Vietnam is famously known for its rich heritage, history and beauty. With a coastline of 3,260 kilometers, the country is home to many beautiful beaches, bays and islands. These features make Vietnam an emerging hotspot for tourists, with the country already having welcomed more than 5.5 million foreign tourists from January 2023 to June of the same year. 

Barring the COVID-19 period, when countries had closed their borders, tourism has consistently and increasingly contributed to the GDP growth of Vietnam, with its share of GDP reaching up to 9.2% in 2019 with 18 million visitors. In 2023, the tourism sector is on a steady path to returning to similar contribution levels to Vietnam’s economy.

Tourism is a “smokeless industry” that helps provide jobs and livelihood to a vast part of the population. Apart from the main cities of Vietnam, Hanoi and Ho Chi Minh, many smaller and more remote areas have emerged as tourist destinations due to the authentic experiences they provide and their connection to “real” Vietnam. Here is how tourism is alleviating Vietnam’s poverty.

The Correlation Between Tourism and Poverty Reduction

According to a paper titled “Impact of Tourism on Poverty Reduction: Evidence from an Emerging Tourism Market,” published in the Montenegrin Journal of Economics in 2020, poverty and tourism have a negative correlation. Not just in Vietnam but globally, tourism has been seen to largely positively impact poverty alleviation efforts. Tourism does not just help bolster a country’s hospitality sector (hotels, restaurants, etc.). Still, it also provides an avenue for growth for multiple other industries that complement tourism and tourist presence. 

This presence includes the transportation sector, manufacturing industries, agricultural sector, village industries, etc. It also provides a job and livelihood to people as tour guides and cab drivers, among others. Additionally, tourism allows the country’s products to be opened up to a new consumer market, foreign tourists. Thus, the tourist economy impacts many underlying factors that contribute to poverty and allows for poverty reduction in the real sense, not just superficially.

The ILO Project and Toolkit

With this idea and under this pursuit, the International Labour Organization (ILO) developed a project and toolkit to use tourism to reduce poverty in countries. Many countries took up and implemented this concept, which the ILO popularized, including Vietnam in 2012. As per an ILO report, the idea behind this project was “to connect poor and isolated communities” with the tourism industry and to offer the village people “opportunities to sell their handicrafts.” According to the then-ILO Vietnam Director, Gyorgy Sziraczki, “The tourism value chain and its significant connection to other sectors, such as agriculture, construction, utilities and transport, as shown internationally, can contribute to poverty reduction and economic development in Viet Nam.” He believed that “one job in the core tourism industry indirectly generates 1.5 additional jobs in the related economy.” 

This project has shown how tourism is alleviating Vietnam’s poverty. Upon the beginning of this project in the country, three tourism villages were opened up to tourists. Within three years, about 200 village households were already making a profit of $5,100 per month by providing tourism services. Selling traditional and authentic handicrafts is a testimony to tourism’s impact on people and their livelihood and quality of life.

Future Prospects in Alleviating Vietnam’s Poverty

After vigorous tourism development in Vietnam, the tourism industry has become the leading or pillar industry of most provinces and cities in the country’s Southwest region. With its new Visa policies, rapidly expanding market and focus on the development of tourist hotspots and the hospitality sector, Vietnam is on the road to becoming a popular and greatly visited tourist destination in Asia, with its tourism revenue expected to be around $27.5 million by the end of this year. 

– Manasvi Kadian
Photo: Flickr