Tourism and Underdevelopment

Discover a continent before all the others do. A playful, mysterious world twice the size of Western Europe. Towering snow-capped mountains and unexplored jungles. An incredible marriage of pre- Christ Indian cultures to the Spanish life that conquered them. Cosmopolitan cities will startle us. And the ancient ruins and primitive peoples who still worship the airplane as god will shock us. Colorful Indian markets beg us to bargain and white beaches invite us to unwind. Leisure time is every country’s national hobby. Rio. Montevideo. Buenos Aires. Lima. This is South America! Come with American Express on an adventure of a lifetime. (from an American Express tour promotion ad) Tourism is often seen as an important tool for curing the economic ills of Latin America. It does not, however, solve any of the problems of underdevelopment, but rather, it creates greater underdevelopment. It serves American business–not the people of Latin America. Several questions will be raised here: Why is tourism important? Who pays for it? Who are the real beneficiaries? What does tourism really promote? Why do Puerto Rican nationalists bomb resort areas of Condado Beach? Is there an alternative? International tourism is the largest volume service industry in world trade. In 1970 an estimated $17 billion was spent worldwide on foreign travel and transportation.2 Encompassed by the tourism industry are several “smaller” industries: accomodations industries(hotels, resorts); transport industries (air, bus and ship lines); food, drink and catering services; tourist agencies and related services (travelers checks, credit cards, car rental networks). There are also the industries that are “secondary” to these but which are of strategic importance to the economy; these include the aircraft, construction, communications, advertising and banking industries. The United States generates 60 percent of international tourism and is, therefore, the world’s major source of tourists. Like most American industries expanding abroad, the tourism industry is dominated by well-known multinational corporate giants such as Pan American Airways, Ling-Temco-Vought, International Telephone & Telegraph, Trans World Airlines, and American Express. As other industries, it requires a stable investment climate and uses its vast commercial, political and financial powers to maintain open markets, dependent economies and friendly regimes to ensure profit and control. Let’s look at how U.S. penetration is sanctioned. Dr. Carlos Sanz de Santamaria, Chairman of the Alliance for Progress Coordinating Council, stated at the Inter- American Tourist Congress in 1967 that “tourism can become the most effective weapon in South America for redistribution of national, regional and international income.” 3 Terrance Cullinan, in a Stanford Research Institute report entitled Tourism in Latin America, 4 gives the traditional arguments for tourism development: (1) strengthening of the economy by significant contributions to national income; (2) establishment of national identity — which in some Latin American cases might serve both outsiders and the nation itself; (3) preservation of national culture–by utilization of folk art and culture, establishment of protected museums, and provision of funds for guarding monuments and retention of artifacts; (4) providing employment–by developing a labor- intensive industry with jobs at all scale levels,” 5 (emphasis in the original). Tourism is also supposed to add an impetus to regional cooperation, or as Doreen E. Crompton de Calvo in a recent issue of the Bank of London and South America Re- view noted, “The characteristics of international tourism today dictate that Latin Americans see their region as a whole, in the way that tourists see it.” 6 Can these “benefits”of tourism really alleviate and deal with the urgent problems facing Latin America– problems such as lack of decent housing and health facilities, illiteracy, malnutrition, unemployment, high infant mortality, undemocratic and unresponsive governments, and foreign control of vast sectors of the nations’ social, political and economic life? WHOSE ECONOMY BENEFITS? An important event in the history of the U.S. tourist industry occured in January of 1968 — President Johnson appealed to Americans to restrict their international travel to the Western Hemisphere to aid in the balance of payments problem. In late 1967 he had asked the Alliance for Progress to give priority to Latin American tourism development. ! __ _ Although the travel ban was “never put into effect, it had an impact; traffic by U.S. resdents to Latin America rose 14.2 percent over 1967, with reported increase of average tourist expenditures, the reverse of the world trend.” 