ASIAN DEVELOPMENT BANK

Transcription

1 , RESTRICTED TAR:TON ASIAN DEVELOPMENT BANK This Report has been prepared for the exclusive use of the Bank. TECHNICAL ASSISTANCE TO THE KINGDOM OF TONGA FORA NATIONAL TOURISM PLAN January 1991

2 CURRENCY EQU I VALENTS (As of 15 November 1990) Currency Unit T$1. 00 US$1.00 = Tonga Pa'anga = US$ = T$ The Pa'anga is pegged to the Australian dollar. For the purpose of calculations in this Report, an exchange rate of US$1.00 = T$1.30 has been used. This was the rate prevailing when the technical assistance was formulated. ABBREVIATIONS ] AIDAB EC GNP MLCI NTP SDP TCSP TTA TVB VFR WTO - Australian International Development Assistance Bureau - European Community - Gross National Product - Ministry of Labour, Commerce and Industry - National Tourism Plan - Sixth Development Plan - Tourism Council for the South Pacific - Tonga Tourist Association - Tonga Visitors Bureau - Visiting Friends and Relatives - World Tourism Organization GLOSSARY Tourist Seat Capacity Dedicated Seats Primary Tourism A temporary visitor spending at least one night in a country, whose stay does not exceed one year (WTO definition; synonyms: visitor, arrival). The total number of airline seats on regularly scheduled airline services available to a certain country. Seats allocated by an airline operator to a certain destination, either as a result of aviation agreements, or as part of commercial deals with travel agents. The part of the economy producing basic tourism services (mainly accommodation). Secondary Tourism - The part of the economy producing optional services for tourists (restaurants, attractions, transport, shopping). NOTE (i) (ii) The fiscal year (FY) of the Government ends on 30 June. In this Report, $ refers to US dollars.

3 1 I. INTRODUCTION 1. In December 1989, the Government of the Kingdom of Tonga requested advisory technical assistance to help prepare a National Tourism Plan (NTP) for the country. A Fact-Finding Mission visited Tonga from 12 to 19 June 1990 and held discussions with Government officials and private sector representatives. The Mission confirmed the need for the advisory technical assistancel/ and reached agreement on both the objectives and scope of the consultant's terms of reference, cost estimates and the financing and implementation arrangements. The technical assistance first appeared in ADB Business O pportunities in September 1990.!1 II BACKGROUND A. General 2. The Kingdom of Tonga, an archipelago of 171 islands of which 36 are inhabited, is located 3,500 kilometers northeast of Sydney, Australia and 1,900 kilometers north of Auckland, the capital of New Zealand. The three main island groups are, from south to north, Tongatapu, Ha'apai and Vava'u. Nuku'alof a, the capital, is located on Tongatapu, the largest island in the country. The total population amounts to about 99,500 (mid-1989 estimate). It is estimated, however, that about 32,000 Tongans live overseas, mainly in the United States (14,000) and New Zealand (9,000). The 1986 census counted 24,000 people as economically active in the monetary sector, or 25.7 per cent of the total population; about ten per cent of those were unemployed. 3. The Tongan economy, providing the population with an average per caput GNP income of US$910,2/ has been seriously affected by declining world market prices for its major agricultural products, notably coconut and its derivatives, bananas, fish and vanilla. This led to a decrease in exports and larger trade deficits as imports continued to increase. Foreign exchange remittances from overseas Tongans have met the trade deficit to a considerable extent. Also foreign exchange earnings from tourism have grown in importance as a means to reduce trade imbalances and balance-of-payment deficits. 4. Tourism's contribution to the national economy is not accurately known. Estimates made for 1987 range from T$8.0 million ($6.2 million) by the World Tourism Organization (WTO), to T$10.6 million (US$8.2 million) by the Tourism Council of the South Pacific (TCSP)3/ and T$14.6 (US$11.2 million) by the Bank of Tonga. For 1989, the Ministry of Finance estimated the foreign exchange earnings to amount to T$11.5 million ($8.8 million). Comparing these figures with the / Under TA No TON: Tourism Development, for $65,000, approved on 15 May 1990, suggestions for Terms of Reference for a possible National Tourism Plan had been drafted. 2/ World Bank, September / In a regional context, Tonga is a member of TCSP. This EEC-sponsored organization initiates, and where possible, coordinates tourism development efforts for all its South Pacific member countries. Most overseas representations of the South Pacific countries in the major travel markets are financed with TCSP funds.

