Post on 18-Jan-2023
TOURISM: A VEHICLE FOR SUSTAINABLE
DEVELOPMENT AND POVERTY ALLEVIATION?
-THE CASE OF CAPE VERDE ISLANDS-
Dalia Soares Gomes
/Semester 2, November 2012/
APG5390 Individual Major Assignment
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Abstract
There is a growing worldwide recognition that tourism can be a viable development strategy
for developing countries. This paper analyses a variety of aspects of the current tourism
development in Cape Verde islands and assess whether tourism is being used as a vehicle for
sustainable development and poverty alleviation. The paper concludes that tourism does
make substantial contribution to poverty alleviation, notwithstanding many challenges in
regards to the destination’s sustainability.
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LIST OF CONTENT
Abstract ......................................................................................................... 2
PART 1 ......................................................................................................... 4
1.1. Introduction ....................................................................................... 4
1.2. Sustainable Development.................................................................... 5
1.3. Sustainable Tourism and Pro-Poor Tourism – New Paradigms ............. 6
PART 2 ....................................................................................................... 10
2.1 One-Page Briefing on Cape Verde Islands: Facts and Figures ............ 11
2.2 A Snapshot of Tourism Development in Cape Verde ......................... 12
2.3 Assessment of the ‘Sustain-Ability’ of Cape Verde’s Tourism Sector. 13
3. Conclusion............................................................................................. 19
4. Reference list ......................................................................................... 21
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PART 1 TOURISM, SUSTAINABLE DEVELOPMENT
AND POVERTY ALLEVIATION
1.1.Introduction
It is widely recognised that industrialisation, modernisation and economic growth have
played important roles in the development process of many nations, allowing them to
improve the well-being of their population by raising the quality of education systems,
medical facilities, and general standards of living. However, it is generally acknowledged as
well, that these processes/agendas have also caused pollution problems, environmental
degradation and deepened social disparities. Despite remarkable progress over the past
decades, there are still people living in acute poverty and suffering inadequate access to
essential resources required for a living with dignity. According to the 2010 World
Development Indicators, it is estimated that 5.6 billion people live in developing countries,
half of the world’s population lives on two dollars a day, 1.4 billion people live in extreme
poverty, 915 million are malnourished, 1.3 billion lack access to clean water, and more than
1.5 billion people lack access to good sanitation (The World Bank, 2010).
Since the 1970’s, when the notion of direct relation between economic growth and
development was rejected in favour of a focus on poverty, inequality and dependency
reduction (Sharpley & Naidoob, 2010), tourism has been increasingly recognised as a
potential developmental vehicle and an effective tool to ameliorate poverty in ‘Third World’
countries, especially in Small Island Developing States (SIDS). Yet, the ability of tourism to
provide a means of reducing poverty has recently been challenged, and some observers have
criticised it as being an exploitative form of neo-colonialism (Brohman 1996). In response, a
new approach to tourism has emerged - the so-called ‘Pro-Poor Tourism’, under the broad
rubric of ‘Sustainable Tourism’ (Harrison, 2008, cited in Trau, 2012).
This paper firstly starts with a brief literature-based analysis of the emergence of sustainable
and pro-poor tourism concepts, and then discusses the practical implications of these
approaches to the case of tourism development in the archipelago of Cape Verde. An
overview of the tourism development in this Small Island Developing State (SIDS) is given
through contemporary tourism and socio-economic data, as well as information on sectorial
policies/strategies that have been recently implemented. The paper concludes with a
discussion on the barriers to effective use of tourism as a vehicle for development and
poverty alleviation in Cape Verde. Before discussing the ‘status-quo’ of the tourism industry
and its new paradigms, a brief review of the emergence of the ‘sustainable development’
concept will be presented in the following section, in order to contextualise the shift on
tourism planning approaches.
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1.2.Sustainable Development
The post-war period, especially from the early 1970’s, was marked by an unprecedented
growth of widespread public and international concern regarding environmental degradation
caused by humankind pressures (Brenton, 1994). In 1987 the United Nations World
Commission on Environment and Development (WCED) published a report entitled “Our
Common Future” (also referred to as the Brundtland report) which coined the most quoted
definition of Sustainable Development - development that “meets the needs of the present
without compromising the ability of the future generations to meet their own needs” (WCED,
1987, cited in Haslam, Schafer, & Beaudet, 2011, p. 310). The commission sought to address
the apparent disconnection between conservation and development and took the stance of
claiming that the two were not necessarily mutually exclusive (Roe 2008).
