INTRODUCTION
THE GLOBAL PERSPECTIVE OF TOURISM
Global Trends
Tourism is now the world's largest and most widespread industry. In 1999, global tourist arrivals reached a total of 663 million (source: WTO), and turnover reached US$453 billion. Growth has been erratic in the last few years, as economic crises in the Far East reduced the amount of intra-regional traffic significantly. This decline has now been reversed and tourism is still an industry with positive growth. Present trends estimate that total arrivals are expected to reach 1 billion by 2010, with a sustained annual growth rate of over 4 % between 1995 and 2020.
In the main markets of the industrialized world there is a trend towards long-haul holidays as air services become more competitive and airline technology reduces the. cost per mile of aircraft operation. All this reduces the travel costs, and the increasing numbers of destinations has also resulted in highly competitive market places with price and standards of service being significant factors in choice.
Long haul tourism is still split between travel trade generated business and independent travel. In many core markets there is also increasing polarization between mass market multi-national tour operations offering global programmes, and smaller specialist operators featuring limited numbers of destinations or special interests who cater to an increasing number of tourists looking for quasi-independent travel arrangements.
Table : Annual Growth of International Tourism as a Percentage over Previous Years %
1996/97 1997/98 1998/99 1996/97 1997/98 1998/99
International Tourist Arrivals International Tourist Receipts
Source: World Tourism Organization
Regional Trends
In 1999, after two years of decreasing arrivals, tourism in South Asia increased in the majority of countries, and resulted in an overall increase of 8.3% over the previous year's arrivals.
Table
Regional Tourist Arrivals
| Country | Tourist Arrivals in ‘000s | ||||
| 1995 | 1996 | 1997 | 1998 | 1999 | |
| India | 2,124 | 2,288 | 2,374 | 2,398 | 2,481 |
| Iran | 452 | 567 | 740 | 1,007 | 1,173 |
| Nepal | 363 | 394 | 418 | 435 | na |
| Maldives | 315 | 339 | 366 | 395 | 429 |
| Sri Lanka | 403 | 302 | 366 | 382 | 436 |
| Pakistan | 378 | 369 | 374 | 428 | na |
| Bangladesh | 156 | 166 | 182 | 171 | 172 |
| Bhutan | 4 | na | 5 | 6 | na |
| Afghanistan | na | na | na | na | na |
The regional economic down turn which effected all countries in South and South-East Asia has now been reversed, and economic data shows that many countries have now fully recovered. One short-term impact on tourism was a significant decrease in intra-regional tourism but, in many cases this was replaced by long-haul tourism. This was achieved as airlines and destinations both reduced prices (in both real and foreign currency terms) and increased promotion in both existing and new long-haul markets. This has had a longer-term effect of increasing international awareness of the range of attractions in Asia (and the good value offered) and, in many cases, this increased business from new long-haul markets has been able to be sustained.
The reduction in intra-regional traffic was, in many countries, also replaced by growth in domestic traffic as tourists stayed at home for their vacations. Many local tourism authorities implemented effective domestic marketing campaigns. Future trends forecast by the World Tourism Organization show a potential for robust growth across the region.
Table: Forecast of Inbound Tourism to South Asia 1995 - 2020
| South Asia | Forecast Average Annual Growth Rates | |||
| 1995-2000 | 2000-2010 | 2010-2020 | 1995-2020 | |
| 5.7% | 6.7% | 5.8% | 6.2% | |
Source: World Tourism Organization
1.2
SITUATION IN PAKISTANTopography
The Islamic Republic of Pakistan is located in the South of Asia lying between 24.5°-36.75° degrees north latitude and 61°-76° degrees east longitude. It shares its borders with five countries namely, Iran in the west, Afghanistan in the north west, Russia, Tajikistan and China in the north, and India in the east. The Arabian Sea washes its southern shores. Pakistan has a total area of796,0952km and the equivalent of three times the size of Britain. Geographically it lies in the north western part of the Southern Asian sub-continent and is divided into six natural regions. The Himalayan and trans-Himalayan regions occupy the entire northern end of Pakistan, to a depth of about 200 miles. The mountains there are among the highest in the world rising to an average height of over 20,000 feet including Gasherbrum I (26,470 feet) Nanga Parbat (26,660 feet) and K2 (Mount Godwin Austin) at 28,251 feet is the second highest in the world. The sub mountain plateau comprises districts of Peshawar, Kohat, Bannu and Mardan, which was once a flourishing centre of Greco- Buddest culture. The Indus plain covering an area of 200? miles are the most prosperous agricultural region of the country. It is also the cradle of the oldest civilizations. The largest freshwater lake in South Asia (Manchar) is also in this region. The desert areas include Sind, Sagardoab and Cholistan in Bahawalpur and the Thar desert in Tharparker district which shares the border with the Indian desert state of Rajistan. Baluchistan plateau and the western bordering mountains are also two distinct geographical regions of Pakistan. Flowing through the country is the 2500km Indus River - rising in Tibet flowing north-west dropping south from the mountains and emptying through a delta into the Arabian Sea. On the basis of ecology the country is divided into four main zones.
• The Mountainous North
• The Plateau of Balochistan
• The Potuhar Plateau
• Punjab and Sindh Plains
These zones are divided into the following areas:
Mountainous and Hilly areas Northern Mountains Western Bordering Mountains Sulaiman Mountains and Kirthar Hills Mountains and Hills of Sub-Himalayas, Siwalikas and Salt Range
Plateaus Baluchistan Plateau Potuhar Plateau Plains
Trans-Indus Plain Upper Indus Plain Lower Indus Plain Deltaic Plain
Desert Area Cholistan Desert Thar Desert
The diversity of landscape is a special feature of Pakistan, the conservation of which has been by the establishment of as much as fourteen national parks.
Climate
Pakistan is in the warm temperate zone, with summer temperatures of equatorial magnitudes. A weak form of tropical monsoon climate occurs over much of the country with arid conditions in the North and West, where the wet season lasts from December to March. Baluchistan is the driest part of the country, with an average rainfall of 21cm. Overall rainfall is less than 10 inches, mostly in the months of July, August, December and January. Temperatures vary according to Province and location with a max high of 52 Celsius in June and July and min lo^ of minus 32 Celsius in January and February.
History
The history of Pakistan can be traced back to before 2500 BC when a highly developed civilization flourished in the Indus Valley. The Indus Valley Civilization was at its peak from the 3rd to the middle of the 2nd millennium BC. Moenjodaro, which was discovered in 1922 is considered as one of the most spectacular ancient cities in the world.
Excavations have brought to light evidence that advanced civilizations existed even in the most ancient times. The oldest evidence of human activity is of early Stone Age peoples in northwest Punjab. Primitive agriculture as far back as the late 4th millennium BC has been indicated by excavations, and in the 3rd millennium BC permanent villages were farming along the lower Indus.
Since then Pakistan has been shaped and influenced by the migration and invasion of many nationalities the most well known of which was Alexander the Great. From the Indo-Aryans through Mauryans, Bactrians, Scythians, Parthians, Kushan, White Huns Shahis Moghuls through to the British in the seventeenth century. Pakistan was a key route on the Silk Road which for centuries wound its way south from Central Asia down through what is today Pakistan.
Population and Culture
Pakistan houses the world's ninth largest population and one of the fastest growing from just 32 million at independence in 1947 to over 130 million in 1997 spread between the four provinces. The current growth rate of 2.6 percent is the highest in the region. The concentration of population is in the Indus Valley. The rural population makes up approx 67.5 percent of the population with the urban population at approx 32.5 percent. This is distributed between Karachi (10 million, (Lahore (5.5 million), Peshawar (2.5 million), Faisalabad (2 million), Rawalpindi (900,000 thousand) and Hyderabad (800,000 thousand). Of the four provinces Punjab has 55.6 percent of the population. Although there has been no official census since 1981, it is estimated that the population is currently roughly 137 million, but there is discrepancy in the real population figures which range from 132 to 140 million. It is estimated that over half the population is under 15 years of age. In 1996 the total labour force was estimated at 36 percent. With the current annual growth rate of 2.6 percent rate the population of Pakistan is likely to be 250 million by the year 2020.
Pakistan is an Islamic country with over 97% Muslims, Hindu (1.5%) Christian (1%) and other minorities (0.5%). With its position on the old trade routes, Pakistan has a mixture of peoples and languages as a result of early migration, with facial appearances that reflect European (Greek), Arab, Mongol, Indian and in the north, Chinese origins. As a consequence although officially the national language is Urdu, it's the mother tongue of less than 8% of the population, English is the official language of Pakistan.
Pakistan is enriched with a culture that has its origins in over half a dozen civilizations that has flourished here since the 4th millenium BC and its cultural diversity ranges from Chitral and Kalash in the north to Sindh in the south, expanded and multiplied into sub-cultures to be found now throughout the whole of Pakistan.
Political and Administrative Structure
Administratively the country is divided into four provinces; Punjab, Sindh, North West Frontier Province (NWFP) and Baluchistan. Federally Administered Tribal Areas (FATA), Northern Areas and Azad Kashmir are all Federally administered areas. The principle cities are Islamabad the political capitol, with its twin city of Rawalpindi in the north of Punjab, Lahore in Punjab province, Karachi, in Sindh, Quetta in Baluchistan and Peshawar in NWFP.
Pakistan has a federal political structure, and has a parliamentary form of government; a Parliament consisting of two houses - the Senate and the National Assembly. The Senate is mainly advisory. The National Assembly is the working body of Government. The 217 members of the National Assembly are elected for five year terms of office. Of these 20 of these are set aside for women and non-Muslims. The Prime Minister is the head of Government and is elected by the Assembly. T^-" Cabinet and the Prime Minister are responsible to the National Assembly. The Senate arid ^ Assembly jointly elects the Head of State (President), also for a five year term. The President on the recommendation of the Prime Minister, appoints Governors for each province and each Governor nominates a Chief Minister. Each province has their own directly elected legislative assembly. Authority devolves down through provincial Divisions, Districts, and Subdivisions headed by Commissioners, Deputy Commissioners and Assistant Commissioners.
There are over 20 different political parties in Pakistan. The major ones being the Pakistan Muslim League (PML), Pakistan Peoples Party (PPP) and Jamad-i-Islami.
Economy
The public sector development budget is under pressure while domestic and foreign investment has stagnated. The current population growth rate has risen to 2.6% which is high and is placing a heavy pressure on Pakistan's resources and on its governance. This is coupled with a high unemployment level of about 18% with the expectation that this figure will increase by a much as half a million annually at the current population growth rate. The inflation rate is high which is contributing to the poverty levels and some 5% of GDP is lost due to environmental degradation.
Major crops are rice, cotton, sugarcane and wheat. In the fiscal year 1999-2000, the production of rice stood at 5156 thousand tones while the production of cotton reached 11240 thousand bales and Sugarcane was 46363 thousand tones. The production of wheat during the same period is estimated at 19272 thousand tones.
Major exports are cotton fabric, yam, raw cotton, synthetic textiles, ready made garments, fish, rice, leather and carpets while major imports are petroleum products, petroleum crude, wheat, palm oil, plastic material, medicinal products and iron and steel.
The industrial sector in Pakistan depends mainly on cotton textiles. The textile industry represents one of the most important sub-sectors of the economy and its products account for over 60% of total exports and represents some 18% of the country's large scale production. Overall, manufactured goods represent about 85% of Pakistan export revenue of which cotton products amounts to over 80%. The manufacturing sector accounts for almost 25% of total employment in the country.
THE ECONOMIC IMPACT OF TOURISM IN PAKISTAN
Tourism is considered to be a very viable sector of the economy in which to encourage development investment, both in expansion of capacity and in product development to provide a wider appeal to potential visitors to the country and provide incomes and opportunity for businesses and communities.
Pakistan is endowed with a range of natural, historical and cultural features that provide an excellent platform for the development of the sector. The country already attracts substantial visitor numbers from around the world to climb or trek in its mountains, to discover its age-old civilizations and explore its cultural diversity. Building on this base of attractions to widen the appeal of the country as a destination and charting the strategies to achieve these objectives is the purpose of the Tourism Master Plan.
The past decade has not been one of growth in the tourist area, with the number of vacation visitors actually in decline. This despite Pakistan's undoubted attractions. Other factor, not the least of which is the almost total lack of destination marketing, has denied Pakistan the benefits of foreign exchange that increasing tourist volumes can bring.
In examining the current state of the visitor market and its infrastructure capacity to meet forecast demands, the report segments the visitor flows into component elements
to better evaluate the impacts on infrastructure and product areas within the country. It also examines the investment required in marketing, product development and capacity to reach realizable goals. The benefits in foreign currency revenues of such a strategy are identified as well as evaluating the impact of spending on the range of products that make up each tourist's experience.
In achieving the primary objective of increasing foreign exchange earnings the report
also examines the achievement of other goals such as poverty alleviation, improved opportunities for business and community benefits.
Provincial and Principal Areas
Pakistan is divided into four different provinces; Punjab, Sindh, NWFP (North West Frontier Province) and Balochistan. Their respective capitals are Lahore, Karachi, Peshawar and Quetta. In addition to the four provinces are the Northern Areas. The Northern Areas are divided into the administrative districts of Diamir, Ghanche, Ghizer, Gilgit and Skardu. The Northern Areas are governed directly from Islamabad.