4 2 total export earnings (including re-exports) of T$9.6 million ($7.4 million), it can be said that tourism as a source of foreign exchange is of major importance to the economy of the country. 5. Other direct and indirect tourism benefits to the Tongan economy are quite significant as well, More than 1,600 Tongans (about 7 per cent of the economically active population) are estimated to have been employed directly in the tourism industry. Further, the Government has estimated that: (i) for each dollar spent by a tourist, an additional income of 42 cents was generated elsewhere in the economy; (ii) for each job created in the accommodation field, 1.42 additional jobs were created elsewhere; and (iii) each tourist dollar would yield 30 cents in Government revenue, It was also estimated that between 10 per cent and 15 per cent of the Government's estimated revenue for FY 1987/88 of T$29.4 million ($22.6 million) was directly attributable to tourism. fl 6. Tourism revenues are derived mainly from air visitors, who numbered about 21,000 in Excluding cruise ship visitors (which unrealistically inflate tourism numbers, but stay only for very brief periods on shore and spend limited amounts only), tourist traffic has crept slowly upwards in the past two decades. In 1969, only 3,300 tourists arrived. For the years between 1985 and 1989, growth in air visitors averaged about 10 per cent a year. 7. At present, there are about 530 rooms of varying configurations and standards available in 37 hotels and guesthouses for tourist use in Tonga. A unique feature of the Tongan tourism industry is the almost total local ownership of the accommodation establishments. This and the fragmented nature of the accommodation field probably has increased the accrual of local economic benefits. However, the absence of large-scale resorts capable of providing a promotional focus and feeding smaller resorts has been a deterrent to more rapid growth, utilizing the considerable tourism potential in the country. 8. Due to the relatively high incidence of small scale accommodation attractive to young back-packers, who tend to have long length of stays (more than two weeks), the leakage of foreign exchange into imports for tourism is relatively small, ranging from 3 per cent for guesthouses to 46 per cent in regional hotels. For the larger, foreign-owned and operated hotels and resorts catering to more wealthy tourists in other South Pacific countries, imports typically absorb 60 to 80 per cent of all foreign exchange spent by tourists.1/ 9, Historically, the USA, Australia and New Zealand have been the major source markets, but their combined share of the market has declined somewhat, from 63 per cent in 1965, to 60 per cent in 1985 and 54 per cent in Increases in arrival numbers from Europe and Asia (mainly Japan) have compensated for this decline. As the numbers for individual countries are small or not available, and f1uctuate widely from year to year, conclusions about arrival trends from other markets are not warranted. The majority of all visitors arrive at Fua'amotu International Airport, Tongatapu, recently upgraded, with Japanese assistance, to receive B-747s. This airport is served by four international carriers, which provide a total of 1,332 in-bound seats per week and link Tonga with Honolulu, Auckland, Sydney and Nadi (Fiji). j/ See, for instance: Dwyer, L. "Import Content of Tourist Hotel Food and Beverage Purchases in the South Pacific", 1988.

5 3 10. The figures on tourism in Tonga provided in previous paragraphs include both tourism by foreign nationals (or "tourism for pleasure" purposes, often considered to be tourism in a restricted sense of the word) and Tongans residing abroad who return to visit friends and relatives (the so-called Visiting Friends and Relatives or VFR category). In 1987, less than fifty per cent of all arrivals declared "pleasure" as the purpose of their visits. Although bonafide visitors, the non-pleasure category of tourists (mainly belonging to the VFR category) have different patterns of behavior, use of tourism facilities and spending. Tourists from the VFR category, for example, rarely stay in hotels, make few visits to tourist attractions and spend less in the hospitality industry. It should be noted, however, that this does not imply that the VFR and other "non-pleasure" categories spend less than foreign visitors. 11. The high, and stable, VFR and "non-pleasure" content in the number of air arrivals creates a rather severe constraint for the future expansion of international tourism in Tonga. Under present conditions, airlines have good occupancy rates with commercially attractive fare structures. Increasing the number of flights or using larger planes for the sole purpose of promoting additional international tourism to Tonga may be commercially unattractive. To fill one additional extra flight per week by a B-737 (at present being used by Air New Zealand), requires an increase in the number of foreign tourists of 5,720 on an annual basis, roughly fifty per cent of present arrivals. In addition, as other destinations in the South Pacific are as a rule better known, airlines tend to spend their promotional budgets on those destinations. 12. The development of tourism in Tonga is further hampered by constraints such as: (i) lack of competitiveness in the international tourism market; (ii) a lack of tourism-specific skills and management expertise, despite relatively high levels of general education; (iii) limited air access; (iv) inadequate tourismrelated infrastructure; (v) land tenure regulations; and (vi) insufficient access to capital. A lack of drinking water may become a severe constraint in the future. 1/ 13. Almost all South Pacific countries have their own, government-sponsored, tourism promotion agencies. In Tonga, promotion (as well as data collection and research) has been entrusted to the Tonga Visitors Bureau (TVB), a statutory body financed by the Government and the TCSP. The TVB is accountable to the Ministry of Labour, Commerce and Industries (MLCI), which is responsible for tourism, although it employs no tourism specialists. The annual budget of TVB for FY 1990/91 amounts to T$872,000 ($671,000); only 32 per cent is spent on marketing and 6 per cent on overseas representation and promotion, the remainder being spent mainly on salaries. 1/ The Australian International Development Assistance Bureau (AIDAB) is currently implementing a study on the water supply potential in the country.

