Friday, July 11, 2008

Funding a Festival

Now that the dust surrounding Jordan Festival has “sort” of settled, a key question remains to be answered: the return on what seems to be a relatively huge investment.

I was pleasantly surprised to hear a government official directly involved with this “Festival” justify the return as being simply non-monetary. The official explained that the crowd that this “Festival” has so far drawn shows that it managed to attract visitors from various countries, implying an increase in the number of visitors to Jordan (yet to be proven, but let us assume that it is correct). This line of reasoning is at the heart of the multiplier effect argument that many in the tourism private sector have been calling for when reaching out to the government. Needless to say that these calls have always fallen on deaf ears. Therefore, to see a government official reason along these lines is refreshing to say the least.

The problem with believing that the government is suddenly strategically thinking along multiplier effect lines is that it contradicts facts on the ground. If Jordan Festival has been the muse that inspired the government to start thinking along these lines, then how about the far more important muses within the tourism industry that need to be treated with such enlightened thinking.

Unfortunately, the way I see it is that arguing that Jordan Festival will manage to attract more visitors to the Kingdom is only a selective choice of an argument that happens to serve the government side in this particular instance. My feeling comes from watching the government on numerous occasions employ a selective choice of “buzz” arguments that are built on weak (or non existent) premises simply to justify losing propositions. If the government has all of a sudden realized the importance of tourism as well as the multiplier effect that it creates, it should then take a serious look at the industry and the “milking” approach it applies towards it. The tourism sector is one of the most promising sectors for the economy of Jordan. It is, to use a cliché, the “oil of Jordan”. More important the tourism industry is built on pillars made mostly of private investors, who unlike the organizers of the Jordan Festival, look for real return on their investments. If buying and selling land becomes more lucrative than sustaining a whole industry through building the necessary superstructures (hotels, restaurants, etc), then what the government is doing by not paying enough attention to the laws regulating and “truly” encouraging investing in this industry is simply driving a very serious group of investors into non-productive sectors of the economy. The government needs to stop looking at the tourism industry as a cash cow to milk, and instead start looking at it as one of the most serious strategic sectors of the economy. It should stop looking at it with dollar sign lenses that promise to finance the treasury because of failures elsewhere in the economy. This shortsighted approach is robbing the country of much needed real opportunities embedded in sound strategic plans that could truly unleash the true potential of this lucrative sector.

Finally, and to go back to the “Festival”, if the government is serious about looking at its return in non-monetary terms, it needs to back its argument up with transparent and clear disclosures. Dodging fair and reasonable questions by throwing fancy arguments does not cut it. After all, the Festival is a relatively huge investment that is funded by taxpayers’ money. Failure to come out with satisfactory answers will only add to the cynicism that is already attached to it.

In hindsight, it seems that the best thing that ever happened to this Festival was probably the whole boycott fiasco. It produced an unintended consequence that resulted in adding it to the list of taboo subjects that no one is allowed to question or even talk about…unless it is to praise it of course!


Mohanned said...

I see this as the initial step before "privatizing" or in other words contracting the festival to a private company. A government shouldn't be in the festivals business to start with-coz you know the size of our government is enormous and they manage everything. Now let me take of my neoliberal coat and move on: The number of foreigners attending any event in jordan is not related to tourism( at least not as the government describes it), Jordan is a hub for many international NGOs, reporters, companies, and other organizations(such as blackwater and such) that do their business in Iraq from Amman. Also, this year I didnh't see many arab tourists as in previous years where you can tell by the cars roaming the streets of amman.

As for the success of the festival-however they measure it- I wouldn't be surprised if the municipal elections trick was used. You know, like when you stuff ballot boxes, It wouldn't be so hard to fill up arenas..

By the way, why would someone in his straight mind come to the most expensive city in the arab world?!(Oh, and even in that stat the income to living standards ratio is ignored)..

Mohanned said...

On a side note: How do they calculate the amount of money that tourism brings to the country? I never got it.Also why did you assume that the tourism sector is view as a milking cow? As far as I know, foreigners don't pay sales tax, so the true milking cow is me and you..(But you know what..You statment makes sense considering that many of us jordanians feel like we are tourists)

Tallouza said...
This comment has been removed by the author.
Tallouza said...

Mohanned, I noticed the same about the obvious decline of cars with foreign Arab license plates this summer compared with previous summers. It turns out that the schools in the Gulf have altered their summer school holidays to include Ramadan, which falls in September this year. So brace yourself to some serious traffic jams in the coming few weeks.

As for the turnout at the Festival, it is great that it exceeded expectations, even if the crowd is generated from local residents (citizens and expats). I am sure you agree. I would, however, disagree with you on the way the arenas were packed :-)

The caclualtion of Tourism contribution to an economy is done through "Tourism Satellite Account (TSA)". Jordan just started applying TSA. TSA allows tourism to be accurately measured and compared with other economic sectors. The results of TSA provides for a
better understanding of the true size and value of the tourism industry, based on hard figures
that are internationally comparable and whose reliability is high since they are based on the
quality statistics produced by the official national statistical systems. TSA today is becoming the accepted international standard to measure the direct economic effects of tourism within an economy against that of other industries and other economies. I hope this answers your question.