The Economic Effects of Religious Tourism in Karbala‍
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By: Mohammed Riyad Kazim Supervised by: Lect. Yasmine Hatem Badid‍
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A) Local income: It is very difficult to identify the size of the city’s tourism income, as the statistics of the Central Statistical Organization do not consider the tourism sector as an independent sector within the applications of national accounts, but rather it has been integrated within the wholesale and retail trade sector, which makes it very difficult to separate between them. The importance of the city’s tourism income can be estimated at about 30-40% of the city’s total local income during the year 1989-1993, but on the scale of Iraq it does not exceed 0.30% (5) due to the neglect of tourism during the time of the former regime, but religious tourism has a promising future during the next few years. The first level of income generated from direct tourism activity will generate a series of new incomes that appear through the tourism investment multiplier. Due to the background interconnection between the tourism sector and other activities, new additional cycles in production and investments are achieved in all industries and branches located at the second and third levels, etc.‍
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Thus, the total income resulting from tourism activity is doubled according to the investment multiplier law, and the value of the tourism multiplier in Iraq during the nineties is estimated at 2.5 times (6)‍
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B) Job opportunities: Religious tourism has a role in creating job opportunities and increasing employment, especially religious tourism that depends on providing direct service. Since the religious tourism sector is intertwined with other sectors, the impact on generating job opportunities extends beyond the tourism sector. In this regard, we can refer to a global statistic that states that every hotel room generates 100% job opportunities in hotels and generates 75% in other tourism activities, which generates 100% in other sectors‍
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C) Developing infrastructure: Tourism also helps develop infrastructure because it meets the needs and desires of the increasing numbers of tourists, which requires the development and addition of new infrastructure. This can be done through foreign investments when Iran has advanced to establish infrastructure in the cities of Karbala and expand the investment base in them and activate economic activities such as markets, hotel services, housing, transportation, and two factories in Karbala to recycle waste and establish airports…etc.‍
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The expansion of religious tourism affects prices by raising them to higher levels since the increasing numbers of tourists represent a purchasing power that puts pressure on the available goods and services. The first indicators are the tendency of land and real estate prices in the city of Karbala towards a continuous increase compared to other Iraqi cities.‍
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D) Raising tax revenues: It is possible that tourism development in the city of Karbala leads to raising tax revenues because tourism is a factor generating taxes and fees. In order for tourism to serve the city community, part of these financial revenues should be used to develop tourism facilities and another part to develop the standard of living of citizens.‍
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[5] – Abdul Muttalib Mahmoud Al-Khawam, A Study in Tourism Investment and its Economic Dimensions with Special Reference to Iraq, Master’s Thesis, University of Baghdad, Baghdad, 1996.‍
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[6] – Muthanna Taha Al-Hawri, Ismail Muhammad Ali Al-Dabbagh, Economics of Travel and Tourism, Amman, Al-Warraq Foundation, 2001, p. 193.‍