6 4 14. Recently, the Tonga Tourist Association (TTA) was formed and recognized by the Government.1/ Also, the establishment of an inter-governmental Tourism Advisory Board is under consideration. In addition to several studies on specific aspects of tourism (archaeology, handicrafts manufacturing, water supply, manpower development, feasibility of hotels, supply and demand, sectoral linkages and air transport, for example), three studies2/ on general development policies and strategies have been prepared. However, progress in implementing tourism policies has been limited. Despite the Government's emphasis on tourism development, the funds allocated in annual budgets were limited. Besides, the Government did not appoint any officials responsible for translating policies into action programs for implementation. 15. The tourism objectives stated in the Sixth Development Plan for the 1990/ /95 period are shown in Appendix 1, together with the related action plans for future tourism growth up to 1995 prepared by the TVB. In the Sixth Plan, the Government emphasizes the development of tourism in order to create job opportunities, diversify the structure of the economy and increase foreign exchange earnings. It, therefore, attaches priority to programs designed to: (i) facilitate visitor access; (ii) market Tonga in major source countries; (iii) develop tourismrelated infrastructure; and (iv) promote (local) private sector investment in the tourism sector. B. Need for Technical Assistance 16. The reasons for the limited implementation of past tourism development policies have not been adequately studied. It is, therefore, not clear whether correct or wrong policies have been advocated. The reasons for the limited response of the private sector to Government policies are also insufficiently known. In any case, the respective roles of the public and private sectors remain ill-defined, making local investors (including Tongans returning from abroad), reluctant to participate in the development of tourism. Finally, the SDP provides no budget for action programs for implementation. The TVB provided some action plans (see Appendix 1) but did not provide details on implementation. Such programs, including guidelines for matching institutional development, are urgently needed. 17. It is at present beyond the capacity of the Government and other organizations (TVB, TTA) to prepare strategic guidelines and related action plans. To overcome this shortcoming and to adequately evaluate the interplay of other key 1/ The Tonga Tourist Association has been formed for the prime purpose of promoting tourism within Tonga, and in particular to coordinate and encourage the improvement of the services and facilities of persons engaged in the hospitality and tourism industry. It is also the role of the TTA to make recommendations on Tonga's tourism development to the Minister reponsible for tourism in the Government. j (1) Tonga Development Plan for Tourism By: R. Lascelles, B. Mumtaz and M. Sal ier, Bartlett School of Architecture and Planning. University College, London, (2) Tourism Development Programme, 1975/76. By: P.A. Management Consultants, New Zealand, (3) Tourism Development Policy and Strategy for the Kingdom of Tonga. By: E.L. Inskeep. UNDP/WTO (RAS/83/002), 1984.