The Brundtland report laid the groundwork for the convening of the World Summit on
Sustainable Development (also known as the Earth Summit) held in Rio de Janeiro, Brazil, in
1992. One of the principal outcomes of this event was the Agenda 21, a declaration of
principles that placed human beings at the centre of concerns for sustainable development,
emphasizing poverty alleviation as a morally imperative and prerequisite for environmental
sustainability (Haslam, Schafer, & Beaudet, 2011). At its Millennium Summit in 2000, the
UN identified poverty as one of the biggest global challenges and set forth as one of its
Millennium Development Goals (MDGs) to eradicate extreme poverty by 2015. Two years
later, a second Earth Summit took place in Johannesburg, South Africa, where an emphasis
on the MDG and poverty eradication was highlighted as one of the p riority overarching
objectives and essential requirement for sustainable development (United Nations, 2002). In
June 2012, a mega-conference marked the 20th aniversary of the first Earth Summit - the
“Rio+20”. The event held in Rio intended to bring world leaders and high- level
representatives of more than 190 countries to renew their political commitment to achieve
sustainable development and poverty reduction.
In summary, the concept and parameters for measuring development have transformed over
time and ‘sustainable development’ has been intensely debated for more than twenty years,
through diverse international conferences and world summits, seeking global commitments to
promote the balance between economic, social and environmental goals of the global
community. Although some sober observers have noted that the concept (sustainable
development) is too abstract and ambiguous, it maintains today as a dominant paradigm of
development used by development agencies, environmentalists, academics, governments,
Non-Governmental Organizations (NGOs) and practitioners from various sectors, including
the tourism and travel industry.
It is within this global context of development, poverty and environment debates that the
tourism industry has responded by launching the concept of ‘sustainable tourism’. Programs
such as the Pro-Poor Tourism Partnership (PPTP) and the Sustainable Tourism-Eliminating
Poverty (ST-EP) are examples of initiatives pursuing to enhance tourism’s role as an
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effective tool for sustainable development and poverty alleviation. In the following section,
these approaches will be covered in more detail.
1.3.Sustainable Tourism and Pro-Poor Tourism – New Paradigms
Over the past 50 years, international tourism has grown at an astonishing rate and is now
recognized as one of the largest and most important industries worldwide. As an export
category, tourism ranks in fourth place after fuels, chemicals and automotive products.
According to the United Nations World Tourism Organization (UNWTO) in 2011 worldwide
tourism arrivals reached 983 million, and generated around US$ 1,030 billion of international
tourism receipts (UNWTO, 2012a). Contributing to some 5% of the world’s Gross Domestic
Product, tourism sector is known as one of the world’s largest employer as it creates nearly 6-
7% of the overall number of jobs worldwide (UNWTO, 2012a). Tourism has been recognized
as an engine that can stimulate local economy through income generation, infrastructure
development, and foreign exchange earnings. It is also acknowledged the important role of
tourism in the achievement of the MDGs, especially in regarding Goal 1 - employment and
poverty reduction, and Goal 3 - gender equality and empowerment of women (49% of formal
hospitality and restaurant industry employees worldwide are women (UN Women, 2011).
At a global scale, tourism is seen as an extremely significant economic activity, especially for
developing countries where in some cases it is the only viable source of growth or export
earnings (PPTP, 2004). In fact, for more than fifty of the world’s poorest countries, tourism is
ranked first, second or third in terms of their economies (Sofield et al., 2004). Although
developed economies remain both the major tourism destinations and source of international
tourism, in recent decades arrivals to emerging economy destinations have grown faster than
advanced economies and this trend is likely to maintain in the future. As a result, the market
share of developing economies reached 47% in 2011 (UNWTO, 2012a). Besides the
perceived potential economic gains that tourism can generate, it is also seen to create a
number of other benefits such as renewed interest in local arts and crafts, increase public
support for conservation, improvements in leisure activities, communication systems,
medical, and other facilities in the host countries. For these reasons, many governments of
developing countries increasingly regard tourism as a panacea for their development issues.
Despite the apparently successful growth of tourism in many developing economies, its
developmental role has recently been defied. Many scholars argue that, because the
international tourism is bound by a globalising neoliberal capitalist system driven by foreign-
owned Western tourism companies’ interests, the Third World tourism industry often
replicates problems of dependency, internal disarticulation and substantial overseas leakage
of tourism earnings, loss of control over local resources, disproportionate spatial distribution
of benefits, reinforcement of socioeconomic and spatial inequalities, increased local costs,
displacements, cultural alienation, and loss of identity among host communities (Jamieson,
2003; PPTP, 2004; Scheyvens & Momsen, 2008; Trau, 2012). Postcolonial critiques see
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international tourism as a form of neo-colonialism due to the fact that the majority of
controlling and integrating forces in developing countries are large transnational First World
companies (Lee & Jamal, 2008). Moreover, mainstream tourism has also been blamed to
generate conflicts over access to scarce resources (water, land, and energy), promote sexual
harassment (sex tourism), increase pollution and other environmental damages (UNEP-
UNWTO, 2005; Dunn, 2007).