7 (See boxes on p.5) Most arguments for tourism development claim it is a significant method for channeling dollars into an underdeveloped country and for diversifying their economies The United States has consistently pushed tourism development as an important way to expand markets and investments. In Latin America, tourism is a relatively under- exploited industry, the major exception being Mexico. Although there have been tourists in Latin America as far back as Cortes, as of 1968 tourist receipts for Argentina amounted to only 2.3 percent of national income, for Colombia 4 percent and for Ecuador, 3.9 percent. The reasons given for these small totals are: (1) Misconceptions of Latin America by outsiders– mainly from the United States; (2) Poor relationships with those tourists who do come–including high costs and lack of services (3) Lack of interest in and support for tourism by Latin American governments. Beginning in 1968 numerous industry studies were made to see how these three problems could be overcome. With American ingenuity, efficiency, management and capital, it did not seem too difficult a task. At least there were permanent basic resources: no matter how intensive the exploitation of sun, snow, water, scenery or history, there was no danger of depleting these resources, as is the case with the oil and raw materials that American industry has traditionally gone after. The “misconceptions” of Latin America are described by one writer who noted that North Americans often view their ‘Good Neighbors; many of whom they cannot name, as mixtures of unsafe water, unpleasant revolutions, uncontrolled graft, uninspired backwardness and immitigable poverty, with a lot of steamy jungles and the Andes thrown in. The images had to change before Latin America could “sell.” American advertising agencies, airline companies and tourist organizations began to step up promotion of Latin America in the United States. So now, in the middle of The New York Times travel section or Holiday magazine, we find an article on how repression in Brazil is not really that bad and tourists should, by all means, still go there. Major U.S. advertising companies such as J. Walter Thompson, Grant, McCann-Ericksson and Compton landed the large public relations contracts to promote Latin American tourism. At first, prior to 1968, the major advertising for Latin America was done by the U.S. airline companies such as Braniff, Pan Am or Eastern. Now, Latin American governments are paying U.S. companies to do promotion. For example, Compton recently landed a contract with the government of El Salvador to do advertising and public relations in the U.S. market. A Miami-based group, South American Travel Organization (SATO), which has all the South American government tourism agencies as members, pools funds to finance combined U.S. advertising programs for all of its members. 10 Because the United States is the main generator of travel to Latin America, most of the promotion is done in this country. (See Table I and accompanying diagram for breakdown of expenditures in the United States for tourism promotion.) Since the volume of tourism has jumped in the last three years, it is safe to’ assume that the expenditures have also increased. EXPENDITURES IN U.S. MAGAZINES FOR TOURISM PROMOTION, 1967 Selected Countries (Thousands of Dollars) The major beneficiaries of promotional expenditures in the U.S. market are magazines and newspapers aimed at specific income groups. Soon additional profits for advertising firms with tourism experience will be obtainable by providing technical help to Latin American travel organizations in designing and planning promotional programs. What in actuality has the promotion campaign done to clear up “misconceptions”? It has replaced an ignorance of the region and people with racist, sexist, paternalistic portrayals packaged for the white upper and middle class people who stay in the first class and luxury hotels. Take for example, the following: The prettiest women in Mexico are in Oaxaca state. They swing along slowly and gracefully, their loose dresses swishing to and fro, and they roll majestic hips from side to side. They love clothes. Even if they have only a few pesos, they wouldn’t think of going to a fiesta in last year’s dress. 11 Institutional and attitudinal racism of the United States, like a disease, is carried to Latin America with the influx of tourists. Rich white tourists tend to concentrate in large hotels or resorts which local populations often find are, for all practical purposes, off limits to them. In Puerto Rico, for example, it is nearly impossible for Puerto Ricans to use their own beaches when Americans or U.S.-owned hotels are nearby. Americans also have established institutions, such as casinos, in Latin America–institutions that are forbidden in the United States (except in Nevada). And once gambling is established, gangsters, drug traffic and prostitution are usually close behind. In most tourism promotional literature there is an emphasis on local crafts. When people go to Guatemala they notice that in each village people are wearing different “costumes”, but they fail to notice the uniformity of poverty. Tourism promoters actually make a concerted effort to maintain quaint primitive villages, even to the extent of making them National Landmarks, so they can not be changed. Is this some of the idea behind preserving national culture…poverty as a tourist attraction? – 5- When tourists go to Latin America filled with lovely thoughts from Cook’s Travel or Diner’s Club about rhythmic Latin Americans, this does not promote a “national identity”, or constructuve relationships between North and South Americans. It promotes an atmosphere where people jump for tips because they are starving, where people