Is Tourism the Solution to Meghalaya’s Economic Woes?

In spite of having a name (abode of the clouds) that evokes a sense of awe and adventure, tourism in Meghalaya is still in its nascent stage. The industry has experienced a tremendous growth in the last decade with the number of tourist doubling during the same period. But, in terms of infrastructure and other extension services to support the industry, much remains to be done.

Some of the well-known destinations in the State are Cherrapunjee/Sohra (rainiest place on Earth), Nohkalikai (one of the tallest waterfall in the country), living root bridges (in the War-Khasi region), Mawlynnong (cleanest village in South Asia), Jakrem (hot springs), Dawki (water sports), Mawphlang (sacred grove), and the limestone caves of Khasi-Jaintia and Garo Hills to name a few. Many potential tourist spots still lie undeveloped (for example, Kyllang – a single granite boulder several stories tall is hardly visited by tourists) while historical sites in well-known tourist spots, like the British era ruins and monuments in Sohra, are hardly known.

The future of the industry is promising with the State Government only too keen to latch itself to the trend by organizing events (Monolith and Cherry Blossom festivals, etc.) at a regular basis to project Meghalaya as a tourist hub. And nothing symbolizes the optimism of the industry more aptly than the large resort being build on the outskirts of Sohra which has its own golf-course. This particular resort stands out as an anomaly in a stony landscape covered by tall grasses where soil cover is almost non-existent and water shortage a pervasive problem during the dry season. It is not just private groups that are investing a lot of money in creating a package for attracting tourists from around the World. The local communities are also keen in cashing on the increasing footfall by developing facilities (eco-parks, guest houses, lakes for fishing and recreation, etc.) of their own to lure visitors to their villages. For a cash-strapped state like Meghalaya, tourism appears as a viable source of income.

However, I am not optimistic about the sustainability of this particular model for development. Tourism, in my opinion, will make the economy of Meghalaya more vulnerable to global/National shocks which are endemic in a capitalist order and accentuate the weak position of the State within the Indian economy.

Meghalaya’s economy has been largely based on the extraction of natural resources and supplying them to the market without value addition. In this regard it is no different from many of those third world countries whose economic model is based on export of raw material and import of finished products. This model creates a dependency relationship which recreates the colonial circuits of value extraction in the present age. Such countries are inevitably at a disadvantageous position in comparison to the erstwhile colonial nations. Transfer of funds from the latter to the former does take place, whether they are in the form of grants supporting infrastructural development or loans to tide the balance-of payment problems. But the conditions attached to such transfers only accentuates the dependency (e.g., structural adjustment programs). The situation in North East in general and Meghalaya in particular is not very different. With the weak development (or non-existence) of the secondary sector (especially manufacturing), neglect of the primary sector and limitations of the tertiary sector the region (and the State) is very much dependent on the largess of the Central Government. Much of this again goes into the coffers of the local elite who like the elites of the third world are only concerned with holding on to their privileges. This keeps the State and the region locked into a highly disadvantageous relationship with the rest of the country.

This highly weakened positioned is further exacerbated when the prevailing model, i.e., extraction of raw materials (irrespective of future ramifications, i.e., environmental degradation), is disturbed. Such shocks have already adversely affected Meghalaya’s economy during the past few decades. First, there was the timber ban of the 1990’s which decimated the timber industry in the state. While there is no doubt that environmental protection and sustainability is an important issue it is highly misleading to think that people on the ground are antagonistic to such concerns. Even before the ban people had realized that there was a danger of losing future gains for short-term profit. Village communities, in especially the Ri Bhoi district, henceforth declared that only local contractors would be allowed to fell trees in their villages. The reasoning was that being part of the local community, local contractors had an incentive in following more sustainable practices (match extraction with regeneration). Similarly, other alternatives to ensure that conservation and livelihood are harmonized could have been explored. But that didn’t happen and the result was the loss of livelihood without provision of alternatives weakening the economy.