As an attempt to off-set the perceived failure of top-down approaches, characteristic of the
mainstream tourism development, alternative approaches have emerged, such as ‘Sustainable
Tourism’, declared as a global strategy at the Rio Summit in 1992; and ‘Pro-Poor Tourism’
(PPT)- primarily manifested in a series of case studies under the Pro-Poor Tourism
Partnership (a collaborative research initiative between the International Centre for
Responsible Tourism, the International Institute for Environment and Development, the UK
Department for International Development and the Overseas Development Institute - ODI).
Sustainable Tourism approach acknowledges that tourism and the environment are
interdependent and therefore seeks a balanced development through the management of all
resources in such a way that economic, social and aesthetic needs can be fulfilled while
maintaining cultural integrity, essential ecological processes, and biological dive rsity and life
support systems (WTO 1998, cited in Ashley et al 2001). This holistic, long-term approach to
tourism planning takes full account of current and future, global and local impacts of tourism,
addressing the needs of host communities, visitors, the industry, and the environment. This
concept is meant to be applicable to all forms of tourism in all types of destinations, including
mass tourism and the various niche tourism segments (UNEP-UNWTO, 2005). PPT
approach, by its turn, involves “targeting and involving the poor in each step of the process to
protect natural resources, preserve cultural traditions and create on-going employment for the
community as a whole” (Jamieson 2003, p.1). This approach aims to increase the net benefits
to the poor, and ensure that tourism growth contributes to poverty reduction by unlocking
opportunities through increasing economic gains and non-cash livelihood benefits, improving
market access and participation in decision-making, and enhancing backward and forward
tourism linkages (Ashley et al, 2001; Scheyvens & Momsen, 2008; Shen, Hughey &
Simmons, 2008). A distinction feature of PPT is its focus on the broader challenges of
poverty (as shown in Table 1), including infrastructural development, capacity building,
training and education, and empowerment (Scheyvens, 2007, as cited in Sharpley & Naidoob
2010). In other words, PPT seeks pro-poor growth and takes into consideration the multi-
dimensional nature of poverty, and attempts to maximize the realization of potential gains
along the tourism value chain by enhancing the multiplier effect of tourism (linkage with
related subsectors such as transportation, restaurants, construction, leisure, heritage, arts &
craft, fishery and agricultural production).
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Table 1. Pro- Poor Tourism Strategies
Source: PPTP (2009, in Sharpley & Naidoob, 2010, p.150)
Aiming to promote poverty alleviation as a major objective of sustainable tourism
development, UNWTO launched its Sustainable Tourism for Eliminating Poverty (ST-EP)
initiative at the Earth Summit 2002. The ST-EP program, which takes into account the links
between poverty, environment and development, is a manifestation of the MDG to halve
extreme poverty by 2015. It focuses on improving the capacities of national tourism
administrators, local authorities, and stakeholders in developing countr ies in planning and
implementing poverty reduction policies and projects, through the development of
sustainable tourism (Gartner 2008). Since the launch of the ST-EP program, and the
establishment in 2004 of the UNWTO ST-EP Foundation in Seoul, over 100 projects in 34
developing countries have been funded and implemented, and about 20 regional and national
training seminars on tourism and poverty alleviation have been organized (UNWTO, 2012b).
According to ST-EP initiative’s philosophy, there are seven mechanisms through which the
poor can benefit directly or indirectly from tourism and therefore have been widely
disseminated and incorporated in ST-EP projects, studies, training and related conferences:
(i) Employment of the poor in tourism enterprises, (ii) Supply of goods and services to
tourism enterprises by the poor or by enterprises employing the poor, (iii) Direct sales of
goods and services to visitors by the poor (informal economy), (iv) Establishment and
running of small, micro or community-based tourism enterprises or joint ventures by the poor
(formal economy), (v) Redistribution of proceeds from tax or charge on tourists or tourism
enterprises, (vi) Voluntary giving/support by tourism enterprises or tourists, and (vii)
Investment in infrastructure stimulated by tourism also benefiting the poor in the locality,
directly or through support to other sectors (UNWTO, 2007).
In recent years, the list of UN agencies, International Financial Institutions, multilateral
agencies, environment NGOs and industry associations supporting and working with PPT and
Sustainable Tourism - related projects/initiatives, has increased dramatically. Despite debates
by some academics on the legitimacy of tourism as an effective developmental agent, there is
a generalised worldwide support towards the argument that sustainable tourism can be a tool
for poverty reduction, especially through “alternative” forms of tourism such as ecotourism
and community-based tourism.
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As already mentioned previously, the concept of sustainable development can be quite vague.
