As a result of what economists sometimes refer to as “post industrialisation,” the structure of the global economy has changed profoundly over the last couple of decades. The shares of manufacturing and agriculture have declined significantly while that of the service sector has increased.

In several developed economies, services now contribute up to 80 per cent of the gross domestic product. Within services, some of the fastest growing areas include those that cater to the demographic change occurring in developed countries. The population in these countries is rapidly aging as the rates of fertility decline and advances in health care increases life expectancy. The demands placed on the economy by older people are different from those of the young.

Tourism is one area that has grown enormously as a result of the older citizens’ wish to travel and see the world. As shown in the Table-1, the number of tourists worldwide has increased by 35 per cent in the nine-year period between 1996 and 2005. In only two of the previous nine years, the rate of growth in tourism did not increase. There was a slight decline in 2001 and 2003 because of security concerns related to the 9/11 incident. Once these concerns were eased, the rate of increase in the number of tourists travelling across the borders of their countries picked up again.

The amount of revenues related to tourism has also increased significantly at a rate higher than the increase in the number of people classified as tourists. In 1996, revenues from tourism were estimated at $438 billion globally; they increased by 42 per cent to $623 billion in 2005. Revenue generated by each tourist increased from $730 to $813 in the 1999-2004 period.

Given this change in the structure of global demand raises an important question: whether Pakistan, like so many other developing countries, can also benefit from this change in the structure of global demand? The destination of foreign tourists now includes many in the developing world. China, India, several countries in East Asia – even the countries in the volatile Middle East – have benefited from this development. Could Pakistan join this league of nations or is Pakistan now regarded too risky a place for the western tourists to contemplate seeing many of its attractive sites? Before answering these questions let us see what is actually happening in Pakistan with respect to tourism.

The number of tourists arriving in Pakistan more than doubled in the 1996-2005 period, increasing from 369,000 to 998,000. The sharp increase in 2004 and 2005 period was the result of the influx of tourists from India, a trend that has not continued.

While the number of people coming to Pakistan has increased significantly it has not translated into a corresponding growth in foreign exchange receipts. Earnings from this activity increased from $146 million in 1996 to $185 million in 2005. Earning per tourist in 2005 was only $231 equal to less than one-third of the global average. Of the four provinces in the country, Punjab has been the most active in developing tourism. Pakistan today is a small player in global tourism.

The number of tourists travelling the country in 2005 was less than one per cent of the world total. Pakistan’s earning from tourism was only 0.03 per cent of the global average. These proportions are less than Pakistan’s share in global population (2.75 per cent) or in global output (0.4 per cent). The share of revenues and number of tourists travelling is much greater for the countries of East Asia, China and India. It is obvious from these numbers that Pakistan is not fully realising its potential. This could change if a different approach to the development of tourism was to be developed that first builds on developing an interest on the part of the citizenry to travel for pleasure within the country before attracting people from the world outside. Such an approach is better done by the provinces and by the districts in the provinces. In other words what is require is the local touch.

The sector has received some attention from the provincial government in Punjab since the creation of the Tourism Development Corporation of Punjab (TDCP) in 1987, an autonomous body set up under the Company’s Law. The TDCP meets current expenditures from the revenues it generates while relying on the provincial public sector development programme for initiating new projects and programmes. In view of the troubled security situation, the corporation is focusing on the development of domestic tourism.

According to the managing director TDCP Mr Irfan Ali, the development work done by the provincial government over the last several years has considerably improved the infrastructure needed for the promotion of tourism. There has been a significant improvement in the network of roads, railways have improved their operations and begun to attract additional passengers, the standard of inter-city bus transport has improved and the private sector is engaged in building hotels and resorts. The corporation itself is making investments in resort development.

The TDCP strategy is to focus on the development of new sites which will not only open the areas unexplored by tourists. It will also help to lessen the pressure in places such as Murree, Nathiagalli, and Bhurban that have reached their absorptive capacity. Several places in the southern part of the Punjab are the focus of the corporation’s attention. Cholistan desert and the city of Bahawalpur, the main urban area in the desert, are being developed as tourist sites. The corporation has launched the Cholistan Desert Jeep Rally which has begun to attract a large number of visitors from all parts of the country. Its popularity is likely to result in its designation as an international rally in 2010.

The corporation is also focusing on the conservation of historical sites in some of the major cities in the province, in particular in Lahore, Multan and Bahawalpur. In Lahore, the corporation is engaged in many activities including identifying what it calls “hidden sites”. These will be of considerable interest particularly to domestic tourists if they are made aware of their historical and cultural significance.

Pakistan – and within Pakistan, Punjab – could draw a lesson from the experience of China in developing tourism. In the 1980s, the Chinese government began to promote domestic tourism. This was done by clustering holidays in certain periods which gave time to the people to travel. Once that was done, the government began to promote tourism among the members of the large Chinese diasporas spread across the globe. To accommodate this group, the government made large investments in developing the historical and traditional sites with which the diasporas were familiar. The third stage was to open parts of the country to foreign tourists. As their number increased, travel to new areas was allowed. This multi-stage strategy was successful in making tourism a large foreign exchange earner. Various provinces in Pakistan could follow a similar strategy.

That the Pakistanis from its various diasporas are important in tourism is indicated by Table 2. It shows that 692,000 tourists arrived in 2006 from the ten largest points of origin. In this the largest shares were from the United States (31 per cent) and the United Kingdom (14 per cent). These two countries have two of the three largest Pakistani diasporas. That Norway also figures amongst the ten largest origins of tourism is because of the fact that this country, albeit small in terms of population, also has a large Pakistani diaspora. There is in other words considerable potential for developing tourism in various provinces in spite of the perception that it is not a secure place for visitors. That perception may change as more and more people get acquainted with the country.