Tourism initiative a good first stepThe government held a conference chaired by President Park Geun-hye to promote tourism in hopes of boosting the industry as a new growth engine and incubator of jobs. The government plans to refund value-added tax on hotel bills for foreign tourists, allow foreigner-only casinos on luxury cruise ships and permit advertisements promoting medical tourism, thus deregulating 25 areas that have been impediments to tourism growth.
If the tourism industry receives the hoped-for boon from the liberalization measure, foreign visitors are expected to increase to 16 million in 2017 with the number of tourism-related jobs jumping from the current 850,000 to 1 million.
President Park said the tourism industry is a typical sector for convergence and added-value, with room for integrating and mixing various areas as well as producing new jobs. That is why we have repeatedly called for the tourism industry to be fostered as a key service sector requiring strategic national attention and promotion. The tourism industry encompasses not only travel agencies, lodging and dining, but also transportation, medical services and cosmetics. It also can boost the convention, exhibition and exposition sector. Singapore and Hong Kong are the best regional examples that rely on revenues from tourism.
Nonetheless, deregulation efforts and administrative support to the tourism industry have been deterred by government agencies and interest groups. When one side suggested refunding sales tax for tourists, the other opposed it citing a fall in tax revenue. When one proposed casino liberalization, the other feared negative repercussions.
The recent government conference, however, addressed differences and came up with a comprehensive action plan to promote tourism with the attendance of representatives from national and local governments.
Such concerted and organized liberalization and support efforts should be applied to other sectors like medical and education services. Still, the government can do better than the initial measures to promote the service sector announced earlier this month, which were merely a repackaging of earlier ideas. It must take a crack at the thorny areas of opening the market for for-profit medical facilities and international schools. The service sector is the answer to the creative economy envisioned by President Park and her promise to attain a 70 percent employment rate. It is the growth engine for the country’s future.