Sustainable tourism itself has dealt with issues of its operationalization, especially in regards
to the lack of measurement indicators. In this sense, there has been an increase in tourism
literature dealing with sustainability assessment methods, and the ‘Sustainable Tourism
Benchmarking Tool’ (STBT) is a notable example. STBT, developed by UNCTAD, covers
seven tourism-related dimensions which are analysed through several key connected issues :
Tourism Assets (natural and cultural), Tourism Activity (number of tourists, tourism
revenues), Linkages (multiplier effects), Leakage (missed opportunities), Infrastructure (e.g.
transport, communication), Attractiveness (competitiveness), and Environmental and Social
Sustainability (e.g. regulatory framework, number of jobs, average wage). The framework
presented in Figure 1 provides a unified methodology to assess sustainability, based on a
number of quantitative indicators which will allow the creation of a comprehensive database
against which the sustainability of tourism activities in various countries can be assessed
(Cernat & Gourdon 2012).
Figure 1. STBT Framework Chart
Source Cernat & Gourdon (2012, p. 1055)
It is in light of the STBT dimensions and the Sustainable/ Pro-Poor Tourism approaches
presented earlier in this section, that the paper now turns to the case of tourism development
and poverty alleviation in Cape Verde islands. With the support of academic literature and
knowledge drawn from the author’s experience working in the national tourism public sector,
this paper attempts to analyse challenges that hinder the effective use of tourism as a vehicle
for sustainable development and poverty alleviation in Cape Verde.
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PART 2
CASE STUDY:
Figure 2. Map of Cape Verde’s Geographic Location
Source: Google Maps
"We want a sustainable and high value-added tourism, which effectively
contributes to the improvement of the well-being of Cape Verdeans, without jeopardizing the resources needed for future generations’ survival".
Cape Verde’s Tourism Development Strategic Plan (MTIE 2010, p. 95)
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2.1 One-Page Briefing on Cape Verde Islands: Facts and Figures
The Republic of Cape Verde is an archipelago in the Atlantic Ocean, 500 km off the coast of Senegal, comprising ten volcanic islands and five islets scattered over 4.033 km². The largest
island is Santiago, where the nation's capital city lays – Praia, and the smallest is the uninhabited Santa Luzia island. The island currently hosts about half a million inhabitants of which more than 54 percent are less than 25 years old, 50.5 percent are female, 62 percent
live in urban areas, 85 percent are literate, with 11 percent of its total labour force unemployed (INE 2011). Former Portuguese colony, the country achieved its
independence in 1975, since which time it has experienced stable political democracy and notable economic development, with tourism and tourism–led Foreign Direct Investments playing significant roles.
In recognition of its structural transformation, sound macroeconomic performance, and policy
credibility, Cape Verde graduated from Least-Developed Country to Middle-Income Country status in 2007 - the second in sub-Saharan Africa after Botswana and the first graduation in more than a decade. In 2011, Cape Verde’s GDP amounted US$ 1.9 billion, and its Human
Development Index was 0.568 – value above the average of its region, ranking the country 133rd out of 187 worldwide countries (UNDP, 2011). The rapid growth since the early 1990’s
has sharply reduced poverty in Cape Verde. The World Bank’s latest poverty update informs that the share of the population in poverty decreased from 49 percent in 1989 to an estimated 24 percent in 2010, with a higher concentration in women and rural areas, where 72 percent
of the poor live (World Bank, 2011). According to the 2010 MDG Report, despite some challenges of gender and rural/urban inequality, youth and child vulnerability, health care
access, and security issues; the country is expected to meet most of the MDG's by 2015, especially the targets related to poverty eradication and hunger (UN Cape Verde, 2010).
Like many other SIDS, Cape Verde is a vulnerable country, mainly due to its insularity and small size, scarce natural resources, water sho rtages, fragile ecosystems, and low
production capacity- with barely 10% of its surface arable. These physical and natural characteristics create unique constraints, especially in regards to agricultural production (over 80 percent of all food consumed is imported), transportation costs, and basic economic
inputs. The share of primary sector in GDP is low - agriculture represents less than 10 percent and depends largely on rainfall intensity; fishing, by its turn, is an activity with great
development potential, but currently not fully exploited. Cape Verde is therefore, greatly dependent on remittances from emigrants supplement and Official Development Aid. Its economy is mainly service oriented with commerce, public services, transport, and tourism
accounting for about three-fourths of the national output (MAHOT, 2011).
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2.2 A Snapshot of Tourism Development in Cape Verde
Tourism development was ‘born’ in Sal island with the construction of the first international airport in 1939, the opening of a Belgian owned Guesthouse in 1967 and the over-stay of
crew members of the South African Airlines on their way to Europe. However, it was only from the 1990’s that tourism became a relevant economic activity, due to the increased interest of foreign investors in the real estate tourism sector and the remarkable cultural
promotion undertaken by the national icon singer Cesaria Evora (MECC, 2010).
