RD – 411

SOUTH–EAST ASIA: A MESO REGIONAL

STUDY

TOURISM IN
MALAYSIA:
IT’S IMPACT

Submitted to :
Prof. B. Zutshi

Submit
ted by:
Ritu
parna Sengupta
M.A
nd
.,2 Semester,
 CSR
D

CONTENTS

1.Introduction
2.Methodology
3.Database
4.Objectives
5.Review Of Literature
6.Discussion
a.Trends in Tourism Industry
b.Impacts on the Economy
c.Impacts on the Society
7.Conclusion
8.Bibliography
 INTRODUCTION

Tourism- it comprises the activities of persons travelling to and staying in places

outside their usual environment for not more than one consecutive year for leisure,
business and other purposes not related to the exercise of an activity remunerated
from within the place visited(World Tourist Organization).In other words it refers
to the temporary,short-term movement of people outside their residential and
working places to some destinations and their activities during the stay.In the
recent years,tourism has become a popular global leisure and is one of the largest
and dynamically developing sectors of external economic activities in a country.
Malaysia is a beautiful country in Southeast Asia,extending from
approximately 1˚N to 6˚45́́ʹN latitude and 99˚36ʹE to 104˚24ʹE longitude
consisting of thirteen states and three Federal Territories, with a total landmass of
329,845 square kilometres (127,354 sq mi). The country is divided into two
parts,Peninsular Malaysia and Malaysia Borneo( also known as East Malaysia) by
the South China Sea.After being continuously under the control of different
foreign powers for a long time it finally gained it’s independence on 31st
August,1957.Surrounded by Thailand in the north,Indonesia in the south,south-
west,Singapore in the south and Phillippines in the north-east, Malaysia has a long
coastline ,specially Peninsular Malaysia. It borders the Strait of Malacca, an
important international shipping crossroad, and therefore helps in the development
of international trade which is integral to its economy. Malaysia has a biodiverse
range of flora and fauna, with picturesque coastal plains rising to hills and
mountains.All these scenic natural beauty along with a diversity of cultures,well
structured development in all the sectors has given a boost to tourism which forms
increasingly important sector of the Malaysian economy. The tourism industry has
experienced rapid growth andcontinues to be a key foreign exchange earner,
contributing to GDP (gross domestic product) growth, investment and employment
as well as strengthening the services account of the balance of payments.But
tourism has it’s negative effects also on the society as well on the
ecosystem.Therefore, the study of impacts of tourism is quite important in order to
understand the society and type of economy prevailing in Malaysia which is done
in this paper.
 METHODOLOGY
The methods used in analyzing the data available was:
➢ Simple bar graphs
➢ Pie charts
➢ Trend lines

DATABASE
➢ Asean Statistical Yearbook,2008
➢ Facts and Figures,(www.tourism.gov.my)
➢ Annual Tourism Report,2008

