Why do we call for tourism investment?

Ahmed Majed Badawi Hamza

Supervisor: Prof. Dr. Abdul Ali Kazim Al-Fatlawi

By answering this question, we will reach the importance of tourism investment:
The issue of interest in tourism investment raises contradictions among economists, some of whom take a negative position on the opinions of this type of investment, and the opposite, as some economists who oppose tourism go to the fact that tourism represents a consumer sector more than it is a productive one and that for tourism to flourish in a country, it must have a large productive capacity to produce consumer energies. Since developing countries – in particular – are characterized by weak internal demand, it is not justified to bring in other consumers from abroad (tourists) to increase this demand as long as the production itself is weak. Its costs are high, and sometimes, it needs government support to provide goods and services at prices that suit those with limited incomes, the majority of the developing population. These opponents conclude that it is necessary to define the strategic role of tourism in developing countries on the basis that it is an effective sector in the short term to compensate for some of the foreign currencies that the country needs, and not in the long term, as it is a productive sector that constitutes an important part of the national economy, and tourism can be viewed in the long term if we can develop production capacities to the extent that allows covering internal demand with a production surplus that can be exported. Other economists who oppose tourism argue that tourism in developing countries may represent a negative value if we subtract all the terms of the imported content text and production requirements from the total tourism income to extract the net value.https://uomustansiriyah.edu.iq › …PPT
The researcher believes that responding to these opponents is considered in this place to achieve two goals, as the response here proves the opposite of the ideas that these opponents carry. At the same time, I show the extent of the importance of tourism investment as follows:
• We, as tourism economists, do not call for tourism investment in the tourism sector without investing in other economic sectors, and we thus reject one-sided development and call for the establishment of planned and balanced economic investments for all economic sectors, including the tourism sector.

• The tourism industry is characterized by its dense sectoral connections with other economic sectors, and accordingly, tourism does not only affect tourism activities, but its impact extends to the branches of the national economy.
Thus, the effects of tourism knock on the doors of most projects and economic sectors of the national economy, which indicates the importance of this type of investment.
• Developing countries are characterized by the existence of a vicious circle (Poverty circle), and to break this circle, economists agree on the necessity of injecting (financing) into the domestic market from abroad, meaning that new financing elements must enter from outside this circle and in considerable quantities to break one of the links in this chain. Tourism investments in the tourism sector, as an active sector with dense sectoral interconnections, can move the economic cycle and break the poverty chain from the side of low income or low demand and thus allow activation from abroad, which results in the activation of various productive sectors. (Abbas, 2016)