA’s tourism economy is not just a question of money, it’s an issue of alignment and working together as a tightly knit team.
We need to identify a "high road" for tourism, in terms of key indicators such as international air arrivals, contribution to GDP, employment creation, broad-based geographic and social reach, and reduced seasonality.
This is supposedly the role of the national tourism sector strategy within the context of the National Development Plan but, whereas news media still quote the oil price and the gold price, they still don’t mention tourist arrivals as a key economic indicator.
We have to do two things urgently.
First, we have to raise the level of socioeconomic debate and discourse on the importance of tourism as a key economic and social driver.
Second, we have to urgently overcome the barriers to tourism that are holding us back from being a top 20 global destination in the World Economic Forum’s tourism competitiveness ranking.
That, in turn, requires tourism to be elevated back to a status in the Cabinet similar to that which it enjoyed during the tenure of minister Valli Moosa, when each minister was asked at each meeting what their department had done for tourism that week.
We are told that the visa situation is being urgently addressed to simplify things for tourists, and to remove the onerous and impractical unabridged birth certificate requirement that has cost us so many visitors.
The concern, however, is that while we are talking, other countries are doing — as evidenced by Ethiopia’s announcement that online visas, which were introduced in June 2017 for travellers from select countries, are now available to all visitors. If Ethiopia can do this, why can’t SA?
Ethiopia appears to have learnt from the hugely successful Dubai strategy, in which the national carrier works closely with the airport and tourism marketers to facilitate inbound tourism.
SA’s tourism potential is not being held back solely by the visa situation, but the approaches taken by Ethiopia and Dubai show the critical importance of key participants in the enabling environment of the tourism value chain working together, to optimise conditions that will be favourable for tourism growth.
SA needs the ministries of police, transport, public enterprises, sport and recreation, arts and culture, water affairs, international relations, health, local government, labour, trade and industry, and environment all to acknowledge and behave as members of "Team Tourism", and do whatever is in their power to help create the optimal enabling environment for the growth of tourism.
Lawrence would undoubtedly agree that tourism is right on trend as a place of employment in the services sector, as not only can it be accessed by citizens with the broadest range of skills, it provides jobs in urban and rural areas and does not necessarily require massive capital expenditure.
Growth in tourism services is often driven by small entrepreneurs, in response to the needs of tourists, and every 12 additional tourists creates one permanent job.
Re-industrialisation through manufacturing will alone not be able to provide the sustainable lift the South African economy needs. The services sector will have to provide the bulk of the employment in future, and tourism, which already supports 10.3% of jobs in the country (it directly employs more than 700,000 people, while supporting more than 1.6-million jobs), needs to be the vanguard of the new economic growth.
The Western Cape government introduced Project Khulisa to drive integrated thinking to create and promote sectors of the economy that can drive growth, but there is still much to be done. Isn’t it time for every one of us, whether in government or the private sector, to ask this key question: What have we done to make it easier, safer and affordable for tourists to visit SA today?
• Spicer and Bannister are board members of Wesgro — Cape Town and the Western Cape’s official tourism, trade and investment promotion agency.
At a seminar hosted by Deloitte and Wesgro, the Cape tourism agency, Lawrence also emphasised that whereas reindustrialisation is vital to an emerging economy, it has to be accompanied by increased productivity and a focus on exports — as opposed to import replacement. But job losses in manufacturing are still inevitable as a result of technology and business efficiencies.
He expressed a great deal of concern that, other than in the Western Cape, SA — which he categorised, along with Brazil and Russia, as a diverging economy — has not as yet transitioned into being service sector-driven in a world that is increasingly services-orientated.
The seminar took place, coincidentally, on the morning of the announcement of the extremely disappointing performance of the South African economy in the first quarter of 2018.
While this led immediately to comments in the media about "Ramaphoria" waning, in truth, the foundations for this underwhelming performance were laid during the end days of our failed recent presidency.
An economy has often being likened to that of a giant oil tanker — it appears to have a momentum of its own and takes some time to turn around; but turn it around we must, and arguably tourism has to be at the forefront of that turnaround.
President Cyril Ramaphosa’s support for tourism in his state of the nation address was reprised with a greater degree of substance in Tourism Minister Derek Hanekom’s recent budget speech. However, the reignition of SA’s tourism economy is not just a question of money, it’s an issue of alignment and working together as a tightly knit team.
We need to identify a "high road" for tourism, in terms of key indicators such as international air arrivals, contribution to GDP, employment creation, broad-based geographic and social reach, and reduced seasonality.
This is supposedly the role of the national tourism sector strategy within the context of the National Development Plan but, whereas news media still quote the oil price and the gold price, they still don’t mention tourist arrivals as a key economic indicator.
We have to do two things urgently.
First, we have to raise the level of socioeconomic debate and discourse on the importance of tourism as a key economic and social driver.
Second, we have to urgently overcome the barriers to tourism that are holding us back from being a top 20 global destination in the World Economic Forum’s tourism competitiveness ranking.
That, in turn, requires tourism to be elevated back to a status in the Cabinet similar to that which it enjoyed during the tenure of minister Valli Moosa, when each minister was asked at each meeting what their department had done for tourism that week.
We are told that the visa situation is being urgently addressed to simplify things for tourists, and to remove the onerous and impractical unabridged birth certificate requirement that has cost us so many visitors.
The concern, however, is that while we are talking, other countries are doing — as evidenced by Ethiopia’s announcement that online visas, which were introduced in June 2017 for travellers from select countries, are now available to all visitors. If Ethiopia can do this, why can’t SA?
Ethiopia appears to have learnt from the hugely successful Dubai strategy, in which the national carrier works closely with the airport and tourism marketers to facilitate inbound tourism.
SA’s tourism potential is not being held back solely by the visa situation, but the approaches taken by Ethiopia and Dubai show the critical importance of key participants in the enabling environment of the tourism value chain working together, to optimise conditions that will be favourable for tourism growth.
SA needs the ministries of police, transport, public enterprises, sport and recreation, arts and culture, water affairs, international relations, health, local government, labour, trade and industry, and environment all to acknowledge and behave as members of "Team Tourism", and do whatever is in their power to help create the optimal enabling environment for the growth of tourism.
Lawrence would undoubtedly agree that tourism is right on trend as a place of employment in the services sector, as not only can it be accessed by citizens with the broadest range of skills, it provides jobs in urban and rural areas and does not necessarily require massive capital expenditure.
Growth in tourism services is often driven by small entrepreneurs, in response to the needs of tourists, and every 12 additional tourists creates one permanent job.
Re-industrialisation through manufacturing will alone not be able to provide the sustainable lift the South African economy needs. The services sector will have to provide the bulk of the employment in future, and tourism, which already supports 10.3% of jobs in the country (it directly employs more than 700,000 people, while supporting more than 1.6-million jobs), needs to be the vanguard of the new economic growth.
The Western Cape government introduced Project Khulisa to drive integrated thinking to create and promote sectors of the economy that can drive growth, but there is still much to be done. Isn’t it time for every one of us, whether in government or the private sector, to ask this key question: What have we done to make it easier, safer and affordable for tourists to visit SA today?
• Spicer and Bannister are board members of Wesgro — Cape Town and the Western Cape’s official tourism, trade and investment promotion agency.
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