7 constraints mentioned above, external support is required for the formulation of a National Tourism Plan (NTP), building upon the considerable number of previous studies. The NTP should review existing policies and strategies to enable the Government to choose between the various development alternatives (for instance between indigenously-managed tourism or foreign-capital based tourism) and develop more realistic action plans for the development of tourism. The NTP should, therefore, contain appropriate suggestions for action-oriented programs and projects which must be implementable within the context of the prevailing expertise, capital and budget constraints or suggest measures to eliminate these constraints. The proposed technical assistance will address these issues. A. Objective III. THE TECHNICAL ASSISTANCE 18. The objective of the technical assistance is to prepare a National Tourism Plan that will assist the Government and the private sector in Tonga in generating sustainable growth in the tourism sector in a socially acceptable, environmentally sound and economically viable manner. This growth should be balanced with the requirements of other economic sectors, relevant developments in the international tourism sector and trends in tourism in the South Pacific. 19. The outcome of the technical assistance will enable the Government and private sector operators to make clear policy choice and commit to a development strategy for tourism. The social, economic and environmental ramifications of the various policy and strategic development options for the medium- and longer-term will be assessed. Short-term action plans, including assessment of resource requirements, will be formulated to support the implementation of policies suggested. B. Scope and Work Program 20. The basic tasks of the technical assistance will be to: (i) enable a clear policy choice and commitment to tourism by the Government and the private sector by identifying the various policy and strategic development options available for tourism in Tonga, and the social, economic and political ramifications of each option; and (ii) prepare a strategic program for the coming decade together with explicit subsidiary action plans to achieve step-by-step expansion of the tourism sector in coordination with, but without adversely affecting the development of, other social and economic sectors. 21. The work program under the technical assistance will concentrate on the following major aspects: (1) Development Polic y Issues: involving identification of the prospective tourism development options available to Tonga, ranging from maintaining a small-scale, locally-owned, limited capacity industry to large-scale tourism development utilizing substantial external (and significant local) resources;

8 6 (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Reg ional Development: analysis of the tourism potential for the three island groups viz Tongatapu, Ha'apai and Vava'u and the manner in which expansion of tourism development and tourist penetration might be staged for each; priority sites suitable for varying types of tourism would be identified and detailed development plans formulated within an overall strategic framework and time table; Manpower: identification of current employment patterns and the impact on services, development potentials, and labour migration from a formally well educated population without adequate tourism and management skills; future training needs and manpower requirements for the various strategic options would be stated as would ways of maintaining local management levels; Marketing: formulation of an appropriate market position for Tonga in identified high potential markets, in such a way as to give maximum yield for minimum visitor throughput; identification of specific marketing programs to increase the competitiveness of Tonga, develop suitable commercial tour products and man-made attractions, reduce seasonality, and increase patronage of commercial tourist facilities and accommodation; Financial Resources: assessment of the relevance of the existing investment incentives schemes and identification of specific measures and a strategic framework to stimulate local and foreign investment in selected tourism infrastructure and operations; Tourism Product Develo pment: preparation of inventory and assessment of the market relevance of the existing scenic attractions, accommodation and transport infrastructure and secondary tourism activities and identification of opportunities for new products in each category; Environmental (Tourism-Related) Issues: identification of those attractions or regions which are environmentally sensitive; development of appropriate control/management measures or limits; assessment of the town planning and zoning needs of Nuku'alofa; examination of the need to introduce buffer zones around tourism development areas, appropriate building and sewage disposal codes; Social and Legal Issues: analysis to gauge local awareness of tourism activities and tourists and to assess mechanisms and processes of change in the Tongan culture among the local population; land usage and the land tenure system as impacted by, and impacting on, tourism development will be examined; Infrastructure: assessment of additional requirements in tourism-related infrastructure (water, electricity, roads) stemming from the projected inorease in tourist traffic and development of remote sites; identification of appropriate development measures to be taken by, respectively, the private and the public sector as part of the development process; Institutional Framework: involving a review of the official instruments of tourism policy; i.e. the MLCI and TVB, the impact of incentives and

