Unveiling Indonesia’s poverty dynamics: Analyzing the structural impact of the tourism sector on poverty depth and severity

Suparman Suparman; Yunus Sading; Maskuri Sutomo; Muzakir Muzakir

doi:10.24294/jipd.v8i5.3799

Home - JIPD - Volume 8 - Issue 5

Submit to JIPD

Journal Browser

Volume | Year

Issue

• Current lssue

View All

News and Announcements

View All

Unveiling Indonesia’s poverty dynamics: Analyzing the structural impact of the tourism sector on poverty depth and severity

Suparman Suparman

Yunus Sading

Maskuri Sutomo

Muzakir Muzakir

Journal of Infrastructure Policy and Development 2024, 8(5), 3799; https://doi.org/10.24294/jipd.v8i5.3799

Submitted：22 Dec 2023

Accepted：08 Jan 2024

Published：28 Apr 2024

Download PDF(269.58KB)

Cite

XML

Abstract

This study addresses the impact of the tourism sector on poverty, poverty depth, and poverty severity in Indonesia, focusing on the micro-level dynamics in the province. Despite numerous tourism destinations, their strategic contribution to regional progress remains underexplored. The motivation stems from the need to comprehend the nuanced relationship between tourism and poverty at both the national and local levels, with specific attention to the untapped potential at the province level in Indonesia. We hypothesize that a higher tourism sector GRDP will be inversely correlated with poverty levels, and the inclusion of a Covid-19 variable will reveal a structural impact on poverty dynamics. Employing a Panel Regression Model, secondary data from the Central Statistics Agency (BPS) spanning 2011–2020 is utilized. A panel data regression equation model, including CEM, FEM, and REM, is employed to analyze the intricate relationship between tourism and poverty. The findings demonstrate a negative correlation between higher tourism sector GRDP and the number of poor people. The Covid-19 variable, considered a structural break, reveals a significant association between increased cases and elevated poverty and severity across Indonesian provinces. This study contributes a micro-level analysis of tourism’s role, emphasizing its impact at the provincial level. The findings underscore the need for strategic initiatives to harness the untapped potential of tourism in alleviating poverty and promoting regional progress.

Keywords

References

Akama, J. S. (2002). The role of Government in the development of tourism in Kenya. International Journal of Tourism Research, 4(1), 1–14. Portico. https://doi.org/10.1002/jtr.318

Alvarado, R., Murshed, M., Cifuentes-Faura, J., et al. (2023). Nexuses between rent of natural resources, economic complexity, and technological innovation: The roles of GDP, human capital and civil liberties. Resources Policy, 85, 103637. https://doi.org

Ashley, C., Boyd, C., dan Goodwin, H. (2000). Pro-Poor Tourism: Putting Poverty at the Heart of the Tourism Agenda. Natural Resource Perspectives 51. London: Overseas Development Institute.

Ashley, C., Roe, D., dan Goodwin, H. (2001). Pro-Poor Tourism Strategies: Makin Tourism Work for The Poor: A Review of Experience. London: Overseas Development Institute.

Ashley, C., Mitchell, J. (2005). Can tourism accelerate pro-poor growth in Africa? London: Overseas Development Institute.

Ashley, C., Roe, D. (2002). Making tourism work for the poor: Strategies and challenges in southern Africa. Development Southern Africa, 19(1), 61–82. https://doi.org/10.1080/03768350220123855

Badan Pusat Statistik (BPS). (2020). International Visitor Arrivals Statistics 2020. BPS-Statistics Indonesia.

Badan Pusat Statistik (BPS). (2020). Measurement and Macro Poverty Analysis of Indonesia 2020. BPS-Statistics Indonesia.

Blake, A., Arbache, J. S., Sinclair, M. T., et al. (2008). Tourism and poverty relief. Annals of Tourism Research, 35(1), 107–126. https://doi.org/10.1016/j.annals.2007.06.013

Bulut, U., Ongan, S., Dogru, T., et al. (2023). The nexus between government spending, economic growth, and tourism under climate change: testing the CEM model for the USA. Environmental Science and Pollution Research, 30(36), 86138–86154. https://doi.org

Carbone, M. (2005). Sustainable Tourism in Developing Countries: Poverty Alleviation, Participatory Planning, and Ethical Issues. The European Journal of Development Research, 17(3), 559–565. https://doi.org/10.1080/09578810500209841

Chok, S., Macbeth, J., Warren, C. (2007). Tourism as a Tool for Poverty Alleviation: A Critical Analysis of ‘Pro-Poor Tourism’ and Implications for Sustainability. Current Issues in Tourism, 10(2–3), 144–165. https://doi.org/10.2167/cit303