There are also seven political agencies termed Federally Administered Tribal Areas (FATA) within which the laws of Pakistan do not apply. The Pakistan Government, like the British before them, leaves these areas to govern themselves. Unfortunately tourists are discouraged from visiting these areas which are all in the northwest of the country.
All parts of Pakistan have their distinct tourist appeal ranging from the high mountains in the north to the beaches of Balochistan on the Arabian Sea. The best known tourist areas have traditionally been in the Northern Areas and NWFP with their high mountains. The Four mountain ranges - the Hindukush, Pamir, Karakoram and Great Himalaya form the densest concentration of high peaks in the world.
If Pakistan is known at all in the tourism world abroad it is because of the two northern provinces (NWFP & NA). The Mountains, Trekking, The Hunza Valley; one of the most beautiful valleys in the world, the Karakoram Highway, the Silk Road, the Khyber Pass, and others have all caught the attention and imagination of the international adventure and special interest tourist. In other provinces the archeological sites and rich cultural history are relatively unknown outside of Pakistan. The Indus Valley Civilization, the excavations at Moenjodaro, Alexander the Great, The Gandhara Civilization, The Moghul Empire, Marco Polo the list goes on. These are the rich ingredients for tourism to develop seriously in Pakistan.
Infrastructure
Despite the lack of clear organization surrounding infrastructure, Pakistan has seen general improvement in recent years. Extensive bilateral and multilateral aid and Central and Provincial Government funding have combined in order that basic services reach all socio-economic levels. Water continues to be a major source of concern and surface and foul water drainage is unavailable in most parts of the country. In general the disposal of solid waste is ineffective despite being administered by the local authorities.
The national electric grid supply is expanding but the main population centers are not adequately provided for. Efforts to improve the telecommunications systems have led to the recent privatization of the telecommunications industry, and the service has already started to improve.
Apart from a long established rail and road network on which upgrading is taking place, there are over 30 airports in Pakistan with the main International ones being Karachi, Islamabad, Lahore and Peshawar. Having realized the importance of this sector, the government has taken various measures to build an air transport infrastructure, and a selective open sky policy has been adopted with a number of countries based on reciprocity and bilateralism.
The country has two major deep-water seaports, Karachi Sear Port and Port Qasim, and in addition, two fish-harbour-cum-mini ports are being developed at Gawardar and Keti Bunder. In support of these, a new major road link from Karachi to Gawadar has recently started construction linking all the coastal towns and villages en route. This major infrastructure development is due for completion in 2005.
Over 90% of Pakistan's freight and passenger traffic travels by road, and at present there are some 300,000 kilometers of road in Pakistan. The National Highway Authority is responsible for the development and maintenance of national highways which account for 4% of the total road network in the country. The country's first motorway, Lahore-Islamabad (367km) was completed in 1997 with the construction of the Islamabad-Peshawar motorway due for completion in 2001. The construction work on the Rawalpindi Bhattian-Faisalabad motorway has also commenced and is expected to be completed in October 2000.
The Pakistan Railway network consists of 7,791 kilometers of track and its major asset includes 582 locomotives, 2,029 passenger coaches and 22,247 freight wagons. Its gross earnings in 1999 stood at Rs.7,208 million.
Pakistan is now connected with most of the countries of the world through international gateway exchanges. Value added services such as internet, e-mail, cellular mobile telephone, optic fiber systems, card pay phone and paging services etc are all developing with more than 3.8 million lines and 2663 telephone exchanges.
1.3 POTENTIAL OF TOURISM IN NORTH WEST FRONTIER PROVINCE (NWFP)
Stretching for 700 km along the border with Afghanistan, astride the Khyber Pass and other historical gateways to India from Persia and Central Asia, and embracing some of Asia's most impenetrable mountains and intractable people, is the North west Frontier Province NWFP.
Here Buddhism matured and was launched across the Karakoram into Asia. Here, too, some of history's most famous conquerors got their noses bloodied by fierce mountain tribes. The province was also the favoured battleground of British macho colonialism, home to some of its most admired enemies. Today the province contains the world's biggest autonomous tribal society, that of the fiercely independent but conspicuously hospitable Pashtuns (Pathans).
The Peshawar plain-the broad Kabul River Valley from the Khyber Pass to the Indus-was called Gandhara by the Hindu tribes living here in the 2nd millenium BC. Alexander the Great arrived here in 327 BC. Alexander's successors ceded Gandhara to the Mauryan Empire, whose king Ashoka opened it to Buddhism in the 3rd century BC. Ashoka's edicts on morality are still visible, inscribed on rocks at Shahbaz Garhi and Mansehra. Gandhara in the 1st to 3rd centuries AD was the heart of the Kushan Empire. In 467 the Huns savaged Ganddhara, though Buddhism survived in Swat right into the 15th century. Babur, a grand son of Timur, raided across the Khyber Pass in 1505 and attacked Bajaur and Swat in 1518 on his way to founding the Moghul Empire. Having failed to extend their will further, in two embarrassing wars with the Afghans (1838-42 and 1878) the British finally agreed with them in 1893 on a common border, the so called Durand Line. Pakistan has maintained Britain's arm's length approach to the Tribal Areas. In 1969 Chitral, Dir and Swat were added to the NWFP.
The capital of NWFP is located at the east end of the legendary Khyber Pass. This rough edged trading town has been taken and retaken for 2000 years. It is a kaleidoscope of Asian peoples and its old city is straight out of a storybook. From here the Pakistan government maintains a delicate and tenuous hold over the Pashtuns. The public toting of guns is now discouraged, but west of the city Pakistani law applies only as far as the edge of the main road; visitors to the Khyber Pass for example must have armed tribal escort. The British cantonment beside the old city has shady boulevards, churches, army quarters and lavish high walled homes. City's post partition face includes University Town and score of Afghan refugee relief agencies, and the sprawling new administrative-residential township of Hayatabad..
2. MANAGEMENT OF TOURISM AT FEDERAL & PROVINCIAL LEVEL
Introduction
One of the core issues of tourism development is the system of management and organization structured to run it. With the passage of time and the advantage of experience of other countries tourism administrations, it is possible to make comparisons and compare role models best suited to Pakistan. There are many role models to choose from as almost all countries in the world have tourism management bodies of some kind.
One of the primary recommendations of the master plan report is in the area of who should manage the tourism sector. However to fully appreciate the rationale behind the recommendations it is first necessary to look at and evaluate the present organization and management structures which have been in place in Pakistan for the past thirty years and which had its genesis dating back to 1949.
The Federal Ministry of Culture, Sports, Tourism and Youth Affairs
To understand the present position of the Ministry it is necessary to review briefly the tourism industry in Pakistan in its historical perspective. Awareness of the relative importance of tourism was slow to understand, and although Pakistan became a member of the International Union of Tourism Organizations (IUOTO) now the World Tourism Organization (WTO) in 1949, as a sector of government activity, tourism was placed with the Ministry of Railways where it remained until 1955. It was then transferred to the Commerce Ministry. It was during this period (1955-60) that a proper organization for tourism was conceived and a Tourism Bureau was created in 1960 when it became part of the Ministry of Commerce and attained the status of an attached Department.
In 1964 it was transferred to the Office of Chief Administrator Civil Aviation and Tourism. When the Aviation Division was created in 1968, the Bureau remained as an attached Department of this Division. In 1970 it was downgraded to a Cell though continuing as part of the Civil Aviation Division when most functions of the Bureau were assigned to the newly formed Pakistan Tourism Development Corporation. Tourism was taken seriously for the first time at the policy making level in 1972 when a Ministry of Minority and Religious Affairs and Tourism was created, though this Ministry was disbanded in 1976 when the Tourism Division became part of the Ministry of Commerce again. In 1977 the Ministry of Culture, Sports, Tourism and Archaeology was created. A difficult period of time ensued with the imposition of Martial Law and what small tourism there was, declined as a result.
From 1977 to 1996 tourism remained in the same Ministry but was given various emphases in the administration and switched between divisions. In
1996 the Ministry became the Ministry of Culture, Sports, Tourism and Youth Affairs which was split into three wings:
• Tourism and Sports
• Culture and Administration
• Youth Affairs
From the foregoing it can be surmised that judging the manner in which tourism was shifted around over the years, it had a relatively low priority in the government.
In spite of the fact that a national tourism policy was introduced in 1990, the sector was still accorded a very low priority, and tourism seemed to be attached to ministries with sectors requiring more attention and priority. Certainly in the current ministerial structure, culture, sports and youth affairs, tourism seems more a pain in the side than a sector which needs cultivating and nurturing. The manner in which the business affairs of tourism is conducted at the level of the Tourism wing gives cause for alarm on a number of counts, not the least of which is it's dealings and relationship with the private sector.
Currently the Ministry is responsible for the policy formulation, development, marketing and promotion of both foreign and domestic tourism besides coordination and regulating of federal and provincial governments and private sector activities responsible and involved in tourism. Within the overall set up it is pertinent to observe that only the tourism wing of the ministry in collaboration with its field organizations are totally responsible for the development of the tourism industry. These organizations are:
• Department of Tourism Services
• Pakistan Tourism Development Corporation
• Malam Jabba Ski Resort
• Pakistan Institute of Hotel & Tourism Management
• Pakistan Austrian Institute of Hotel & Tourism Management
The tourism wing of the ministry currently has approximately 90 officers and staff on full time employment ranging from the Joint Secretary's Office down to Assistant Chiefs and clerks. These staff is career employees of government controlled and disciplined by the Establishment Division. As with all or nearly all government employees they are termed generalists and can be moved from ministry to ministry as required. Over the year the tourism staff has been gradually reduced to its present numbers. There is very little serious tourism knowledge in the tourism wing other than one or two long time academic professionals in the Development and Research section.
Within the tourism wing the work has been distributed amongst various sections, these are:
• Regulation Section
• Publicity and Promotion Section
• International Coordination Section
• Facilitation Section
• Operation Section
• Research & Statistics and Planning Development
Regulation Section
Is responsible for the administrative control of the Dept of Tourist Services, Pakistan Tourism Development Corporation, Pakistan Institute of Tourism and Hotel Management and Malam Jabba Ski Resort. In addition to administrative matters the section is also responsible for the control, licensing, standards and improvement of hotels, restaurants, travel agents, tour operators, tourist guides and evaluation of proposals and requests for training abroad.
Publicity and Promotion Section
The functions of this section are to propose publicity and promotion measures and to monitor and evaluate the publicity and promotion of PTDC and providing funds for undertaking publicity, promotion and marketing of tourism within and outside Pakistan. They are also responsible for liaison with national and international organizations in terms of publicity and promotions. These would include WTP, PATA, ASTA.UFTAA, WATA and similar international bodies. A crucial involvement is the close working relationship needed in regard to all matters of private sector participation in international trade fairs, conferences and exhibitions, as well as working closely with PIA, other airlines, tour operators, hotels and other organizations involved in the promotion of Pakistan overseas.
International Coordination Section
This section is responsible for all activities involving WTO and other international organizations concerned with tourism development. This means matters relating to statutes, rules of procedure, contributions, elections, legal and administrative structure and obligations of Pakistan's membership as a full member. Other involvements include participation at international conferences, general assembly sessions, executive council sessions and meetings of various working parties within these parameters.
Facilitation and Support Section
Its main duties are to support the private sector in establishing tourism facilities and to assist them in applications and requests for concessions and incentives from government as set out in the tourism policy. It also publishes the frontier formalities booklet for the guidance of international tourists. It has to ensure the upkeep and standards of tourist facilities at airports, railway stations, bus stations, archaeological sites etc. It also is responsible for regulating and facilitating foreign employment in the tourism sector.
Operation Section
This section is responsible for processing applications of mountaineering expeditions and trekking parties and provides the necessary permissions and administrative arrangements as well customs clearance, briefing/debriefing, porters, weather and a range of other facilitation. It formulates the rules and regulations for mountaineering expeditions and traveling parties. This section also is responsible for maintaining proper and correct statistics of all mountaineering groups in Pakistan and suggests measures for the promotion of mountaineering in Pakistan. It covers a wide range of other related adventure activities such as trekking, hunting, safaris, white water sports etc.
Research & Statistics and Planning Development
The function of this section is to collect statistical data on various aspects of tourism and publish in report form. It is also responsible for preparation of development plans, project appraisal, monitoring and evaluation of development projects. It also undertakes research studies and is required to formulate the ministry's tourism development projects. It compiles eight regular publications besides completion of some adhoc research papers and studies.
