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The position of the Group of Ten - G 10 - was as simple as it was
unquestionable. They had lost faith in the GATT system to function as a
fair trading platform and believed that unless fundamental inequities were
addressed they would oppose the entry of new issues. The new issues also
happened to be areas where they had little to gain from multilateral trade
- investment measures, services, and patents. The most controversial
issue was the question of services and the formal position of the Group of
Ten was that there could be no negotiation of services in the new round.
Inspite of their spirited opposition the ministerial meeting decided to
launch the most comprehensive round of trade negotiations in the history
of the GATT.
The compromise at Punta del Este was that the proposed agreement
regulating trade in services should be reflective of the concerns of the
G-10. Among other things it would have a clear developmental orientation
and there would be due respect for national laws and regulations. Suffice
to say that what emerged in Marakkesh in 1994, at the end of the Uruguay
Round of negotiations, was anything but that. The developmental aspects
were couched in preambulatory language, hence not legally enforceable, and
the General Agreement on Trade in Services (GATS) clearly intruded deeply
into the hitherto sovereign space of domestic policy. After the formation
of the World Trade Organisation (WTO), India continued to consistently
raise issues of inequity in the GATS negotiations, albeit removed from her
earlier principled position of absolute opposition.
The Doha ministerial of the WTO, concluded in November 2001, is thus a
cause for alarm as it saw very little dissent from developing countries on
the issue of services. This lack of resistance mandated a substantial work
programme on the GATS. Countries were required to submit their initial
list of service sectors to be committed to GATS rules by March 31, 2003.
Beyond Trade Issues
The push for the inclusion of services and investment was the result of
the US acquiring a decisive competitive edge in trade in services in the
1980s; both the WTO staff and the European Commission now acknowledge that
there would be no GATS without the push and support of services
multinationals from the developed countries . In fact as early as 1985
the Indian Commerce Secretary Prem Kumar voiced India's apprehensions in
the New York Times when he said, 'Liberalisation of trade in services may
not result in comparative advantage and the protection of infant
industries in less developed countries. Besides it may impinge on national
sovereignty and economic ambitions'.
The GATS is the first multilateral agreement to provide legally
enforceable rights to trade in services. The Punta del Este compromise,
though largely violated, proved to be a strong factor in deciding the
basic framework of the GATS. The agreement that countries acceded to, in
Marakkesh 1994, was unique in two important respects in that it followed
both a top-down and a bottom-up approach. The WTO principles of Most
Favoured Nation (MFN) and transparency apply to all services sectors in
the GATS classification list. National Treatment and Market Access
provisions currently apply only to those sectors that a member country
lists in its schedules of commitments.
The agreement applies to all forms of government and government measures
regulating trade in services. Article 1[3] of the legal text of the GATS
which talks of the scope of the agreement mentions that in 'fulfilling its
obligations and commitments, each member shall take such reasonable
measures as may be available to it to ensure their observance by regional
and local governments and authorities and non governmental bodies within
its territory.' The GATS classification list consists of twelve services
sectors, which are further sub divided into 160 sub sectors.
Services have tended to be a more regulated sector than others because
some of them are not just commodities which consumers can do without if
they cannot afford them. These include basic services like the provision
of health, water and education. The agreement has been strongly attacked
for the inclusion of these non- trade issues that the WTO secretariat
responded in February 2001 with a booklet titled 'GATS - Fact and
Fiction.' In page 12, the secretariat agrees that most public services
will be covered under GATS clauses but mentions that governments are free
to decide if they should be privatised or liberalised.
This is at best a partial truth as horizontal principles of MFN and
Transparency are thus applicable to virtually all services. The 'freedom
to commit' clause is predictably devoid of any understanding of the
political context in which negotiations in the WTO take place. Over 50
years of multilateral trade have clearly shown that the developed
countries hold the cards in these deliberations.
