The Value of Investing in Local Economic Development and Sustainable Tourism Ji You Urban Specialist Sustainable Development Department The World Bank August 1, 2013 Dunhuang, China
The World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency Est. 1945 Est. 1960 Est. 1956 Est. 1988 Role: To promote social and economic development To promote social and economic development To promote private sector development To reduce political investment risk Clients: Governments of member countries with per capita income between $1,025 and $6,055. Governments of poorest countries with per capita income of less than $1,025 Private companies in member countries for IS Governments of member countries for AS Foreign investors in member countries Products: Technical assistance Loans Policy Advice Technical assistance Interest Free Loans Policy Advice Equity/Quasi-Equity Long-term Loans Risk Management Advisory Services Political Risk Insurance Shared Mission: To Promote Economic Development and Reduce Poverty 2
The Role of the Bank: Contributing to Poverty Reduction through Cultural Heritage and Sustainable Tourism. With the advent of community based Sustainable Tourism in Bank financed operations, Cultural Heritage has become a centerpiece for linking local economic development and poverty reduction. The Bank s Global Operations: Since 1970s, the World Bank has financed 322 operations designed to boost local economy through heritage protection and sustainable tourism development, with a sum of US$6.8 billion.
The Bank s Operations in China: 16 operations totaling US$385. 73 million in culture heritage and sustainable tourism during 1993-2013. The operations include 3 standalone projects for culture heritage conservation and sustainable tourism. 1. Gansu Cultural and Natural Heritage Protection (US$38.4 million approved in 2008 and under implementation) 2. Guizhou Cultural and Natural Heritage Protection (US$60 million approved in 2009 and under implementation) 3. Shandong Confucius and Mencius Culture Heritage Protection and Development Project (US$50 million approved in 2011 and under implementation)
The project development objective is to generate benefits for local communities from the development of sustainable culture tourism in Gansu Province.
The project is the first standalone cultural and natural heritage protection and development project financed by the Bank in China. Total project cost is $57.84 million with the Bank loan of $38.40 million. The loan effectiveness was in August, 2008 and the loan close is by December 31, 2013. The project comprises two components: Component 1: Protection and Development of Priority Sites for Nine Key Cultural and Natural Heritage Sites within Six Municipalities in Gansu Province. 1.1 Heritage Conservation and Presentation 1.2 Infrastructure, Tourism Services and Environment Protection Component 2: Institutional Strengthening and Capacity Building
A major element of Gansu s poverty alleviation and economic restructuring strategy is the development of a sustainable tourism industry. The province has a rich endowment of cultural and natural heritage resources which offer a strong platform for economic development through tourism. Tourism is seen by Gansu Provincial Government as a way to generate income to finance heritage protection and as a source of local economic development.
However, despite Gansu s rich tourism resources, the sector contributed only 3% of provincial GDP when the Bank prepared the project back to 2008. The Bank financed project does not intend to resolve all of the problems that limit heritage protection and tourism development in Gansu Province; rather, it has been designed as a barrier removal and demonstration project, which will allow Gansu province to build capacity for the culture heritage and tourism sector, while testing methods for reducing institutional, planning and financing barriers at key sites in Gansu Province.
The project has been supporting the greater involvement in and acceptance of sustainable tourism by the community through the project s training program and several key activities such as the Folk Culture Center at Mati Temple Scenic Area. The development of local entrepreneurial activities based on tourism (e.g. handcarts, home stays, guiding) has been supported through technical assistance and community training in business planning, hospitality sills, marketing, and promotion
Outcome of the Gansu s Striving to Invest on Local Economy and Sustainable Tourism: 1. Tourism Sector Contribution to GDP increased from 3% in 2008 to 8% in 2012. 2. Tourism Industry Revenue increased from US$1.5 billion in 2007 to US$7.6 billion in 2012.
Contact Information: Mark Lundell, Sector Manager Sustainable Development Department East Asia and Pacific Regiaon mlundell@worldbank.org Guido Licciardi Urban Specialist Urban Development and Resilience Unit Sustainable Development Network glicciardi@worldbank.org Ji You Urban Specialist Sustainable Development Department East Asia and Pacific Region jiyou@worldbank.org