The terms of reference and duties of each of these sections are comprehensive. However the Ministry is still uncomputerised with outdated procedures and work methods. Specifically, work output and accomplishments is hampered by considerable impediments ranging from administrative bureaucracy, lack of modem day computer technology, lack of funds, lack of experience and professional knowledge, lack of facilities, short working hours and general lethargy. In fact its deficiencies in all departments and lack of funding have serious implications in the effective management of the tourism sector. It has never been a source of effective and meaningful data, and the most recent statistics and references date back to 1981. This has been rectified with the completion of motivational and expenditure surveys of foreign and domestic tourism undertaken early in the current year 2000. The Ministry in its present form has never had the respect or confidence of the private sector and has not contributed to the development of the sector in any meaningful degree over the last twenty years. Its lack of actions in pursuing policy implementation is lamentable. The Ministry is not fully empowered to tackle the problems of tourists and tourist enterprises because of assigning of most of these responsibilities to other ministries/divisions
Department of Tourist Services (DTS)
This department was established in 1976 after promulgation of the three acts to ensure the standard and quality of facilities to be provided by hoteliers, tour operators and tourist guides. Currently it has a staff of 116. The main responsibility of this department is to enforce these acts in the country as a whole and to ensure that tourists are provided these facilities/services which are promised them. Specifically the functions of this department encompass the following:
Registration of hotels, restaurants, travel agencies and tour guide services.
Classification of One to Five star hotels.
All matters pertaining to the issue, renewal, supervision, cancellation, transfer of licenses of hotels, restaurants, travel agencies and tourist guides.
Prescribing limits on the number of persons to be accommodated in rooms, transport, and service charges relating thereto etc.
Enforcement of apprenticeship scheme.
Study of rules of establishment of hotels, restaurants, travel agencies and ensuring their conformity to these rules.
Enforcement of the code of conduct as specified.
Fixation of rates and service charges for boarding, lodging, food & beverage and charges applicable to travel agencies and tour guides. Revision of such rates according to economic fluctuations or otherwise.
Setting up of Advisory Committees in accordance with the laws and performance of secretariat work connected with it.
Receive and investigate complaints of tourists, foreign tour operators and travel agencies.
This department is one of the most contentious mechanisms of the tourist industry in Pakistan. It functions on the disciplines of three tourism acts, which are outdated by twenty years. The standards and international regulations in the accommodation sub sector alone over the last twenty-five years has changed and improved to modem day demands. The requirements of every aspect of hotel construction and facilities including kitchens, food preparation, health, services, public areas, sanitation, environment etc etc. now has to conform to international standards. Grading also now comes into the international domain, as well as taking into account quality of staff and training requirements. The list goes on.
That this department functions, decides and enforces based on totally outdated laws is not acceptable either here in Pakistan or internationally. Under international law, tour operators who promote and bring visitors to a country are now legally responsible for providing what is stated in their programmes. In the case of Pakistan a stated grade of hotel based on the existing tourism acts does not conform to international standards, and as a result if featured and quoted in overseas tour programmes a client may sue the agent for misrepresentation. This is one fundamental issue which illustrates the need for a total review and updating of the acts as they stand. To continue to control the sector by enforcing these are further distancing the tourism private sector from the Ministry. This is compounded by the fact that those responsible for licensing, standards and enforcement are unqualified in their tasks. They are basically untrained or experienced in what is now a highly professional and international sub-sector of the industry.
The Ministry of Tourism through the DTS has never addressed the grievances of the private sector to modify these acts which are now non-implement able at this stage, and numerous proposals given by. the private sector has gone unresolved.
The inherent malpractices that exist in the tourism public sector have its genesis in this area of enforcement. As a result there is no standardization or quality control of the tourism product and the travel agency/hotel private sub-sector are disillusioned and unresponsive to meaningful involvement with the Ministry in areas of promotion and co-operation.
Pakistan Tourism Development Corporation (PTDC)
The PTDC is a public limited company registered under the Companies Act in April 1970. Ostensibly it was created to be the government's arm and thrust for tourism development in Pakistan. It was given a wide brief and effectively fronted the ministry in all the activities of development and promotions. It's stated objectives are:
To develop tourism infrastructure on an all Pakistan basis
To act as an agent on behalf of the Federal Government for the production of tourist literature and publicity for tourism both domestically and internationally.
To act as a catalyst to encourage the private sector to play a more active role in tourism development.
To undertake tour operations and provide ground handling facilities for group tours.
The PTDC has an administrative structure which is responsible to control and operate all its involvement's in the tourism sector. These are:
Planning and Development Wing/Engineering Department which undertakes identification and implementation of projects dealing with tourism infrastructure such as motels, recreation units, resorts etc.
Publicity and Promotion/Marketing Department which undertakes the production and publication of tourist literature and foreign and domestic tourist markets.
Associated Hotels of Pakistan (AHP) Ltd, which manages the AHP chain of hotels which includes: Faletti's Hotel, Lahore Flashman's Hotel, Rawalpindi (Dean's Hotel, Peshawar has been sold out to the private sector) Cecil's Hotel, Murree
PTDC Motels Ltd which undertakes the management of all hospitality units operated by PTDC in various tourist destinations in Pakistan.
Pakistan Tours Ltd which provides ground handling and transport facilities for international and domestic groups and also acts as an inbound tour operator.
PTDC maintains 20 Tourist Information Centers (TIC's) in different parts of the country. A model TIC has been set up at Taxila and Islamabad and a new one has now opened at Karachi airport. Grants received from government for maintenance of tic's are utilized for salaries of working staff and on rent and maintenance. TIC staff is directly employed by PTDC.
PTDC is governed by a Board of Directors. The Chairman is either appointed by the government or the position is held by the Minister of Tourism in the absence of an appointed Chairman. A maximum of 22 directors is allowed. The Chief Executive is the Managing Director under whom the various organizations, subsidiaries and departments of PTDC operate. The Managing Director is the principal reporting officer to the Board.
PTDC currently has a staff of some 240 excluding Hotels and Motels. An unsatisfactory and worrying aspect of the day to day administration and management of PTDC is that not all staff is employed by the Ministry directly. There is the problem of dual management in that half the employees are generalists employed directly by the ministry and half employed as semi experienced personnel directly by PTDC. This results in dual orders and disciplines resulting in petty suspicions which affect reporting procedures and a lack of internal cooperation.
Since its inception PTDC has had a troubled time and its relationship with the ministry and the private sector has not been good. PTDC involvement in activities such as tour operating has been seen by the private sector as the government being directly in competition with the private sector. Its funding from government has not been sufficient to enable it to function as originally envisioned and it is top heavy in institutional and administrative costs, so much so that it was estimated that almost 80% of its funding from government has in the past gone on administration and staff costs. This has been addressed in part with a reduction in employed staff.
PTDC does however own and operates 31 motels and facilities totaling some 550 rooms in areas where the private sector would not invest and currently provides a good deal of required low cost motel accommodation in the Northern Areas and to a lesser extent in parts of NWFP. Its involvement in hotels has been a serious failure in terms of standards and profitability. Due to lack of government support no funding was available to maintain standards, and experienced staff was difficult to identify. However PTDC has now privatized Dean's Hotel in Peshawar and Cecil's Hotel in Murree which has since closed and is being rebuilt as a shopping complex. The remaining two properties are still operated by PTDC though efforts are underway to privatize Faletti's in Lahore, but technical hitches concerning cantonment authority will delay any progress to privatize Flashmans Hotel in Rawalpindi. That these two hotels are allowed to remain open and promoted by PTDC as acceptable standards of accommodation as hotels is a serious indictment of the governments involvement in commercial tourism activities.
Malam Jabba Resort Ltd
Malam Jabba Resort is a private limited company under the administrative control of the Tourism Division having its own Board of Directors with the Secretary, Ministry of Sports, Culture, Tourism & Youth Affairs as its
Chairman. Formed in 1980, the Company took over from M/s Pakistan Services Ltd the construction and establishment of a Ski-cum Summer Resort at Malam Jabba, Swat, and after obtaining administrative and financial approval from government completed the project in 1988 at a cost of Rs.90.68 million which included the loan amount of AT Shillings 16.30 million provided by the Austrian Government. It is designed to offer the following facilities and equipment:
52 Rooms
Restaurant
Chairlift
Training Lift
Skate Rink
Skiing equipment
Snow Clearing Machines
Two Generators
Two Chalets
The project was never visualized as a financially viable proposition which was conceded by ECNEC when it granted its approval to the project in 1979. Six attempts were made to lease out the project but to no avail. Finally it was privatized and sold to the highest bidder M/s Parks Pakistan (PVT) Ltd for Rs 50 million. The company backed out however and filed a suit against the government for non-issuance of a liquor permit.
With a view to making the resort functional for promoting tourism in the country and also to generate income to meet the increasing expenditure being incurred on salary and maintenance, the resort was put into partial operation through PTDC in July/August 1998. It was formally opened while incomplete by the then Prime Minister in November 1998 and directed that PTDC should make it fully operational at least to the first floor by June 1999. Other options were considered such as the resort being run as an extension of the Serena chain of hotels. Meanwhile it was decided that PTDC would act as managing agents on payment of certain management fees. This has not been formalized and the future of the resort is currently in doubt.
A recent inspection of the resort showed that the resort displays five different names on signboards positioned at strategic places and three different names in the main entrance lobby. There are engineering defects in the roof resulting in leakage into rooms below, only part of the accommodation has been completed and there is the appearance of decay and general neglect. Only 22 rooms are functional.
The main visitors to the resort are day-trippers who visit during the summer season. However no facilities for day-trippers have been .provided by the resort. These include:
Drinking Water
Toilets
Parking
Resting areas (seats/benches)
Children's recreation facilities
Walking tracks
Shelter
Restaurant/Fast food outlets
Telephones
As with the PTDC, staff is divided into two groups. One group employed by the Ministry the other employed by PTDC. This has created hostility among the staff which adversely affects the working environment, efficiency and standards of service at the resort. There is an urgent need to address the lack of training and qualified staff for the resort which adds to the fact that it is a deteriorating physical plant and will have an inevitable negative impact on tourism generation to this area.
Pakistan Institute of Tourism & Hotel Management (PITHM)
The Pakistan Institute of Tourism & Hotel Management (formerly known as Tourism and Hotel Institute, Karachi) was initially set up as a cookery school under the decision of the Cabinet in December 1960. Later, an institution called the Pakistan Hotel Training Institute was established by the former Department of Tourism in September 1967 in collaboration with the Pakistan Hotel, Restaurants and Clubs Association. Capital investment was provided by the Government of Pakistan for the establishment of the Institute and to supplement its recurring expenditure.
It aimed to train personnel for hotels, restaurants, air/shipping lines and in various catering disciplines. The cost funding was covered by the UNDP/ILO as agreed in the project document and signed by the UNDP/ILO and the Government of Pakistan. This funding covered the cost of international training experts, overseas training and equipment. Interested organizations contributed training expenses of their staff and private students paid their own fees.
The institute functioned under the National Tourism Organization until mid 1972 when it was registered as a society under the Societies Registration Act I860. thereby acquiring its legal status. Since then the Institute has been functioning as an autonomous body administered by a Board of Governors including representatives of the travel trade, the hotel industry, PTDC, Airlines, shipping lines and the Ministry of Education. The Ministry of Culture, Sports, Tourism and Youth Affairs functions as the coordinating, supervisory and controlling body for the Institute with the Secretary of the Ministry acting as ex-officio Chairman of the Board.
The main function and activity of the Institute is to impart knowledge by training manpower for the Hospitality, Travel and Tourism Industry in Pakistan. This is done by regular courses, seminars, workshops, on the job training etc. It also arranges and coordinates training programmes with international agencies such as Western Wheat Association, World Food Organization. It cooperates with PIA’s training center in Karachi and provides courses for the Pakistan Navy. It also offers consultancy services when and where required.
Since its inception the Institute has been located in rented buildings which could not cater for the demands of a professional education institute. This has been a major constraint on its effectiveness and its ability to train students to the standards indicated in its aims and objectives. Recently the institute has moved to a newly constructed building which is not yet complete and lacks numerous important facilities and equipment and has yet to resolve many problems to enable it to provide better training and facilities and environment for students and staff.
The institute cannot provide proper fulltime training in any of its disciplines which are stated as courses conducted in:
• Travel and Tourism
• Tour Planning
• Sales and Marketing
• Hotel Management
• Hotel Front Office
• Hotel English Skills
• Food and Beverage Production and Service
• Bakery
• Fast Food and Continental
• Food and Beverage Service (bar and restaurant)
• Housekeeping
• On the Job Training
• Interior Decoration
• National Training Bureau (Special Skills)
It has had no official Director for the last decade and the current Acting Director has little management or training skills and is not in tune with the requirements of the hospitality industry. The existing staff is demotivated and unqualified with instructors entrenched in outdated syllabuses and teaching methods. As a result, the image of the school throughout the industry is very negative, primarily due to lack of knowledge as to the industry needs and what the school can provide.
The inabilities of the school is further compounded by government controls and establishment employment scales where it is not possible to attract national or international qualified trainers at acceptable private sector levels.
Previous funding assistance through the EU and ILO in a range of technical support has not been adapted by PITHM and consequently has proved unsustainable due to the lack of Government commitment and implements able actions.
A new PAITHM school is being completed in Swat with assistance from the Austrian Government. At the time of this report it is questionable and remains to be seen, that in view of the experience of PITHM, Karachi, and if it is to be run on the same lines, if it will contribute improved training standards to the industry.
2.2 PROVINCIAL TOURISM DEPARTMENT AND ITS CONSTITUENTS ORGANIZATIONS N.W.F.P.
Tourism is the responsibility of the Department of Tourism, with the Secretary as the delegated official in charge of tourism. Efforts of the Federal and Provincial Governments have resulted in promotion of tourism in this province but have not been able to fully explore the tourism assets of the province.