The unequal power relations within the WTO are now well documented and the
presence of basic services in the classification list is a veritable
threat to millions in developing countries who need a high level of
subsidised, if not free, service delivery for survival. Ensuring adequate
and affordable access to basic services for all citizens is frequently
seen as one of the core jobs of governments. Inspite of its potential
impacts, the GATS - unlike the TRIPS and Agreement on Agriculture - has
received little public attention in India and other developing countries
but this is unlikely to last.
In April 2001, over 400 organisations from 53 countries called on their
governments to immediately invoke a moratorium on the GATS 2000
negotiations and devote the remaining two years of the scheduled talks to
conducting a comprehensive sectoral assessment and removing clauses in the
GATS that tie the hands of governments.
In August 2001, the United Nations Sub-Commission on the Promotion and
Protection of Human Rights adopted three resolutions calling into question
the impact of key aspects of the globalisation process on human rights.
Applying, for the first time, a human rights perspective to the GATS, the
sub-commission recommended that the WTO include consideration of the human
rights implications of the GATS on the provision of basic services, such
as affordable and accessible health and education services.
An important signal and clear message to all governments as well as
international economic policy forums to take international human rights
obligations and principles fully into account in international economic
policy formulation. It also called for a report on this matter from the
United Nations High Commissioner for Human Rights.
The issues at stake
In the ongoing debate on the GATS much attention has
been focussed on the above mentioned non-trade aspects of the agreement.
Tourism, seen as a tradeable service, has escaped the attention of many
critical groups fighting this fundamentally flawed document. This section,
drawing largely from an understanding gained from over sixteen years of
research and advocacy in tourism issues, will show that the reasons to
oppose tourism in the GATS span environmental, economic, sovereign and
livelihood imperatives.
Multilateral trade in tourism is expected to bring in substantial amounts
of foreign exchange, generate income and employment and hence bring
development to countries of the south, particularly those that are faced
with a crisis in their primary and secondary sectors. Predictably it is an
important sector in the GATS, listed under Tourism and Travel-Related
Services (sector 9 in the classification list). Notions of development
have continually evolved keeping in consonance the definitions provided by
western theories and prescriptions. The tourism led development model is
one such avatar, promising not only to bring visible and ostensible
benefits in terms of infrastructure and employment but also to protect the
environment. Peddled by multilateral agencies, as an export industry that
supposedly fills foreign exchange coffers, it has been readily embraced by
most southern governments.
India's initial economic argument against multilateral trade in services
is especially true for the tourism industry. International tourism
continues to be characterised by huge imbalances in the share of business
and distribution channels, between tourist sending and receiving
countries, with the bulk of economic and political power held by the
former. It is today the largest industry in the world and is fast
expanding. Tourism's continuous geographical spread and diversification of
products has implied that the share of Europe and the US - the major
tourism players - has decreased and is expected to fall further. In 1995
Europe's share of tourist arrivals was 60% of the world total. By 2000 it
had fallen to 57.7%. The World Tourism Organisation (WTO-OMT) forecasts
that it will fall further to 45.9% by 2020. With Nature and culture as
today's catchwords more travelers set out in search of exotic cultural
experiences the developing world has to offer. The signs are clear -
destinations will shift south. A destination maybe halfway across the
globe but the design of the GATS ensures that they can be controlled by
multinationals from the north.
It is in this unequal context that GATS' promises of development to the
south must be understood and critiqued. The Tourism developmental debate
in India is also intricately linked to the reasons that attract tourists
and hence the industry. It is the rich natural heritage spread along the
forests, mountains, coasts and rivers, all of which are the living spaces
of communities, which constitute the 'Tourism product.' Even Protected
Areas, which have by definition prohibited commercial activities, are now
being seen as potential tourism areas. It is the location of tourism, a
resource-intensive activity, in these areas that gives rise to a conflict
of interests between the needs of local communities and conservation with
the needs of a consumer-oriented industry which understands nature as an
economic commodity.
