MAINSTREAMING TOURISM FOR RURAL POVERTY ALLEVIATION: A CASE IN PENARIK, TERENGGANU, MALAYSIA World Ecotourism Conference 8 – 11 July 2010 Kuala Lumpur Convention Centre By: Norhazliza Abd Halim Phd candidate, University of Tasmania, Australia Lecturer, Universiti Teknologi Malaysia

BACKGROUND “ Tourism can be used way of addressing poverty, not as a panacea but as a useful tool of development and poverty alleviation especially in developing countries ” (Christie, 2002; Jamieson, Goodwin, Edmunds, 2004) Tourism’s potential for being pro-poor lies in four main areas: Tourism is a diverse industry - increases the scope for wide participation The customer comes to the product - provides considerable opportunities for linkages Tourism is highly dependent upon natural capital - assets of the poor Tourism can be more labour intensive - higher proportion of tourism benefits. (Ashley, Roe and Goodwin, 2001)

KEY CONCEPTS Who is most affected by Rural Poverty? Those who live in remote areas, have higher child/adult ratios, work in insecure and low-income jobs and belong to ethnic minorities. Most rural poor are smallholder farmers who live in low-fertility regions and are dependent on uncertain rainfall. Their survival depends on subsistence crops, and sometimes on livestock. (IFAD, 2001) Approach to link tourism with poverty alleviation Pro Poor Tourism: lead by Overseas Development Institute in late 1990s “tourism that results in increased net benefits for the poor” (Ashley, Roe, & Goodwin, 2001) Sustainable Tourism for Eliminating Poverty (ST~EP): lead by UNWTO, supported by UNCTAD in 2002 “…will help to promote socially, economically and ecologically sustainable tourism, aimed at alleviating poverty and bringing jobs to the people…” (UNWTO, 2002)

PPT / ST~EP 1 2 3 1999, Pro-poor tourism was put on the agenda … It is not a new kind of tourism product but an approach to tourism which focuses on ‘tilting’ the cake at the micro, meso and macro levels towards the poor rather than expanding the cake. (Sofield, De Lacy, Lipman & Daugherty, 2004) A different way of doing business, not just philanthropy. (Ashley, Nyathi, & Haysom, 2005) Tourism could be pro poor And it could be made more pro poor PPT is an approach that can be applied to any tourism. It is not a ‘niche` 1 2 3 (Source: Ashley & Harrison, 2006) How tourism can alleviate the rural poverty? (Especially in Malaysia context)

The Fact… As many as 75% of the world’s poor live in rural areas (IFAD, 2001:15) Poverty rates remain the highest in the predominantly rural areas of Malaysia - 70.6% - based on Poverty Line Income (PLI) of RM657 per month (Government of Malaysia, 2006) Top tourism destinations, particularly in developing countries, include national parks, wilderness areas, mountains, lakes, and cultural sites, most of which are generally rural. As the 2nd largest economic contributor to the Malaysian economy, tourism has become the priority tool to energize the rural economy. Pro-poor tourism is still a relatively new phenomenon in Malaysia, although certain elements of pro-poor tourism may be observed in the tourism developments.

The Challenge… Pro-poor tourism remains predominantly at the micro level – current interventions cannot deliver impacts at a significant scale – tourism for poverty alleviation should be expanded and applicable in mainstream (mass) tourism. The biggest challenge is to ‘mainstream’ PPT so that it is a business approach across the industry, rather than a niche market. How to mainstreaming poverty alleviation through Tourism? (In the context of Rural Poverty)

Why Mainstreaming ?… PPT will contribute little to poverty alleviation unless it is mainstreamed (Roe, 2006) Mainstreaming: ensure that sustainable tourism development is included in wider poverty alleviation programmes. Include poverty alleviation measures within overall strategies for the sustainable development of tourism. PPT should be on a big scale rather than a piecemeal micro enterprise approach like the traditional CBT, where all forms of potential work should be considered in assessing value chain benefits to the poor.