Since the new millennium, there has been a dramatic increase of international tourist arrivals to the country - from 115,000 in 2000 to around 428,000 in 2011 - year when it saw the fastest growth rate within its region (UNWTO, 2012). According to the latest census of the
National Statistics Institute (INE), in 2011 some 475, 294 guests spent a total of 2,827,562 nights at Cape Verde’s accommodation establishments, with a 5.7 average length of stay
(INE 2012). According to the same source, the UK, France and Portugal were the main source markets (Figure 3), and for the very first time, the island of Boa Vista received more international visitors than the Sal island (Figure 4), which had been the main tourism
destination since the beginning of tourism development in Cape Verde.
Statistical data from national and international sources point to an expressive tourism growth. However, it is not yet clear if this exponential growth has brought long term sustainable
benefits to the poor. A detailed scrutiny of the socio-economic impacts of tourism or a robust assessment of its sustainability is beyond the scope of this paper. Nevertheless, the following section will shade light on some aspects of tourism in Cape Verde that might be restricting its
potential use as a sustainable pro-poor development tool. The following analysis is organized by the seven STBT framework dimensions presented in section 1.3.
Figure 3. Guests and Nights (% ) per Source Market in 2011
Source: adapted from INE 2012
Figure 4. Guests per Island in 2011
Source: INE 2012
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2.3 Assessment of the ‘Sustain-Ability’ of Cape Verde’s Tourism Sector
2.3.1 Tourism Assets
Cape Verde is a country of contrasts, where rocky coastline and towering mountains get
mixed with endless white-sanded beaches, and flat desert landscapes. Together with its unique blend of African and European cultural heritages, culminating in its savoury cuisine and exquisite cultural manifestations (dance, music), Cape Verde has sober assets from which
diversified tourism products can be developed. However, since the start of tourism development, the main assets sought and promoted have been the beaches and its warm dry
climate. With an average temperature of 25 degrees throughout the year and extensive kilometres of sandy beaches and dunes, "Sun and Sea" has been identified as the country’s core tourism product, and due to their endowments, Sal and Boa Vista have been the
preferred destinations. This geographic concentration not only brings some negative environmental impacts (see point 2.3.7), but also hinders the possibility for the poorest
communities to directly participate in the tourism sector. By comparing the distribution of poverty and tourism demand, one can conclude that the majority of the islands with the largest rural populations and highest poverty rates are those which have been receiving the
smallest share of tourist visitors. This point can be illustrated by Fogo’s case which is the 4th most populated island, hosts the poorest county of the country (with a poverty rate of 59
percent) (INE 2009), yet ironically has had the least number of international visitors over the past years, ranked 4th from the last in terms of guest arrivals. In order to maximize the potential of each island and unlock opportunities for the poor, Cape Verde should consolidate
its “Sun and Sea” segment, while offering complementary tourism products based on other natural assets (e.g. natural parks, mountains, marine wildlife) and cultural resources (e.g.
colonial monuments, cultural heritages). For this to happen, it is urgent a National Tourism Resource Inventory exercise. It should be noted that a concept paper of such project has already been designed, but due to budget issues, it has been postponed.
3.3.2. Tourism Activity
Tourism (supply and demand) in Cape Verde has been growing steadily for more than a decade, resisting even critical periods such as the global financial crisis (see Table 2).
Table 2. Evolution of Tourism Demand and Supply Source: INE 2011; UNWTO 2011*
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
International Arrivals (1000)* 115 134 126 150 157 198 242 267 285 287 336 428
Growth rate - 17% -6% 19% 5% 26% 22% 10% 7% 1% 17% 27%
Guest entrances (1000) 145 162 152 178 185 234 281 313 333 330 382 475
Total Nights (1000) 685 806 694 903 865 936 1,368 1,433 1,827 2,022 2,342 2,828
Average Length Stay 4.4 4.6 4.2 4.7 4.6 3.9 4.6 5.7 5.2 5.9 5.7 5.7
Nº of Accommodation Establishments 88 88 93 105 108 132 142 150 158 173 178 195
Total Nº of Rooms 2,391 2,489 2,820 3,146 3,150 4,406 4,836 5,368 6,172 6,367 5,891 7,901
Available Capacity 5,239 5,450 6,062 6,682 6,749 10,342 10,450 11,544 13,708 14,096 13,862 17,025
Average Occupancy Rate / Bed 51% 49% 41% 44% 41% 40% 44% 40% 48% 45% 50% 58%
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Due to its climate endowments, Cape Verde is perceived to be an all-year destination, with low seasonal variation (in 2010, the seasonal amplitude index of guests in accommodation
establishments was 1.51). However, tourism is not only geographically concentrated (in two islands) but is also highly dependent on few source markets. According to the Tourism
Compendium 2012 edition, 89 percent of international arrivals in 2011 were from Europe (UNWTO 2012c). Moreover, national data show that even within Sal and Boa Vista, the majority of tourists stay in a small number of very large foreign-owned hotels/ resorts (INE
2012). In this sense, one can argue that because Cape Verde ’s tourism industry is largely dependent upon small number of big hotels (available capacity) on two islands (Sal and Boa
Vista), served by one main source market (Europe), the country is very vulnerable to external shocks. The Tourism Marketing Plan, published in 2010, called for a higher diversification both from the demand side (suggested new markets such as South Africa and USA), and
supply side (proposed strategies to promote Cape Verde as “one country, ten destinations”) (DGT 2010). Nevertheless, another feature of Cape Verde’s tourism sector is that the
distribution channels are highly controlled by powerful international tour operators (e.g. TUI), which insist in promotion campaigns focused mainly on Sal and Boa Vista. In this context, this paper suggests that more attention should be paid to the Visiting Friends and
Relative (VFR) market. It is generally estimated (although without empirical evidence) that the number of emigrants and their descendants living abroad currently exceeds the population
of Cape Verde itself (MAHOT 2011). On top of that, its diaspora has a high incident of return visits. In this sense, a way of decreasing Cape Verde’s vulnerability is to cater to this segment, as it is less price sensitive (due to emotional ties with the country).