Ecotourism
Ecotourism has become the developmental paradigm of a reformed tourism
industry but it remains a fashionable phrase that everyone pays homage to
but none cares to define clearly. Conservationists, the industry,
indigenous peoples and developmental organisations have varying
definitions of what they believe is genuine ecotourism. To a large extent
the danger of the phrase lies in its ambiguity. It has allowed the tourism
industry access into hitherto untouched areas around the world without
having to compromise its raison'd etre, profit. The Indian state tourism
ministers' conference on ecotourism virtually declared the whole of the
country as potential ecotourism destinations. While this conference gave
the much-needed fillip to industry, a conservation-led effort on
regulating ecotourism in forest areas was stymied. The Wildlife Tourism
guidelines initiated by the Ministry of Environment and Forests in 1994
still continue to be in the draft stage. National parks and wildlife
sanctuaries thus allow tourism in the absence of well-defined regulatory
mechanisms.
There are signs of change, though. Communities and local bodies are
asserting themselves in gaining a hold of tourism development in their
areas. In a historic declaration on biodiversity conservation and
ecotourism the Gram Sabha Lata of Chamoli, Uttaranchal resolved on October
14, 2001 to follow a community-based method of tourism management. The
declaration has twelve salient points. Point 4 mentions that in any
tourism related enterprise in the area preference would be given to
unemployed youth and underprivileged families. Point 5 ensures the
involvement and consent of the women of the region at all levels of
decision making while developing and implementing conservation and tourism
plans. The Declaration acknowledges the spirit of Agenda 21 of the 1992
Earth Summit in Rio and draws inspiration from the Chipko movement, which
was born in the surrounding hills.
In Jharkhand, 'Johar' - a group representing indigenous peoples of the
area - has formulated a conservation-oriented and people-centered tourism
policy even before the government could get its act together. The policy
has been sent to the Jharkhand government forcing it to respond to the
aspirations of the people who were part of the struggle for statehood.
In Goa, following an intensive struggle, there is now the practice of
issuing shack/restaurant licenses only to locals. Similarly only tourist
taxis whose owners are from within the village are permitted to park their
taxis in front of the hotel in the village. One of the main messages from
the recent South Asian Regional Conference on Ecotourism held in January
2002 in Gangtok, Sikkim was on the involvement of local communities in
tourism development thereby contributing to biodiversity conservation.
Delegates felt that before tourism was planned for any region it was
important to study some key issues of which the most crucial was to find
whether the local community wanted tourism in the area.
Internationally a visible area of success is policy-makers' acceptance
of tourism's impacts on the environment. Though at the 1992
Conference of Rio no separate chapter in Agenda 21 was devoted to
tourism, it is now an issue in the Rio follow-up process with the United
Nations Commission on Sustainable development (CSD) adopting an
international programme of work on tourism and sustainable development
since April 1999. Tourism's adverse impact on bio diversity is also a
significant area of deliberations in the Convention on Biological
Diversity (CBD) that 183 countries are party to. Since the fourth
meeting of the Conference of Parties [COP4] in May 1998 efforts have
intensified at the international level to develop tourism programmes that
are in agreement with the three objectives of the CBD, which are contained
in Article 1.
The fifth meeting of the Conference of Parties to the CBD [COP-5], May
2000 accepted formally the invitation to participate in the international
work programme on sustainable tourism development under the UN CSD. The
CBD secretariat requested for a workshop to be convened that would prepare
a proposal for contribution to guidelines related to sustainable tourism.
The workshop on Biological Diversity and Tourism, convened in Santo
Domingo in June 2001, was asked to use as a basis for their work concepts
developed in other documents that were relevant to the subject matter such
as the Berlin Declaration on Biodiversity and Tourism, 1997, the World
Tourism organisation (WTO-OMT) Manila declaration on the Social impact of
Tourism, 1997, the United Nations Environment Programme guidelines for
sustainable tourism, declarations by indigenous and local populations, and
the WTO-OMT Global Code of ethics for Tourism The draft guidelines have
already been presented to the necessary technical bodies like the
Subsidiary Body on Scientific, Technical and Technological Advice. When
the CBD endorses these guidelines they become binding on member states.
The GATS dilemma
It is into this complex web of tourism that the GATS enters as an
uninvited guest. Tourism's presence in the GATS is as far removed from
local realities in tourism destinations as the language of sustainability,
benefit sharing, conservation and democratisation is from the WTO lexicon.
