Maximiliano E. Korstanje⇑ Department of Economics, University of Palermo, Buenos Aires BUE
Sun & sea tourism: Fantasy and finance of the all-inclusive industry
By Linda Ambrosie. Cambridge Scholars Publishing (http://www.cambridgescholars.com/, Newcastle upon Tyne, England) 2015, xiii+298 pp (figures, tables, bibliography, index), Hb £52.99. ISBN: 978-144387804-3.
Once, mythology tells, humans were exiled from Eden for their arrogance. Banished from paradise, they tried to replicate the archetype of a lost paradise on the earth (Cantallops & Cardona, 2015; Korstanje & George, 2015). This mythical allegory not only has been exploited by business models but by tourism-related experts for more than five decades. This book does not offer an anthropological viewpoint about how the allegory of paradise lost is formed; rather, as Ambrosie puts it, it reveals the evolutions of the markets and their effects on marketing paradise on the tourism economies of Latin America and Caribbean destinations.
The act of producing and selling fantasy is the touchstone of this valuable book. However, a nation’s economic security is undermined whenever its fiscal regulation cannot be ensured. The tour- ism sector especially is monitored by governments suspecting tax evasions. In particular, some offi- cials are complicit with private sector investors involved in international tourist ventures. The main thesis of Ambrosie is that even if tourism generates profits, creates new jobs, and pays taxes in order for state to enhance their fiscal balance, this does not necessarily crystallize into substantial improve- ment for community. Tax avoidance conjoined with inefficiency in fiscal management by government are two of the main reasons, the enclave tourism industry is far from being sensitive to economic cycles. Of course as Ambrosie adds, this is nothing new, unless by the fact that her focus is on the con- flicts between private and public sectors.
In Part I, readers will find an in-depth discussion of enclave tourism particularly private interests and its evolution. In this section, the author describes the tactics by which private sector corporations avoid paying taxes at the same time governments implement more aggressive programs of tax-plan- ning. To this reviewer’s knowledge, this represents the most interesting side of the book simply because leads to an understanding of how financial losses of states can be accelerated by tourism.
In Part II, the inception and proliferation of sun and sea destinations in Mexico and Caribbean islands are described. Ambrosie’s personal experience in this region illuminates her discussion. As an example, she describes how Mexico has had very little growth in tourism revenues despite a great flux of visitors. To put this in bluntly, the number of visitors at destination does not guarantee sustainable growth in the local economy. The reasons why this happens are manifold, but include legal jurisprudence issues and challenges in capturing taxes—all of which are brilliantly addressed by Ambrosie.
Part III gives some hints about how to improve the degree of governance in destinations that are financially dependent on tourism. Here some doubts arise, where is the genuine contribution of this book to specialized literature? For example, is enclave tourism responsible for the inefficiencies of state? Though scholars often cites the negative effects of enclave tourism in Third World, most never seriously question whether this results from the private sector’s eagerness for financial returns, or governmental efforts fiscally optimize the use of resources. Ambrosie argues convincingly that while capital investment generates significant public resources in tourist destinations, growth of indirect wealth still remains stagnate. It is interesting to reflect on whether this reflects the expansion of all-inclusive resorts or if there are other forces at play.
One might speculate that the Caribbean was re-colonized through this pattern of consumption. However, the author explains economic changes in this region are the result of multiple combined fac- tors. At a first glance, legal perquisites and the mobility of capital facilitated the conditions of labour exploitation. Almost half of global enclave tourism is located in Mexico and Caribbean nations. Though this industry concentrates a high degree of human capital, only marginal profits are obtained by locals. These ventures, far from being interested in producing local wealth that leads towards natives’ pros- perity, firms seem more concerned with lowering costs to maximize incomes.
On particular strategy for many of the regions’ nations are to set-up off-shore financial centres (tax havens) for international investors. Banking secrecy, null tax rates, shell companies, and weak regu- lations to all limit the potential economic prospects for the local workforce. The metaphor of a lost paradise reflects hides the financial flows attracted by these tax havens. Capital flux can often escape the scrutiny of central economies. Under-developed nations have little ability to capture part of this mobile capital flux through the introduction of taxes. In many cases, tourism investors manipulate their reported revenues to avoid taxes and inflate costs. Tactics are developed to cement the possibil- ities for local actors to redistribute produced wealth, but financial leakages, tax evasion, and clandes- tine activities constrain local development. This where the book offers a good starting point for understanding some of the economic challenges of sun-and-sand tourism. However, little attention is given to the role of bribes, tax evasion, and other illegal activities. To some extent, enclave tourism has not formed from the lack of planning or government intervention as the classic literature sug- gests; rather, Ambrosie masterfully shows how it takes shape in a finely-ingrained program to exploit the nature of Caribbean as well as financial loopholes. Aside from all this, the author adheres to her
belief that evasion is something other than a neo-colonial tactic; it is an ‘‘issue of income inequality” (p. 226) replicated in all nations. This work exhibits not only a good attempt to shed light on how glo- bal tourism generates material asymmetries in developed and underdeveloped countries, but gives detail on the local compliance of the State in promoting, knowingly or not, tax-avoidance.
Nonetheless, methodologically speaking, there are some serious limitations respecting to the cred- ibility of consulted sources that come from governmental sources. There is the potential that govern- ments and private sector inflate numbers to protect their interests or attract further investors. The counting of travelling tourists is sometimes also inflated and official statistics are presented (if not manipulated) with the real aim to capture further investment. In this context, how can we ensure the information in public sources has not been manipulated? The lack of a more sceptical view of gov- ernment sources as well as non-statistical research limits the full impact of Ambrosie’s assertions. This raises a hot point, how may we conceal private and public interests in the fields of development? Doubtlessly, this seems to be one of the most troubling aspects concern policy makers in tourism fields.
Cantallops, A., & Cardona, J. (2015). Holiday destinations: The myth of the lost paradise. Annals of Tourism Research, 55, 171–173.
Korstanje, M., & George, B. (2015). The medium or the message? An examination of myths as resources to understand the tourism phenomenon. International Journal of Tourism Anthropology, 4(2), 122–141.
Maximiliano E. Korstanje: Department of Economics, University of Palermo, Buenos Aires BUE 1414, Argentina Tel./fax: +54 4964 4600. E-mail address: email@example.com
Assigned 15 November 2015. Submitted 11 January 2016. Accepted 26 January 2016
Available online 2 March 2016 http://www.sciencedirect.com/science/article/pii/S0160738316300342