think that the only way to achieve development is by serving the needs of the rich white foreigners, rather than the needs of one’s own people. It promotes an industry which, more than any other business, is based on serving outside interests. The second factor said to hinder the tourist industry is the high cost and lack of services for tourists. Many have experienced irregular transportation, scarcity of comfortable hotels, complicated entry documents, general incompetancy among tourist industry personnel… 1 2 U.S. industry now has an opportunity to move in and build new hotels and provide additional services. In the last few years multinational corporations have expanded hotel construction and take-overs of hotel management. Intercontinental Hotels, owned by Pan Am, has 17 hotels in Latin America and plans several more; Western International, owned by United Air Lines has 41 hotels in Latin America; Sheraton, owned by IT&T has 10 and is pushing to expand to key Latin American cities; Hilton, owned by TWA has 11 hotels. Hilton and Intercontinental work principally on a management contract basis, whereas Sheraton puts up necessary captial from its own resources to buy or construct accomodations. The hotels that are needed in Latin America, notes a Bank of London & South America study of tourism, are in the luxury and first class categories, until air fares are reduced to such an extent that middle-income tourists can afford to visit Latin America…or until the annual holiday away from home becomes an integral part of the way of life of middle-income Americans. 13 A 1969 report noted that for tourism to add sufficiently to the Latin American economies, the total minimum financing required over the next five years would be $1.5 billion to account for a shortage of 75,000 rooms at an average cost of $20,000 per room. The infrastructure (such as roads, restaurants, shops, transport facilities) needed to support the hotels would amount to at least an additional $300 million. 14 There is a general scarcity of investment capital in Latin America for tourist infrastructure development. Sincd 1968 funds have come from three primary sources: (1) investments by U.S. multinational corporations which construct and/or manage hotels and resorts; (2) loans from the United States or U.S.-controlled financial institutions; (3) loans from Latin American governments. Various business groups have launched investment programs In May of 1968, Braniff International, with the aid of Western International Hotels, Deltec Corporation and ADELA, formed HASA (Hotel Associates, S.A.), a new corporation geared entirely to developing tourism. HASA drafted a tourism development program that called for the investment of $150 million over the next ten years to increase luxury and first class hotel accomodations by 60 percent, either by expansion of existing hotels or by new construction. The tourism industry was looking so lucrative that in Colombia, the Catholic Church offered to finance a new luxury hotel. 16 In 1969 the World Bank, through its International Finance Corporation, began granting loans for tourism development. In 1969-1970, the first years when IFC was granting funds for tourism development, Colombia received nearly $2 million from the IFC to help finance Intercontinental hotels being constructed in Cali and Medellin. In 1969, El Salvador received nearly $1 million to help construct a Western International hotel, El Camino Real, in San Salvador. 17 Loans for Latin American tourism development were also extended by the Inter-American Development Bank, the U.S. Agency for International Development, and the U.S. Export-Import Bank. The EXIM Bank may lend up to 50 percent of total project costs. All of these loans must be guaranteed, usually by the host country government or a strong bank. Some Latin American governments have refused to give guarantees to foreign investment and have lost the opportunity for guaranteed foreign loans. This policy — followed so as not to give foreigners an advantage over domestic investors — is being eliminated as the absence of adequate domestic investment capital becomes more evident. (emphasis added) The primary function of these agencies is to increase U.S. exports. The tourism infrastructure developments — roads, airports, electricity, communications systems — are all important for opening up countries for U.S. investors. This infrastructure could be potentially important for the growth of Latin American industry, yet under the present conditions the Latin American governments are primarily helping the growth of foreign investors and lenders. 1 9 It becomes clearer that tourism development is basically benefitting the United States and that the people of Latin America are paying for it. Most of the loans come from the United States or at least through U.S. controlled agencies. Although total tourist receipts for Latin America esti- “The day is not far distant when weary Americans will be able to sip a dry martini and look across bazaars and thatched roofs of far-off cities to see the familiar signatures of Howard Johnson, Holiday Inn, Ramada, Marriott, Sheraton, Sonesta, TraveLodge, Western International, Intercontinental and a host of others.” Business Week, August 8, 1970. ..