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The effects of tourism on the economy of Cancun, Mexico
Introduction.
The market conditions of economies based largely on tourism are dynamic to say the least and Cancun, Mexico is no different. There are many factors that come together to create such a vibrant economic fabric, and indeed there are many more issues that come about because of the characteristics of tourism based economies. Some of the issues needed to be examined are the effects of the national government, Multinational Corporations (MNCs), and Non-Governmental Organizations (NGO) such as the World Bank (WB) and the World Trade Organization (WTO). Long standing and established economic sectors are also greatly affected when a major tourist destination such as Cancun develops in an area. The various environmental and cultural aspects of the region that attract the foreign investments and tourists are also integrally related to the economic stability of the region.
Traditional food market.
MNCs, NGOs, and the National Government.
The involvement of the government, MNCs or NGOs is not always good and many times the various policies developed serve to benefit some people while it leaves others in ruin. The Mexican government initial plan and direct goal was to develop tourism in the rural region rich in cultural and environmental attractions, and as an added bonus to stimulate the other economic sectors in the area (Kandelaars 5). However, some plans do not turn out the way they were expected to. In Cancun and much of the surrounding Yucatan peninsula the developing tourist industry has greatly decreased the economic standings of the other sectors; namely agriculture and fisheries. For example, with the creation of NAFTA and other trading agreements it has become cheaper for large hotels and businesses to purchase their food from foreign suppliers. This cripples the native farmers and forces some of the smaller family farmers to abandon their farms and move to urbanized locations in search of work.
Corn farmers in Mexico.
International investments and involvement are no different. Much of the money coming into the area to build up the tourism sector leaves in exactly the same way that it came in. That is to say that the foreign investors gain all the profits from the tourism and the local population is left wanting. Also, many loans and agreements between international organizations and Mexico come with various mandates that could hurt the local population at the same time that it helps international investors. One example of this is a recent World Bank loan that mandates water privatization and cost recovery (Kelsey Online). This privatization which on one hand will increase profits for the local water company, which is 50 per cent owned by Suez of France, may harm the local population (Kelsey Online). Locals may not be able to pay for the water or in some cases are not sold water because they do not have proper deeds to their property because they have been “lost” by the government (Kelsey Online).
Direct Effect of Tourism on the Economy.
Hotel construction in Cancun.
Economic Positives.
With the development of large tourist destinations there grows a possibility of a higher standard of living; more jobs being created which will not only keep people in the region but also attract people from other parts of the country as well. Women have a greater chance to find good work and tourism may diversify the economy. In Cancun you can see much of this happening with the population boom and the number of economic sectors increasing from just agriculture and fisheries to local services and construction. In a study done in 1989 the number of people employed solely in tourism amounted to 1.3 million people (Kandelaars 5).
Traditional slash and burn agriculture.
Economic Negatives.
A major negative economic change is the replacement and even loss of traditional jobs to tourism jobs. When tourism or any other sector becomes the primary focus of the economy for any region the other sectors are not able to grow and develop as well as well as they could. This event is known as the Dutch disease (Kandelaars 7). With out other sectors to lean on the economy becomes a mono-economic structure and is extremely vulnerable to economic, natural and social disasters.
World Economic System and Natural Disasters.
There are many uncontrollable factors that also either produce times of plenty or hardship for economies based on tourism. For example, economic recessions affecting the entire world will hurt Cancun’s economy greatly. When there is an economic recession the first things to go are luxury items and that includes trips to tropical paradises. Natural disasters such as hurricanes can also decrease profits. The destruction of property, the beaches and the surrounding areas and can turn interested tourists and prospective investors away.
References
Kandelaars, Patricia P.A.A.H. “A Dynamic Simulation Model of Tourism and Environment in the Yucatan Peninsula,” Pg. 1-13.
Kelsey, Jane. Our World is Not For Sale. Stop corporate globalization. “The WTO Should Take a Look in Cancun’s Back Yard,” 9 September 2003. http://www.ourworldisnotforsale.org/showarticle.asp?search=255. 7 April 2008.
Menotti, Victor. International Forum on Globalization. “Towards a ‘Plan Cancun’…Key WTO Issues for Mexico.” http://www.ifg.org/analysis/wto/cancun/plan_cancun.htm. 7 April 2008.
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