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Problems and Prospects of Sustainable Tourism in the Republic of Kazakhstan

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Problems and Prospects of Sustainable Tourism in the Republic of Kazakhstan Business and Economic Research ISSN 2162-4860 2018, Vol. 8, No. 2 Problems and Prospects of sustainable tourism in the Republic of Kazakhstan Piratdin Allayarov (Corresponding author) School of Economics and Trade, Hunan University, 410006, Changsha, China E-mail: [email protected] Bakhit Embergenov Department of Learning and Writing Center Alexander College, BC V6B 1P2, Vancouver, Canada Si Thu Han School of Economics and Trade, Hunan University, 410006, Changsha, China Received: February 18, 2018 Accepted: March 2, 2018 Published: April 5, 2018 doi:10.5296/ber.v8i2.12951 URL: https://doi.org/10.5296/ber.v8i2.12951 Abstract This survey attempts to identify the existing problems faced by the tourism sector of the Republic of Kazakhstan and to identify the government policies initiated for the betterment of the tourism sector of the country. The methods of data collection, which were used are interviews from the travel and tour agents for the identification of the problems faced by the tourism industry of Kazakhstan and survey from the board members of the tourism companies of Kazakhstan. The method was used to reach logical conclusions and catered individual considerations in line with the research question. Recommendations to propose ways in which the government can improve the sector are given. The impact of sustainable tourism sector on the economy and financial health of Kazakhstan is presented. Keywords: Tourism industry, Sustainable tourism, Kazakhstan, Government policy 1. Introduction Geographically, the Republic of Kazakhstan is the 9th largest country in the world. The tourism sector of Kazakhstan has contributed approximately 0.3% to the Gross Domestic 115 http://ber.macrothink.org Business and Economic Research ISSN 2162-4860 2018, Vol. 8, No. 2 Product (GDP) of Kazakhstan, as per the data compiled in 2014 (Costa, Panyik, & Buhalis, 2014). However, the growth in GDP contribution is expected to clock in at 1.6% or $3.08 billion to the economy of Kazakhstan as per the statistical records of World Economic Forum (WEF) in their report of competitiveness presented in 2017. Moreover, the government of Kazakhstan is optimistic about the GDP growth, and it has been forecasted that the GDP is expected to grow to notable 3% by the year 2020. Furthermore, the tourism industry of the Republic of Kazakhstan has also been ranked 81st for the calendar year 2017, by the World Economic Forum. There has been an improvement in the ranking of four times as compared to the previous ranking of WEF. Globally, the tourism industry has posted decent growth owing to the growth of other economic sectors such as chemical, automobile, petroleum etc. and the impact of global growth has also been witnessed in the Republic of Kazakhstan. It is logically viewed that the growth in the tourism industry has its impact on the global economy at large because increase in tourism activity in any country brings handy foreign exchange to that particular country and it serves as a tool to support the balance of payments (Leamer, E. E., & Storper, M. 2014). The growth witnessed in the tourism sector of Kazakhstan, has resulted in favourable changes to the country’s balance of payment, supported the company’s foreign trade deals and has also created employment opportunities for the youth of Kazakhstan. Moreover, the government has also initiated infrastructural developments to attract tourists, and this has also resulted in improving the overall superstructure and infrastructure of the country. The Republic of Kazakhstan likewise the other central Asian countries have strategically utilized tourism for driving the economic growth. Welcoming foreign visitors not only brought the foreign exchange to the country but also enabled the government to efficiently decide on its economic and political choices. Major export bills of Kazakhstan include the export of raw materials and government has installed a few controls over its export prices, as an initiative to reduce its reliance on the petroleum sector which has been the revenue generator analogous to the Gulf countries (Basher, Haug, & Sadorsky, 2017). The government with an intention to fuel the economy has taken various steps to develop the energy sector of Kazakhstan with an objective of achieving economic diversity. The economic development and stable economic position of the country are likely to affect the sustainable development of the tourism industry. As there have been serious fluctuations in the international oil prices, the government’s policy to reduce its economic reliance on petroleum sector is welcomed by the tourism industry as well. According to the statistics of World Trade Organization, it is concluded that if the Asian destinations are economically developed and stabilized, then it is likely that the rich tourists across the globe may also prefer to visit the Central Asian countries more frequently, including Kazakhstan, and these destinations may supersede the European destinations. Due