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The Importance of the Tourism Industry for Pakistan’s Economy

The Importance of the Tourism Industry for Pakistan’s Economy

Eamaan Arain


Pakistan is a geographically and ethnically diverse country that has much to offer; from natural beauty, historical heritage to cultural diversity. It is home to mountainous regions, rivers, glaciers, as well as deserts. Pakistan has huge potential to be a famous tourist country and benefit from the social and economic impacts of tourism. In fact, Pakistan has been ranked the top destination out of 20 other adventure travel destinations for 2018 by the British Backpacker Society.

The beautiful landscapes of Pakistan

Here are just a few examples of the beautiful landscapes you can witness in Pakistan:




Positive Impacts of Tourism Development

Source: United Nations SCTD

Source: United Nations SCTD

Because of the abundance of natural beauty and cultural heritage in Pakistan, the country has the potential to develop huge economic and social gains that arise from the result of development of this industry.

1)Economic Development

The improvement of a nation’s economic outlook through tourism is improved due to the fact that Travel & Tourism is an export sector, attracting foreign spending to a country in the form of international visitors. Hence, tourism growth attracts foreign exchange. Moreover, it helps create job opportunities.

Source: WMSRDC

Source: WMSRDC

There are three ways it can generate employment: direct, indirect, or induced employment.

In direct employment, the total spending by visitors which precisely support tourism activity results in the creation of new jobs. In indirect employment, the supply sector of tourism creates opportunities within itself rather than directly being created from tourism activity. Induced employment is brought about when the local people expend the money received from tourism which in turn creates jobs as a result of the tourism expenditure. Also, Tourism has a positive effect on the economic activity of the nation and can improve the economic condition and GDP of Pakistan. According to a report by the World Travel and Tourism Council, Travel & Tourism alone generated US$7.6 trillion (10.2% of global GDP) and 292 million jobs in 2016, equivalent to 1 in 10 jobs in the global economy. The sector accounted for 6.6% of total global exports and almost 30% of total global service exports.

2) Social Improvement

Tourism also has a constructive effect on the poor community of a country. Poverty rates are exceptionally high in Pakistan. According to an article by Dawn News published in 2016, the Poverty rate of Pakistan suggests that around one third of Pakistani’s are poor. The poverty line estimates the number of poor households at 6.8 million to 7.6 million.

Source: Thinkstock

Source: Thinkstock

The tourism sector is quite labor intensive and it has a high proportion of unskilled or semi-skilled workers; hence, poverty is reduced directly in the form of wages of those who directly participate in the tourism sector. The tourism value chain also includes food, transportation, furniture, and other industries that cater to tourism activities. Another way tourism helps the poor is that tourism has a pivotal role in planning for and responding to natural disasters that have devastating effect on the poor communities of the country.

What needs to be done?

Pakistan needs to go a long way to fully benefit from the advantages of tourism. As shown by the following diagram, The 2017 World Economic forum’s Travel and Tourism Competitiveness Report (TTCR) ranked Pakistan 124th out of 136 countries based on several factors.

Most of the places in Pakistan are hard to access and have poor infrastructure. In fact, some of the roads (especially those located in the northern areas) are one of the most dangerous roads in the world. This acts as a deterrent for those who want to visit Pakistan. In addition to this, Pakistan had been suffering from political instability and security challenges in the previous few years which have had a negative impact on Pakistan’s tourism environment.

Given the economic and social benefits of tourism, investment in this sector has the potential to greatly increase the economic activity of Pakistan overall. Government sponsorship of new businesses in the tourist market; improvement of infrastructure to meet international standards; advertising campaigns that cater to attract tourists and the development of holiday packages tailored to explore the greater regions of the country is greatly encouraged to significantly boost the economy of Pakistan.


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