9 the performance and relationship of activities of the Tonga Development Bank and the impact and relevance of private sector (but Government supported) organizations such as the TTA; and (xi) Absorptive Capacity: formulation of short-term action plans and an assessment of the country's capacity to implement these plans, including the design of remedial measures whenever necessary. 22. A team of international consultants will be required for a total of about 20 man-months, covering the following main fields of expertise: (i) tourism planning and development; (ii) tourism marketing and international aviation forecasting; (iii) physical planning; and (iv) economic/financial analysis. In addition, short-term specialist input may be required in the fields of: (i) international aviation and transport economics; (ii) development sociology; (iii) law; (iv) manpower development and training; (v) (small-scale) hotel operations; (vi) archaeology; (vi) environmental impact assessment and marine park management; (viii) water supply; and (ix) civil and coastal engineering. The number of consultants would be kept to a minimum by combining different areas of expertise among individuals to the extent possible. The consultants will be recruited in accordance with the Bank's Guidelines on the Use of Consultants. The broad terms of reference for the consultants are given in Appendix 2. C. Cost Estimates and Financin g Arrangements 23. The total cost of the technical assistance is estimated at $575,000, consisting of $515,000 in foreign exchange costs and $60,000 equivalent in local currency costs (see Appendix 3). The Bank will provide from the Technical Assistance Special Fund a grant of $550,000 to meet the entire foreign exchange cost and $35,000 equivalent of local currency cost. The Government will contribute the equivalent of $25,000 in kind for counterpart staff and other local costs such as office accommodation, logistical support and administrative expenses. D. Imp lementation Arrangements 24. The MLCI will be the Executing Agency for the technical assistance. The - study will be undertaken in close collaboration with relevant Government agencies, TVB and TTA, and private sector organizations involved in the tourism sector. 25. The consultants' team is expected to be fielded in April 1991 and the study will be undertaken in the following four months. The inception report, to be submitted within three weeks after the start of the work will be reviewed by the Government and the Bank. An interim report will be submitted within two months after the start of the work. It will contain an outline of the major policy and strategic development options. This report will be discussed during a workshop, to be organized as soon as possible after its completion, attended by the Government, private sector representatives and the Bank to enable the Government to indicate to the consultants which development option(s) should be worked out in detail and for which option(s) supporting short-term action plans are to be designed. The draft fna1 report, to be submitted four months after the start of the work, will be reviewed and discussed shortly after its completion at a seminar to be held in Tonga, attended by representatives of the Government, the private sector, the community and the Bank. The aim of these discussions will be to reach as much consensus on, and acceptability of, the emerging National Tourism Plan as

10 8 possible. The final report, which will incorporate changes agreed at the seminar, will be available within two months after the seminar. IV. THE PRESIDENT'S DECISION 26. The President, acting under the authority delegated to him by the Board, has approved the provision of technical assistance to the Government of Tonga in an amount not exceeding $550,000 for the purpose of preparing a National Tourism Plan and hereby reports his action to the Board.

11 9 Appendix 1 Page 1 GOVERNMENT SECTORAL POLICIES PLANS AND STRATEGIES A. Policy Guidelines from Sixth Development Plan 1. Tourism is accorded a high priority in terms of sectoral and national aims under the Sixth Development Plan (1990/ /95). National objectives for the Plan are to: (i) (ii) (iii) (iv) (v) (vi) (vii) continually develop tourism, expand it into one of the major sectors of Tonga's economy and integrate it into the country's total development objectives and program; ensure a planned sectoral growth with positive contribution to employment creation, foreign exchange earnings and to net economic benefits to Tonga; ensure an equitable distribution of tourism activities and earnings throughout the Kingdom given the limited scope for expansion of tourism development in the outer regions and rural areas; ensure that tourism development will be used as a technique for the conservation of Tonga's unique cultural patterns, archaeological and historical sites, the natural environment and for improvements to the country's urban areas; continually develop tourism so that it attracts the types of tourists who appreciate and respect Tonga's culture and environment; ensure that tourism maintains a high level of local participation in ownership and management while allowing sufficient flexibility for foreign investors where large amounts of capital are needed and/or when specialized operations or skills are needed to provide variety; and ensure effective Government support by providing adequate resources for tourism planning, development and marketing. During the Plan period, the Government will place priority on programs designed to free-up visitor access, marketing Tonga in major visitor origins and the further development of infrastructure facilities, which in turn will stimulate private sector expenditure in the tourism industry. B. Action Plans Proposed b y TVB 2. The Tongan Visitors Bureau, as part of its contribution to the formulation of Sixth Development Plan, has developed comprehensive scenarios of future tourism growth up to The program envisages an extensive range of product improvement and development aimed at overcoming the earlier identified constraints. (Reference in text: page 4, para. 15)