-6- mated (at constant 1967 prices) at $3 billion for 1975 and $6.2 billion for 1980,compared with approximately $1.4 billion in 1967, these receipts go primarily to foreign interests. The Latin Americans, on the other hand are left with the bills for debt payments on tourism infrastructure loans– in 1967 Latin America hard currency service payments on all debts outstanding amounted to more than $2 billion, about half the total for the entire developing world. 20 With a developing tourist industry, Latin America will be taking out even more loans. TOURIST RECEIPTS As used in this article,”tourist receipts” include the total spending in a country by tourists who reside in other countries. The tourist receipts for Latin America, therefore, include the earnings of foreign and U.S. tourist concerns, which either reinvest their profits into more U.S.-owned services or repatriate the earnings. The chart below gives a rough idea of how tourists spend their money: Expenditures by tourists at the major luxury and first class hotels will be the primary source of all tourism income to Latin Americans in the 1970’s22 North American tourists spend more than other travelers. They prefer to stay in familiar name JU.S.hotel chains– “brand names inspire confidence.” Most of the tours include meals at hotels (organized tour travel is expected to triple in the next five years). Much of the entertainment is in hotel nightclubs and cafes. Gambling casinos are an additional lure. Much of the local sight- seeing is done in cars rented from U.S. agencies. Bills are aften put on convenient U.S. credit cards and nearly all tourists use U.S. travelers checks. As conventions and other business-related travel increases, the luxury hotels will add another lucrative source of profits. Currently the pleasure-business tra- vel ratio is three to two. 23 But business travel is growing in importance and conventions, conferences and exhibitions are providing large amounts of income. It is usually only American-owned hotels that can accomodate such huge numbers of people. For example, out of six hotels able to accomodate conventions in Caracas, at least four are American owned. A recent magazine ad for Forbes in The New York Times claims hotel chains and airlines would virtually “curl up” without convention- generated revenue. From the above chart on tourism expenditures, it would appear that a good percentage of the tourist receipts go into the Latin American economies. The reality, however, is that only small amounts of money actually stay in Latin America, since most of the revenue is going to the foreign concerns. States is by creating a market for U.S. goods. Latin America, already a booming market for U.S. imports, is opened up still more with tourism and loans that promote tourism development. 24 A U.S. Department of Commerce study notes that Tourism activity will create a further demand for hotel and restaurant equipment that offers an opportunity for U.S. suppliers of hotel furnishings, electrical and air conditioning installations, refrigeration equipment and swimming pool constructors. In addition, American food product lines will be necessary to supply U.S. tourists expected to fill hotels. 5 s Tourism development also generates demand for office furniture and business machines, interior decorators, catering equipment, construction materials and equipment. Whose economy is being stimulated? Aside from stimulating the U.S. accomodations industry and in general enlarging the market for U.S. goods, tourism development in Latin America will also give a boost to the U.S. transportation industries–particularly airlines, since 97 percent of the travelers arrive by air. Most U.S. visitors fly by their national lines. The primary U.S. carriers to Latin America are Pan Am and Braniff. Long distances between cities and relatively poor surface transportation benefit the air industry. International travel from the United States to Latin America is expected to rise more than 14 percent annually 26. Increased travel also stimulates purchases of additional aircraft from the U.S. manufacturers. 27 One of the reasons for the growth of air travel is that Latin American governments have been allowing North American carriers more routes. These awards often merely implement plans made in U.S. tourist industry studies: Major advertising campaigns by the primary U.S. carriers and their hotel affiliates are expected to double by 1972 if substantially increased landing rights are granted by Latin American governments and if those governments begin to bear some of the necessary overall promotional expenditures (emphasis added). or: An additional way tourism benefits the United Type of expenditure Percent of total expenditures accomodations 30 food and drink 25 purchases 25 sightseeing and entertainment 10 local transport 5 others 5- 7- Major U.S. Hotels in Latin America U.S. airlines Country City Hotel Chain serving country Argentina Buenos Aires Sheraton (UC) SH Braniff if” ” Hilton (UC) HIL Pan American it” ” Plaza Hotel IHC Bariloche Holiday Inn (UC) HOL Mendoza Holiday Inn (UC) HOL Brazil Sao Paulo Sao Paulo Hilton (UC) HIL Braniff Rio Sheraton (UC) SH Pan American Chile Santiago San Christobal SH Braniff f” Carrera Hotel SH Pan American f” Holiday Inn (UC) HOL Antofagasta Holiday