Christie, I. T. (2002). Tourism, growth and poverty: Framework conditions for tourism in developing countries. Tourism Review, 57(1/2), 35–41. https://doi.org/10.1108/eb058377

Croes, R., Vanegas, M. (2008). Cointegration and Causality between Tourism and Poverty Reduction. Journal of Travel Research, 47(1), 94–103. https://doi.org/10.1177/0047287507312429

Dogru, T., Isik, C., Sirakaya-Turk, E. (2019). The balance of trade and exchange rates: Theory and contemporary evidence from tourism. Tourism Management, 74, 12–23. https://doi.org/10.1016/j.tourman.2019.01.014

Dogru, T., McGinley, S., Sharma, A., et al. (2023). Employee turnover dynamics in the hospitality industry vs. the overall economy. Tourism Management, 99, 104783. https://doi.org/10.1016/j.tourman.2023.104783

Dogru, T., Mody, M. A., Hanks, L., et al. (2023). The impact of business models and state regulations on the accommodation sector: Theory and empirical evidence from the recent pandemic. International Journal of Contemporary Hospitality Management.

Gascón, J. (2014). Pro‐Poor Tourism as a Strategy to Fight Rural Poverty: A Critique. Journal of Agrarian Change, 15(4), 499–518. https://doi.org/10.1111/joac.12087

Ișik, C., Ahmad, M., Pata, U. K., et al. (2020). An Evaluation of the Tourism-Induced Environmental Kuznets Curve (T-EKC) Hypothesis: Evidence from G7 Countries. Sustainability, 12(21), 9150. https://doi.org/10.3390/su12219150

Isik, C., Dogru, T., Turk, E. S. (2017). A nexus of linear and non‐linear relationships between tourism demand, renewable energy consumption, and economic growth: Theory and evidence. International Journal of Tourism Research, 20(1), 38–49. Portico. https

Işik, C., Kasımatı, E., Ongan, S. (2017). Analyzing the causalities between economic growth, financial development, international trade, tourism expenditure and/on the CO2 emissions in Greece. Energy Sources, Part B: Economics, Planning, and Policy, 12(7)

Işık, C., Ongan, S., Ozdemir, D., et al. (2023). Renewable energy, climate policy uncertainty, industrial production, domestic exports/re-exports, and CO2 emissions in the USA: A SVAR approach. Gondwana Research. https://doi.org/10.1016/j.gr.2023.08.019

Işık, C., Simionescu, M., Ongan, S., et al. (2023). Renewable energy, economic freedom and economic policy uncertainty: New evidence from a dynamic panel threshold analysis for the G-7 and BRIC countries. Stochastic Environmental Research and Risk Assessm

Işık, C., Sirakaya-Turk, E., Ongan, S. (2019). Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence. Tourism Economics, 26(8), 1344–1357. https://doi.org/10.1177/1354816619888346

Islam, F., Carlsen, J. (2012). Tourism in Rural Bangladesh: Unlocking Opportunities for Poverty Alleviation? Tourism Recreation Research, 37(1), 37–45. https://doi.org/10.1080/02508281.2012.11081686

Jabeen, G., Wang, D., Işık, C., et al. (2023). Role of energy utilization intensity, technical development, economic openness, and foreign tourism in environmental sustainability. Gondwana Research. https://doi.org/10.1016/j.gr.2023.03.001

Karagöz, D., Işık, C., Dogru, T., et al. (2020). Solo female travel risks, anxiety and travel intentions: examining the moderating role of online psychological-social support. Current Issues in Tourism, 24(11), 1595–1612. https://doi.org/10.1080/13683500.

Karagöz, D., Ramkissoon, H. (2023). Loneliness, travel nostalgia, subjective well-being and prevention regulatory focus: a moderated mediation model analysis. Current Issues in Tourism, 1–17. https://doi.org/10.1080/13683500.2023.2175201

Kibicho, W. (2004). Community tourism: A lesson from Kenya’s coastal region. Journal of Vacation Marketing, 10(1), 33–42. https://doi.org/10.1177/135676670301000104

Ko, T. G. (2005). Development of a Tourism Impact Assessment Instrument for Community Sustainable Development. Internal Journal of Tourism Research. 7(3–4) 134–147.