As of March 2001 commitments under Tourism and Travel Related Services
(sector 9 in the classification list) ranked higher than for any other
service sector with 120 of the WTO's 142 members opening up at least one
of the 4 tourism sub-sectors. The sub sectors include Hotels and
Restaurants (including catering), Travel Agencies and Tour Operator
services, Tourist Guide Services, and others.
There is no questioning the fact that Tourism is an immensely lucrative
activity and a source of employment -both direct and indirect, for
millions worldwide. But the commitments of developing countries,
reflecting this blinkered understanding of tourism, need to be questioned.
While much research has gone into the multiplier effect of tourism in an
economy, less talked-about but crucial to developing countries that rely
excessively on international tourism is the question of leakages.
Leakages are inherent in any industry that has a substantial level of
foreign participation but when it exceeds specific levels it can virtually
negate the positive impacts of that economic activity. In tourism
leakages can take the form of repatriated profits to the country of origin
of the hotel chain, repayment of foreign loans, imports of equipment,
materials and consumer goods to cater to the needs of the tourist. As
Benavides (2001) points out huge corporations control a substantial chunk
of the mass tourism market. In Europe integrated tour suppliers sell more
than 60% of the packages. Without the clauses of the GATS, the tourism
industry has used various anti-competitive techniques like de-racking,
exclusive use of the Global Distribution Systems (GDS) and Computer
Reservation Systems (CRS) as barriers to market entry to secure higher
commissions from the smaller tour operators and hotel chains in the
developing countries. In India the Swiss Multinational Kuoni, by taking
over the major domestic player SITA, controls a majority of both the
inbound and outbound tourists. With the GATS clauses coming into effect it
is clear that the domestic economy gets only a nominal amount of the
profits generated.
Article XVII on National Treatment implies that there can be no
discriminatory treatment of foreign players. Selective promotion of SMEs
(Small and Medium Scale Enterprises) and restrictions regarding
cross-border payments will be ruled as violations if a country has
committed to National Treatment and Market Access under GATS disciplines.
There are a few major domestic hotel chains in India but the huge chunk of
the tourism industry consists of SMEs. They have borne the brunt of the
anti-competitive practices of the big tour operators and most of them are
likely to go under if there is unrestricted foreign entry. They do not
have access to cutting-edge technologies to get direct bookings and the
possibility of imposing labour and environmental standards will ensure
their exit from the market. Most of the SMEs are locally based, and thus
backward linkages to the economy - like local employment and purchase of
local commodities - are strong. These are important factors to note while
India makes further commitments in the tourism sector. The Caribbean
countries have already expressed concerns about the possible impacts of
the deregulation of their tourism sector under the GATS.
The numerous violations by the tourism industry are now being recognised
by the judiciary. The recent judgement of the Supreme Court in the Span
Motel case underlines the need for local laws to regulate excessive
tourism development. In a far-reaching judgement the Supreme Court
ordered, on March 15 2002, the former Union Environment minister Kamal
Nath to pay a fine of Rs. 1 million for environmental damage caused by
'callous interference with the natural course of a river'. The company,
Span Motels, has also undertaken to bear its share of the project cost of
ecologically restoring the environment around the Beas River in the
Kulu-Manali region.
The imminent danger in the GATS is that it only vaguely addresses
environmental concerns in Articles XIV and XX dealing with "general
exceptions" and " exhaustible natural resources". With respect to
measures to control trade the GATS says that it "could take the form of
defining certain standards for the service concerned or limiting the
effect of the service activity". The GATS text goes on to say that this
does not imply that Article XIV can be used to justify the imposition of
these restrictions and an alternative available for members would be to
request renegotiations of their commitments.
These restrictions will result in a number of complexities, especially if
a country has unlimited commitments in a sector. The renegotiation process
is devoid of any meaning through what is known as the 'ratchet' effect.
Article XXI, which allows for modification or withdrawal of a commitment
states that due notice of three months must be given after the commitment
has been in place for three years. It requires negotiations with all the
affected members and is subject to compensation for the affected parties.