Inn (UC) HOL Arica Holiday Inn (UC) HOL Concepcion Holiday Inn (UC) HOL Vina del Mar Holiday Inn (UC) HOL Colombia Bogota Tequendama IHC Braniff t” Hilton (UC) HIL Pan American Barranquilla El Prado IHC Eastern Airlines Cali Cali Intercontinental (UC) IHC Medellin Intercontinental Medellin IHC Dominican Santo Domingo Embajador IHC Pan American Republic ” ” Holiday Inn HOL Ecuador Quito Colon Internacional WI Braniff f” Intercontinental Quito IHC Pan American El Salvador San Salvador El Salvador IHC Pan American ” ” Holiday Inn (UC) HI Camino Real WI Guatemala Antigua Antigua WI Pan American Guatemala City Camino Real WI Delta Airlines It” ” Guatemala Baltimore WI Eastern ff” ” Holiday Inn (UC) HOL Guyana Georgetown Holiday Inn (UC) HOL Pan American Intercontinental Guyana IHC British Honduras Belize Holiday Inn (UC) HOL KEY: HOTEL CHAINS (Parent company in paranthesis) SH – Sheraton Hotels (International Telephone IHC – Intercontinental (Pan Am) (and Telegraph) WI – Western International (United HIL – Hilton Hotels (Trans World Airlines) Airlines) HI – Holiday Inns BR – Braniff Abbreviation: UC – Under construction- 8- Country City Hotel Chain Airlines Mexico Various cities 22 Western International (plus 1 UC) American Airlines 1 Sheraton Braniff 1 Intercontinental Eastern 1 Braniff Delta 3 Hilton Pan American 5 Holiday Inn (plus 11 UC) Nicaragua Managua Intercontinental Managua IHC Pan American t” Holiday Inn (UC) HOL Panama Panama City Granada Hotel BR Braniff ” ” Holiday Inn (UC) HOL Pan American ” ” El Panama WI Colon Miranda WI Peru Lima Grand Hotel Bolivar IHC Braniff 1″ Sheraton (UC) SH Pan American Puerto Rico Ponce Intercontinental Ponce IHC Delta f” Holiday Inn (UC) HOL Eastern San Juan Holiday Inn HOL Pan American ” ” Caribe Hilton HIL “‘ ” San Geronimo HIL P.R. Sheraton SH Mayaguez Mayaguez Hilton HIL Dorado Dorado Hilton HIL Uruguay Montevideo Victoria Plaza IHC Pan American Venezuela Caracas Hotel Tamanaco IHC Pan American Holiday Inn (UC) HOL Delta Avila WI Caracas Hilton HIL Sheraton-Humboldt SH Maricaibo Holiday Inn (UC) HOL La Guaira Sheraton-La Guaira SH Macuto Macuto Sheraton SH Valencia Intercontinental (UC) IHC Barinas Llano Alto WI Coro Miranda WI Cumana Cumanagoto WI Maracay Maracay Hotel & Country Club WI Margarita Island Bella Vista WI Merida Prado Rio WI San Christobal El Tama WI Santo Domingo Monico WI Trujillo Trujillo Hotel WI Urena Aguas Calientes WI Source: Travel brochures, Holiday Magazine, Hotel Index. UNITED mm AV 141 fJ4s; ilrWLI-9 – If South American countries are to meet announced tourism development objectives and reduce the pre- sent northward flow of Latin America dollars, they will probably have to renegotiate existing bilateral trade agreements restricting U.S. flag ships. 28 What are the Latin Americans gaining? It appears they are financing their own exploitation. (At this point it is interesting to note that some of the power of the multinational corporations is derived from the intricate web of services they provide. For example, Holiday Inns owns Continental Trailways and Sheraton owns Carte Blanche credit cards and Avis Rental Cars. These comprehensive systems of services aid in keeping the money circulating within U.S. concerns.) In addition,the expected doubling of tourist arrivals in Latin America by 1975 will require complete reconstruction or replacement of about half of the region’s airports and additons or alterations to most of the remainder. Experienced U.S. construction firms will probably get most of the contracts and much, if not most, of the infrastructure development financing will be secured from U.S. sources which will insist on “Buy American” clauses in their loan contracts. Aristocratic Bellhops The third factor given for the undeveloped nature of Latin American tourism is the relative disinterest of Latin American governments. Whether this was ever true, it is certainly not the case now. Aside from some countries such as Bolivia and Uruguay creating ministerial posts for tourism directors, doing regional tourism promotion with groups like the Central American Common Market, declaring tourism a basic industry in Brazil, recently many Latin American elites in government have instituted various tourism incentive programs which make investment in this sector increasingly attractive to foreign capital. Brazil, for example, offers a ten year income tax holiday for construction and operation of new hotels; Colombia has a program whereby 15 percent of the cost of a goverment-approved tourist facility is granted by the government in cash; Argentina has a deduction from taxable income of amounts spent to buy land and construct and equip buildings servicing the tourist sector; Peru (not clear whether all terms still in effect) has a ten year exemption from import duties on tourism-related machinery and equipment and provides 5gr tax-free reinvestment in hotel construction. BRASILIA SPURS HOTEL TOILETS BRASILIA (AP)- New hotels here cannot qualify for special tax exemptions unless they have a bathroom in each room or suite, a lack that “discourages our most frequent tourist, the American,” according to Joaquim Xavier da Silvera, president of the Government tax agency. The New York Times, April 28, 1970. The majority of these inducements and incentives favor