Northern Areas, if properly developed, can attract
tourists from all over the world
From Shamim Ahmed Rizvi,
Islamabad
July 16 - 22 , 2001
The new tourism policy announced by the Federal
Minister for Culture and Tourism reflected the thinking of President
Musharraf, which he had expounded a few months back while addressing
an international gathering at the annual silk route festival combined
with Gilgit Trade Fair. General Musharraf had observed that Northern
Areas, if properly developed, can attract tourists from all over the
world as it offered the world most beautiful scenic spots.
He had announced that to harness the tourism
potential of the area, his government was focusing on the speedy
development of the areas. A network of Road Linking Chitral, Gilgit,
Astoor, Hunza, Skardu and Chillas will be ready within the next 2
years while new tourism policy would announce attractive incentives to
construct motels and other infrastructure for tourists. Development of
Tourism Industry in Pakistan has a big potential, Gen. Musharraf had
observed.
The new tourism policy has unfolded certain new
directions which were hitherto not given due attention, in the
promotional efforts to attract foreign tourists and thereby to
meaningfully develop this important source of foreign exchange inflows
into the country. According to the projections in the new policy, the
minister expected 6.5 percent annual growth in tourist arrivals and
subject to the implementation of the newly charted strategy, foreign
exchange earnings from this source by the year 2005 should reach $800
million annually as compared to the present estimates of about $200
million.
The policy envisages a number of initiatives,
including holding of car and motorcycle rallies in the Northern Areas
of the country, one-window clearance of permission and arrangements
for the intending foreign mountaineers, competition in the rock
climbing, construction of road leading to scenic spots and historical
monuments, building of tourist resorts, hotels and motels, allowing
foreign tourists use of existing rest houses and bungalows owned by
federal and provincial governments and autonomous bodies, construction
of washrooms at petrol stations on highways in addition to similar
facilities at appropriate distances on the highways, in addition to
similar facilities at appropriate distances on the highways, promoting
homecoming tours by overseas Pakistanis, encouraging greater
participation of the private sector in tourist development by offering
incentives for investment, improving the quality and functions of
tourist guides within the framework of the Pakistan Tourism
Development Corporation, in addition to larger representation of the
private sector on the board of directors of this corporation, etc.
Additionally, the programme also envisages a wide
publicity campaign through preparation of informative brochures and
documentaries for distribution to foreign missions abroad. The
publicity material would also include a calendar of national events
such as national horse and cattle show and other occasions of interest
in Pakistan for foreign tourists. It is proposed that package tours
would be encouraged by allowing certain incentives to travelling
agencies and others. The incentives mentioned in the policy statement
propose income tax relief to tour operators who sponsor a minimum of
500 tourists during the course of a calendar year.
However, the new policy does not mention any
details of fiscal incentives that might be permissible to private
investors in the tourist development process. It may be mentioned here
that the previous policy had allowed industry status to tourism
development activity in order to make available such fiscal incentives
to investors in tourism facilities as are available to the industrial
sector. It is not clear whether such a treatment will continue to be
available to investors in the tourism sector. In fact, the new policy
is silent on fiscal or other incentives for the intending private
investors in this sector although the development of adequate
infrastructure facilities would alone ensure successful progress in
the promotion of tourism in the country. The policy statement has
indicated heavy reliance on the private investor's participation in
the development of first class transport facilities, tourist resorts,
hotels and motels of different sizes for foreign tourists. At the same
time all weather roads would have to be constructed in different hilly
areas of the north in order to facilitate visits from foreign
tourists. Investment for this purpose would have to be attracted from
the private sector through necessary fiscal incentives. When
investment activity in the country as a whole remains at low ebb and
tourism development activities carry a comparatively high risk,
special incentives and reliefs in some forms would be necessary to
organize an active touris industry. Additionally long term loan
facilities at a reasonable rate of mark-up, preferably comparable with
export refinance, would have to be given due consideration. It is
common knowledge that all fixed capital investment consists of equity
investment to the extent of 40 percent and debt capital to the extent
of 60 percent. As such, liberal loan financing for this sector can
hardly be overlooked.
Preferably, a specialised banking institution may
be promoted jointly by the public sector land private promoters for
exclusively catering for the development of tourism in the country.
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