Ultimately, it may be subject to retaliation within the rules, of the
dispute settlement body, by affected countries.
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Issue #5, Combat Law
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An uninvited guest
Combat Law, Issue #5
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Globalisation and the Environment
Combat Law, Issue 5 -
As early as a decade ago policy makers in developing countries were
circumspect about the ability of free trade to foster all round economic
growth in their countries. At the 1986 ministerial meeting of the General
Agreement on Tariffs and Trade (GATT), in the tourist resort of Punta del
Este, Brazil and India led the fight in opposing the entry of
so-called "new issues" into the already burgeoning basket of free trade.
Understanding the GATS through Tourism has its advantages. Tourism is
prominent in the GATS and is advanced as a sector in which developing
countries have much to gain. Being a complex and fragmented industry it is
connected to virtually all the services sectors in the classification
list. An examination of Toursim thus simultaneously throws light on
problems with the GATS in general. GATS rules go beyond what is normally
understood as trade and the agreement is primarily driven not by member
governments but by a potent corporate agenda. Many regional and local
governments have begun to understand this language as more light is thrown
on the negative impacts of this industry. An equitable tourism requires
careful planning at all levels and the involvement of all stakeholders,
especially local communities who are directly and most profoundly impacted
by it. Tourism's presence in the GATS also goes against other
international commitments of member countries in Multilateral
Environmental Conventions and Protocols. Once these simple principles are
accepted and internalised in policymaking the WTO can achieve its
purported objectives and tourism can play a more important role in meeting
important environmental and social objectives.
The Market Access provisions (Article XVI) clearly state that if a country has made unlimited commitments in a sector it cannot limit the number of service providers. The GATS Committee on Specific Commitments has clarified that even if you do not discriminate against foreign providers, you cannot limit the number of service suppliers, domestic or foreign. To put this in tourism parlance it negates the core principles of ecotourism and sustainable development. e.g the clause can be interpreted to call into question the viability of a hotel complex being denied entry into an ecologically fragile area on the basis of local environmental laws.
The GATS' pre-eminence to national, regional and local laws comes directly in conflict with the need for local domestic regulations to regulate tourism, or for that matter any developmental activity. In significant ways it also negates the decentralisation processes sanctioned by the seventy-third and seventy-fourth amendments of the Indian Constitution in 1992. At the World Summit on Social Development in March 1995 India declared to the world: 'What India aims through this (devolution of powers through the constitutional amendments) is not merely representative self-governance but more importantly participative self-governance because while panchayats are elected bodies representing a certain population of a territorial area, the Constitution provides for a parliament of people at the village level called the 'gram sabha' which is a body consisting of all persons eligible to vote at the village level'.
It is interesting to note that this statement comes less than three months after the WTO was formally established. Under the two amendments respective state legislatures were asked to confer on the Panchayat and Municipal bodies such powers and authority so as to enable them to prepare plans and implement schemes for economic development and social justice. The decision-making powers of local bodies are extensive and contain 29 items most of which are in the GATS classification list . Nearly all the requirements of the tourism industry fall within the rights and powers granted to the panchayats. Effective devolution of powers would thus mean that the industry would have to seek the permission of the concerned local body for sanction to operate in its jurisdiction.
Kerala has been in the forefront in devolving powers to local bodies. The movement for decentralised, local development planning took a concrete form with the Peoples' Plan Programme providing a broad forum for the expression of the developmental aspirations of the people at the grassroots level.
An examination of the Vikasana Rekhas (developmental reports) of the various district panchayats shows that tourism was high on the priority of sectors earmarked for developmental interventions at the panchayat level. The Vikasana Rekhas of the fourteen districts in the state reveal a complex picture but it is important to highlight aspirations of some panchayats vis-a-vis tourism development. The district plan document of Thiruvananthapuram district suggests that conservation should be a built-in component of tourism-induced development. 'The rivers and the beaches should not be polluted; forests should not be encroached upon, ancient monuments should be protected to retain the original values and charm. Tourism should not hurt nature or marginalise local inhabitants'.