12 10 Appendix 1 Page 2 3. Some of the key initiatives identified for the next five years are: (1) upgrading of international accessibility by air, in terms of overall capacity and frequency of flights with a minimum of transfers; (ii) encouraging the establishment of a Government hotel corporation to invest, with joint venture partners, in hotels and resorts in Tonga; (iii) encouraging the development of new, high quality, medium size (up to 500 rooms) beach-oriented integrated resorts with convention facilities in Tongatapu under international management; (iv) (v) (vi) (vii) (viii) encouraging upgrading of existing small-scale lodges and new small-scale fale-type (traditional cottage-style accommodation), beach-oriented resorts; expanding the Tonga National Center, development of a museum and other manmade and secondary tourism attractions; improving access to tourist facilities in all regions; upgrading the organizational and administrative arrangements of tourism; formulating and implementing a ten year national plan for tourism; (ix) expanding marketing activities in long haul markets and increasing cooperative and regional marketing to achieve a high quality, special interest market; and (x) upgrading training opportunities for Tongans by expanding course availability and linking training with new infrastructure development.

13 11 Appendix 2 Page 1 BROAD TERMS OF REFERENCE A. Objective and Scope 1. The objective of the technical assistance is to prepare a National Tourism Plan that will assist the Government and the private sector in Tonga in generating sustained growth in the tourism sector in a socially acceptable, environmentally sound, and economically viable manner. This growth will be balanced with requirements of other economic sectors, relevant developments in the international tourism sector, and trends in tourism to the South Pacific. 2. The technical assistance will enable the Government and private sector operators to make a clear policy choice and commitment to a development strategy for tourism. The various policy and strategic development options for the mediumand longer-term will be assessed as to their social, economic and environmental ramifications. Short-term action plans will be formulated to support the implementation of policies suggested. B. Expertise Required 3. The technical assistance will require the services of a multidisciplinary team of consultants. It is envisaged that about 20 man-months of consultants' time will be required for the largest part in the following fields of expertise: (i) (ii) (iii) (iv) Tourism Plannin g and Development (Team Leader) - the tourism sector and the national economy, opportunities for intersectoral links and secondary tourism development, and institutional and organizational issues. Tourism Marketing - international air visitor trends, market segmentation, promotional targeting and cost-effective concomitant institutional framework. Physical Planning - tourism development nodes, tourism-related infrastructure need, land use and urban planning, planning and design guidelines, environmental protection, and development opportunities. Economics/Financial Analysis - national economic development priorities, links with other sectors, economic and financial feasibility of shortterm action plans. 4. In addition, short-term specialist services may be required in the fields of: (i) international aviation and transport economics; (ii) development sociology; (iii) law; (iv) manpower development and training, including the impact of labor migration; (v) small-scale hotel operations; (vi) archaeology; (vii) environmental analysis and marine park management; (viii) water supply; and (ix) civil and coastal engineering. (Reference in text: page 7, para. 22)

14 12 Appendix 2 Page2 C. Broad Terms of Reference 5. Collection of primary data is not foreseen. Consultants will review completed and ongoing studies,1/ particularly those associated with environmental issues, policies, proposals, data collecting systems and statistical data related to the tourism sector, and liaise with the public and private sector organizations which have an interest in tourism development, in order to facilitate acceptance, of and commitment to, the National Tourism Plan. 6. To achieve the objective, the consultants will: (i) (ii) (iii) (iv) (v) (vi) (vii) review all relevant literature, documents, maps and publications available; identify tourism development options available to Tonga and evaluate costs and benefits of the most relevant options, taking into account future demand, transport facilities, accommodation supply, the market relevance of existing attractions and marketing efforts; consult and liaise with all relevant Government officials and private sector representatives, in particular in connection with selecting development options for further detailed analysis; analyze the tourism potential for the three island groups (Tongatapu, Ha'apai and Vava'u) and the manner in which development of these potentials can be synchronized with national development policies, those concerning environmental protection in particular; assess the environmental impact of tourism on the foreshore, coral reefs and lagoons and suggest measures for their protection, taking into account the interests of traditional users as well; gauge local attitudes towards tourism and tourists, especially those in connection with land use and the land tenure system; identify potential sources of investment funds, local as well as foreign, and assess whether incentives are adequate to mobilize these sources; 1/ Relevant studies include: (i) "Tourism Opportunities in the South Pacific Tonga", Arthur 0. Little, 1989; (ii) "Masterplan for Development of Popua Peninsular", Riedel & Byrne, 1990; (iii) "Import Content of Tourist Hotel Food and Beverage Purchases in the South Pacific", Larry Dwyer, 1988; (iv) "Preliminary Report on Tourism Development in Tongatapu Island", Fujita Corporation, 1987; (v) "Improvement to the Handicraft Industry in Tonga", TCSP, 1987; (vi) "Improvements of Tourist Attractions, notably Historic and Archeological Sites within the Kingdom of Tonga", TCSP, 1987; (vii) "Tonga Development Plan, ", R. Lascelles, P. Mumtaz, andm. Safier, Bartlett School of Architecture and Planning, University College, 1978; (viii) "Tourism Development Programme, 1975/76, PA Management Consultants (New Zealand), 1976; and (ix) "Tourism Development Policy and Strategy for the Kingdom of Tonga", E.L. Inskeep, UNDP/WTO, 1984.