foreign, rather than local firms. Usually only foreign capital has the resources to build the large capacity, first class accomodations that are called for. Even when local firms attempt to get financial aid, leaders consider the large multinational firms better credit risks. In countries where the government has little interest in the welfare of the people, it sees building luxurious rooms for foreign businessmen andstourists as a higher priority than housing and services for the people. Even Establishment writers have noted that when tourism development is left to foreign enterprise, it tends to destroy the physical and moral character of the countries it dominates: The greatest danger faced by the tourist sector, as by other sectors of the economy, is the situation described by M. J-J. Servan Schreiber in the American Challenge, when the local tourist sector may become almost entirely the domain of foreign capital. In these circumstances the net gain to the country, at any event to the balance of payments, will be very small and may possibly even have a negative quantity. 3 0 JOBS OR SLAVERY? When the facades of tourism are bared, some people still say that tourism is important for foreign economies with few developed resources because it provides employment. Undoubtedly it provides jobs, but what kind? Waiters, porters, prostitutes, bellboys, messengers, dishwashers, ST. LUCIA WORRIED ABOUT TOURISM CASTRIES, St. Lucia, Feb. 11 (UPI)- The little island of St. Lucia is having some second thoughts about her rapidly growing tourism industry…. But despite the obvious employment gains, government officials are expressing concern about the industry”s role in St. Lucia’s economic life once the construction boom is over. The government estimates only 10 cents out of every tourist dollar stays in St. Lucia. The luxury hotels import everything from butter to entertainers and, according to one government official, ‘unless substantial effort is made to retain the tourist dollar by way of production, packaging and marketing of local handicrafts and foodstuffs, and the presentation of local talent, music and drama, St. Lucia will be a mere conduit pipe for the re-export of the tourist dollar.’ JOURNAL OF COMMERCE, February, 12, 1971. ‘IHE BEST THINGS INLIFE-ARE FREE. For stance … Advance Reservations, Swimming Pool, Ice, Parkin& Holiday Inn Magazine and Baby Bed… at *& 9- 10 – doormen, shoeshiners, and some managers (to add local flavor). This is certainly not what is considered serving the peoples’ needs. Wages are low. Does this type of employment help development or improve the quality of life? As many Latin Americans say, “Are we throwing everything we’ve got into a nation-building effort simply to produce a crop of waiters, guides and drink-mixers for rich tourists?” 31 Is it in the line of correct human and national priorities to be preserving archeological and historical sites, natural scenery, game reserves, and sporting facilities while vast numbers of Latin Americans do not have decent housing, health or education. This is not to argue that the former are not important, rather that they should not be undertaken at the expense of the basic services for the people’s welfare. THE PEOPLE FIGHT BACK: PUERTO RICO Puerto Rico is often pointed to as an example of a country with a well developed tourist sector. But what else does Puerto Rico have? The United States controls over 80 percent of the total industrial development; Puerto Rican workers on the average get one-third of the salary paid in the United States for the same type of work and the cost of living is 25 percent higher; per capita income of Mississippi (the nation’s poorest state) ten years ago was 81 percent higher than Puerto Rico’s; 30 percent of the labor force is either un- or under-employed; one million people out of a total population of 2.5 million in 1966 lived off surplus government food; the U.S. Department of Defense is the largest landowner with 13 percent of the arable land, nine military bases with 25,000 troops, two atomic bases and training grounds for the Green-Berets. Puerto Rico now has the world’s highest drug addiction rate. 32 Rather than see the progressive U.S. takeover of Puerto Rico continue, several “independista” groups have recently stepped up their resistence activities. Two of the most active are the Armed Commandos for Liberation (C.A.L.) and the Revolutionary Armed Independence Movement (M.I.R.A.), both of which were formed in the late 1960’s. Since then numerous armed attacks and bombings of U.S. property have occurred. The Condado, the principal area in San Juan for American hotels and tourists, has been declared a war zone and Puerto Ricans are told not to venture into the area. One C.A.L. communication declares: It is a center of vice, drugs, prostitution, and gambling. Our fellow Puerto Ricans have no business there. A total boycott of the Condado zone, that is the watchword. 33 Luxury hotels in the Condado Beach area and U.S. corporations such as the First National Bank, The Grand Union, Hertz Co., Woolworths, have all been targets. One aim is to disrupt business and another aim is to force insurance companies to pay more money in indemnities than they receive in payments, thus discouraging such types of investment and insurance. 