NWFP after assessing the performance of the Tourism Development Corporation of Punjab and realizing that most tourism assets of Pakistan are located in the jurisdiction of NWFP, set up the Sarhad Tourism Corporation (STC). The STC was assigned the total responsibility for promotion activities necessary . The Corporation acts as a field wing of the Department of Tourism.
NWFP along with the Northern Areas is generally recognized as the tourism region of Pakistan, with its beautiful valleys, lakes, ski resorts, archaeological sites, historic remains, rivers, mountains and glaciers, civilization and culture and its people. With the Northern Areas it is the main tourism product and image to be projected to the outside world; that it has failed to be developed and promoted, is a lack of motivation and will, based on negative financial resources of the provincial government and its tourism organizational structure.
The functions of coordination, regulation and implementation of policies of the Department of Culture, Sports, Tourism, Archaeology and Museums are looked after by the Secretary being its head. In the secretariat, the Secretary is assisted by:
Deputy Secretary, Sports, Culture, Tourism, Archeology & Museums.,
Four section officers alongwith their support staff.
The organization of the Secretariat is as follows:
ORGANIZATION OF THE SECRETARIAT
ROLE AND FUNCTIONS
The Department's functions, as prescribed in the Rules of Business of the Government of NWFP, are as follows:
Tourism;
Sports;
Culture;
Archaeology & Museums;
The attached Directorates of the Department have set the objectives as detailed in the following paras:
DIRECTORATE OF SPORTS
The Sports Directorate has the following objectives:
Control and allocate necessary grants to the sports organizations in the Province;
Develop sports activities;
Hunt talent by holding inter-district, inter-divisional and inter-agencies tournaments; and
Impart training through coaching camps.
SARHAD ARTS COUNCIL
Sarhad Arts Council was established in 1985 at Peshawar with a view to achieve the following broad objectives:
Preserve cultural heritage;
Promote and develop culture, art and literature on indigenous and national lines, keeping the regional background intact;
Monitor the activities of cultural, arts and literary organization:
in the Province;
Forge unity among different segments of society;
Maintain a healthy balance between the institutions involved ii cultural and literary activities and Government functionaries;
Cement the bond of brotherhood between oilier province; through cultural exchanges, arts exhibition and literary meetings;
Launch campaign against drug abuse/menace through cultural and literary activities.
SARHAD TOURISM CORPORATION
Sarhad Tourism Corporation (STC) was incorporated as a limited company on January 14, 1991 for the development of tourism industry in the Province. The strategy of STC is to act as catalyst and encourage the private sector to come forward for the development of various aspects of tourism. The objective for the establishment of STC is to:
Motivate the private sector to come forward and support tourism development in the shape of tour operations and accommodation facilities at potentially attractive regions;
Provide long-term, leases to private sector for development of properties through Joint ventures with STC;
Serve as a spring board for fruitful interaction between the Government, PTDC and the private sector for proper development of tourism industry;
Cooperate with private sector in developing, distribution and sale of quality information and publicity materials;
DIRECTORATE OF ARCHAEOLOGY AND MUSEUMS
The Directorate has been established to:
Preserve the cultural heritage;
Operation and maintenance of the Peshawar Museum to impart knowledge and educate the youth students, scholars and foreign visitors.
3 SWOT ANALYSIS, PLANNING ORGANIZING LEADING & CONTROLLING IN THE PROVINCIAL TOURISM Department
THE ADMINISTRATIVE DEPARTMENT AND ITS SECTIONS:
This Department i.e. Information, Public Relations, Culture, Tourism, Archaeology & Museums was bifurcated in to two separate Admn: Departments i.e. (i) Information & Public Relations Department and (2) Sports, Culture, Tourism, Archaeology & Museums Department vide Establishment & Administration Department Notification dated 6.3.2002. Previously it was functioning under one Administrative Secretary.
It is mentioned here that the Directorate of Sports was previously functioning under the Administrative control of the Higher Education Department. After restructuring of the Department, it has been attached under the Administrative Control of this Department. The following are the four section of the Department:
1.ADMINISTRATION 2.PLANNING 3.CULTURE & TOURISM 4.ARCHAEOLOGY, MUSEUMS & SPORTS
The objectives of The Department are
Augment the tourism, revenues and tourism potential of the Province in particular and the Country in general; and
Establish Tourism Information Centres at various locations in the Province to disseminate information about tourist spots and facilities to potential tourists and provide market services.
The Department is promoting the Government's increased emphasize on Sports, Cultural, Touristic and Archaeological activities. The Sports Directorate regularly holds inter-district and inter-divisional tournaments and conducts coaching camps in squash, athletic, hockey, badminton, boxing, football, table tennis, basketball, weight lifting and volleyball at Peshawar, Abbottabad and Swat where participants are coached. The accession registers of all antiquities of the museums have been maintained by the Directorate of Archeology and Museums. The museum itself comprises of three sections viz Gandhara, Muslim and Tribal sections. Sarhad Art Council is responsible in collaboration with the rest of directorates for the promotion of cultural heritage of the province. Sarhad Tourism Corporation has been established to promote sustainable tourism in the Province.
The Administration Section
This section of the department is responsible for the personnel related matters . Preparation of Establishment budget. It deals with general administration issues of the directorates and the department besides training. The HUMAN RESOURCES of the department includes the manpower of the Department itself and its directorates of Culture, Sports, Tourism, Archaeology & Museums is provided in tin table given below:
TABLE MANPOWER OF THE DEPARTMENT AND ITS DIRECTORATES
(In Nos.)
| OFFICERS | STAFF | TOTAL | |||
| 2002 | 2002 | 2002 | |||
| 1. | Secretariat | 6 | 24 | 30 | |
| 2. | Culture | 2 | 40 | 42 | |
| 3. | Sports | 4 | 16 | 20 | |
| 4. | Sarhad Tourism Corporation | 5 | 20 | 25 | |
| 5. | Archeology & Museum | 4 | 94 | 98 | |
| Total | 21 | 194 | 215 | ||
The Planning Section
It is responsible for the preparation of project proposals in coordination with the concerned directorates. Each year proposals are sent to the Federal and provincial governments for inclusion in their development programmes. The section provides after consultation with the directorates, quarterly, six monthly and yearly progress as well as review reports. Its main function is the in and on time approvals for the projects of the directorates and their monitoring. The planning section is focused on the developmental activities . The developmental activities are aims at the promotion of sustainable tourism and preservation of cultural heritage. The dissemination of modern and traditional games, the propagation of the living culture , the preservation of ancient civilizations
and their remains are goal to be achieved through continuous planning.
The Tourism & Culture Section
It is responsible for communicating the external information received to the directorate concerned and to receive reply from directorates internally for further dissemination to the department concerned . The role of this section is to coordinate and link up the directorate of Tourism & Culture to that organization of the government , international, national and local that can be a source of preservation of cultural heritage and promotion of sustainable tourism.
The Archaeology, Museums & Sports section
This section is responsible for linking its related directorates to the concerned agencies whether in the private or public sector for the achievement of the goal of preservation of ancient civilizations and the propagation of games in vogue and also those being forgotten.
The basic thrust of the directorate is towards preservation of ancient civilization especially the site listed on world heritage list i.e. Takht Bhai. The main attraction in ancient cultures is with reference to Gandhara , Hindu Shahi, the Muslim era and other scattered remains. The Swat Valley, Mardan & Charsadda regions provides for a number of sites where traces of the old culture are visible. The Historic Kissa Khani Bazar , Peshawar and the Khyber pass all are the custodians of old tails and trails that sometimes links to warriors and at other times recalls historians, travelers and writers. The section enables the Directorate to know about the latest techniques for preservation, display and making the knowledge of old civilization more interesting to the visitors so that they visit these treasures time and again.
ORGANIZATION
The Department is carrying out its allocated business through the following attached departments:
§
Directorate of Sports§
Sarhad Arts Council§
Sarhad Tourism Corporation and§
Directorate of Archeology & MuseumsDIRECTORATE OF SPORTS, NWFP
In the pre-devolution setup there was a Directorate of Sports NWFP at the Provincial level and Divisional offices of the same at the Divisional Headquarter levels in old setup. After devolution of powers to the District Government, the Sports offices at Divisional level were abolished and instead District Sports Offices established in each District Headquarter headed by a District Sports Officer. Organogram of the new setup is placed below:
After establishment of District Governments, all playing facilities such as stadiums, Gymnasiums and Squash Courts, provided by the Provincial Government have been handed over to the District Governments for their management, use and its maintenance.
FUNCTIONS OF THE DIRECTORATE OF SPORTS NWFP
Promotion of Sports in the Province by providing playing facilities such as Sports Stadia, Gymnasia, Squash Courts, indoor Games Hall, Swimming Pools, etc. at Tahsil, District and Divisional Level. Coordinating activities of sports organizations, providing them financial assistance and Coaching of the youth. Coordinating inter schools and inter colleges sports activities. Holding of inter-district, division & Provincial Tournaments. Arranging inter-provincial sports competitions and conducting international matches. Arranging special people sports festival. To impart training through coaching camps. Advise the Government on plans and programmes for youth welfare. Organize Youth activities at the Provincial level. Promote youth activities in the private sector. To coordinate with the Federal Government m the Youth Affairs Division to promote the activities of the Youth. To organize inter-provincial as well as international youth exchange programmes with the collaboration of Federal Government.
ACHIEVEMENTS
The Provincial Sports Department has provided a number of playing facilities at the Provincial, Divisional and District Headquarters in NWFP. The playing facilities provided during the period of present regime are as under: -
Hockey turf at Bannu Hockey Stadium.
Improvement/renovation of Sportsmen Hostel at Bannu.
Construction of Bannu Sports Stadium
Sports complex at Kohat constructed consisting of Cricket, Football and Hockey.
Tennis courts at Peshawar.
Badminton Hall at Mardan.
The Directorate of Sports NWFP is regularly organizing Inter District, Inter Division and Inter Provincial Youth competitions for boys and girls. Besides, Pakistan level tournaments and Sports Festival for Special people have been organized.
Holding of National, Provincial and Regional level Sports tournaments/activities for Special people and the general public specially for the students community.
To organize International competitions if allotted by the Federal Govt. / respective Sports Federations.
Coaching and Training Camps for the talented Sportsmen.
Inter Agencies Sports competitions.
Mass participation activities like Walk, Road race, Jogging and mini Marathons.
Efforts are being made to provide play grounds in each Tehsil of the Province. This year a sum of Rs 3.8 million has been allocated in the ADP for provision of play grounds. Moreover, the Provincial Govt. with the assistance of Federal Govt will provide Synthetic Hockey turf at places like Abbottabad, Swat, Mardan and Kohat etc. Presently 2 Synthetic Hockey Turf one each at Peshawar and Bannu are available.
A sum of Rs 5.3 million has been allocated in the current financial year for the promotion of Sports activities. It may be mentioned here that the Govt. of Punjab and Sindh are providing more than Rs.20 million for the same Sports activities which are supposed to be organized by the Directorate of Sports NWFP.
To organize sports properly through out the Province and to have better coordination with the executing agencies in connection with the construction of Sports projects, it is essential that District Sports Officers in each District of the province are established with the minimum staff of the District Sports Officer., Junior Clerk, Naib Qasid and a Chowkidar. In Punjab they have established Sports offices even at the Tehsil level.
The Millenium Spring festival was organized by the Sports Department at Army Stadium, Peshawar on 10th March, 2000. The Chief Executive of Pakistan was the Chief Guest. Besides Governor, NWFP and Corps Commander 11 Corps, a large number of high ranking Civil/Military Officers and general public witnessed different events such as Buz Kushi Match, Tent Pegging, Horse Dances and Band display.
SARHAD COUNCIL OF THE ARTS
The Sarhad Council of the Arts is functioning under the Administrative control of Culture Department. No restructuring/devolution has been taken in this organization as it contains a bare minimum of staff.
FUNCTION OF THE DIRECTORATE OF CULTURE
To Preserve Culture Heritage;
To promote and develop culture, art and literature on indigenous and national lines, keeping the regional back-ground intact;
To monitor the activities of cultural, arts and literary organizations in NWFP;
To forge unity among different segments of society;
ACHIEVEMENTS
The Cultural Wing has fabricated a cultural Float on 23rd March, 2000 (Pakistan Day) depicting the cultural heritage of the NWFP in particular. The Float has taken part in the national festival on the Pakistan Day held at Islamabad. It was viewed by a large number of people, besides the dignitaries invited on the occasion. It has a positive impact in preserving a developing cultural traditions and heritage.
The Culture wing is also maintaining and running the Nishtar Hall meant for holding cultural shows, literary activities and other government functions. As many as 66 cultural shows have been held in Nishtar Hall during the last 10 months. The function of the Pakistan Day on 23 March, 2000 chaired by the Governor, NWFP was also held in Nishtar Hall.
In its pursuit to the cultural development, financial assistance is provided to the needy and deserving artists/singers/sportsmen and Artisans. During the last 20 months, a sum of Rs.8,17,800/- has been provided to them as stipend/ financial assistance.