15 13 Appendix 2 Page 3 (viii) make an inventory of present manpower and training needs, and suggest appropriate training programs, in particular those for improving the management standards of local operators; (ix) (x) assess the additional requirements in tourism-related infrastructure (water, electricity, roads) and suggest projects for necessary improvements; review the official instruments of tourism policy and assess the need for changes in institutional arrangements and procedures, especially those related to facilitatory mechanisms for intending developers; and (xi) taking into account the above, formulate policy guidelines for the midand longer-term, and short-term action plans containing economically viable, socially acceptable and environmentally sustainable tourism development projects for implementation, fully taking into account the absorptive capacity of the country and, when necessary, suggest remedial measures. D. Implementation Arrangements 7. The work program is expected to commence in April 1991 and will be completed by August The consultants will, to the extent possible, be based in the Ministry of Labour, Commerce and Industries in Nuku'alofa and will liaise closely with the Director of the Tonga Visitors' Bureau and representatives of the tourism industry throughout Tonga. 8. The consultants will have full access to the necessary office space, word processing and copy facilities, local transport, communications, secretarial and technical support staff, and other necessary support facilities of the Ministry of Labour, Commerce and Industries. E. Reporting - 9. The consultants will be required to submit the following reports to the Government of Tonga and the Bank: (1) Inception Report: outlining the detailed work program, initial findings, major issues and proposed methodologies within three weeks of the commencement of the Study. (ii) Interim Re port: containing an outline of the major policy and strategic development options within two months after starting work. (iii) Draft Final Re port: within four months of starting work. (iv) Final Re port: incorporating the comments of the Government of Tonga, private sector representatives and the Bank, within two months of the receipt of such comments.

16 14 Appendix 2 Page The Interim Report will be presented at a workshop to be held in Tonga to be attended by the Government, relevant private sector representatives and the Bank to enable the Government to indicate to the consultants which development option has to be worked out in detail and for which policy supporting short-term action plans will have to be designed. 11. The draft final report, to be submitted after four months, will be reviewed and discussed at a seminar to be held in Tonga as soon as possible after completion of the draft final report. The purpose of the seminar will be to discuss the conclusions and recommendations included in the draft final report with relevant representatives of the Government, the private sector, the community and the Bank in order to reach as much consensus as possible on, and acceptability of, the emerging National Tourism Plan.

17 15 Appendix 3 ESTIMATED COST OF THE TECHNICAL ASSISTANCE Amount ($) A. Financed by the Bank 1. Foreign Currency Cost $ (i) (ii) (iii) (iv) (v) (vi) (vii) Remuneration of Foreign Consultants Per diem of Foreign Consultants International Travel Reports and Communications Government Participation in Contract Negotiations Report Production Contingencies 275,000 70,000 50,000 5,000 7,000 10,000 98,000 Sub-total (1) 515, Local Currency Cost (i) (ii) (iii) (iv) (v) Seminar Domestic Travel (air) Administrative Support - offices and secretarial services - word processing - local transport - communications Workshop Contingencies Sub-total (2) Sub-total (1 + 2) B. Financed b y the Government 1/ (Local Currency Cost) (i) (ii) (iii) (iv) (v) (vi) (vii) Counterpart Staff Office Accommodation Administrative Services Liaison Assistance Data Collection Domestic Travel (land) Contingencies Sub-total (B) GRAND TOTAL (A + B) 8,000 5,000 3,500 3 ;500 1,000 2,000 5,000 7,000 35, ,000 7,000 4,000 4,000 2,000 2,000 1,000 5,000 25, ,000 1/ It is anticipated that Government contributions as specified in paragraph 23 (here expressed in $) will be made in kind. (Reference in text: page 7, para. 23)