34 Terrorism has cost the companies millions–estimates go up to $25 million. 35 Fearing more terrorism, some 300 police are assigned to protecting leading politicians and businessmen on the island. Many businesses have private protection. 36 In the face of this resistance, numerous companies are cancelling plans for expansion. “Most of San Juans’ hotel operators are worried. Even with gambling around every corner, most of the hotels and big nightclubs are empty,” reports The Miami Herald. Many Puerto Ricans see great similarities between present day Puerto Rico and pre-Revolutionary Cuba because of the degree of penetration and control by the Americans and the abysmal poverty of their country. Indeed, Puerto Rico is considered a model for tourism development just as pre- Revolutionary Cuba was once considered a tourist paradise. For this reason, the road taken by Cuba and the radical shift in its priorities–from servicing the needs of foreigners to servicing the needs of its own people–is of particular interest to the Puerto Rican “independistas.” “The people who provide services in the Caribbean have become less happy than they used to be,” admits the head of Holiday Inns, “but this is not unique in the Caribbean.” The executive said that Holiday Inns can’t let local unrest upset its future plans. “If we did, we couldn’t build at all. Where is there peace today? They are bombing all over the world. Sure we’re building in Madeira, and that’s peaceful right now, but we can’t limit ourselves to the peaceful backwaters of the world.” Caribbean Report,”Black Power and the Hotel Business,” September, 1970. The sun is 93 million miles away from most places At El San Juan Hotel itsyours for the basking- 11 – IS THERE AN ALTERNATIVE? It is often argued that tourism is an important industry for nations that have few other resources. The question to ask is not, “if the population, government, and climate is right, can tourism be developed?” but “What are the correct priorities? Why aren’t other sectors developed? How can they be developed?” Cuba has come up with some answers. Pre-Revolutionary Cuba was the dominant Caribbean/ Latin American tourist destination and is often held up as a model for tourist development. The Cuban people found that tourism was only bringing them vice and degradation. Since the triumph of the Rebellion, sectors of the economy are beginning to be developed that will serve the Cubans and begin to alleviate the problems of underdevelopment caused by unresponsive oligarchies and years of foreign domination. Although tourism in the form that it took before the Revolution is ended in Cuba, a different approach is being taken. With the view that the people who need the rest are the workers, rather than the ruling class, workers’ resorts have been developed. People are encouraged to see their own country and are given free vacations in the places where foreigners used to have mansions and private clubs. There is discussion on in Cuba that a section of the Isle of Youth (formerly the Isle of Pines, the island where Fidel and others were imprisoned after the 1953 attack on Moncada) is going to be developed for some foreign visitors: progressive people from all over the world, many of whom live lives of constant harassment, will be offered a place in Cuba to gain strength for the struggles that they are waging in their homeland. In many ways the prospects for foreign travel are exciting. For progressive people it can aid in increasing internationalism and understanding of other people and cultures. It is a far cry– and long struggle–from the present kind of travel that promotes poverty, primitive villages and swinging Latin Americans as tourist attractions. FOOTNOTES 1. This article will focus on Central and South America plus the Spanish-speaking islands of the Caribbean: Puerto Rico and the Dominican Republic. We hope to publish separate studies on the impact of tourism on Mexico and pre- Revolutionary and Revolutionary Cuba in future newsletters. Readers are urged to send any information to: NACLA Tourism Project, P.O. Box 226, Berkeley, California 94701 2. San Francisco Chronicle, February 9, 1971, AP release 3. Doreen E. Crompton de Calvo, “Tourism in Latin America,” Bank of London and South Amer- ica Review, Vol. III, no. 28, April, 1969, p. 202. 4. Terrance Cullinan is with U.S. Natural Resour- ces, Inc. a California based international corp- oration with interests in oil, timber and land, and in recreational development. He spent three years working in Latin America on tourism and manpower development projects in conjunction with the Stanford Research Institute. He is also president of Terrybukk, a consulting firm which has recently finished a study of tourism in British Honduras. 5. Terrance Cullinan, “Tourism Beyond the Rio Grande,” Texas Business Review, August, 1969, p. 4. 6. Crompton de Calvo, op cit., p. 211 7. Terrance Cullinan, Tourism in Latin America, Long Range Planning Service, Menlo Park, California: Stanford Research Institute, 1969, p. 6. This booklet was one of our major sources of information, however it is now out of print. (Hereinafter cited as SRI Report.) 8. Cullinan, “Tourism Beyond the Rio Grande,” p. 3. 9. San Francisco Chronicle, October 26, 1970. 