1. UNIVERSIDADE DO PORTO, FACULDADE DE ECONOMIA
GLOBALIZATION AND TOURISM SECTOR
SUBMITTED TO : António Manuel Figueiredo
SUBMITTED BY : 060400009 Meltem Lale ÜNAL
060400013 Ali Onur ARISOY
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2. ABSTRACT
The main aim of this work is to introduce the interaction between the globalization process
and the tourism sector. By discussing this mutual relation, firsly we explain how the
globalization have to be understood and in which ways influences the tourism, afterwards
within the framework of these explanations, we will observe the position of Turkish Tourism
and its place in Turkish economy.
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3. CONTENTS
1. INTRODUCTION
2. GLOBALIZATION
2.1. TECHNOLOGY
2.2. ECONOMY
2.3. POLITICS
2.4. CULTURE
2.5. TERROR
3. THE EFFECTS OF GLOBALIZATION
3.1. THE INEQUALITY OF INCOME BETWEEN COUNTRIES
3.2. THE FLUCTUATION IN THE PRODUCTION MARKET
4. GLOBALIZATION AND TOURISM
5. THE IMPACT OF TOURISM TO THE ENVIRONMENT
5.1. POSITIVE IMPACTS
5.2. NEGATIVE IMPACTS
6. SUSTAINABLE TOURISM DEVELOPMENT
7. CASE STUDY: GLOBALIZATION AND TURKISH TOURISM
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4. 1) INTRODUCTION
In the end of 1970s, Turkey, like the other developing countries realised the weakness of
import-substitution strategy and began with a more open economic growth strategy. In 1980s,
Turkey began an fast reform process in most of the sectors of the economic system. This
process of reform which began with the liberlisation of external trade regime and financial
sector, reached to liberalisation of capital movements in the end of 1989, being a reform
which could change all the caractristics of the environement of policy determination.
Turkey, with policies that it maintained after 1980 ,gained a liberal economic image. These
years are also the years that the world economies also liberilized and opened to the world
market and generally these years can be designated like a rapid globalization period. One of
the most important developments in this period is the rapid growth of the world tourism. This
sector which develops with a very high acceleration, was creating new employment areas
furthermore was differentiating the flow of income transfers between countries.
Turkish tourism sector also with its attacts and developments began to have important
portions from this drawn. The investments done to Turkish tourism sector which passes today
10 billion dollars and the initiatives to this sector, is increasing each year. The simultaneus
apparence of this two trends, globalization and tourism, make observing their interaction
interesting and important. In this work we will emphasize mainly the influence of the period
of changes in the world economy to the Turkish tourism sector and its place in Turkish
economy.
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5. 2) GLOBALIZATION
Globalization is a process of changes which affects effectivement all phases of our lives from
economics to technology, from health to terorism. In other words, is a new world formation
tried to be established after the World War 2 and which is especially effective after 1980. The
main aim of this new world formation is to provide the countries and the people to live with
closer relationship.
And this can be obtained by taking up the barriers to increase the circulation of goods,
knowledge, services, capital and people in the world.
We catagorise the phases which are affected more by globalization in five:
2.1) Technology
Technology and globalization have a complemantary web, because of this there is a big
effect of technological developments to establish this new world formation. Globalization due
to the increasing colloboration and the opportunities of marketing helps the acceleration of the
technological development. Technology also forms the infrastructures of all the phases
affected by the globalization. New arms, credit cards, communication satellites and the other
developments also underlie the defencial, financial and cultural globalization.
2.2) Economy
The most important changes occure doubtless in economy. The liberal economies ;open to
external markets, decreasing the state effects with the initiatives of competiton and the private
entrepreneurs; were increasing rapidly in the world. The other important development was in
financial markets. When the barriers of the mouvments of the capital are taken off, many
funds circulating countires are formed. The other important relationship is the world trade
volume and the volume of the direct investments between counties reached to a very high
dimension.
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6. 2.3) Politics
When we look to the configuring the world poitics, we see important changes in the concepts
of “ independence” and “ dominance” . The contries now can not act with their decisions like
they want , as free as before. The balance formed in the world politics can affect the country's
internal politics also the country's decisions. Also the international organizations and
organisms are the importants actors of the globalize world. We see that in the scene of the
world politics, with the national countries there are also United Nations, European Union or
North Atlantic Treaty Organization. The other change is the achievement of important roles of
the non-governemental organizations in the world politics. Greenpeace or the similar
organziations can change the decisions of the countries.
2.4) Culture
Globalizaiton, in one way, give opportunies to every cultures to open to the world and to be a
part of the world culture, in another way also provide the dominance of one popular culture –
generally is American Culture- . It provides Indian, Africain culturas more awareness but
these cultures only stay like a sub cultures under effets of the west culture with one type of
food, one type of clothing.