The latest shock was the coal ban on account of its deleterious environmental impacts. I support the ban not solely for its adverse ecological consequences but because of the horrendous working conditions found in the mines. Lack of safety regulations and exploitative labour conditions (including child labour) should have been reasons enough to clamp down on the industry a long time ago. The cumulative effect has been to weaken the State’s economy which has made it more dependent on the Central Government for funds at a time when the ‘Special Category’ status has been abolished. Under this framework favourable funding pattern and extra assistance was available to Meghalaya and other states in the region. With its abolishment the state will have to look at internal sources for revenue generation. Search for alternative revenue sources has already forced the State to restart the lottery business which had been shut down in the past. At the same time, it gives the government of the day the opportunity to abdicate their responsibility for providing social services by citing financial constraints.

In such circumstances, tourism appears as a panacea of all ills. Most of the tourism in Meghalaya is based on natural scenery and this aligns perfectly well with those who call for a ‘cleaner and greener’ model of development. Instead of building factories, one can build resorts. And instead of transporting truckloads of a resource which pollutes the environment, tourists can instead be transported to visit areas of pristine natural beauty. Earning the hard cash of the tourists is now an incentive to protect and preserve the environment. Since the the State has so far failed to build its economy on production (weak secondary sector and challenges in the primary sector) it is only logical that it will look towards consumption as its saviour. This of course is not consumption which is generated from the local population’s rising affluence but a consumption which is derived from surplus accumulated elsewhere. And it is for these reasons that I have reservations with the this strategy.

To begin with, emphasis on tourism allows the Government to neglect the needs of the local population and instead attention is diverted to meet the demands of visitors from outside the State. Recently, the Government of Meghalaya decided to implement the Fifth Pay Commission in the State which would lead to an increase of 32% in basic pay for state government employees. Similar announcement happened five years ago making it a part of the electoral strategy of an incumbent administration. This is not to say that it shouldn’t happen. Increase in wages to reflect cost of living is necessary. But such benefits are only limited to those who are fortunate enough to get employment in the Government sector (where nepotism is rampant). But this does not apply to contractual workers who now make a bulk of the workforce. At the same time, the minimum wage adopted in the State is much lower than the central rates. As a result of all this, with majority of the workforce engaged in the informal sector (which includes agriculture) it has meant that only a small section will experience an improvement in living conditions. The rest of the workforce is stuck in working long hours for low paying jobs which do not have any social security component. What this also means is that effective demand in the local economy will be very low. So in order to raise revenue, the solution then is to look at consumption emanating from non-local sources (on which tourism is based). But for this strategy to be viable and act as a catalyst for driving growth in the local economy, income-redistribution has to take place in a broad manner. In short this means that concentration of wealth among few groups has to be avoided.

Let us take the example of the resort in Cherrapunjee/Sohra. It has to be conceded that it is a very beautiful structure and seems well-equipped to handle tourists who demand a good life and are willing to pay for it. But as already mentioned above, the contrast of the resort with the surrounding area is startling: its looks like a lush oasis in the midst of a dry desert. The village of Kutmadan, where I did my field work, is just a few hundred metres away. During my study, I found that water shortage and poor living conditions to be pervasive in the village. One of my friend from the University comes from that village and he had to work as a daily wage labourer in order to pay for his tution fees. The last time I was there, I remember drinking tea in dilapidated looking shop in the village and being served by a very old lady. Of all the villages that I had visited during my PhD field work it looked one of the most wretched. Will the establishment of the resort help in rejuvenating the landscape (terraforming the landscape like done in the case for the golf-course) and solving the water crises in the area (improve water supply)? Will it lead to a rise in income for the people in the village? I am not optimist about any of these questions. The resort was built with the aim to cater to the individualized needs of the tourist (mostly outstation) and not the collective requirements of the local community. The latter are public goods and the underlying logic of private enterprise is in-congruent with the aims of the former. It is for this reason that private concerns should never be allowed to enter into realms that deal with the provision of public goods (food, water, education, environment, etc). And it is why I believe that the resort will not lead to an improvement in the living conditions of the people around the area. Nobody from the resort is going to have tea in that small shop in the village. But it would be mistake on our part to interpret it as a lack of responsibility of a private enterprise towards the local population on whose resource and land their enterprise is predicated. By focusing the ire at a private enterprise, whose sole aim is generating profit, it has the effect of absolving the government (an accountable pubic institution) of its failings. But what if the resort (or any such enterprise) were to be a cooperative initiative with the mandate of distributing the surplus to everyone in the community?

