The objective of the Tourism Equity Fund launched by the government yesterday – ‘to drive transformation in the tourism sector’ – runs the risk of obscuring the greater challenges of growing the sector and boosting job growth, the IRR has warned.
In a statement, the IRR notes: ‘There is undoubtedly a need for inclusivity in every area of the economy, but the critical objectives are growth and the creation of jobs. The government runs the risk of being tone deaf if it makes the mistake of emphasising ‘transformation’ in tourism at the expense of growth and jobs.’
It points out that the tourism sector is one that has been hardest hit by the Covid-19 pandemic and the subsequent lockdowns, with countries the world over sharply restricting international travel, and domestic regulations severely curtailing business activity.
‘Focusing on transforming rather than reviving the tourism sector will deflect attention from what is really needed – in the same way that the government’s decision last year to use the Broad Based Black Economic Empowerment (BBBEE) scorecard to determine the beneficiaries of the Covid-19 tourism relief fund was a regrettable and divisive response to an industry-wide crisis.
‘What the tourism sector needs is for the government to create an environment in which it can once again be a driving force in the economy, as it was prior to Covid-19, when it accounted for 8.2% of all economic activity in 2018. This means that the government has to stop Blatant Elite Enrichment (BEE), because it strangles productivity, kills businesses, and costs jobs. Moreover, it has failed to empower the vast majority of black South Africans, who are its intended beneficiaries. The only thing it transforms is the bank balances of politically connected elites.’
The IRR highlights President Ramaphosa’s own Economic Reconstruction and Recovery Plan as identifying tourism as one of the key priorities in bringing the economy back to life. The plan notes that ‘(the) tourism, cultural and creative industries were among the hardest hit by Covid-19. Accordingly, efforts aimed at ensuring these sectors’ recovery and growth will form an integral part of the overall reconstruction and recovery effort.’
For this to happen, the IRR argues, addressing the sector-wide crisis rather than merely ‘transformation’ must be the focus of the Tourism Equity Fund.
[Picture: Heinrich Botha from Pixabay]