Thursday, July 2

The Art of Borrowing

Take a look at this interesting article about the paradoxes of tourism.  Of the nine, the most intriguing was:
"2. To capitalize on what you already have, you must borrow.
Tourism can provide the ideal export for developing countries, which avoid debt by capitalizing on what they already have: a unique culture, a singular natural environment, and a definite place in world history.
However, this means airports, major sanitation facilities, local transportation, hydroelectric plants, medical facilities, and hotels.
The government faces a choice: it could build them itself. The financing would come from foreign lenders, placing the country in debt, or come from local tax revenue, making local people pay for major infrastructure and services that will only be used by outsiders.
Or the government could allow others to build. With foreign investment, the country relieves itself of providing capital, but forgoes profits."

Photo credit: Carlton
When developing nations began to join global capitalism, they needed to borrow and invest in popular modes to stimulate the economy.  In Bangladesh: Reflections on the Water, Novak discusses the amount of aid given to Bangladesh each year to build hotels, roads, bridges or invest in commercial corporations.  Bangladesh has collected $16 billion in aid since 1972, but is still 147 out of 179 on Human Development Index.  Novak explains that this is only about $8 per capita per year (there are now almost 150 million people in BD) -- and this $16 billion is nothing compared to the $3 billion for Israel's 3 million people.  It is important to realize that each investor comes with rules, stating where the new bridge can be built, disregarding local complaints.  Novak explains that some imports, like American food, which is cheaper to buy, hurt local farmers.  A piece of this government that I am still learning about is the lack of taxes and it's huge effects on democracy and the economy, both national and local.

Thinking about the BNT article, Bangladesh does not have a lot of tourism (which will explain the abundance of surprised stares from locals).  Tourism is huge in India, especially with the Incredible India campaign, as well as the rest of Southeast Asia.  So while there is aid given to Bangladesh, there is little attention or support.

There is no way that little ole' me can break down the problems of this entire country, but I will certainly attempt to shed light on the complexity that is Bangladesh.

1 comment:

  1. Dear Pagli Didi,

    Kmon acho? How are you? Really glad to read your blog. Keep doing what you are doing. I know something good will come out of it. Any help you need locally let me know. My brother in-law is a member of the Parliament. Also he is very well known. I wish you all the best.
    Taru Uncle.