OBJECTIVES
➢ To analyse the trend pattern in the tourism sector
➢ To analyse the effect of tourism industry on the economy of Malaysia.
➢ To find out the social impact of the tourism industry.
 REVIEW OF LITERATURE
Tourism is the world’s largest industry and growing significantly.International
tourism arrivals worldwide grew by 36% to 625 million,and international tourists
receipts grew by 65% to US$445 billion,from 1990 to 1998.(Report by WTO)
International tourism is one of the most rapidly expanding links between the
advanced capitalist nations and the underdeveloped world and this rapid growth of
international tourism is likely to have important cultural implications
everywhere,which seems particularly so in South-east Asia, where societies are
deeply divided culturally and where tourism has taken up culture as a major
marketable attraction. (Wood ,Robert E.).Other than being an key foreign
exchange earner contributing to GDP,the expansion of the industry also has an
effect on the growth of other related service industries, particularly food and
beverages, accommodation, transport,entertainment, shopping and other small and
medium-sized industries and therefore has created employment in other related
industries.
Until the 1970s, tourism was not regarded as an important economic activity
in Malaysia and though the Tourism Development Corporation of Malaysia (TDC)
was set up in 1972, the sector was given a low priority. Dut partly to limited
financial allocations, TDC faced constraints in the effective performance of its
catalytic role. During the 1980s, tourism became an increasingly important
industry worldwide and led to rapid developments in various sectors of the
economy which were felt by Malaysia as well as other countries. Recognizing that
tourism can play a role in economic and social development, as well as in fostering
national integration and unity, the Malaysian government undertook several
positive initiatives to stimulate the development of the tourism sector.( Yasak
,Mohd. Nawayai) Today, the tourism industry has experienced a rapid growth and
gained an importance in the Malaysian economy. It is the second largest foreign
exchange earner, after manufacturing. With the exception of 2003(SARS and Gulf
War)there has been a steady growth in this sector. From 1990 to 2005, tourist
arrivals increased from 7.4 million to 16.7 million; more than half the tourists were
from Singapore. From 1990 to 2005, tourist receipts increased from US$1.7 billion
to US$8.4 billion per year.(The Financial Express;Library of congress)
.Furthermore, the increase in the number of institutions of higher learning and
twinning programmes with foreign universities has provided the foundation for the
growth in education tourism. Education tourism has become popular as reflected
by the demand for tours to visit schools to enable students from other countries to
gain knowledge of the school education system as well as experience the
Malaysian school atmosphere, which is unique with the social interaction of the
various ethnic groups besides contributing to the national economy.The Medical
and Health Tourism which was introduced in 1999 has also contributed
handsomely to the national economy(The Financial Express).Ecotourism have also
contributed significantly over the years to GDP but the the number of visitors are
difficult to assess except at a few sites because of the lack of records.(
Yasak,Mohd. Nawayai ) All these shows that tourism sector have a positive effects
on the economic sector of Malaysia.
Socially tourism has a great influence on the host societies. Tourism can be both
a source of international amity, peace and understanding and a destroyer and
corrupter of indigenous cultures, a source of ecological destruction, an assault of
people’s privacy, dignity, and authenticity.The same is the case of Malaysia also.In
ecotorism,the development is not much because of several reasons. The
involvement of individuals from local communities is uneven. At some sites (for
example, Kinabalu Park) local residents are closely involved in guiding, staffing
and gaining financial benefits from the park's operation whereas sites exist in
which the local community forms a passive component of the tourism product.
(Yasak,Mohd. Nawayai) Hughes-Freeland's paper points out that performance
traditions are changing, as they always have done, and that tourism is only one
aspect of cultural development and cannot be isolated from other cultural policies
that aim to develop and preserve traditional cultural practices. On the other hand,
away from the ' cultural centre' of Yogyakarta, rural groups seeing tourists as an
additional source of income, have revived rustic dance forms. Now classical
groups have brought these regional styles to the hotels. Here we see quite clearly
how tourist interest may legitimize and main-tain, and even re-create local interest
in things close to home, the tourist industry providing a contemporary rationale for
the continuation of classical and regional performance traditions.(
Hitchcock,Michael ; King,Victor T.; Parnwell ,Michael J.G.)But one very
important negative aspect of tourism in Malaysia is human trafficking. Tourism
growth and global technological advancements have enabled international
travellers easy and affordable access to potentially vulnerable communities,in turn
leading to increased sexually abusement and exploitation of children.(ASEAN
reveiw)In terms of human trafficking Malaysia acts as a source,transit and
destination country.Most of the trafficked persons are children and women mainly
used as sexual workers since it is more in demand in the famous tourist spots
generating good income for the traffickers.in recent years this has become a major
concern of the government since it leads to deterioration of social environment and
therefore several laws and policies are taken by the Malaysian government in order
to tackle the situation.(Report)
Tourism has both positive and negative aspects in social and economic
life of Malaysia.In order to enhance a more sound development more measures
are still to be taken by the government.
TRENDS IN TOURISM SECTOR:
Malaysia is greatly blessed with a rich and diverse biodiversity. Peninsular
Malaysia and East Malaysia, both just north of the equator, are subject to the same
movement of air masses and have similar climates. Temperatures and precipitation
vary by elevation and proximity to the sea, but temperatures tend to be uniform
year-round with annual average temperatures ranging from 23º C to 34º C,with
rainfall varying from 1,300mm to 4000mm.These along with high humidity has
led to the development of a rich flora and fauna. Furthermore,the topography of
Peninsular Malaysia, Sabah, and Sarawak is picturesque with hills and mountains
in the interior rising from the vast coastal plains.In addition Malaysia’s long
coastline and many coral-fringed islands,with Straits of Malacca to the west and
South China Sea to the east have given rise to a large number of beaches and
marine parks.Malaysia is also endowed with diversity of cultures, indigenous
traditions of the KadazanDusuns,Ibans and other ethnic communities.All these
factors along with initiative of the Government of Malaysia had led to
development of the tourism sector in Malaysia.
In the present scenario Malaysia is one of the most sought after tourist
destination in the world.Tourists from various parts of the world visit the place in
large numbers every year.Its rich culture,scenic beauty attracts people from all
over the world.The tourism industry has shown a constant rise in the number of
visitors