3.3.3 Linkages
As argued by Mitchell and Ashley (2010), economic impacts of tourism can be categorised as Direct (wages and other forms of earnings from the tourism sector), Induced (tourism
workers re-spend their earnings in the local economy), Indirect (earnings from non-tourism sectors that arise from tourist activity), and Dynamic (long-term changes experienced at the destination). According to the 2012 Travel & Tourism Economic Impact Report, in 2011 the
Direct Contribution of Travel & Tourism (T&T) to Cape Verde’s GDP (‘internal’ spending directly linked to visitors) was about 16 percent, and the Total Contribution (including
indirect and induced contributions) accounted for 43 percent (WTTC, 2012).
1 Ratio between the three months with most guest entrances and the three months with the least guest entrances
- authors calculation based on data from INE 2011b.
Figure 5. Cape Verde: Total Contribution of T&T to GDP / Its Global Ranking (out of 181 countries Source WTTC (2012, p.1;3)
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Although tourism direct effects (such as hotel worker wages) are more evident and have already been subject of national surveys, the indirect contributions are also very significant,
as shown in Figure 5. In Cape Verde the main recognized linkages between tourism and the national economy are found in the labour market. However, there are many untapped
opportunities for developing a stronger tourism supply chain and increase net benefits to the poor. Despite the analyses in section 2.1 showing that Cape Verde might not have the supply capacity (crop production) to meet the present tourist demand for food and beverage, there
are still some openings where market access of the poor can be improved, namely by providing fresh fish, seafood, tropical fruits, or even artisanal food (e.g. goat cheese, sweets,
molasses, liquor) to the resorts. Another opportunity window for the poor’s participation can be found in the informal sector, especially within the “cultural industries”. Presently there is a lack of authentic arts and craft products available for tourists - resorts hold souvenir shops
that sell merchandises “Made in Cape Verde” that are not local; and there is an upsurge of Senegalese street vendors selling craftworks from mainland Africa, which do not always
translate the reality of the country (e.g. paintings with “Cape Verde” alongside giraffes and elephants – which do not exist in the country). It should be noted that the government is aware of these opportunities and has promoted some pilot supply-chain studies in order to
understand best strategies to increase inter-sectorial linkages. Efforts have also been made to enhance the capacity-building of the locals to deliver quality products that meet international
tourist standards. However, due to the predominant resort-based tourism, plus the above mentioned issues, the spill-over of tourist spending outside hotels is still very limited.
3.3.4. Leakage
Tourism leakage in Cape Verde is fuelled by its economy openness and its high import propensity. On the one hand, the Government
has created special incentives for foreign investments (especially in the tourism
industry) through generous fiscal incentive package include a five-year tax holiday; exemption from customs duties on imports of
materials for the construction and operation of hotels, marinas, golf courses, and other
activities linked to tourism; rights for profit expatriation and recruitment of foreign workers; and free opening and movement of accounts in foreign currency (CI 2011). On the
other hand, structural constraints (low production capacity, high transaction costs) make it more cost-effective to import inputs necessary to feed the hospitality industry, than seeking
them locally. Recent WTTC data show that in 2011, Cape Verde generated CVE238.3bn in Visitor Exports (spending within the country by international tourists), which accounted to 60 percent of the total exports in that year – see Table 4 (WTTC 2012). However, there are
currently no candid national estimates of the level of leakages within the tourism sector, though in 2008 an ODI report suggested that one-third of the benefits of tourism revenues is
‘leaked’ through imports necessary to meet the tourism demand (Mitchell, 2008).
2 Cape Verde Escudo, which is pegged to Euro: 1 EUR=110 CVE
Table 3. Country’s Ranking: Relative contribution Source: WWTC 2012, p.8
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One may conclude that the main causes of tourism leakages in Cape Verde are related to the sector’s foreign-owned / import-based supply chain, in result of investment policies and
inherent structural factors. In this sense, and as stated in the above mentioned ODI report, the most effective policy response to reduce leakages would be to increase linkages by improving
the business environment and enhancing human capital (ODI, 2012).
