Sparrows on the seashore: tourism policies and development
How are tourism-generated revenues distributed? This photo was taken in 2010 near a seaside resort in north-east Brazil. It always reminds me of the age-old development economics debate about the theory of offer and “trickle-down economics”. According to this neo-liberal market vision, the public investments intended for leading economic stakeholders always end up being redistributed in the economy through productivity, consumerism and investment. The poorer populations would, therefore, benefit from wealth generated by leading economic stakeholders. Remarkably, it is in the name of these mechanisms that governments justify tax exemptions for major companies, and also targeted public investments for “growth areas”, in order to concentrate spending, increase competitiveness and attract investors. By means of employment creation (direct and indirect) and productivity gains – which would therefore add to the general improvement of the population’s material conditions – the “trickle” would, as a consequence, create a “multiplication effect”, growth areas would be extended to peripheries and the rich would interact with the poor.
The theory of offer has often been criticised for its flowery metaphors which offset the mystifications of such a vision. For Richard Sennett, it is a smokescreen used to justify the implementation of neo-liberal policies amongst the poorest. John Kenneth Galbraith (1982), on the other hand, qualifies it as a “horse and sparrows theory” which depicts development as a flock of sparrows gobbling up the oats, given by the state, to the racehorses of the capitalist economy: “If you feed the horse enough oats, some will pass through to the road for the sparrows.” Other intellectuals highlight the limits of the trickle-down theory by reminding us of the effects of hoarding, capital flight, surplus policies and even ostentatious surplus destruction (termed by George Bataille as “the accursed share”) which are encouraged by leading economic stakeholders with public incentive backing.
In his first publication, The shared space, Brazilian geographer Milton Santos (1979), judges the growth area model to be “euro-centred”. For Santos, the model does not take the “double-circuit” structure of Latin-American cities into account: an “upper circuit” associated with the technological modernisation of major capitalist companies and the world economy; a “lower circuit” of small businesses, informality, poverty and local anchorage. Once public areas and markets are socially divided, there is no linear development “trickle”.
However, in north-east Brazil, “tourist development areas” have been created ex nihilo in undeveloped coastal areas outside large cities on the basis of theory of offer and growth area hypothesis: the Parque das Dunas-Via Costeira in Rio Grande do Norte state, Cabo Branco in Paraiba, Costa Dourada between Pernambuco and Alagoas and Linha Verde in Bahia. Government authorities have limited their involvement to creating attractive conditions for foreign capital through tax incentives, infrastructure facilities and providing coastal accommodation for the hotel industry. In the 1990s, a second regional tourist policy phase (North-East Tourism Development Programme – PRODETUR-NE) further consolidated these areas by expanding the intervention zone to other tourist hubs; like the resort where this photo was taken. A loan agreement was signed between the federal government and the Inter-American Development Bank (IADB) to fund the programme: in total, USD 626 million were injected in two phases from 1995 to 2008.
Several Brazilian researchers like Rita de Cássia Cruz (2000) spoke out against the fact that these infrastructure programmes, which promoted exchange value over use value, were being embezzled for leading real estate and hotel stakeholders. The IADB’s administrative control and the liberal creed, adopted by the public authorities, attracted investments for “high yield” projects to the detriment of human interest projects: 85% of the funds were for urban infrastructure (36% for airports, 26% for road systems and 23% for sewage works), in comparison to only 7% for cultural heritage restoration, 3% for institutional and training development, 3% for environmental protection and 2% for study fees and projects (2%) (Central Bank of Brazil, 2005).
How can one not be surprised when faced with such a gap between the loans allocated for tarmac and pipelines and the loans for the development of human skills? As François Ascher (1984) once stated during a presentation at UNESCO: “it isn’t tourism which enables development, but a country’s general development which makes tourism profitable”.