There is actually a community-model followed in one of the most famous tourist sites of the State. I have a relative who has been living in that particular (world famous) village for more than two decades. A few weeks ago, when I visited him I asked him about the redistribution mechanism of the massive earnings that tourism had brought to the village. He informed that some form of redistribution does take place, like supporting the education of young children of the families who are unable to do so. However apart from that he didn’t give any other specific instances of income-redistribution. But what struck me was when he informed that he wanted to sell items to the tourist from his courtyard but was not allowed by the community. And since he does not have the capital to build a proper structure he is still earning his livelihood from farming. At the same time, one cannot help but notice some of the palatial houses that have come up in the village. This is however inevitable. Even if redistribution is mandated, people who are already taking part in the economy and have invested a lot of capital will claim a greater share, directly or indirectly. The undemocratic nature of village administration in Meghalaya will ensure that such resultant inequality will only grow. And even if everyone (like my relative) gets the right to participate in the local economy, differences in capital endowments will still determine the final outcome.

I do not think that tourism will bring a sustained development in Meghalaya. It is a model based on ephemerality and uncertainty

Even if one ignores or somehow solves the above problems, the potential for tourism to bring sustained development to the State is highly unlikely. Tourism depends, already mentioned above, on the surplus generated outside the particular region. This effectively means that activity is completely dependent on factors which are completely out of control of the local circumstances. In this age of globalization, characterized by an international economy linking different parts of the world in sophisticated ways, control is already an illusion. But in this case that illusion is also absent. In a world economy dominated by the capitalist order crises formation is a certainty. Production for sole purpose of production and accumulation for sole purpose of accumulation makes capitalism a highly volatile system where capital over-accumulation leads to periodic crises. The most recent was the 2008 financial crises which started in the US housing market and quickly engulfed the whole world (e.g., European debt crises). Deterioration in living standards and high level of unemployment are the main features of such periods. Not unlike the recent demonetization shock, effective demand (on which tourism depends on) comes down dramatically in such instances. People don’t want to spend but rather choose to save for fear of uncertainty. Austerity measures, as were imposed by international financial agencies, further deepens the crises. In such situations, real money, i.e., physical commodities rather than fictitious money (fiat money) become more valuable. Tourism, however does not deal with physical commodities. It deals with consumption of images and symbols rather than physical products. One can say that this is again an advantage for this industry because it does not extract anything from the environment. But in times of crises, the very immateriality of its products makes it useless. An argument can be that some of the products (like food, drinks, artisan items) consumed by the tourist are actually physical commodities and production and trade in them is a corollary benefit of the industry. But here again many of the products that are being sold in the tourist spots around the State are those that are produced outside the State. Also even if some of them are produced locally the the impact in the local economy is very restricted. Production by a few producers for a few consumers (non-local) cannot be a substitute for production where majority of the work force of the State is involved to satisfy local as well as national (maybe international) demand. Such a system ensures that income-redistribution is much more broad-based, provided of course, working conditions (including pay and social security) are monitored.

Tourism is one of the fastest growing sector of the world contributing around 10% of the global GDP. This figure does not tell what is the nature of the value being produced and the sustainability of the industry. I do not mean to insist that tourism cannot be a source of precious revenue or it does not give a chance to improve the livelihood for many. I mean only to state that it is highly vulnerable to economic cycles which will become more widespread and devastating with increasing integration of the world/national economy. This is not to say that other sectors of the economy are not, but this one is particularly so. Instead on improving the fundamentals of the local economy, dependency is created on the rate of surplus accumulation in core economic regions (international or national) forcing the former to always remain at the periphery. For a state like Meghalaya which is already in a dependency relationship within the political as well as economic structure of the country it is not a conducive model. Therefore, I do not think that tourism will bring a sustained development in Meghalaya. It is a model based on ephemerality and uncertainty; instead demands must be made to the Government to stop spending money on ‘spectacles’ and focus on production (strengthening of primary sector – where most of the workforce is concentrated, and building of the secondary sector – production of tangible commodities) which will lead to sustained growth and a more effective redistribution.

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Bhogtoram Mawroh Written by:

A geographer by training

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