The plan document of Ernakulam, the district with the highest number of foreign tourists, is symptomatic of the effects of unplanned tourism development. It states 'tourism should not been seen as a tool of development. A nation achieves meaningful development only when its productive sectors attain strength and the natural resources are earmarked for efficient utilisation in the production process. Consuming the resources in a non-renewable manner to cater to consumerist tendencies in the name of tourism is an unpardonable crime'.
The panchayat report goes on to say that that complete responsibility for tourism development should be handed over to local bodies. While one may not find coherence in the panchayats understanding of this complex industry the need for meaningful devolution of powers to determine developmental processes in their areas is clearly evident among all the plan documents. In March 2002 Tamilnadu panchayat presidents requested the state government to transfer personnel of all concerned departments and devolve at least 55% of budgetary revenue to panchayats and make this announcement in the coming state budget. Panchayats have launched a state-wide campaign calling for meaningful devolution as mandated by the constitution. India's position in the GATS negotiations presently gathering force in Geneva should be reflective of these voices from the ground.
Ongoing GATS Negotiations and Tourism
In 1999 the Dominican Republic, El Salvador and Honduras developed a proposal for an annex in the GATS to specifically deal with tourism related services. This proposal was subsequently reiterated in December 2000 with Nicaragua and Panama joining the former three. The proposal is intended to focus commitments in tourism into a single cluster of varied services that are connected to tourism. These are drawn from the UN central product classification [CPC], which is a comprehensive list of services closely linked to tourism. The list was formulated jointly by the WTO-OMT and a host of other organisations to measure the exact economic impact of tourism.
The main advocate of the cluster approach for tourism in the GATS has been the World Tourism Organisation, which has been disappointed at the treatment meted out to tourism in the GATS. The WTO has also felt the need to revise the Tourism list in the form of the Standard International Classification of Tourism Activities . The EU, US and Australia have been active proponents of the cluster approach since the lack of clustering in the architecture of the GATS is seen as one of the major constraints for any meaningful liberalisation in sectors that are of interest for these countries.
The rationale is simple. It is felt that the option to commit has led to a lack of coherence in commitments with a divergent pace of liberalisation in sectors that are closely connected to each other. Most developed countries have clearly voiced their support for the cluster approach and hence support the annex proposal. Some developing countries have been non-committal and have looked at the annex with scepticism. The annex has been sold under the label of a developing country proposal notwithstanding clear signals that it involves changing the structure of the GATS by negating the positive list approach.
The positive developments in the annex, though few, are important to mention. The annex proposal views tourism as a development issue and aims to introduce the concept of sustainability into the tourism trade. It takes note of the disturbing fact that there has been no monitoring of the impacts of progressive liberalisation on developing countries. Mode four of the supply of services, which deals with the presence of natural persons, has been virtually ignored. The annex also mentions that inspite of the presence of safeguards in the agreement the anti-competitive behaviour of foreign tourism providers still continues.
The proposed transfer of technology is yet to materialise and the proposal rightly highlights the increased incidence of vertical and horizontal integration of tourism providers in developed countries, which is likely to see a huge drop in the market independence of local players. The importance of access to and use of information systems like the GDS and CRS according to transparent, reasonable and objective criteria is taken note of. A cluster approach to address the above concerns is unfeasible for the simple reason that it takes away probably the only flexibility that the GATS has - the request offer/positive list approach. Clustering will enable the GATS negotiations to move into a fast track mode, thereby negating the ability of developing countries to undertake no or minimal liberalisation in specified service sectors.
Very few industries have the kind of far-reaching cross-cutting impacts that tourism has. The privatisation of essential services, which is being pushed through the structural adjustment programmes of the World Bank and the IMF, is now reinforced by the fact that these services figure in the classification list. The local populations' access to basic resources is often curtailed in tourism areas when these are diverted to the benefit of the wasteful consumption patterns of the industry.