Koščak, M., Knežević, M., Binder, D., et al. (2021). Exploring the neglected voices of children in sustainable tourism development: A comparative study in six European tourist destinations. Journal of Sustainable Tourism, 31(2), 561–580. https://doi.org/1

Mahony, K., & Van Zyl, J. (2002). The impacts of tourism investment on rural communities: Three case studies in South Africa. Development Southern Africa, 19(1), 83–103. https://doi.org/10.1080/03768350220123891

Manyara, G., & Jones, E. (2007). Community-based Tourism Enterprises Development in Kenya: An Exploration of Their Potential as Avenues of Poverty Reduction. Journal of Sustainable Tourism, 15(6), 628–644. https://doi.org/10.2167/jost723.0

Muganda, M., Sahli, M., & A Smith, K. (2010). Tourism’s contribution to poverty alleviation: A community perspective from Tanzania. Development Southern Africa, 27(5), 629–646. https://doi.org/10.1080/0376835x.2010.522826

Muhanna, E. (2007). The Contribution of Sustainable Tourism Development in Poverty Alleviation of Local Communities in South Africa. Journal of Human Resources in Hospitality & Tourism, 6(1), 37–67. https://doi.org/10.1300/j171v06n01_03

Ongan, S., Işık, C., Bulut, U., et al. (2022). Retesting the EKC hypothesis through transmission of the ARMEY curve model: an alternative composite model approach with theory and policy implications for NAFTA countries. Environmental Science and Pollution

Reid, D. G. (2003). Tourism, Globalization and Development. Responsible Tourism Planning. London: Pluto Press.

Saayman, M., Rossouw, R., Krugell, W. (2012). The impact of tourism on poverty in South Africa. Development Southern Africa, 29(3), 462–487. https://doi.org/10.1080/0376835x.2012.706041

Scheyvens, R., Momsen, J. H. (2008). Tourism and Poverty Reduction: Issues for Small Island States. Tourism Geographies, 10(1), 22–41. https://doi.org/10.1080/14616680701825115

Scheyvens, R. (2002). Tourism for Development: Empowering Communities. Harlow: Prentice Hall.

Scheyvens, R. (2007). Exploring the Tourism-Poverty Nexus. Current Issues in Tourism, 10(2–3), 231–254. https://doi.org/10.2167/cit318.0

Schilcher, D. (2007). Growth Versus Equity: The Continuum of Pro-Poor Tourism and Neoliberal Governance. Current Issues in Tourism, 10(2–3), 166–193. https://doi.org/10.2167/cit304.0

Sebele, L. S. (2010). Community-based tourism ventures, benefits and challenges: Khama Rhino Sanctuary Trust, Central District, Botswana. Tourism Management, 31(1), 136–146. https://doi.org/10.1016/j.tourman.2009.01.005

Simpson, M. C. (2008). Community Benefit Tourism Initiatives—A conceptual oxymoron? Tourism Management, 29(1), 1–18. https://doi.org/10.1016/j.tourman.2007.06.005

Sofield, T., Bauer, J., De Lacy, T., et al. (2004). Sustainable Tourism~ Eliminating Poverty (ST~ EP). CRC for Sustainable Tourism Pty Ltd.: Gold Coast, Australia, 76.

Spenceley, A., Meyer, D. (2012). Tourism and poverty reduction: theory and practice in less economically developed countries. Journal of Sustainable Tourism, 20(3), 297–317. https://doi.org/10.1080/09669582.2012.668909

Tosun, C. (2000). Limits to community participation in the tourism development process in developing countries. Tourism Management, 21(6), 613–633. https://doi.org/10.1016/s0261-5177(00)00009-1

Tosun, C. (2006). Expected nature of community participation in tourism development. Tourism Management, 27(3), 493–504. https://doi.org/10.1016/j.tourman.2004.12.004

Truong, V. D. (2017). Tourism, poverty alleviation, and the informal economy: the street vendors of Hanoi, Vietnam. Tourism Recreation Research, 43(1), 52–67. https://doi.org/10.1080/02508281.2017.1370568

UNCTAD (United Nations Conference on Trade and Development). (2007). FDI in Tourism: The Development Dimension. UNCTAD Current Studies on FDI and Development No. 4. United Nations, New York and Geneva.

UNCTAD (United Nations Conference on Trade and Development). (2008). FDI in Tourism: The Development Dimension. UNCTAD Current Studies on FDI and Development No. 4. United Nations, New York and Geneva.

UNWTO (United Nations World Tourism Organization). (2002). Tourism and Poverty Alleviation. Madrid: UNWTO.

Zhao, W., Ritchie, J. R. B. (2007). Tourism and Poverty Alleviation: An Integrative Research Framework. Current Issues in Tourism, 10(2–3), 119–143. https://doi.org/10.2167/cit296.0

Previous
article in this issue

Next
article in this issue