Why VCA ?… Value Chain Approach to Pro Poor Tourism To identify: Where the poor participate in the tourism economy and; What opportunities exist for increasing the participation and earnings of the poor, in different parts of the tourism chain Value Chain Approach to Pro Poor Tourism - VCA focuses on the inter-linkages between elements of the value chain, and usually addresses both economic flows and governance issues between levels. Tourism and the local economy – building linkages. Building linkages with the local economy is also known as PPT (www.propoortourism.org.uk), which is about doing business differently as well as communities can benefiting through tourism (Sofield, 2008). Industries related to tourism can grow, become more competitive and contribute to a more dynamic economy.

3 Pathways by which Tourism affects different poor people Direct income from employment, Small and informal sector, non-labour income and non-economic livelihood effects Indirect income from supply chains, from tourism staff spending their wages and other induced effects Dynamic effects on the local and national economy (i.e. human resource development, improved infrastructure ‘spill over’, and tax) (Source: Mann and Mitchell, 2006) Area covered by VCA

Increased income of existing poor participants in tourism A change in the operation of the value chain can benefit poor people in 3 different ways: Increased access to the tourism value chain to more poor people, thus creating new entrants Increased income of existing poor participants in tourism Increased non-financial benefits to poor households (Source: After Ashley, Goodwin, McNab, Chaves, Scott, 2006)

RESEARCH GOAL Aimed to clarify how fostering linkages between private sector in tourism and other community activities as pro-poor tourism strategy through tourism value chain analysis and recommend directions to effectively apply tourism as a tool for rural poverty alleviation with the focus on a high-end resort and its linkages with the local community in several traditional fishing villages in Penarik, Terengganu, Malaysia.

RESEARCH OBJECTIVES Understand the nature of the existing level of knowledge on tourism for poverty alleviation in rural area of Malaysia. Identify the existing linkages (potentials and constraints) between tourism and local economic in Penarik, Terengganu. Analyse the involvement of key stakeholder (roles and interactions) related factors enabling and constraining (potentials and constraints) in application of tourism as a tool for rural poverty alleviation in Penarik, Terengganu.

(Roles and Contribution) DATA COLLECTION TERRAPURI HERITAGE VILLAGE (The high-end resort) PENARIK COMMUNITIES (Local Linkages) KEY STAKEHOLDERS (Roles and Contribution) Local craft, fishermen, farmers, artisans, restaurants, retail outlets, hawkers, vendors and traders, local entrepreneurs, local culture and heritage product, tourism SMMEs Variables: Jobs Direct jobs Indirect jobs Income Basic salaries scheme Add-ons (i.e: training) Working conditions Career options Housekeeping Dining room and Kitchen Front Desk Supervision Security Purchase of goods and services Furniture, decorative objects housekeeping materials Food and drinks Guides Transportation Socio-economic condition Occupations; Education level Incidence of poverty Financial Resources Income; Type of earnings Subsidiary / Funding from Institutional Tourism Acceptance and expectation to gain from tourism Linkages with tourism Type of products Earnings Benefits Ministry of Tourism, Tourism Promotion Division, ECER (tourism) Tourism Action Board (State), State Economic Planning Unit, Community leader, etc. Roles Government agencies NGOs Universities Tourism Industry Policies and Guidelines Partnership Capacity building Funding Marketing and promotion Networking Integration approach

Case Study… MALAYSIA PENARIK TERENGGANU TERENGGANU located at the East Coast of Peninsular MALAYSIA PENARIK – located at the northern of TERENGGANU

MALAYSIA at a glance… The number of international tourists to Malaysia in 2008 is 22.0 million, compare to 20.9 million in 2007 - generating a revenue of RM 49 billion (Tourism Malaysia, 2009) Poverty in Malaysia – 3.6% in 2007 and 7.1% in rural area – poverty alleviation strategies include: macro economic strategies, capacity building, & social equity.