visiting Malaysia over the years.The available data shows that from 2000 to 2008
there has been a sharp increase in the number of visitors visiting Malaysia with a
temporary decline during 2003 due to the effect of 9/11 bombing in USA and Bali
bombing in in 2002 and Gulf War in 2003.From 2000 to 2008 the number of
visitors increased by more than 53% which is more than half.

The composition of the tourists is also variable.Those tourists which come from
the countries forming ASEAN are known as intra-ASEAN and the those from the
rest of the world are known as extra-ASEAN.The percentage of intra-ASEAN
visitors is always much higher thanthe extra-ASEAN visitors.This may be possibly
due to easy and cheaper access to Malaysia from this countries.
The above graph shows that among the extra –ASEAN countries,the largest
number of visitors is from Europe except in 2004,followed by India and Japan. But
in the recent years,mainly from 2007 Japan has been left behind by
China.However the overall number of tourists in 2004 was much low due the
effect of Tsunami.According to Christopher Yek, the South Asia Regional
Manager of Malaysia Airlines,the cause behind the increased number of Indian
tourist in Malaysia is cheaper holiday options in Malaysia.The amount of money
one has to spend for one night in a five star hotel in India can get a stay of three to
four days stay in their Malaysian counterpart. “Indians, perhaps, are the highest
spenders in the world,”he added.

Malaysia recorded 22,052,488 arrivals in 2008, an increase of 5.1% from 2007, a

testimony that the marketing and promotional efforts by Tourism Malaysia have
been successful in attracting tourists to Malaysia. As the graph shows ,the general
trend was followed by the number of visitors during the year 2008 also.ASEAN
countries had the largest number of visitors to Malaysia,followed by Asia.
.
An important thing was noticed in the tourist arrivals to Malaysia apart from
the ASEAN countries .China hadthe largest number of visitors to Malaysia,
followed by India.This was again mainly due to the various promotional measures
taken by the Tourism board of Malaysia in order to promote tourism.

The increase in number of tourists was contributed significantly by the

intensification of promotions in countries like Brunei, Indonesia, the Philippines,
China, India and the Middle East. Although there was a decline in the number of
arrivals from Brunei and Thailand, ASEAN market remained as an important
market for Malaysia.The graph above shows the top ten countries from which
highest number of visitors have come to Malaysia.Among the ASEAN countries
Singapore continues to be the major country of residence for tourist arrivals,
contributing about more than half the number of tourists (52%),followed by other
ASEAN countries of Indonesia(21%),Thailand(7%) and Brunei(5%).
Thus,the tourism sector in Malaysia have constantly shown a upward
rising trend throughout the years except for a brief lull in 2003.
IMPACT ON THE ECONOMY:
The significant role played by the tourist industry in Malaysia can be traced from
it’s earliest developments.This is because in comparison with other South-East
Asian states such as Indonesia and Thailand for instance,Malaysia was less
developed in the tourist industry sector.Today it has become the country's second
biggest source of foreign exchange and the third largest economy sector.Over the
years the industry is significantly contributing to GDP (gross domestic product)
growth, investment and employment as well as strengthening the services account
of the balance of payments.The related service industries like accommodation ,
food,transportation ,entertainment and other small sized industries have also
received a bang in their growth as a result of the rapid increase in the tourism.
The receipts from tourism has shown a steady growth.The receipts increased
from RM 8580.5 million in 1998 to RM 53367.7 million in 2009 which is a
manifold increase in the time period.Except for 2003 the receipts have been
steadly growing over the years. In 2008, an increase of 7.6% from the previous
year was