The Nagarhole hotel case is one example of the possible conflicts that can arise due to the lack of regulatory laws in ecologically sensitive areas. The Taj Group of hotels was awarded a contract by the Forest Department of Karnataka in 1994 to run an eco-friendly jungle lodge in the Nagarhole National Park. This put into perspective the historic exclusion of tribal communities from the area, their homeland since time immemorial. The Wildlife (Protection) Act, 1972 provides for the extinguishing of all rights of local inhabitants in National parks. Since the 1960s to this day the adivasis of Nagarhole have been systematically pushed to locations ranging from one to twelve kilometres from the fringe areas of the forests. With hardly any compensation, they have been reduced to living in ghettos, of which some are government sponsored, and restricted from their ancestral lands.
In November 1996 the Nagarhole Budakattu Hakku Samsthapana Samiti - an adivasi organisation, filed a petition in the Supreme Court against the Karnataka Forest Department and the Taj Group of Hotels. The petitioners argued that under the WPA, a five star hotel was totally prohibited in a national park, as it was a non-forest activity. The court, after examining the WPA and the Forest Conservation Act, 1980, pronounced the contract illegal and void and stated that the property be handed back to the state government. An incomplete victory though, as the adivasis of Nagarhole continue with their struggle.
The Periyar Tiger Reserve, located in the Western Ghats - among the 18-biodiversity hot spots in the world - in Kerala is another example of the blatant violation of laws by both the government and the industry. There are three hotels operated by the Kerala Tourism Development Corporation (KTDC) functioning inside the Reserve. Added to this the families of forest officials and the employees of KTDC reside in the Reserve and the waste generated by the hotels and housing quarters is directly discharged into the nearby lake. Vehicles carrying tourists are also allowed to enter the Reserve and electric wires to the hotels have often led to the death of wildlife. It is over six years since the 25-year-old lease agreement with the Kerala Forest Department expired but the hotels continue to operate in violation of the law .
These concerns are not unique to the areas mentioned above. As state governments turn to tourism as a means to development the fallacies of centralised tourism planning are increasingly evident. Its adverse impacts on ecosystems, local economies, women and children, cultures and local regulatory bodies, are conveniently ignored in the mad rush for foreign exchange. Hotels and related infrastructure like roads and electricity generation plants consume huge amounts of energy, water and generate pollution and wastes often in ecologically fragile destinations that are unsuited to deal with such impacts.
But Tourism continues to be one of the least regulated industries in the
country. In the Environmental Impact Assessment (EIA) Notification of
1992, tourism projects in forest regions are not mentioned in the list of
projects requiring environmental clearance from the Central Government.
In 1995, water privatisation in Puerto Rico meant poor communities went without water while US military bases and tourist resorts enjoyed an unlimited supply. Golf courses, amusement parks, and the abundant use of water in dry residential areas - the possibilities under the GATS are endless. Attributing the SICTA tourism-dedicated activities to the GATS services sectoral classification list shows that all the twelve service sectors have distinct interlinkages with the tourism trade. Which could imply that in a tourism dependent area under the SICTA virtually all the service sectors should be opened up for multilateral trade. This is unlikely but this close interlinkage of other services sectors with tourism is indicative of the chaos that will ensue if the cluster approach is adopted.
The case of the missing data
Services negotiations began in February 2000 as part of the built-in agenda of the Uruguay round, and there now are several negotiating proposals (mainly on market access) on the table. Most developing countries are still grappling with these various proposals. Even large developing countries like Brazil, India and Egypt lack the necessary expertise to make informed commitments in their sectors. In India trade statistics are available only for a few service sectors. Several of the important services such as communication, construction, finance, cultural and recreational services are not adequately represented in the Balance of Payments data.
As Chanda (2001) has emphasised 'services trade data are subject to qualifications and shortcomings due to statistical, conceptual and methodological difficulties in measuring services. However, there are ongoing efforts by the UN and other multilateral agencies to improve data collection and methodology in this area'. Though travel is represented in the Balance of payment statistics, a huge segment of the tourism trade the SMEs most of which is in the informal sector, is virtually unmapped. Given this lack of information, developing country representatives have maintained that it is necessary that the WTO carry out its mandated assessment of trade in services.