SARHAD TOURISM CORPORATION
The Sarhad Tourism Corporation NWFP was established in 1991 to promote and develop the Tourism industry of NWFP by involving both the private and public sectors. A Cabinet Committee on Tourism, under the chairmanship of the Minister for Tourism NWFP was established in January 2000, for the formulation of a comprehensive tourism policy. The Committee held its four meetings and discussed threadbare various aspects of the matter. The Committee approved the Draft Tourism Policy for placing before the Cabinet. It was also decided in principle that the Government properties shall be taken into as equity share with private sector while developing the same for tourism purposes. Further progress in this regard is under way.
The NRB has proposed the transfer of PTDC Motel and information centers to the Provincial Government NWFP for its operationalization by the Sarhad Tourism Corporation, which is under consideration by the Cabinet committee headed by Minister Agriculture Government of NWFP.
OVERALL GOAL: To act as a catalyst for the promotion of sustainable tourism development in NWFP.
SHORT TERM OBJECTIVES : To create awareness of Tourism as an Industry, build rapport with private investors for promotion of tourism in the NWFP, publicity and promotion.
MID TERM OBJECTIVES : To accomplish the task of motivating the private sector to come forward and indulge in certain activities to provide the demonstrative effect by running tourism development complexes all over the Province and through acquisition of existing state land and development of new facilities and buildings.
LONG TERM OBJECTIVES: To create adequate awareness amongst the people that tourism is an income generating agency and that it can become a leading industry for the NWFP.
ORGANOGRAM
ACHIEVEMENTS
As per its policy of public -private partnership, the STC advertised the leasing out of the Falak Sair Hotel at Kalam for a period of 30-33 years. The process of its leasing out to the private sector is at the final stage. Likewise, privatization of Kund National Park is also under active consideration.
The Shandur Polo Tournament is an important annual festival from the view point of Tourism development. This time it was held on July 8-10, 2000 and attracted a large number of people. The Chief Executive of Pakistan also graced the occasion.
According to a programme, the STC is going to install a chain of logos in Peshawar City at places of historical value for the convenience of tourists particularly coming from abroad. The Peshawar Museum and Khan Klub will be the starting and terminating point of the logos respectively.
Three rest houses at Nathiagali, one at Donga Gali and one at Behrain, Swat, were got transferred from the C&W Department to the STC for the use of tourists. These rest houses were renovated, furnished and made worth living by the STC and now are rented out to the tourists at rates little lower than the market. This has put a positive impact on Tourism activities pursued by the STC.
The Government of Pakistan in collaboration with UNDP/WTO has engaged a team comprising national and international consultants for formulation of a Master Plan for Tourism Development in the Country. The consultants visited Peshawar on 21.8.2000 and held meetings with the Minister for Tourism, NWFP, the Acting Secretary Tourism and the Managing Director, STC and apprized themselves of the necessary information in this regard. Further meetings will be held in due course of time for feminization of the Master Plan.
A group of 6-7 selected persons related to the field of Tourism from Sri-Lanka, are scheduled to visit Pakistan with the near future for comprehensive study of the Touristic potential once formulate its recommendations for the promotion & development of Tourism industry in the Country
DIRECTORATE OF ARCHAEOLOGY & MUSEUMS, NWFP
Since no devolution has been under taken in the Directorate of Archaeology & Museums, therefore no such office nor subordinate offices or institutes are run or controlled by the District Governments. The Directorate has the following subordinate institutions:
Peshawar Museum, Peshawar
Dir Museum, Chakdara
Mardan Museum, Mardan
ORGANOGRAM OF THE DIRECTORATE
The Provincial Government of NWFP with a view to have our own Provincial Governments law to deal with matters related to moveable and immoveable antiquities, has recently implemented the NWFP, Antiquities Act – 1997 in letter and spirit.
For the preservation of Architectural buildings located in this Province, the NWFP Premises Act is under consideration of Government for promulgation as ordinance.
To conduct exploration in the Province for the discovery of new sites and to carry out excavations of the existing sites situated at various places.
To conserve the ancient sites and monuments for their preservations for the present and coming generations.
To improve and display existing Museums and to take steps for the establishment of new Museums in the Province.
ACHIEVEMENTS
Development of Hund as Archaeological & Tourist point:
The existing site of village Hund is located on the western bank of River Indus at a distance of 5/6 kilometer from the main Swabi Jehangira Road in the Swabi District. It is a well known historical place at the crossing pint of river Indus. Alexander the Great, on his march to India had offered sacrifices to the gods here and crossed over to Punjab. Hund remained the Capital of Hindu Shahi dynasty during the 10th and 11th Century, when Mehmood of Gazna defeated the last ruler of this dynasty and unfurled the banner of Islam in this region.
In view of its historical importance, the Provincial Government decided in 1995 to develop the place as historical and tourist point. Therefore, a PC-1 amounted to Rs.4.170 million was approved with the following components.
Purchase of land at Hund.
Erection of Alexander Monument.
Fencing.
Leveling and dressing
Archaeological excavation.
The land measuring 33 kanal and 8 marlas was acquired recently. Its leveling and fencing has been completed. Construction of the Alexander monument is in progress. Archaeological excavation done in April, May and June, 2000. Valuable coins and some related artifacts have been recovered.
Conservation of Mohabat Khan and Sethi Mosque. Peshawar:
The Directorate of Archaeology & Museums has transferred Rs.0.35 million to the Auqaf Department to start work mentioned in the approved PC-II under the supervision of a panel of experts notified by the P&D Department.
The purpose of the PC-11 is to find the actual causes of decay of these two historic mosques. After detecting the ailment, a PC-I shall be prepared for submission to the P&D Department to conserve and restore the said mosques.
Steps are also being taken for the Conservation, rehabilitation, protection and renovation of Archaeological sites in and around Peshawar/Garden at Gor-khattree alongwith Development of Hund as an Archaeological and Tourist site. Improvement of the existing Museums is also on the card.
ESTABLISHMENT BUDGETING
The Establishment as prepared by the respective functionaries of the Directorates and submitted to the Administration section of the Department. The estimates for the next financial year are submitted in the form of proposals for incorporation in the current budget for the next year by the Finance Department, GoNWFP. The Administration Section of the Department also processes the bills regarding allowances , POL, Stationary, Electricity, Telephone, Gas etc.
On quarterly basis the budgets of the Directorates and the Department is updated with the Finance Department including the office of the Accountant General NWFP.
DEVELOPMENT BUDGETING
(I) MAJOR PROJECTS AND ACTIVITIES UNDER TAKEN:
The Provincial Government have provided a number of playing facilities at the Provincial, Divisional and District Headquarter levels in NWFP. The playing facilities provided during the last 3 years are as under:
(i) Hockey Turf lay at Bannu Hockey Stadium.
(ii) Improvement/renovation of Sportsmen Hostel at Bannu.
(iii) Bannu Sports Complex
(iv) Sports Complex at Kohat consisting of Cricket, Football & Hockey grounds
(v) Badminton Hall at Mardan
(vi) NWFP Cricket Academy
(vii) Establishment of NWFP Squash Academy (in progress)
(viii) NWFP Sports Academy in Swat (in progress).
ADP and Non-ADP projects executed during the financial year 2001-2002 and the current financial year 2002-03 is enclosed (Annex-VI).
SWOT Analysis
In our analysis of the market potential for Pakistani tourism products we have identified the following:
Strengths
A rich historical and cultural heritage
World renowned natural attractions such as the Indus valley and the northern mountains
Good access links with primary source markets
An increasing range of hotels, tours and tourist services
Weaknesses
Very limited tourism infrastructure
Poor tourism services in many areas
Lack of any meaningful promotion of the destination
Inadequate national and provincial tourism organizations and services
Negative international image of Pakistan
Opportunities
To improve foreign and domestic tourism by implementation of the WTO/UNDP Strategic Development Plan for Tourism
To create a new image for Pakistan
To optimize existing foreign and domestic markets
To develop new markets, and new tourism products
To increase the national awareness of the benefits of tourism
To increase developmental opportunities in many rural areas
Threats
Lack of national support for tourism
Failure to implement recommendations of the Strategic Development Plan for Tourism
Failure to improve standards of service in all sectors of the industry
Failure to improve infrastructure in all tourist areas
Renewed political and social instability
Types of Markets
There are a wide range of motivations that bring tourists to Pakistan. To be able to penetrate any tourist market successfully, and to develop Pakistan's tourism industry effectively, without unjustified capital outlay, it is essential to develop markets that are directly attracted by the specific tourism products that are either already available in Pakistan, or can be developed as part of the growth of the Country. Certain tourism products attract similar markets and many markets combine various styles of tourism to create marketable programmes. A full analysis of the various markets appropriate Pakistan is contained in the Medium Term Marketing Strategy Technical Report.
Business visitors require a stable and growing economy, with increasing business opportunities in order to be attracted to a country. A strong economy and a healthy business climate increase the frequency of business visits and an influx of new business tourists. Leisure tourists require good access to many parts of the country, good accommodation, services and recreational facilities, and attractions that have are appeal to the tourists as individuals. As each person is different, each destination invariably has attractions that appeal to a certain group of potential visitors. Even the most unlikely attractions gain the interest of profitable niche markets.
For Pakistan we have identified a range of markets that will be attracted by selected tourism products, some of which can be developed in the short term, while others must wait for the opening up of the whole Country to tourists or the development of improved infrastructure.
Business Markets
Business, professional or official visitors come for a specific purpose. They will have come from countries that have official or trading links with Pakistan The economy of Pakistan is not strong, but there are still many business opportunities here and there is evidence of more new capital projects. In addition, there are many inter-government agencies, NGOs and donor programmes working in Pakistan, and this brings significant long and short stay traffic. In turn these visitors also bring in VFR traffic. The majority of business traffic is regional, and current statistics identify China, India and other parts of the sub-continent as the principal source markets, as well as the United Kingdom and America as markets outside the region. At the present time, business visitors account for approximately 25% of all visitors to Pakistan.
Meetings, Conferences and Incentives (MICE) Meetings, Conferences and Incentive programmes bring a singular, but important form of tourism to a country. It is also an important form of domestic tourism. Motivation to hold meetings or conferences in Pakistan is currently governed by the relevance the meeting subject has to the venue. Most current meetings are hosted by organizations already in Pakistan, or by the Government. Pakistan can well provide meeting facilities and the linked accommodation for meetings from 20 to 2,000 delegates.
Special Events
Special events are important in attracting tourists and can influence the numbers of foreign and domestic tourists, both business and leisure, depending on the style of event. Trade fairs attract both local people and foreign supplier; and buyers. Sports events such as cricket matches, polo tournaments, international athletic meets and others attract supporters from the visiting country as well as domestic visitors. Festivals and national events attract all types of visitor, and are particularly important in attracting regional tourists.
Visiting Friends and Relatives
Because of the Diaspora of Pakistanis overseas there are important Pakistani communities in Europe, America, East Africa and the Middle East. Most of them return regularly to visit friends and relatives and in 1998 accounted for 57% of all visitors. At the 1998 level of 245,000 arrivals, they are, and will remain for many years one of the most important markets for tourism. However, because of the very structure of this market, it is a static market that is unlikely to grow unless there is a significant increase in emigration, and the decision to visit is rarely stimulated by normal tourism promotional campaigns.
Leisure
Leisure tourism is the most important form of tourism for most destinations as it is a sector that can be encouraged by infrastructural and facility development in the Country. It is the tourism sector most influenced by promotional campaigns, and markets can be stimulated by well targeted and effective marketing programmes.
Leisure tourism is also based on the natural and existing attractions of Pakistan, and most facilities can be used by both domestic and foreign tourists In 1998, around 55,000 foreign visitors to Pakistan were identified as coming on holiday or for leisure, and this approximated to only 13% of all arrivals, while there were indications that there were over 1 million domestic tourists on a trip of three days or more.
Adventure Tourism
At the present time, adventure tourism is the most evident in Pakistan, and is given highest priority in existing tourism promotion. This is a very important form of tourism and includes trekking and mountaineering. Most of the tourism of the north is based on this and it has been reported that over 50% of all foreign holiday tourists at the present time participate in these activities. These are very important forms of tourism, and for trekking in particular, Pakistan can increase its market share. Mountaineering has little capacity for growth as the demand for mountaineering permits is now outstripping availability. Improved access to certain areas, improved standard of guiding, the development of facilities for additional activities such as skiing, white water rafting, para-and hang-gliding, and canoeing, through trained and qualified adventure centers, will stimulate additional interest
Soft adventure tourism can be developed in all parts of the Country with such examples as Camel Safaris in Sindh and Baluchistan, River Sailing on the Indus, Jeep Safaris in many parts of Pakistan, Sailing and Game Fishing off the coast of Sindh and Baluchistan, and Horse Trekking in other regions. The deserts are ideal areas in which to develop new soft adventure programmes.
Leisure/Resort Tourism
There are a limited number of tourist resorts in Pakistan, and as most foreign tourists are primarily attracted by the cultural and historical attractions, or sc adventure activities available, most resorts are targeting domestic markets. However, with a large domestic market, there is robust demand for tourist resorts that are aimed at the needs and in a price range appropriate to domestic travelers.