2.5) Terror
Terror is not a instrument brought by the globalization, but under the opportunities and the
conditions that it provided , the terror entered a process of regeneration. Besides the local
terror organisms which organise emphasis activities because of several demands whole over
the world, with globalization we are meeting with a new structure of terror consist of
members in different countries, with demands of a big number of companies and countries
and activities can be realised in whole over the world. The relation of this process with
globalization is based on two reasons. The first one is the creation of tensions and iniquities
by globalization. The people who suffer from this process stay helpless and are far away from
the devices they can search for their rights and they have the rich countries, the companies of
the rich countires and the civils who stay quiet to this process as a target because they see that
they are responsible of this process.
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7. The second reason is with the liberalization of the circulation of the goods, the capital and the
knowledge, the terror organisms can have the money and the ammunition easier. Also
internet, satellite phones which provide communication faster and cheaper, help the education,
the communication and the synergy of the terror organisms' members.
3) THE EFFECTS OF THE GLOBALIZATION
3.1) The Inequality of Income Between Countries
Globalization corrupts the distrubution of incomes in countries and also between
countries.
Figure 1) The Inequality of Income between Countries
Source: The World Bank
The pink line shows the 20 richest countries and the blue line shows the 20 poorest countires.
The vertical part of the graph shows the per capita income ($) .
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8. From 1960s, like we see in the table, the per capita income in 20 richest countries reached
16000$ with triplicating. By the way, there is not a important change in the increase of per
capita incomes in 20 poorest countries.
At the result of this, the bluff between 20 richest countries avarage income and 20 poorest
countries avarage income reached 15 multiple by triplating the increase of the avarage income
in 20 richest countries. The main reason of this change is the poorest countires like Afrika and
the East Asia don't have the infrastructure and the capital to profit from these benefactions of
globalization. In these regions, apart from the services like internet or the telephone; the basic
needs like canalization, the drinking water or healthy alimentation not even be provided.
3.2) The Fluctuation in the Production Market
The powers in the production theory are the demand and the supply. The equilibrium in the
market generally considered the intersection of these powers. The determination of salaries in
the labor market also consider this intersection point. The labor suppy of the workers is
direcly proprtional with prices but the demand of the employer is inversly proportional with
prices. The intersection of these two curves give us the equilibrium price in the market.
The effect of globalization on this relation is that it gets the capital fluid. The possibility that
it can be transfered to beyond of borders is an advantage for the capital. Because of this, the
supply in labor market is more elastic in markets; if not there is a threat that the investments
tend to another market. Under these conditions instead of the equal distrubution of the
additional tax to production and wages, these will be charged by the employees.
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9. 4) GLOBALIZATION AND TOURISM
Tourism is one of the most important areas that globalization affects. Even we can say that the
tourism sector is established with globalization. Also we can say that tourism sector which
grow rapidly cause results supporting the globalization. Besides it provide to meet different
cultures, also we observe important changes in the countries which try to attract tourists with
aim to support the tourists demands and needs.
Generally we can observe the effects of globalization on tourism in three captions:
1) The world economies which liberalized, the cultural and political relations increasing
between countries and developing transport and communication , in one side were
increasing the interests' of people to new countries and also was facilitating the way to
reach to new countries.
The curiosity to the place where was passing a film on cinemas, sport tournaments,
festivals, conferences and siilar activities attract people to new georaphies. The fast
and cheap opportunities ways of communication like mobile phones, internet of the
global world provide reachable the most far regions of the world. Also, the increasing
relations between countires facilitated to pass beyond borders. Today, many countries
offer easiness to tourists to entering in countries , also they encourage tourism by no
demanding visa.
2) One of the important returns of the liberlisation in world economy was the perceptible
process of growth. In global conditions, the economic growth attend faster growing
behaviour. The effect of globalization doesn't have source from the increase of the
production but the increase of the trade.
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10. Figure 2: The Twin Globalization Periods
Source: The World Bank
Like we see in the graph above, the variables that we can consider the indicators of
globalization, the size of the world trade and the quantity of foreign capital entering in
developing countries, with their incresing also there had been an increase in world economy
and accordingly the real per capita income. The increase of the welfare of individuals, played
an important role in grow and development of the world tourism.
3) The other effect of globalization in tourism sector emanate that it produce the
inequality of incomes between countries. Undergoing a change of countries in the world in
last 50 years, in other words, the rich more rich and the poor more poor, caused a flow from
rich countries to poor countries. Particulary, people who live in USA, Europe and Japan; the
fact that their level of income is very higher comparing with other countries' people offer
them very cheap tourism opportunities. It wasn't astonishing with the increase of the bluff
between countries, is brought a tourism from rich countries to poor countries.
