How tourism contributes immensely towards economy of ASEAN

Tourism contributes immensely towards the economy of Association of the South-East Asian Nation (ASEAN) region. In the pre-covid era, tourism accounted for well over 10% of the region's GDP (closer to 12%). Tourism has a significant contribution towards the Thai economy (both in terms of job creation and as a component of the country’s GDP)

In 2023, the ASEAN region received an impressive 70 million tourists. Malaysia and Thailand received the bulk of tourists. While for a long, ASEAN has been dependent upon Chinese tourists in recent years, there has been a significant rise in tourist arrivals from several countries including India (in the aftermath of COVID-19, ASEAN has been trying to reduce its dependence upon Chinese tourists). The geographical proximity of the ASEAN region to India, historical linkages, improved air connectivity (several tier two Indian cities now have direct flights to ASEAN) and affordability of the region, especially vis-à-vis Europe and other global destinations, are important factors for ASEAN being a favoured tourist spot for Indian tourists (in fact visiting ASEAN is cheaper than visiting certain destinations within India).

Between January and November 2023, well over 3.5 million Indian tourists visited ASEAN. The decision of Thailand, Malaysia and Vietnam towards the end of 2023 to waive the visa requirement for Indian citizens has resulted in the above ASEAN countries attracting even more tourists from India. Another important change is that for a very long Thailand, Singapore and Malaysia managed to attract more Indian tourists, in recent years even Vietnam and Cambodia have witnessed an increase in tourist arrivals from India.

Thailand’s proposal

With an eye on attracting more tourists, Thailand has proposed a joint regional visa for six countries -- Cambodia, Laos, Malaysia, Myanmar and Vietnam (the response of the other five countries has been positive towards this proposal). This joint visa aims to ensure mobility and hassle-free travel within these six ASEAN countries.

Thai Prime Minister Srettha Thavisin has set a target of 80 million tourists, by 2027, and one of the key components of this strategy is a joint visa, mentioned earlier, along the lines of the Schengen visa of Europe (the ASEAN nation is planning to take several other steps including promotion of event-based tourism). The dependence of ASEAN region on tourism is likely to increase even further since geopolitical developments including China-US tensions, Russia-Ukraine war and the turmoil in the Middle East are likely to have an adverse impact on the region’s impact. ASEAN has been one of the biggest beneficiaries of globalization, but the last few years have been challenging. On the other hand, given the fact that ASEAN is relatively peaceful and insulated from geopolitical conflicts of the sort witnessed in other parts of the world, it could be a safe bet for tourists.

While already these countries have exempted visas for citizens of several countries, including India, such a joint visa is important for several reasons -- including greater cooperation within the ASEAN region. At a time when the world is becoming more insular and several commentators are becoming cynical about 'regionalism' and ‘globalization’ the proposal by Thailand, and the positive response of other countries, is an important step.

While ASEAN has been hailed in the past as a model for regional economic integration in the past, a joint visa on the lines of Schengen will highlight the ability of the region to think ‘out of the box’ and re-invent itself. It also underscores the fact that countries need to think of new innovative paradigms for economic success. There are also lessons for other regions to focus on synergies and not differences.

While tourism has played an important role in bolstering India-ASEAN relations, greater air connectivity between India and South East Asian nations and addressing other logistical issues will give a further boost to linkages in the tourism sector.

Disclaimer: The views expressed in this article are of the author only.