Cultural Religious and Historical Interests The sub-continent's primary attraction to most international source markets i the broad range of cultural, religious and historical attractions. The many cultures, the wealth of relics from past empires and civilizations, the strong religious heritage of the region, and the diversity of the people provide an appeal that is hard to match in other parts of the world.
The religious sites can attract pilgrims, while the historical sites can be linked in themed tours. In many cases, regional pilgrims will come to Pakistan to participate in religious festivals, while tourists from further away, such as Japan, Korea and Taiwan, may combine a holiday tour with visits to Buddhist shrines. In Pakistan, Buddhist, Sikh and Muslim shrines all provide the opportunity of developing a wide range of religion-based programmes.
The opportunities for innovative tour development and marketing are only limited by a need to ensure better access to certain sites, co-ordination with festival authorities, and the provision of improved guide services and better facilities such as toilets and interpretation.
Environmental and Eco-Tourism
In many parts of the world, and increasingly in the sub-continent, the attractions of the natural environment are seen as a major tourism resource. The interest in the natural world, its birds, animals, land and rivers (both abo1 and below the water) and diverse rural surroundings, bring opportunities for tourism to benefit even the most remote areas. Many of the most important source markets are found in the industrialized countries of Europe, Japan and the Americas.
Environmental tourism, whether referred to as safari, eco-tourism (although this term is suffering from excessive and incorrect use and a poor image), or nature tourism, attracts serious tourists who are keen to discover more about the natural life of Pakistan. The Tourism Master Plan has already identified that Pakistan can offer a variety of areas that are of high environmental interest. However, many of the regions have few tourist facilities, and little in the way of infrastructure, and access may be restricted for safety regions. These lucrative markets will not be attracted if environmental degradation, in any form, is allowed to escalate.
3.6 FUNCTION OF PLANNING, ORGANIZING, LEADING AND CONTROLLING SUMMARIZED.
The Management of Tourism
Introduction
The World Tourism Organization (WTO) recently conducted a comprehensive survey on the changing role, structure and activities of National Tourism Administrations and the involvement of governments in tourism. In recent years there has been a shift in the roles of governments and there is an increasing sign of withdrawal from actively being involved in the marketing and promotion of tourism and a distinct move in handing over the day to day management and promotion of tourism to the private sector. This has resulted in the relinquishing of a number of government's traditional responsibilities and activities in the field of tourism in favour of both local authorities and the private sector.
Nevertheless it is generally accepted that for tourism to develop in a sustainable and orderly manner, an appropriate physical and regulatory framework is required. This can only be provided by governments. They are also responsible for the provision of the basic physical infrastructure necessary for tourism such as roads, airports, communications, power, water, sanitation and other infrastructure. They are also responsible for creating the legal framework within which the tourist industry operates. Image building can also be defined as a government responsibility as a country's image is seen as an integral part of its overall economic development. Tourism is an important source of foreign exchange and an important generator of employment, so many governments consider image promotion a legitimate partner in the development of export markets.
To some extent the shift away from active involvement in tourism by governments is motivated by factors specific to their own national constraints. One of the main concerns is the increasing demands on public sector budgets and how they can justify continued use of taxpayers money to support and promote tourism development when there has generally been a decline for such funding and support for other industries.
A number of countries are also concerned that the effects of governments assuming a promotion and marketing role, which is seen in some countries as a private sector responsibility, may be an inappropriate allocation of government funds. Governments do not make good marketing bodies. Due to the government's slow and bureaucratic administrations, they are slower and less responsive and entrepreneurial than they should be. As a result they are looking more and more to the private sector to take a more involved role in all aspects of tourism management and promotion. The current trend in almost all regions of the world is towards public-private sector partnerships with the government providing the legal and regulatory framework and the private sector/ NTO's administering, managing and marketing the tourism export product.
While it is difficult to make generalizations it would appear that the level of importance given to tourism within governments in some countries far from matches its importance in economic terms. It does not seem to be a question of whether the country has a fully fledged ministry of tourism either. In many countries in which there is a ministry of tourism, it comes well down the hierarchical ladder.
It is not necessarily an advantage for tourism to have its own ministry. The important question is whether this gives it greater influence on Cabinet decision-making, and whether it influences decisions taken in other ministries which affect tourism. Sometimes it can be easier to make an impact by having a Secretary in the government's inner cabinet rather than having a full ministry. In Italy for instance tourism is now the responsibility of a Secretary running a tight unit directly in the Prime Minister's office. The advantage of this is quite clear. Not only does he have the ear of the Prime Minister himself, but also that of important ministers in the inner cabinet!
Where governments have eased themselves out of the direct responsibility for tourism, varied forms of structures have been set up, from National Tourism Administrations (NTAs), National Tourism Organizations (NTOs) to Tourist Boards, Tourist Authorities etc. It matters little the title, rather it is the functions and authority and power vested in them that matters. A number of NTOs are statutory bodies, which means that they have greater power and influence in the tourism decision making process than government departments. They also contribute to policy formulation and have wide powers in licensing and control (including grading of hotels etc) as well as responsibility for human resource development, environment and development. As an example of the extent to which the private sector is now being vested with all aspects of tourism is that of Board Failte, the Irish Tourist Board, who now contract out all their publications and hotel classifications to the private sector. Gradually they are shifting responsibilities of hitherto traditional tourist board functions. An example of this is the "Tidy Towns" scheme for which they had great success as part of their environment policy activities has now been handed over to the Department of the Environment.
Government involvement in tourism still varies but even in the more centrally controlled economies of the world there are signs of a shift from central government intervention to a more broader approach. Moreover, this shift has gained momentum since the early 1980s in line not only with the squeeze on public sector budgets but also the growing climate of liberalization and privatization and the political and economic shift to market driven economies.
Despite some regional variations, current thinking even in the less developed countries of the world is that while governments should be responsible for the development of tourism infrastructure, they should divest themselves of any interests they might have in tourism plant and services. In fact their role should no longer be to intervene directly in the development of their countries tourism industry, but should be more that of a catalyst; stimulating market growth and supporting the private sector with fiscal and other incentives for investment.
At the same time as this change in thinking, there has also been a rationalization of government responsibilities and activities in the management of tourism, with a growing preference for the' separation of promotion and marketing activities from policy and regulation. Increasing autonomy is being given to statutory bodies with private sector management to assume full responsibility for the marketing, planning and promotion of tourism.
Whichever direction and stance that is taken on the structure of Pakistan’s tourism organization, management and promotion, the success or failure of it of course is funding. There is no doubt that central government funding accounts for the biggest input of funding for the current government tourism structure at this time. The question of fixed and variable costs are matters for considerable debate in the rationale for the source of funding particularly where fixed costs dictate the administrative structure sep up, where most or a very large amount of the allocated budget appears to pay for institutional and manpower expenses.
4 CONCLUSIONS
THE PLACE OF TOURISM IN PAKISTAN ECONOMY
Position of Pakistan
Pakistan receives limited numbers of tourists, and recent data have shown no growth in real terms, although there has been recovery from a low point in 1992, and current trends are positive. Using the latest figures available (1998) it can be seen that since a peak in 1989, total visitor arrivals have in fact decreased from 494,600 to 428,790. An examination of the motivation for travel in 1998 shows that returning Pakistanis and others visiting Friends and Relative account for more than half of all foreign arrivals at 57%. Business visits remain strong at 25%, while holiday/ vacation visits are limited to only 13% of all arrivals. Currently, Pakistan receives approximately the same number of foreign arrivals as Nepal, a smaller country with much less returning ethnic traffic, only one sixth of the numbers of India, and less than half of the number received by Iran.
Table Visitors to Pakistan Annual Arrival Data
| 440000 430000 420000 410000 400000 390000 380000 370000 360000 350000 340000 330000 | |
| 1995 1996 1997 1998 |
Table 6.5 Visitor Arrivals by Main Purpose of Visit 1996 - 1998
| Holiday/Vacation | Visiting Friends and Relatives | Business | Other | Total | ||||||
| 1996 | 53,500 | 15%- | 206,700 | 56% | 91,200 | 24% | 17,300 | 5% | 368,700 | 100% |
| 1997 | 53,400 | 14% | 210,700 | 56% | 93,000 | 25% | 17,700 | 5% | 374,800 | 100% |
| 1998 | 55,600 | 13% | 245,300 | 57% | 107,800 | 25% | 20,100 | 5% | 428,800 | 100% |
Source MCSTYA
In real terms, with only 55,000 tourists arriving in Pakistan for holiday and leisure purposes in 1998, this is a very low base. Without returning Pakistanis and business traffic (some of whom participate in leisure activities as a secondary motivation), the Country would have minimal tourism. After discussion with tour operators, we believe that over 75% of long-haul leisure tourists confine their tour to major cites such as Lahore and Islamabad, and to the northern part of the Country.
Trekking, and to a lesser degree mountaineering, are the highest profile activities of tourists, although there are a growing number of more general tours, while religious sites are providing a significant attraction to visitors from the Far East.
MARKET CONSTRAINTS
The primary constraints that have inhibited the development of robust markets for Pakistan, compromised any positive image that the destination may have tried to cultivate, and limited the impact of both airline and private sector initiatives in core markets are:
Market perception of political instability, regional and local conflicts, and poor ' security and safety
Lack of investment in correctly targeted and integrated marketing activities, including the provision of information in Pakistan and overseas.
Erratic standards of service, facility and welcome to foreign tourists.
Poor quality control of both tourist services and facilities
Inadequate research, and therefore inadequate information, on core markets, their primary operators and their market needs
Impact of source market laws
A growing marketing constraint is the importance of consumer protection in major source markets, which impacts on destinations where standards of operation are low. In Europe, the tour operator is, by law, totally responsible for the operation of the tour and the services of all suppliers, while in the USA, Japan and Australia the tour operator can still specifically decline such responsibility. The German travel trade association ASA confirms that there is no way they can exclude this liability. To do significant business in European markets every responsible supplier must recognize these standards of liability, and ensure that their operating standards are raised, and they hold appropriate insurance cover. This does not mean that tour operators in Japan, Australia and the US accept lesser standards as they are more likely to be taken to court by the individual tourist, and the courts tend to support the aggrieved tourist. Therefore most operators in core source markets will only work with operators and suppliers in Pakistan who can demonstrate that they recognized and provide international standards of service and facility, and that their staff is fully trained. This has been demonstrated in Pakistan where the two or three most professional operators serve over 70% of foreign tour operator demand.
4.2 THE CONTRIBUTION OF NWFP
Peshawar
One of the oldest living cities of the sub continent, Peshawar has a history full of invasions and other historic events of great significance. Gateway to the sub continent from the west, Peshawar has always been the first to face the invaders for centuries. The provincial capital of the North West Frontier, Peshawar lies on strategic route to Afghanistan.
Cultural Heritage: The famous Khyber Pass links Peshawar Valley with Afghanistan. Many invaders including Alexander the Great, the Ghaznavis and Mughals used it as passage to conquer India. Peshawar also had been the capital of Gandhra Civilization for many centuries. Places of attraction include the Qissa Khawani (storytellers) Bazaar and the walled city itself.
Potential Assessment: Peshawar has a great deal of capacity for expansion of tourism for all times. Being located on an important trade route extending to the newly independent Russian states, Peshawar needs upgrading and improvements to be made to its potential heritage sites.
Mardan
Mardan is an important town located strategically at the crossroads from Peshawar, Charsadda, Swabi and the Swat Valley.
Cultural Heritage: Extremely useful archaeological excavations have been carried out at a number of sites around Mardan. Most of the sites date back to the time when Gandhara Civilization flourished in the area. The rich cultural heritage of Gandhara has been found at Takht Bhai, Shahbaz Garhi, Jamal Garhi and some sites at Swabi in the east and Charsadda in the west. The first one is also declared as World Heritage Site.
Potential Assessment: Mardan lies on the only road leading north to the famous valleys of Swat, Dir and Chitral. For this and many other reasons, it is not a destination in itself but a stop over of short duration. Mardan City is the main city of this Tourism Development Center and also the provider basic urban services. A decent tourist accommodation does not exist at the moment, which should be provided with limited capacity for tourists who want to spend sufficient time at the historic sites and may not reach Swat the next destination, during safe hours of the day.
Swat
The only area rich in both Cultural as well as Environment value is the famous valley of Swat. With River Swat flowing in the middle, the valley is narrow at many places and present picturesque scenery with snow clad peaks in the background. Geographically and politically the area can be divided into four distinct parts. After scaling the Malakand Pass from Dargai in the south, Malakand Agency is an area with tribal status. Lower Swat mainly consists of Buner and the surrounding areas. Mingora is the capital city whereas Saidu Sharif Airport is located just across the River Swat. During the season, thousands of foreign as well as domestic tourists throng the place. Moving towards north, the Shangia District provides the only link between Swat Valley and Karakuram Highway in Kohistan Valley at Bisham.
Cultural Heritage: Swat is an important link in the long chain of settlements showing significant traces of Gandhara Civilization. The historic sites belonging to this era are scattered in large numbers in the lower and central Swat valley. Churchill Picket is an interesting site belonging to the recent past and located immediately after crossing into the valley from Malakand Pass. It is followed by Buner in Lower Swat, where the Shrine of a saint known as Pir Baba, few historic sites dating back to Alexander the Great and some belonging to the Mughals are the points of interest. From Lower Swat, the stretch of the valley to north belongs to the central area and is the hub of tourist activities of the valley. Many Buddha relics, figures and Stupas are scattered all around.