5) THE IMPACTS OF TOURISM TO THE ENVİRONMENT
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11. One of the most important sector of today’s, tourism, has lots of impacts,such as;
economic,social and cultural impacts.Sometimes,this impacts operate between each
other.That’s why it is so difficult to search generally.First of all, we can observe the positive
impacts of tourism.
5.1 Positive Impacts of Tourism
Economic
We can certainly say that;tourism has one of the most important source of economy.We can
see it’s big impacts on economy.
- Strengthen the economy by bringing in foreign currency,attracting touristic investment and
being as a tax.And this impact also creates to raise employment in the short-run with low
costs and helps to be removed the interregional imbalance.
Phsical
- Help to protect the natural and structural sources.It also helps to enforce these
resources
- Provide to access to the natural resources and quality standards which are accepted in
the international level
- Foster to the quality physical enviroment arrangement that can be achieved by the
local people
- Create to the opportunity for using the unusable sources from the past cenuries such
as; railroad,harbor,shelter,…etc.
Socio – Economic
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12. - Form to the economic value of composition that hasn’t the direct contrubition from the
economic side to the local people
- Create opportunity for small businesses
- Create encouragement for other promoter activity
- Help to increase the income of local people and their life standards
- Increase local people’s life quality by presenting the use of restaurant,sport
organization,…etc to the local people.
Cultural – Educational
- Appreciate the value of art,festival and theatre’s quality by supporting activity and
creating sources for sustaining
- Create the market for local art and handwork
- Enforce some of the region’s local identity and provide an increasing of local honour.
5.2 Negative Impacts of Tourism
Economic
- Country sources can be created the opposite side effects to economy by the currency
loss and profit transfers.For example, and increasing the price of land and allocating of
limited resources for the touristic profit can increase the alternative costs and cause “
colonisation” by the allocation of foreign capital.
- The dependenceto abroad,an artificial price increasing and capital condensation will
be the main economic problems.
Physical
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13. - Establishing of airport,marina and other holiday complex erodes the earthen
- The excess visitor flow can damage the structure of natural enviroment and creates the
excess of voice and garbage
- Water and earthen sources are orientated by the situation trend of tourism
improvement
Socio – Economic
- Tourism becomes the enviroment as a commercial tool
- The imports of good that depends on the tendency of tourist consumption
provides,transferring the local sources of this region to the abroad.
- Create unhealthy market and causes the increasing of blame
- Cause to vanish the traditional worths
- Temporary immigration that the result of tourism,can cause the negligence of
agriculuture.
Cultural – Educational
- Foster to reform of local worths and art builds for going profit
- The transformation of culuture to tourist attraction and misappropriating of natural
hospitality can damage to the local worths and local identity of region.
6– SUSTAINABLE TOURISM DEVELOPMENT
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14. Sustainable Tourism Development is the relationship between the owner of the house
in tourism sector and tourists that meets the needs of present without compromising
the ability genertions to meet their own needs .
If and only if ,sustainability in the tourism should be with long-term strategies.Thus,it
can be more effective and meaningless.Other wise,next generation will not benefit
from the roots of tourism.The entrepreneurs who correlate the tourism with the green
elements can gain around from the tourism.
There are some principles of sustainable tourism.These are;
- Enviromental protection as an integral component of economic development
- Public participation;that means we all have responsibility for sharing a role to play
- Inter - generational equity, social justice and poverty abatement
- Dealing carefully with risk and uncertainity
- Accountability about setting clear standards, ensuring monitoring and enforcement
In principle,there are lots of people to support sustaiablity. But in techincs,it has been
difficult to success. Because it is so complex and general.
SUSTAINABLE DEVELOPMENT
Sustainable Tourism is a tourism which leads to management of all resources in such a
way that economics, and social needs can be filled while maintaining cultural integrity,
ecological process and life support system. We can summarize sustainability in 4
categories. Economic, Cultural, Community and Ecological Sustainability.
Economic Sustainability
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15. - Provide financial incentives for businesses to adopt sustainability principles
- Promote among clients an ethical and environmentally aware behaviour
- Use internationally acceptance and reviewed guidelines for certification and training
- Conduce some of the income generated to assist in training,product development and
ethical marleting
Cultural Sustainability
- Educate tourist about preferred and acceptable behaviour
- Educate tourism industry about preferred and acceptable behaviour
- Protect cultural diversity
- Education and training programs to improve and manage legacy and natural resources
should be established.