The importance of making commitments only after a complete understanding of the respective sector [also the complex interlinkages between sectors] cannot be overemphasised. A recent communication to the WTO council on Services from a group of developing countries mentions that '… the current negotiations are likely to be highly stacked against developing countries. Developing countries will be faced with many requests but, apart from some traditional sectors, will not be equally offensive in their approach. It is instead primarily the export interests of the developed countries that are aggressively driving current GATS talks. Yet at the same time, developing countries, through GATS, as well as the conditionalities imposed upon them by other financial institutions, will be under tremendous pressures to open up. The final balance of negotiations between rich and poor countries, should they proceed in this manner, would therefore be in question.'
The WTO should recognise that the institutional capacity of developing countries is underdeveloped and weak to facilitate a bottom-up democratic discussion of GATS provisions. Even in a country like India where civil society plays an active role in public policy the GATS is largely understood as a mispronunciation of GATT. Our experience shows a high level of ignorance at the local level-inside and outside government. More time is required to promote consultations between Central and State governments before commitments are made. Commitments made without such consultations are likely to stimulate protests at a later date as was evident with the Agreement on Agriculture.
Some countries have already reached a level of liberalisation that was higher than what they had committed to in the GATS. For example Turkey and the Dominican Republic had substantial foreign participation in their tourism sectors even before the GATS. India has been cautious in its commitments leaving most of them in the unbound category. Its autonomous liberalisation for Hotels is 100% foreign participation while in the GATS it is 51%. In the new phase of commitments it is clear that most of the developing countries will be under tremendous pressure to commit further.
In India tourism policy is formulated by the Ministry of Tourism and Culture. The country is a signatory to and has ratified the Convention on Biological Diversity. The mandate to enforce its principles is on the Ministry of Environment and Forests. GATS is seen as a trade issue and the Commerce ministry is authorised to make commitments in the trade negotiations in Geneva. There is no coordination between these ministries while arriving at the national consensus on Tourism commitments in the GATS. On the other hand the central ministries are also far removed from the realities on the ground. Most of the sectors that are being committed are ones that regional governments are jointly responsible for.
The way ahead
Tourism is only one among the twelve sectors in the GATS. A sectoral analysis of the classification list will show similar problems of lack of data, no evidence of tangible benefits from services privatisation, possible adverse impacts on the environment, and widening democracy deficits in policy making at regional and local levels. Developing country delegations need to call the bluff that the push for further commitments in the ongoing negotiations rests on the unproven assumption that liberalisation of trade in services benefits developing countries. On the contrary privatisation of services has had numerous adverse impacts in developing countries like Bolivia, Puerto Rico and Mozambique (Woodroffe 2002). In India, Maharastra's finances totter towards bankruptcy thanks partly due to its disastrous flirtation with Enron,
As the evidence of the adverse impacts of services liberalisation piles up it is strange that developing country delegations continue to commit vital parts of their economies to the vagaries of free trade. The reasons are as many as they are complex: the unequal political context within which negotiations are held inside the WTO, linking aid budgets and trade preferences to the trade positions of developing countries, targeting individual developing country negotiators and the lack of capacity of developing countries to make informed commitments. A more disturbing trend back home is the emergence of think tanks and consultancies, wedded to the free trade philosophy, that now play an important role in determining the government's trade policy. But while the GATS gains strength, egged on by a deep-seated corporate agenda, the impetus for resistance and change is coming from various parts of the world.
The assertion by the panchayats from Kerala and Tamilnadu are not insular examples. Nor are declarations of local communities from the hills of Uttaranchal and Jharkhand. Nor is the fight against water privatisation in the Bolivian city of Cochabamba. Nor is the resolution of the Canadian Federation of Municipalities, representing over 1,000 Canadian municipal authorities, calling for an exemption for local governments from GATS. As the voice from the grassroots in both developed and developing countries gets louder governments will have to listen. And the GATS will have to change.
K T Suresh
December - January 2002
K T Suresh works with EQUATIONS, Bangalore, an organisation fighting the ills of unchartered tourism.
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