Nature/Recreation: Malakand Top offers a resting and picnics spot. Buner in Lower Swat is known for its natural beauty. Two mountain tops of Karakar and Ham are located in Buner, the area which lies off the main route of the tourist movements. Infrastructure improvements may open this area for tourists. Shangia Pass is a scenically beautiful spot,
which remains covered with snow during the winter. The only ski resort of Malam jaba is located almost in the middle of the valley. The Upper Swat Valley changes the character from historic to that of recreation. Many towns have tourism as the economic base. Bahrain, Madyan and Miandam are the most well known destinations. However, the biggest concentration of tourist hotel accommodation is located at Kalam. After Kalam, the valley bifurcates in two small valleys; one on the right is leading to Ushu glacier and ends at the beautiful Mahodand Lake. Whereas, the other on the left goes to Athrore, Gabral and ends at another beautiful Kandalodand Lake.
Potential Assessment: Making any assessment of the potential of the valley for future expansion is perhaps not an easy task. Existing levels of tourism movement in the valley are already extremely high, posing serious threats to the environmental quality. Kalam is already showing the signs where mushroom growth of hotel industry without comprehensive urban planning has seriously damaged the urban environment. Therefore it is required to either put restrictions on the tourist movement in the valley or open new areas as alternate destinations to relieve the pressure on the already established areas. A comprehensive urban development plan should however be urgently prepared for Kalam and its surroundings.
Dir
Dir valley is sandwiched between the Valleys of Swat and Chitral. Main access to Chitral passes through Dir, which also provides access to most parts of the valley. It extends from Chakdara after crossing River Swat in the South to Lowari Pass in the North.
Nature/Recreation: Dir is one of the areas with significant tourism potential. Both historic and environmentally rich sites are located in the main valley. Kumrat is the most beautiful area of the valley, which is visited by many domestic tourists. Presently Dir town is used for temporary stay for the traffic moving on the main Chitral Road, especially during the times when Lowari Pass is closed to the traffic as a result of snow fall and all the Chitral bound traffic is blocked.
Potential Assessment: Although Dir valley has significant tourism potential in the form of
natural beauty, but it requires a large-scale investment for development of basic infrastructure. This seriously restricts scope for its development as an alternate or supplement tourism facility to Swat Valley.
Chitral
Entering from Dir into Chitral requires crossing the Lowari Pass, which remains closed for almost six months of the year due to heavy snow fall during the winter and frequent land slides on certain sections of the road. This serious handicap on accessibility has kept the Chitral relatively isolated from its surroundings and protected the original culture of the valley. Chitral is strategically located at the meeting place of a number of countries including Pakistan, Afghanistan, Russia, Tajikistan, China and India. This gives it a unique geopolitical significance, which is also sensitive from defense point of view. For centuries, a local family has ruled Chitral, till the status of a state was abolished in mid seventies.
Cultural Heritage: Chitral has two most significant attractions. Firstly, the Kafir people of Kalash Valleys who have been living in a time capsule. Believed to be the descendents of the Greek army left behind by Alexander the Great, they have a completely distinct and primitive culture and a totally pagan religion.
Nature/Sports: Secondly, the highest polo ground of the world is located at Shandoor, the border between Chitral and Gilgit. More than 12,000 feet above the sea Shandoor Lake at Shandoor Top is located next to the Shandoor Polo Ground. Thousands attend the annual polo festival every year, including the dignitaries, celebrities and foreigners. The chief guest is normally either the President or the Prime Minister of Pakistan.
Potential Assessment: Chitral has unique tourism products to offer which is the Kafirs of Kalash, and the valley has already been established as a popular destination. However, it has a serious problem in terms of accessibility. Road journey is not possible for six months of the year and air link is as uncertain as the weather of the region. The runway in Chitral is too small to accommodate big aircraft and small aircraft can not operate in bad weather conditions. An improvement in road conditions requires construction of a tunnel across the Lowari Top, a solution that is both costly and technically difficult. Therefore, Chitral can not be included as a reliable tourism product for the purpose of this project.
Hazara
Hazara lies along the KKH between the plains of Punjab and the mountains of Northern Areas. Abbottabad is the largest town of the region, which is also a significant military establishment.
Nature/Recreation: The tourism significance of Hazara Region lies in Karakuram Highway, which passes for most of its length from the region. The area is also a transit service point for traffic leading to the Kaghan Valley, which is a very popular tourist destination among the domestic tourists. Tourism potential of Hazara Region also includes Thandiani, an attractive hill station at high altitude and located in the vicinity of
Abbottabad. The beautiful Galiyat area, which has been included in the cluster of Rawalpindi, Islamabad and Murree, actually extends up to Abbottabad in the northwest.
Potential Assessment: Abbottabad is already an established hill station with limited potential for any further expansion. Since recent past it has also been established as center of good quality educational institutions. This also has a limited potential for future expansion. However, Abbottabad will keep playing the role of a transit station for traffic on KKH and towards Kaghan Valley. Unfortunately, the section of KKH passing from Abbottabad is heavily developed by commercial area on sides, creating traffic jams and disturbing the national and international traffic of KKH. This requires imposing a strict development control for any future commercial development on this section of the Highway. A better solution will be to built a by pass road as new section of the KKH.
Kaghan
Including Muree and Kalam, Kaghan is one of the three most popular tourist destinations in Pakistan mainly among the domestic tourists. The 61km long beautiful valley of Kaghan is accessible from Mansehra, located along KKH after Abbottabad. River Kunhar is the main artery of the valley and most settlements are located along this river.
Nature/Recreation: The large town of Balakot is situated at the mouth of the valley and provides all the tourist related facilities to the Valley. A small offshoot to the main valley is the beautiful and snow covered valley of Shogran. Naran is essentially the final destination of many tourists to Kaghan Valley. The legendary Saiful Muluk Lake is situated at a distance of about 6kms from Naran. The Valley ends at Babusar Pass, rossing which leads to Chilas in Northern Areas.
Potential Assessment: Damage done to the environment of the valley has already been visible. Lake Saiful Muluk presents appalling picture with so much of litter and solid waste left by the tourists after every summer season. The development of a large number of hotels in Naran has generally been done without following any planning. Shogran is now going to witness the onslaught of tourists. This urgently and importantly requires a comprehensive plan preparation for Shogran as well as Naran. The orderly development will also relieve Naran from present overcrowding. Balakot is an alternate accommodation, for tourists who arrive late and do not want to continue journey to Naran after the sunset. All hotel development in Balakot has also been done with proper planning. A comprehensive plan for Balakot is also urgently required.
4.3 THE GROUND REALITIES
Investment in Tourism
The Current Situation
Pakistan's economic situation remains volatile and has yet to fully benefit from the upsurge in economic growth being enjoyed by other economies in the region. A turnaround in economic activity has been recorded in the financial year just past. The country is also plagued by a chronic balance of payments deficit compounded by a decline in currency inflows on capital account and increasing prices for commodity imports (like oil) on current account.
The number of Pakistanis working in the Gulf states decreased significantly when the oil price was low. They have yet to be re-employed offshore. Workers foreign exchange remittances close to halved from US$1,238 million in 1997/98 to US$731 million in the current 1999/00 July year.
International aid agencies have withdrawn their commitment to assist in funding Pakistan's foreign exchange deficit since the nuclear tests of May 1998. Pakistan is in negotiation with the IMF for assistance that is unlikely to be given unless the country adheres to the IMF agenda, whatever the respective merits of the case. While the IMF has indicated that some movement has been made in meeting the requirements questions still apply in the extension of the tax net. Finance Ministry budget estimates and other areas of concern.
Pakistan's currency remains under pressure with foreign currency reserves of the State Bank the equivalent of less than one month's import bill. The current external debt is the equivalent of 300% of this year's projected export revenues. Foreign debt rescheduling which occurred two years ago is now back on the agenda as a matter of urgency. The Government announced at the end of August that negotiations were in progress to confirm a short-term bailout package to reschedule US$5 billion of foreign debt commitments. This is apparently far removed from the IMF's version of these negotiations where US$850 million is on offer from the IMF (at an interest rate 5% above LIBOR) with an additional US$1.2 billion of rescheduled debt, from existing debtors in the London and Paris "Clubs". No new loans are on offer.
Whatever the outcome of the negotiations, there is no suggestion of debt forgiveness just a rescheduling for 12 months. In a year's time the issue will again have to be addressed.
In appealing to international funding institutions for tourism development finance loans, Pakistan has little flexibility or room to maneuver. Many mainstream investment funding institutions would not even consider the prospect. Any promotional activities to secure project funding would, in all probability have to be targeted to those agencies or individuals that are sympathetic to the cause. This could include some of the development banks such as the Islamic Development Bank, Aga Khan Trust and others having a mandate to invest in Islamic communities. Another source is high worth individuals, again in the Arab world, who have a direct ethnic or community connection to Pakistan or a particular project.
5.5 RECOMMENDATIONS
THE ROLE OF PUBLIC PRIVATE PARTNERSHIP
The emerging environmental problems in the tourist areas of Pakistan, including degradation of national and heritage resources, are caused due to rampant misuse of natural resources, over development, lack of land use planning and uncontrolled tourism operations. This has resulted in highly visible forms of pollution of springs/water bodies receiving huge quantities of untreated sewage from tourist accommodations and solid and faceal wastes disposed and spread over mountain/trekking trails, campsites and on the slopes of hills and gullies. This visual and landscape pollution has made many of the scenic areas to be unattractive to foreign as well as local visitors. It is a major source of water borne diseases to the local population of the areas.
This has mainly happened due to lack of a tourism law which should provide legal and authoritative powers to Tourism Management in the country to keep touristically attractive man made and natural resources worth presentation to tourists. Important tourist destinations in other parts of the world have empowered their tourism management authorities to ensure that touristically attractive spots, places and areas are maintained environmentally neat and clean.
Tourism assets of Pakistan can be classified into various categories for the purpose of their legal protection, preservation and upkeep as follows:
• Wilderness: This includes national parks, forests, lakes, water ways, deserts, waterfalls, rivers, plants, animal pastures and landscaping. Their preservation and protection through law is prerequisite for the promotion of tourism in the country. The law must ensure their proper protection from degradation and pollution, destruction and damage.
• Touristically Attractive Areas: This consists of those areas which are demarcated for tourism and leisure facilities. The law must ensure proper preservation and upkeep of these areas and recreational facilities created for the benefit of tourists, as well as maintenance of the landscape, and ensuring that there will be no haphazard growth in these areas. The law must also ensure that no other activity except tourism will be permitted in these areas such as Changa Manga, Jello Park, Patrita Murree, Nathigali, Malam Jabba, Kalam, Ziarat etc.
• Historical and Archaeological Conservation: Historical and archaeological places/areas of all the Provinces are included in this group. There is a need to evolve a strategy for their conservation as well as having an effective legal frame work to ensure their maintenance and proper preservation. In Pakistan these areas are the major attractions for tourists and their preservation and presentation is very poor at this time due to lack of any legal frame work for their protection from erosion and damage being caused by the locals and visitors. The law must encompass all the requirements for their conservation, preservation and maintenance besides making these sites presentable and saleable to tourists.
• Beaches and Other Water Sports: Beaches around Karachi are polluted and densely populated at present. A lesson must be learnt from these beaches and enforce an effective law to ensure the virgin cleanliness of newly developed beaches and enforce already developed beaches to upgrade their quality for enjoyment by all visitors. Proper consideration must be given to cater independently to the needs and requirements of foreign tourists. Foreign Tourists facilities may be meant exclusively for the foreign tourists and local should not be allowed to use these facilities. This will help boost beach tourism in ; the country. Similarly water resources should be kept clean and free from erosion and degradation through the legal system to promote water sports which would also cover the lakes, rivers, steams and canals.
5.1 REGULATORY ROLE FOR PUBLIC SECTOR
The Legal and Regulatory Requirements
Review
It stated that the tourism sector will not develop in an orderly manner until such time as the regulatory machinery is in place, implemented and enforced. That the existing tourism acts are outdated is one thing that they are being implemented and enforced on the sector is a far more serious matter. Even more serious is the fact that they are being implemented by unqualified personnel. As a consequence of these factors the industry will not develop in terms of standards and the product will not improve along required international standards.
Also identified in chapter 4 is that registration and licensing of tourist establishments such as motels and guesthouses are not undertaken sufficiently to control standards and only approximately 50% percent of these operations are registered or licensed. This not only loses control of the tourism sector standards but helps degenerate it by a range of indiscipline affecting among others, the environment in the form of sanitation, hygiene and other pollutants discussed in chapter 9 (Infrastructure) and in chapter 15 (Environment). Another factor is the loss of government revenue in terms of registration fees and tax collection. There is presently no requirement in the hotel act for tourist accommodation to be registered under 10 rooms. This regulation is abused and there are a great number of establishments making false statements as to the number of rooms on the property. It is estimated that these establishments run into hundreds. This means that considerable revenue is lost to government. The law should read that all establishments offering tourist accommodation must be registered and approved to minimum standards irrespective of the number of built rooms.