to the important political and economic positioning of Kazakhstan, this can be very beneficial for the tourism industry of Kazakhstan, provided that the government of Kazakhstan continue its policies to develop the country structurally and economically. International Tourism has increased over the year in the Republic of Kazakhstan (Gössling, 116 http://ber.macrothink.org Business and Economic Research ISSN 2162-4860 2018, Vol. 8, No. 2 Scott, & Hall, 2015). As per the statistical records, there were around 1.47 million of tourists who visited the Republic of Kazakhstan in 2000. However, the number of international tourists visiting Kazakhstan significantly increased to approximately 4.81 million for the calendar year 2012. It has been viewed that the infrastructure of Kazakhstan is not developed and it is largely debated that based on the tourist attractions, which the country has in shape of desert and lake landscapes, attractive mountains and lush green outskirts, the tourism industry of Kazakhstan has not managed to achieve its true potential. Problems with the tourism industry of Kazakhstan are dependent on various factors such as the lack of supply chain, and logistics facilities, underdeveloped infrastructure and low standard services to the tourists. Moreover, one of the notable problems faced by the economical tourists are the high prices which become a hurdle when the tourists plan to visit Kazakhstan. The problem for high prices is not only faced by the international tourists, but also by the local people of Kazakhstan, who have responded negatively by arguing that it costs almost half of their local spending when they visit places other than Kazakhstan for holiday vacations (Dzhusibalieva, 2016). However, international tourists still prefer to visit Kazakhstan despite these problems, and there have also been visits of the various celebrities and famous people like Prince Harry of Britain, who visited the country for the attractive skiing opportunities in the country. The government of Kazakhstan has introduced various policies and formulated the “Tourism Industry Development Plan 2020” to address the problems of the tourism. According to this plan, the government plans to develop five regions of Kazakhstan, i.e. East Kazakhstan, West Kazakhstan, Astana City and Almaty City (Nasiri et al., 2016). Furthermore, the government also expects that through the “Tourism Industry Development Plan 2020” an investment of approximately $4 billion will be made to better respond to the tourism problems and this plan would also result in the creation of three hundred thousand jobs. Due to the Soviet Union’s dissolution, Kazakhstan has emerged as a famous place for the tourists, and this gave rise to the need for formulation tourism friendly governmental policies. It has been argued that before the Soviet Union’s dissolution, there was less competition and the tourism avenues of the USSR were far behind the European tourism standards. The initial years of Kazakhstan after the dissolution of USSR were challenging, where all the sectors needed immediate aid. The tourism sector of Kazakhstan struggled, and the GDP contribution stood as follows: Table 1. Tourism share in Kazakhstan’s GDP Year Tourism share in Kazakhstan’s GDP (%) 1991 0.3% 1992 0.09% 1993 0.06% 1994 0.08% However, on account of the favourable governmental policies and initiatives, the share of tourism in national GDP had steadily increased and by 2012 was improved to 0.68% and the 117 http://ber.macrothink.org Business and Economic Research ISSN 2162-4860 2018, Vol. 8, No. 2 country’s ranking was also improved to 54th in the world. The aims and objectives of this research are to identify the problems and prospects of Sustainable Tourism in Kazakhstan. The government of Kazakhstan after the independence of Kazakhstan from the Soviet Union has introduced various initiatives for solving the issues of the tourism sector of the country. However, there are still some issues which are unaddressed. If appropriate measures are taken such as the Tourism and Development Plan 2020, the tourism sector would flourish and result in high revenue generation for the country. This research aim at providing a detailed analysis of the existing tourism setup by identification of the current problems together with the prospects of the future of the industry. The aims of this research gives rise to the objectives mentioned below: • To identify the existing problems faced by the tourism sector of the Republic of Kazakhstan; • To identify the government policies initiated for the betterment of the tourism sector of the country; • To propose ways in which the government can improve the sector; • To identify the impact of sustainable tourism sector on the economy and financial health of Kazakhstan. 2. Literature Review To attract tourists, it is essential that the tourism industry develop and equipped with the necessary tools depending on the type of people who visit the tourist places within a country. The country which has been chosen for this research study in Kazakhstan. It is imperative to mention here that Kazakhstan is a country which has a strong backing of history and culture.
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