10. Journal of Commerce, January 28, 1971. 11. San Francisco Chronicle, travel section, March 7, 1971. 12. Cullinan, “Tourism Beyond the Rio Grande,” p. 3. 13. Crompton de Calvo, op cit., p. 202. 14. Ibid., p. 209. 15. ADELA is a multinational private investment company, with investments over $150 mil- lion in Latin America. It has over 98 projects in 19 Latin American countries. 53 U.S. corporations hold over 50 percent of the original capital subscription. ADELA’s primary role is to generate in- vestment opportunities in Latin America for large multinational corporations and to improve the climate for foreign pri- vate investment. Through the technique of joint ventures it attempts to break down national opposition to foreign cap- ital. For more on ADELA and IFC, see “Funding the Empire,” NACLA Newsletter, Vol. IV, May-June, 1970, p. 5 ff., and “The Bank of America’s LAAD partners,” The NACLA Newsletter, Vol. IV, Sent- ember, 1970, p. 5.- 12 – 16. SRI Report, p. 9 17. Information from International Finance Cor- poration Annual Reports for 1969 and 1970. 18. SRI Report, p. 9. 19. For an analysis of these and other interna- tional financing agencies, see Hector Melo and Israel Yost, “Funding the Empire,” NACLA Newsletter, Vol. IV, April, 1970, pp. 1-13, and May-June, 1970, pp. 1-17. 20. SRI Report, p. 7,10. 21. Crompton de Calvo, op cit., p. 202. 22. SRI Report, p. 12. 23. Ibid., p. 14. 24. The United States is an important factor for the markets of Latin America. For example, 62.5 percent of foreign imports to Mexico were from the United States; 36.5 percent for Guatemala; 43.2 percent for Honduras: 37.7 percent for Chile; 50.15 percent for Vene- zuela; 30.1 percent for Brazil. Overseas Bus- iness Reports, U.S. Department of Commerce, December, 1970. 25. Overseas Business Reports, U.S. Department of Com- merce, December, 1970. The quote is from a report on tourism in Trinidad, however the observation applies to the rest of Latin America also. 26. SRI Report, p. 14. 27. “Market Factors in Latin America,” Overseas Business Reports, April, 1970. In this report it is noted that in some cases bacause of the extended U.S. use of 747’s the surplus of 707’s will be sold to the Latin American domestic lines. 28. SRI Report, pp. 15 and 16. 29. Ibid., p. 11. 30. Crompton de Calvo, op. cit., p. 203. 31. Cullinan, “Tourism Beyond the Rio Grande,” p. 4. 32. Tricontinental Bulletin, published by the Exec- utive Secretariet of the Solidarity of the Peoples of Africa, Asia and Latin America, Havana, Cuba. “Puerto Rico: Colony in Rev- olution,” no. 48, March 1970 and “Puerto Rico and the struggle against colonialism,.” no. 18, September 1967. 33. Interview with Armed Commandos of Liberation (C.A.L.) leader, from Claridad, San Juan, Puerto Rico, November 22, 1970. 34. Tricontinental Bulletin, no. 48, March, 1970, p. 17. 35. Los Angeles Times, December 12, 1970, UPI release. 36. The Miami Herald, December 3, 1970. 37. The Miami Herald, January 3, 1971. Braniff Style. To get things moving inTexas, just mention our name. Braniff International. Former President Johnson t s 1968 appeal to American tourists discouraging travel to Europe and encouraging travel to Latin America was justified on the grounds of helping the U.S. balance balance of payments position. What was never men- tioned was that his home state and many of his close business and political associates also stand to benefit in a big way from any increase in travel to Latin America. A recent Texas Business Review article (August 1969) entitled “Travel Beyond the Rio Grande” reported that Texas may be affected more than most states by the impact of a more developed tourist industry in Latin America. About 14 percent of annual air traffic between the United States and Latin America in 1967-68 went through San Antonio and Houston. Over 99 per- cent of the international traffic passing through San Antonio’s airport and 83 percent of Houston’s is either coming from or going to Latin America while only 20 percent of the international traffic of all U.S. airports comes from or goes to Latin America. In the words of the Texas Business Review: Texas business is already heavily involved in tourism development and one of the two major U.S. carriers serving Latin America — Braniff — is based in Dallas-Ft. Worth … Braniff officials are among the principals of a company — Tourism Investments S.A. — which plans to place $2 million to encourage deve- lopment of non-luxury facilities, entertain- ment, shopping centers, sports activities and ground transportation in Latin America. Braniff fared quite well during the Johnson administration, winning several new routes to Latin America. One of the men instrumental in landing this plum was Cliff Carter who had been active in Johnson’s political campaigns since 1937, served on Johnson’s personal staff in the 50’s and 60’s and who became executive director of the Democratic National Committee in 1964. In May 1968 he was serving as Director of Public Affairs for Braniff — the Civil Aeronautics Board awarded the new Latin America routes to Braniff in November 1968.* * “6 LBJ Aides Joined Airlines”, The Washington Post, May 28, 1968 and Braniff annual report, 1968. The same ad agency that ran LBJ’s campaign'(Wells Rich Green Assoc.) also handled the Braniff account.