The hallmark of most first world nations is their ability to turn everything at their disposal to an economic opportunity which will further boost their GDP. Natural resources play a significant role in the GDP of a country. However, what happens when a country is not rich in natural resources? For many small countries with little natural resources, tourism can be a great source of economic development and growth.
Singapore, Asia’s giant, which ranks quite low in cultural and natural resources looks to tourism and other forms of revenue generation as its primary constituents for economic growth. Ranked 11th in the world and 2nd in Asia (to Japan), Singapore has one of the most developed and organized tourist packages in the world. Singapore, in 2016 alone, attracted over three times the country’s population from all over the world in tourism.
Singapore, in the 1970s, budgeted about $1 billion to developing the tourism industry. It is call the Tourism Product Development Plan. It is design to maintain and preserve Singapore’s historic districts, such as Chinatown, Little India, and Arab Street. This project is done in the projection of the impact it will have on the economy in years to come. They were not wrong; tourism has grown to have major impacts on the country’s economy.
In recent times, tourism in Singapore has caused visible effects on the minor and major aspects of the economy, in sales, which leads to profit which, in turn, serves as a source of income for individuals and the country as a whole.
Tourism has many subsets that boost the economy and boosts the country’s yearly GDP.
The Subsets of Tourism in Singapore
Exportation and its Contributions to Singapore’s GDP
Traveling is a tricky inseparable part of tourism. Traveling to and from the country contributes immensely to the economy. It serves as a great medium for exportation as well. According to the World Travel and Tourism Council, WTTC, records in 2014, travel and tourism in Singapore led to about $18.9 billion worth of exports. This constituted of 14% of service exports and 3.3% of total exports.
Exports generated from tourism has seen significant expansion over the years. There has been a 276% increase in exports between the year 2000 and 2014 which is more than that received from other sectors of the economy.
Employment, Tourism and the Singaporean Economy
Either directly or indirectly, tourism is probably the most important contributor to the employment sector. Jobs creation everywhere as a result of tourism. Direct jobs, like in the travel sector, hospitality and similar services generate income by the day. This is possible because it is generated with every new tourist that comes into the country.
The WTTC records that as of 2014, for every direct job created in the sector, an indirect job was also created. This makes the tourism sector one of highest contributors to national employment. As the kind of linkage of direct to indirect jobs is higher than that of the educational and agricultural sector. These are the other two sectors with high employment rates. Tourism creates about 11.5% in employment, both directly and indirectly. In 2014, about 4.4 million jobs (either directly or indirectly) where created. In a country of 5.75 million, this is a significant figure in job creation bringing unemployment rates to a bare minimum about 2.2% recorded that year.
This sector alone produces 12 times more jobs than the financial sector.
Factoring in the 0.53 permanent residents and the 1.63 million non residents living in the country, the employment rates of 4.4 million plays a significant role in the country’s economy.
The GDP generated directly from the tourism industry has increased by about 128% since 1995contributing the largest to the general economy as Singapore recorded about 168% increase in its GDP for the total economy over the same period.
Annually, the sector provides about 4% of the actual GDP to the country.
Tourism opens up the country for exploration and attracts investment opportunities from all over the world. Tourism also aids and enhances the economy.
The Singapore Tourism Board (STB), the body in charge of tourism in the country, has made it’s point of duty to remain a significant contributor to the economy and GDP. They keep this mandate by remaining innovative, carrying out intensive planning and investigation to discover new aspects. This is to include in their portfolio forging partnerships with other important sectors, government and individuals.
The organization seek said from the citizens of the country as a lack of cooperation from them would lead to huge setbacks in the sector.
Established in 1964, the STB, then called the Singapore Tourism Promotion Board (STPB), was formed by the government. This is because they had already deduced the importance tourism would provide to the economy.
The STB has moved from just promotions and marketing to full scale establishment of the whole country as a hub. Both for individuals and companies.
The board and the country by extension have moved. From having an initial staff of 25 and welcoming about 91 tourists annually. To now having thousands of people on staff and welcoming three times the country’s population annually.
Significance of tourism
The significance of it to the country’s economy cannot be overemphasized emphasized. Projecting into the future, Singapore will only get much more revenue and job creation from tourism. It is no wonder the government start a body and invest money in this sector.
The rapid growth in the economy is not only attributed to the tourism industry. The service, education (especially from international students), and banking sector also contributed as well. Additionally, the admirable political stability in Singapore is also one of the reasons why the country is rich. If the government continues to maintain its stability and regulate the economy in the most favorable ways possible, there is no telling how productive the country will be in the future.
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