Community Sustainability
- Improve local human resources capacity
- Provide financial incentives for local businesses to enter tourism
- Tourism should provide quality employment to community residents
- Community should maintain control over tourism development
Ecological Sustainability
- Monitor and observe research on the actual impacts of tourism
- Promote responsible tourism behaviour
- Provide tourism in protected areas such as; national parks
- Identfy acceptable behaviour among tourists
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16. 7- CASE STUDY
GLOBALISATION AND TURKISH TOURISM
Turkey, which is developing or less developed country, entered the important process of
globalization since 1980’s.Tho most important part of this process is “opening of trade to the
world” and “ passing to the market economy.” But the process of passing to the market
economy is really difficult in less developed countries such as Turkey, Argentina ,…,etc.
Globalization has some positive and negative impacts like any other concepts. In economic
side, it has positive some positive impacts. For instance, an increase in financial resources, a
rise in competition in the world and producing more and quality goods with less costs. Also
globalization has negative impacts.
For example, in global area, local producer doesn’t stand up to hard competition and can face
to disappear from the market. And also, in the process of globalization, the country that hasn’t
finished to pass to the market economy, like Turkey, can not benefit from this positive
impacts. If they want to gain some benefits from globalization, they will have to take some
prevention about their negative impacts. At this point, the most important problem that
country has to be faced is” balance of payment deficit.” That means, export is smaller than
import. The country can faced to devaluation by the result of balance of payment deficit.
Above, we talked about the globalization around the developing or less developed countries.
After these information , we can talk about the Turkish Tourism in Global Area.
Tourism is one of the most important sector for the less-developed countries. That’s why the
World Bank and IMF always recommend to the less developed countries for improving this
ector and due to this, country can faced their exchange needs. Tourism has 300 million
capacity in the world. And 65% of this capacity is owned by the less-developed countries.The
income of the tourism signs 10% of export capacity of these countries.
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17. Tourism has been an important place since 1980’s in Turkey. In 1982,”Tourism Stimulation
Law” was accepted by the government. With this law, the stimulated the tourism to the
Turkey. The share of tourism in our GDP was 0.8% in 1983 and in 1984, it was 2 times bigger
than 1983 which is 1.7%. In this process, this share increased till now.
In 2001,the share of tourism in export was 7.2% in 1983 and in 1984 it increased such as
11.8% and 18.6% in 1985.In 2002, this share increased till 33.9%.As we can see ,the share of
tourism in GDP and export increased continuously. According to some researchers that, if the
income, that comes from tourism, forms 5% or more of GNP, this economy partly will
depend on the tourism.In recent years, Turkey’s situation is like that.
The most important yield of tourism is admittedly to provide exchange entrance. According to
Foreign Trade Balance side, an increase of net exports has 2 ways;
- Increase export
- Decrease import
The advantage of tourism can be seen at this time. When we compare tourism sector with the
others, we can see the advantages and facilities of tourism sector. Because, country can
achieve the exchange in a short time with less source and with less efforts. That’s why,lots of
countries demand the tourism sector for meeting their exchange needs.
In addition, tourism sector has some opportunities for creating employment. The share of
tourism in the total employment was increased from 3.56% to 5.10% in the period of 1993-
2001.In the current transaction balance side, tourism has an important role .In this figure. We
can see the share in Current Transaction side. Between 1984-2004 current transaction gives
deficit. The deficit in the current transaction balance without tourism income, raised 5 times
more in 2002,in 2003 nearly as 2.5 times more and in the first 6 months of 2004 raised 1.4
times more.
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18. We show the other economic indicator that is called; “The Rate of Closing Foreign Trade
Deficit with Tourism Income.” According to this figure, the tourism income closed the big
part of foreign trade deficit. In recent years, this rate increased in 2002 and 2003,it reached till
79%.
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20. 8) CONCLUSION
During the work, we can see that, globalization, which has negative and positive impacts,
shows its positive effects on tourism and provides an improuvment in tourism.
But globalization is not just only reason of the improuvment of the tourism. We need to assess
in the whole cycle. In this absolute, tourism is not also just only reason for closing current
deficit and sustainable development. Governors should consider that, there are only other
sectors such as service, industry etc that provide efficient economy with the tourism sector.
Right along with these informations, Turkey needs to make some little regulations in the
tourism sectorto remove the negative impacts, also Turkey should not depend upon the
tourism, the country must improuve the other sectors.
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21. References:
• http://www.tcmb.gov.tr/
Last Access: 25/06/2007
• http://www.worldbank.org/
Last Access: 25/06/2007
• http://en.wikipedia.org/wiki/Globalization
Last Access: 25/06/2007
• http://www.radikal.com.tr/haber.php?haberno=3277&tarih=24/05/2001
Last Access: 25/06/2007
• http://www.tcmb.gov.tr/yeni/evds/yayin/kitaplar/kuresel.pdf
Last Access: 25/06/2007
• www.ceterisparibus.net
Last Access: 25/06/2007
• http://www.ekodialog.com/
Last Access: 25/06/2007
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