3.3.5. Infrastructure
Besides the ‘core-tourism’ establishments; efficient transport and communication
infrastructures, electricity and water access, and distribution networks are very important to this sector. There have been significant investments in the modernization of Cape Verde’s international airports (in Sal, Boa Vista, Santiago and Sao Vicente), aerodromes, ports; fossil-
fuel power stations, solar power plants, and road networks throughout the nine inhabitant islands (MAHOT, 2011). One can argue that the main issues related to this dimension are the
services linked to it. TACV (the national flag carrier) and ELECTRA (the public enterprise responsible for electricity and water production/distribution) are nationally and internationally criticized for providing poor levels of services. TACV has many issues with
flight schedule reliability and relative expensive return fairs, even within internal flights. This aspect hinders the possibility for tourism diversification, as it is expensive to visit multiple
islands, plus the internal flight schedules are not consistent. ELECTRA, by its turn, has undergone major restructure reforms, but still fails to completely fulfil the national demand. During the peak season (summer), there are many blackout episodes which have
systematically caused embarrassments to local businesses (e.g. restaurants, bars/pubs, hotels). It should be noted that, due to ELECTRA’s insufficient distribution capacity, most hotels in
Sal and Boa Vista are supplied either by private utility providers (MAHOT, 2011), or by their own micro desalination plants - which increases operation costs and harms the destination’s price competiveness.
3.3.6. Attractiveness
The Tourism Marketing Plan set ten unique selling propositions (Table 4)
which reveal Cape Verde’s competitive advantage based on its culture, climate,
people and its strategic location - situated at the same latitude of the Caribbean Islands, less than four hours
flight from America, Europe and mainland Africa. The archipelago’s
socio-economic and political environment by their turn, are the main ingredients attracting foreign tourism investments to the destination: its economic stability
and sound democracy, with relatively little corruption3 (TI, 2012); assurances low risks for investors. Plus the peg of the local currency (Escudos) to Euro also reduces exchange rate
uncertainty for European tourists. However, as the analysis of Figure 6 demonstrates, Cape Verde faces many challenges in terms of its global competitiveness.
3 Ranked 2
nd in sub-Saharan Africa region on the Transparency International Corruption Index
Table 4. Ten Key Ingredients of Cape Verde Destination Source DGT (2010, p. 47)
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The Travel & Tourism Competitiveness Index (TTCI), developed by the World Economic Forum, aims to measure factors and policies that make it attractive to develop the T&T sector
in 139 different countries. According to the 2011 report, Cape Verde’s overall performance ranked 89th place.
Comparing the country’s overall performance against its key competitor destinations
(identified in the Tourism Marketing Plan), one can note that its TTCI ranks lower than almost all of them - Spain/Canary island (8th), Portugal (18th), Tunisia (47th), Brazil (52nd), as well as Egypt (75th) and Morroco (78th) ; except for its closest competitor, Senegal (107th). If
compared with the overall TTCI within its region, Cape Verde increases its position, ranking 4th place after Namibia, South Africa and Mauritius (the regional leader). An analysis of the
pillars of the three sub- indexes, show that Cape Verde is 5th place worldwide in terms of its ‘Affinity for Travel & Tourism’- which covers, among other variables, the percentage of tourism expenditure and receipts to the GDP. Cape Verde’s worst performance in found in
the pillars of natural and cultural resources (which include variables such as number of world heritages sites and protected areas). However, one can state that the most alarming
observation is the fact that the country is globally one of the least price-competitive destination, ranking 126th - a position way below the average rank of emerging countries in this pillar (which is 58th, according to Kester & Croce (2011)). It can be argued that the
structural handicaps mentioned above (e.g., high utility and operations costs) are the causes for Cape Verde’s low price competiveness. This critical issue asks for a close analysis by
public and private stakeholders, as it may hinder the country’s ability to win new markets or even sustain its long-standing positive trends.
3.3.7. Environmental and Social Sustainability
Environment
The country is amongst the main centers of endemism worldwide (11th position) and is an important breeding area for a variety of fisheries, humpback whales, dolphins, corals, and
marine turtles - third largest world population of Loggerhead turtle (DGT & WWF 2010). A range of regulatory framework (e.g., EIA Decree-Law, creation of the protected areas
Figure 6. Cape Verde’s Global TTCI Performance
Source WEF (2012, p.146)
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network) and environment-related international agreements signed and rectified by a country (e.g., Regional Program for Conservation of the Coastal and Marine Zone of West Africa,
the Biodiversity Convention) can be seen as indicators of a commitment towards an environmental sustainable development. However, the coastal tourism development
combined with the growing real estate business has already produced some negative effects on the country´s coastal biodiversity, as shown in Figure 7. In this context, the General Directorate of Tourism and WWF jointly organized a workshop with key stakeholders and
formed in 2010 a Public-Private Partnership for Sustainable Tourism. However, despite the creation of a steer committee and a strategy proposal, this extremely important project has not
yet been implemented. More attention should be given to the environmental effetcs of the current tourism development, if the sustainability agenda is to be moved forward.