Assessment
The tourist industry is overburdened with laws to control them and prohibit facilitation in a number of areas and these are numerated in chapter 4. They are enforced in the areas of prohibition but not in the areas of product standards, training and facilitation. Under these conditions it is difficult to see how productive public/private sector cooperation can be established to enable tourism to be developed in a professional and disciplined manner. Also in related legislation the Environmental Report of this master plan highlights the dangers and realities effecting the environment as a result of ineffective and unimplemented laws. If tourism is to be developed in a long term sustainable manner, then the legal machinery must be updated, put in place and implemented.
Recommendation 1.
The existing three acts encompassing hotels, restaurants, travel agents and tour guides must be re-evaluated, updated and rewritten where necessary. This should be done with the assistance and cooperation of WTO either through a small Technical
Assistance programme or by the legal authorities in Pakistan with input from the industry. Implementation and enforcement of the acts should be the responsibility of the Ministry of Tourism through the Pakistan Tourist Board.
Recommendation 2.
There is no 'Tourism Law' as such. The constitution of Pakistan part 5 chapter 1 states that the Parliament shall have exclusive power to make laws with respect to any matter in the Federal Legislative List. And in the Fourth Schedule Current Legislative List tourism is mentioned a word at number 42. This indicates that there is no tourism law as such in Pakistan.
Tourism and its various dimensions have been ignored in the tourism and cultural policies of Pakistan and there is no awareness among Government circles regarding the negative fall-out of tourism. The negative impacts of tourism may completely neutralize positive gains. Some significant negative impacts include the threat to unique sub-cultures and specific cultural traits, natural beauties, creation of environmental pollution and degradation, increase in crimes and sex-related diseases, displacement of population, social disruption, weakening of socio-cultural values, cheapening of cultural traditions, damage to cultural identity, creation of income disparities, deprivation of their local resources and damage of tourist products, attractions and sites.
The tourist industry's survival in Pakistan is mainly dependent upon preservation and protection of heritage, culture, archaeological and historical sites, monuments, wildlife, rivers and waterfalls, lifestyle, music, art and other tourists attractions, traditions, customs, local ecology, plants and animals, forests, deserts, pastures, landscape (both mountainous and wooded rangeland) from menace of population degradations and elimination. The modem tourist demands that their environment be of high quality and pollution free. Therefore, a planning process involving tourism and environment requires proper integration at policy level as well as at the implementation stage through persistent monitoring and control with the help of regulatory mechanisms. This approach would demand a close coordination between policy makers at the national level, implementers, operators, regulatory bodies for environmental protection at national and provincial levels, private sector investors, NGO's, community elders, religious and tribal leaders, promoters, pressure groups, various agencies of local bodies and provincial Governments.
5.2 THE INCENTIVES AND AVENUES FOR PRIVATE SECTOR
The Master Plan anticipates that no major investment funding will be required in the first 3 years of this decade. This is both fortuitous and pragmatic because until Pakistan's external finances and trade with the outside world become more into balance little investment funding can be expected to be forthcoming. Moreover, delaying the time when investment capital will be required provides the breathing space to reposition tourism, increase the volume of vacation visitors and with it profitability in the industry and publicize its importance to the economy.
Environment for Foreign Investment in Pakistan
Pakistan has a low image amongst the investment funding community world wide. Gains that had been built up in the 1990s were squandered by the May 1998 N-tests. Economic sanctions were applied by many metropolitan countries and since that time direct foreign investment into the country has reduced substantially.
Direct foreign investment in Pakistan declined from US$1,102 million in 1995/96 to US$472 in 1998/99, the latest figure available.
The debt repayment requirement hanging over the market has and can be expected to continue to have a negative impact on investment sentiments and confidence in the country. On the normal criteria for attracting investment funding for development projects; viz sovereign risk, industry risk and project risk, Pakistan has significant problems. The effect of a high perceived investment risk is two fold: the cost of borrowing goes up the higher the investment risk rating applying and many institutional investors are forbidden by their in-house lending criteria from investing at such levels.
Pakistan's foreign debt rating for sovereign risk and on composite risk ratings for institutional investors is below that of most of its competitors in the region. Sri Lanka has similar investment risk ratings to Pakistan.
Environment for Domestic Investment in Tourism
The banks collectively have had problems with their hotel investments. In the period immediately after the release of the Ministry of Tourism's National Tourism Policy a number of private sector banks provided commercial loans and capital lending to hotel companies. The results were not encouraging.
Their experience has been that there is reluctance on the part of the hotels to keep to the contracted repayment schedules for loans. There are instances where middle level hotels and in some instances chains have raised loans for a specific purpose like refurbishment to use the funds on something entirely different like building a new hotel. Such action automatically reduces the revenue generation over the short term and typically reduces the hotel company's ability to repay according to the schedule. Many had experienced instances where some hotels have had the ability to repay loans but have been unwilling to do so.
As a result, portfolio investment in tourism is now rarely undertaken. Loans are. made on the basis of a personal relationship with the bank and personal knowledge of the business interests and record of the loan applicant. A diversified business holding on the part of the loan applicant is preferred to diversify risk. The risk premium in hotel lending is considered high. Several of the banks are requiring repayment guarantees before they agree to hotel construction or refurbishment lending.
Hotel or tourism sector lending represents something in the region of 1% of private sector and commercialized retail banks loan portfolios. Some of the foreign banks have considerably less than 1% of their lending to the hospitality sector as their principal focus in Pakistan is in other areas such as trade financing. The bulk of bank lending to hotels is for operational purposes (working capital etc) and not for capacity expansion. It is also worth noting that the outstanding loan book at 1% was at a similar level to that commonly perceived as the contribution of tourism to the GNP, namely 0.8% as measured by State Bank receipts methods.
Hotels are not considered to be part of the general commercial property sector, as is the case in some other countries. They are considered quite separately for loan applications, again a reflection of the non-portfolio attitude.
The Loan Criteria applied by private sector banks are:
• Debt equity ratio criteria for lending are set by the State Bank and are currently 60/40. In some circumstances funders will consider a 70/30 ratio. " Interest rates applying in the range 16/17%. They have been higher but are coming down and are expected to drop further.
• Prefer to syndicate loans with a bank or funding institution that has in-depth knowledge of the tourism/hotel sector.
• Typical loan period is a single term 3-5 years. No automatic rollover or right of renewal for further terms is included in the terms. " Limit to hotel loan exposure of 5-71/2% is the preferred ratio.
The short pay back period of 3 - 5 years mitigates against long term capital borrowing for hotel properties where profitability may not be achieved until year 5 to 7. For refurbishment the loan period of 3 to 5 years is appropriate.
The overall attitude is that the banking sector does not favour tourism. It has encountered too many problems in the past. The hotel/tourism sector is seen as a high risk area. Repayment record is poor. Banks will now only lend on a relationship basis rather than on the basis of feasibility studies. They presumably suspect these (feasibility studies) are partisan rather than impartial.
The evidence is that the private banking sector will lend to hotels and the hospitality sector for operational purposes but has a marked reluctance to provide capital investment loans.
The transport sector is another area where banks have in the past lent for capital purposes. This includes tourism transport as well as public transport. The experience with transport loans has been similar to that with hotels.
Micro Financing is one promising area in the local banking scene for the funding of small tourism facility projects. The attitude by borrowers towards interest and repayment differs markedly from that of the large private company. Most are uneducated and believe that if the terms of the loan and repayment are not met they will end up in jail. This provides a powerful incentive to repay.
The typical borrower has minimal revenues and seeks a loan to supplement subsistence activity with a (very) small scale enterprise. These may consist of a tea, soft drink or food stall or getting handicrafts to market to sell. Other examples of micro loans that have been made include the funding to train 10 individuals as tour guides. The Rs.10,000 loans was repaid within 18 months. Funding the purchase of tent and activity equipment for a camping venture in the Swat Valley is another example. The owners had previously used their own funds to purchase the land and undertake site development.
A number of banks or agencies are involved in micro financing small-scale enterprise loans. Several of the donor agencies like the Swiss and Danish have provided micro funding as are some NGOs. The Asian Development Bank (ADB) is to provide the Government of Pakistan with a soft loan US$150 million seed package, US$80 capital for the Micro-finance Bank and the remaining US$70 million for supporting policy reforms for the micro finance sector in Pakistan. In the commercial arena the Bank of Khyber has been active in this area establishing their Microfinance department four years ago and has reportedly achieved very satisfying results to date with no non-performing loans.
Development Banks and International Agencies
The performance of the Development Banks in Pakistan has been dismal.
There are fourteen Development Finance Institutions (DFIs) operating at the federal level, with total assets of US$4 billion (Rs200 billion). These institutions have made investments and advances to the tune of US$3 billion. However, fully half of their total portfolio is categorized as non-performing. Three of the federal DFIs are joint ventures with offshore Islamic partners. These three are considered to be in good financial health compared to the 11 which are government owned institutions.
In addition, four DFIs are working at the provincial level. These institutions were established with a mandate to provide long-term credit lines to develop an industrial base in the country. However, imprudent business decisions have frustrated-that objective with most of these institutions now facing resource starvation and increasingly relying on the state to stay afloat.
The Regional Development Finance Corporation (RDFC) has not been able to provide development loan finance to any project, no matter how viable or deserving, for the past two years. Non repayment of principal by borrowers is also a feature of the DFI scene.
As a potential source of loan finance for the tourism sector DFIs can hardly be considered a likely target in the coming few years.
The World Bank provides grant and loan facilities to developing countries to provide technical expertise for stimulating economic development at the same time maintaining environmental balance and assisting in the alleviation of poverty. The Bank is providing Pakistan with infrastructure and logistics expertise for a long term Trade and Transport Facilitation Project to improve the efficiency of Pakistan's transport systems and hence its export competitiveness.
The World Bank, in company with other international agencies, is complying with the sanctions against Pakistan. As a consequence of which in the present political climate submissions to the Bank, however worthy, would be most unlikely to be even considered.
The IFC, the commercial investment arm of the World Bank, provides project finance at near commercial rates of interest. The lending conditions are typically less onerous than applied by local funding organizations. The IFC also has a commercial focus rather than applying political considerations to its lending portfolio.
In Pakistan, the IFC's focus is on private sector investment in the Oil & Gas sector, power (IPPs) and manufacturing (cement & textiles) sectors. The IFC also has leasing operations for farm equipment (tractors) and industrial equipment.
Tourism, in the form of hotel lending, is an area that the IFC has been involved with during the 1980s and report a similar experience to that of the independent banks. The sector is considered volatile and lurches from boom to recession compromising its ability to maintain a schedule of repayments. The Loan Criteria applied by the IFC are:
Debt/equity ratios previously 60/40 or even 70/30 are being moved to 50/50 in all sectors. A reflection of the high risk that investment in Pakistan is given. Hedging against US$ lending advised.
Interest rates are 4/5% above LIBOR
Loan Period is typically for 7/9 years with a 2 to 3 year grace period allowed while construction of the project takes place. Interest and principal payments kick in when the facility starts to generate revenue.
Larger projects only would be considered with a trigger level of US$10 million. Smaller scale projects are considered the territory of local funding agencies. The exception to this would be if a project could demonstrate exceptional merits in environmental or social benefits flowing from the investment.
The IFC charge an appraisal fee to cover the cost of financial due diligence, typically in the 0.5 - 1.0% range. This is typically in the US$40/50k range and up to US$100k for large projects.
The longer loan time horizon and grace period provided by the IFC is more conducive in allowing a major tourism project such as hotel development to reach financial maturity before repayment is required.
While tourism is not a favoured sector the IFC would consider undertaking a coordinating role to establish a viable integrated package that would have internal revenue linkages. One off/stand-alone projects are considered to be particularly high risk. Another area where the IFC would give serious consideration is in the privatization of government tourist assets.
Projects that would have a potential appeal to international and local funding syndication are those where economic development can be allied with complementary accommodation and facilities development. Such projects provide the direct linkages that underpin the hotel and facilities operations. An example would be the proposed Export Processing Zone and port expansion in Gwadar. Construction of road links to the national highways system and Karachi has commenced but completion is some years away. The
potential to develop a beach resort zone in the longer term would be possible once the access infrastructure is in place.
Infrastructure Investment
Capital investment in infrastructure is affected by Pakistan's foreign and national debt situation. Capital budgets for upgrading and maintenance of national highways are under pressure and funding of new national infrastructure projects scaled down or put on hold, despite their priority status.
RECRUITING
Recruiting
Process of discovering potential job candidates
Recruiting Goals
What Factors Affect Recruiting Effort?
Are There Constraints on Recruiting Efforts?
Image of the organization
Attractiveness of the job
Internal organization policies
Government influence
Recruiting costs
The Internal Search
Advantages:
Good public relations
Builds morale
Encourages good individuals who are ambitious
Improves probability of good selection
Less costly than going outside to recruit
Internally chosen already know the organization
Act as training device for developing middle and top-level managers
Employee Referrals/Recommendations
The External Searches
AdvertisementsBlind-box ad
Employment agencies
Executive search
Schools, Colleges and Universities
Professional Organizations
Unsolicited Applicants
Cyberspace Recruiting
Are Interviews Effective?
Impression management
The Stress Interview
Conditional job offer
