Assessing the Economic Benefits and Costs of Sex Tourism Dr Jeff Pope Curtin University, Australia
Introduction Complex and sensitive issue Large literature on sex tourism Relatively little on its economic benefits and costs Background/Approach
Definition A tourist may be simply defined as a person who visits another place other than his/her normal place of residence for a period of more than 24 hours and less than one year (Pope, 2006). Sex tourism may be either narrowly defined or widely defined.
Narrow definition: tourism where the main purpose or motivation of at least part of the trip is to consummate sexual relations (Ryan and Hall, px) ie it involves sexual intercourse. Wider definition: tourism where the main purpose or motivation of at least part of the trip is for sexual activities of any type (amended from above).
The definition does not include payment of any monetary sum or payment in kind But the vast majority of sex tourism would involve a direct monetary payment or some other financial compensation Should the economist value gifts and other arrangements, especially over a period of time, and if so how?
Thus: Sex tourism and the relationship between a client and a sex worker is complex and riddled with ambiguities (Cohen, 1982).
Major Difficulties and Constraints Definition of sex tourism (already discussed) Moral and ethical considerations of prostitution, and/or certain aspects of it, particularly the age of workers and their method of entry into sex tourism Its confidential, private, and often hidden, nature
Its illegal (although largely tolerated) nature in some countries Difficulty of obtaining information and particularly economic data Refusal by some to discuss or acknowledge its existence
Hypocrisy, particularly government officials where public pronouncements (denial, minimisation) differ from knowledge of, and practice within, a country (tolerance, acceptance, possibly encouragement) Complexity of organisation, from occasional individual casual workers, voluntary full-time workers (with or without pimps) through to forced, enslaved workers controlled by criminal organisations
The overlap and difficulty of separating out international sex tourism, domestic sex tourism and the demand for sex services by locals, especially regarding longer- term health costs
Macro-Economic Benefits Assess in three major ways: Its direct effects Its indirect effects Its total effects ie direct plus indirect effects (Pope, 2006) Importance of the Sex Tourism Multiplier
Leakages: losses to the home economy in the form of imported goods and services. They often occur because of the dominance of overseas-owned owned Multi- National Enterprises (MNEs( MNEs) ) in tourism.
Macro-economic benefits of sex tourism to a country or region over a period of time should focus upon: Number of tourist arrivals, and their composition eg single males Tourism expenditure/revenue Export or foreign exchange earnings Employment in the tourism industry Employment in the tourism economy
Micro-Economic Benefits Analyse from either the demand-side or supply- side (or both). Demand-side, simply expressed per sex worker : TR = average price x number of transactions x time period (eg( annual) A more sophisticated analysis, highly recommended, would divide the market into different segments or sub-groups, each with a different price and ensuing number of transactions.
Simple Example: 3 workers (TR per night/per worker) Category Price US$ Number of clients TR High 100 1 100 Medium 20 5 100 Low 5 10 50 Overall 250 NB Rough estimate based on 3 workers: TR = 60 or 125 ie under-estimate estimate
- Over-estimate estimate also possible (where many low category workers) - Thai research suggests 7 main categories of sex worker Supply-side Major issues include: the source and costs of labour (initial and ongoing) organisation eg individual (freelance) or commercialised (organised by group/business) the degree of regulation (if any) the level of profits compared with costs
Distribution of Monies Business Owners Other parties eg fees, commissions, bribes Mama-san (manager) Sex workers (and repayment of debt issues, where applicable) Support workers
Two Key Micro-Economic Issues Relative earnings of sex workers as a % of overall industry: less than 5% to 25%? % remittance of sex workers earnings back to families in rural areas: 25% to 50%?
Economic Costs The main economic costs are three-fold: Health costs, especially venereal diseases and AIDS, and (hardly ever discussed in the context of poorer countries) mental health and effect on fertility rates Loss of productive workers in the economy, largely because of poor health or early death Wider social effects, such as greater drug use, alcohol use, gambling, crime
Estimates (refer paper) Cautionary comments As a % of GNP/GDP Number of Sex Tourists Prices (per transaction) Labour recruitment costs Ongoing labour costs (wages) Remittances to families
Number of Workers Demographics eg gender, age Revenue and Profitability Benefits for the government Health Costs Overall a very lucrative business in South East Asian countries, estimated in US$ billion and between 2% and 14% of GDP
Concluding Comments Policy Implications: Sex Tourism and Economic Development Further Research More reliable data is needed, where realistic estimates are possible
More Reliable Data/Policy Decisions Improved data would provide a sound basis for better informed policy making in the areas of tourism and economy-wide planning, development, regulation, taxation and investment. It is important to clearly establish the major (specific) policy decisions that need to be made and the necessary economic data on which to base those decisions.
Thank You. Questions? Comments?