Figure 7. Threats Related to Coastal Tourism Development
Source: DGT&WWF (2010, p.10)
Social
It can be argued that a way of assessing the social sustainability of tourism is through the local community’s perception of its impacts. In 2010 the University of Cordoba (Spain) and
the University of Jean Piaget Cape Verde, carried out a study which shed some light on local residents’ attitude towards tourism. The results of the opinion poll suggest that more than 70 percent of the interviewed residents throughout the islands supported the actual state of
tourism development (Jean Piaget 2010). It should be noted though, that the great majority of the sample interviewed, worked in the tourism sector, had a family member linked to the
sector, or wished to work in tourism. This fact can justify to some extent, the generalized positive attitude towards tourism - employment is widely seen as the most direct pathway for Cape Verdeans to benefit from the tourism dynamics. In 2011, the total contribution of T&T
to the labour market, including jobs indirectly supported by the industry, was 39 percent of total employment - 76,500 jobs (WTTC 2012). According to the latest tourism supply
inventory, in 2011 about 5.178 people were employed by registered accommodation
19
establishments, representing a 28 percent increase in relation to 2010 (INE 2012). The inventory also showed that the great majority of employees were national citizens (91
percent) and 57 percent were female workers. These figures can translate tourism’s potential to alleviate poverty through employment generation, especially among Cape Verdean
women.
To conclude this section on sustainability, a small note on the curious case of Boa Vista is presented. Due to its peculiar geomorphology (extent dunes and coastline) this island is at the
same time: (i) one of the richest islands in terms of marine biodiversity, and therefore covered by the largest number of protected areas and ramsar wetlands; (ii) the key island for the
conservation of loggerhead turtle in the eastern Atlantic, and (iii) presently the country’s main tourism destination. Unfortunately, tourism development has caused some constraints that might affect the islands’ future environmental and social sustainability. The exponential
tourism growth has already produced some negative impacts such as increasing living costs (escalating prices for food, and housing), land speculation, emergence of informal settlements
(construction workers), pressure on scarce water resources, and increased foreign ownership of local resources (in this case mainly Italians). Moreover, this island where the number of international visitors exceeds the number of local residents, still struggles over lack of health
and utility infrastructures. This situation has been aggravated by the raise of immigration from other islands and African countries. An increase in social disparity due to tourism
development is also noted. While the top management posts are usually occupied by international experts, the majority of islanders and mainland African immigrants are assigned to low skilled temporary jobs.
3. Conclusion
As discussed in the introduction, although environment and poverty alleviation have emerged as a dominant focus both in development debates and tourism discussions, tourism’s potential
for bringing longer term sustainable benefits to the poor remains uncertain. By analysing the case of Cape Verde through the seven dimensions of the Sustainable Tourism Benchmarking
Tool, this paper showcased some barriers to the fulfilment of tourism’s role as a tool for sustainable development, and laid out some suggestions for enhancing opportunities for the poor through this sector.
The analysis showed that tourism development in Cape Verde has been focused mainly in the
coastal zones (sun, sand and sea tourism) with most accommodation facilities and tourist operators controlled by foreign-owned corporations leading to high vulnerabilities and substantial overseas leakage of tourism earnings. Evidence suggested that tourism makes a
substantial contribution to poverty alleviation, especially through its economic effects (income generation). However, there is a need to combine efforts to enhance inter-sectorial
linkages and local control, in order to ensure the long-term competitiveness and sustainability of this tourism destination.
Because sustainability is directly related to areas of public concern (natural and cultural assets), governments (local and national) should play a pro-active role in pushing the
sustainable tourism agenda forward, by promoting incentives, conditions and resources for
20
local community’s meaningful participation in the tourism sector. One can state that 2013 will be a turning point for Cape Verde’s sustainability agenda, as its main strategic
documents for the areas of tourism, poverty and environment will expire, creating, therefore, prospects for policy redesign. The emerging III Growth and Poverty Reduction Strategy
Paper, alongside the revision of the II National Environment Action Plan (2004-2014) and the National Tourism Strategic Plan (2010-2013), provide excellent opportunities for policy synergies, which can enhance tourism’s credential as a poverty alleviation and sustainable
development tool. As a concluding suggestion, a more detailed analysis of tourism’s current and potential impact on poverty reduction in Cape Verde needs to be carried out (e.g., pro-
poor value chain analysis), and key projects such as the Sustainable Tourism Public Partnership and Tourism Resource Inventory need to be revived.
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