TERENGGANUat a glimpse… Rich and well-known with cultural, natural and heritage tourism products. Became ‘tourism hub’ for east coast Malaysia - ECER Master Plan identified tourism development as one of economic drivers, which PPT is central to the role of tourism in revitalising the rural economy and poverty alleviation. Poverty in Terengganu – 10.5% in 2005 (2nd highest in peninsular Malaysia) – mostly in rural area.

PENARIK… villages by the sea Has an area of 8,499.4 hectare – traditional fishing villages. Highly sensitive coastline and wetland area encompasses Setiu lagoon – preserves various aquaculture wildlife (turtle, river terrapin, fireflies) and mangrove.

PENARIK is poor… Lack of employment and other economic opportunities is a serious problem

PENARIK is rich… It is blessed with tourist attractions – agricultural, natural, heritage, and cultural resources that are largely untapped or neglected

Major economic activities Profile of the Poor … Total population is 3,423; 97% Malay, 0.26% Chinese, and 0.02% India. No. of poor: 350 (under RM657/ month) Major economic activities 85% are fishermen Others: farmers, and hawkers Type of earning More than 75% are based on daily earnings Others are based on salary Income 42% earn just above poverty line (RM657 – RM1,000) 10% below poverty line (under RM657) 48% earn much above the poverty line (above RM1,000) Education level 65% have formal school level (mostly until secondary school)

Pro Poor Tourism Product… Homestay Experiencing the way of village life Ecotourism Traditional performing art - Makyong / Menora Local SMEs products - cracker, salted fish, songket etc.

Terrapuri Heritage Village… Employ 90% (now 21 staff) from the local communities Since the building of the resort. Tourists (arrange by the resort) were taken to experience the way of local life – help to boost the CBT product A boutique resort - embraces ‘Terengganu Royal’ spirit - catering high end market segments More than 90% of resort’s supplies are purchase from the local farmers and fishermen – actively support local products

VCA of Terrapuri Heritage Village… The main chain will be assessed – Terrapuri Heritage Village (accomodation) Another 4 sub-chain will be look through, which link with the resort – food and beverage, agriculture, excursions and handicrafts ‘Poor’ defined as unskilled and semi-skilled people TOURIST Terrapuri Heritage Village Staff Food Cultural & Handicraft Restaurant Stalls Craft Shop Entertainment & Performance SUPPLY CHAIN Excursion & Transport Local Guide Local Transport Agricultural Fish & Meat Manufactured Goods

Findings from Pilot Study… Most of the resort’s consumers are dominate by domestic tourist and high-end mainstream holiday package tourists Up to half of earnings of the poor come from food supply chain Most of the local products from the farmers and fishermen supply to the resort – local linkages exist The resort as an example of mainstreaming provides ‘x’ benefits versus comparison with home-stay (non-mainstreaming) provides ‘y’ benefits – how both of this can work together. Researcher identified 5 productive chains as holding competitive opportunities for the community to link with the resort Fruit and vegetable agriculture, Fishing Cultural activities Artisan products Local food

Pro Poor Tourism Issues… Both tourism and development policy makers did not fully understand the role of tourism in rural poverty alleviation – PPT not addressed in most formal development plan. Lack of infrastructure, of pro-poor value chains and of leadership (at regional and local level), ability to supply tourists with local products are small. Tourism only been introduced to this research area in late 2003 with the opening of homestay programme (Kg. Rhu10) – a lot of tourism resources yet being neglected or untapped. Difficulty in getting funding at initial stage, lack of capacity building, training, and credit.

CONCLUSION Contribution to tourism - Pro-poor tourism has the potential of benefiting the poor, decreasing inequality and mainstream the linkage from a narrow focus on community to all kind of things where communities could benefit through tourism – Need all possible poverty alleviation tools. Relevant to the Malaysian case – Very recently, tourism started to adopt tourism as a tool for reducing poverty – still need a thorough research as a model. Very recently the Malaysian Government has moved to adopt PPT in part for CBET in its eastern provinces of Sabah and Sarawak, and has joined with other BIMP countries to implement a five year strategy for that purpose.

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