earned in tourist receipts which was contributed by the growth of arrivals and
tourist expenditure from the region. The five main contributors are Singapore,
Indonesia, Brunei, China and Australia.It is noteworthy that among these though a
less number of visitors come from Australia(427076) it has contributed
significantly to the tourist receipts (RM 1697.5 million)than the other countries.
Tourism also provides employment to a substantial part of the economy.
For example, according to the Ninth Malaysia Plan 2006-2010, tourism-related
activities provided 492,000 jobs for employees in 2006, representing 4.4 per cent
of the total workforce. This is an increase of 26 per cent compared to 390,600 jobs
in 2000, accounting for 4.2 per cent of the total workforce.As stated earlier the
tourism industry leads to the growth of other related industries also which further
generates more income.In addition it also helps the local low-income group in
tourist places to improve their condition by engaging in tourism related
progammes like acting as guides,rejenuvating handicrafts industry etc.
In today’s world the Internet has become widely popular in terms of
providing information.Since the industry of tourism relies on information
,information and communication technology (ICT) also contributes significantly to
the industry.Most of the tourists gather information and book their tickets today
through Internet.This has led to increased number of services to local operators
and web sites.
IMPACT ON THE SOCIETY:
Tourism has a great impact on the host societies in everywhere in the world. It can
be both a source of international amity, peace and understanding and a destroyer
and corrupter of indigenous cultures, a source of ecological destruction, an assault
of people’s privacy, dignity, and authenticity. Malaysia is also not an exception.
The steady growth of the tourism industry in Malaysia have taken it’s toll on the
social environment.While it has led to rapid economic development of the country
on one hand it has also lead to deterioration of the society on various aspects on
the other hand.It has cause rapid damage to the the ecosystem of the tourist places.
Reports on tourist-activities related damages at popular destinations are abundant.
The decreasing number of visitors to once popular lake of Kenyir was reported to
linked to the fact that overdevelopment around the lake had created eyesores and
eventually pushed them away. In 1999, Kenyir received 114, 782 visitors, while by
the year 2005, the number had decreased to around 15,000. The concentration of
mega infrastructure and resorts along the coast has caused major destruction to the
mangroves, beaches, and lagoons through sand mining and direct discharge of
sewage from the development.destruction of the ecological environment can also
be the result of the creation of extensive infrastructure like jettys,resorts and
airports.This draws the attention to create a more sustainable development in order
to develop the sector without causing harm to the ecosystem.
 Malaysia has been a pot pourri of different cultures since time
immemorial.Cultural mixing is a very common phenomena in the country.The
development of the tourism industry has further led to the enhancement of it’s rich
and diverse culture.People from all over the world come here and have interactions
leading to enrichment of it’s culture. The culture and traditions in Malaysia are
undergoing is undergoing steady but slow changes.
But the most serious social impact of tourism in Malaysia is the growing
industry of human trafficking. Seventy-nine percent of all global trafficking is for
sexual exploitation.Sex tourism is a very lucrative industry that spans the globe
and has it’s grasp in Malaysia too. . In 1998, the International Labour Organization
reported its calculations that 2-14% of the gross domestic product of Malaysia,
derives from sex tourism.In the sex tourism industry majority are children below
the age of 18. Exploitation is driven by poverty, uneven development, official
corruption, gender discrimination, harmful traditional and cultural practices, civil
unrest, natural disasters and lack of political will to end it. Malaysian children and
women are trafficked to Singapore, Hong Kong, Taiwan, Japan, Canada, USA,
Europe and Australia for prostitution. Likewise, women and children from
Cambodia, China, Colombia, Ecuador, India, Indonesia, Laos, Myanmar,
the Philippines, Russia, Thailand, Uzbekistan and Vietnam are trafficked to
Malaysia for commercial sexual exploitation and forced labour. Girls from
indigenous groups and rural areas in Malaysia are also internally trafficked for the
same purposes. Malaysia acts as a source, transit and destination country for
trafficking of women and children.There is a huge demand created for the children
mainly by the tourists who travel for cheaper sex. In Malaysia, transnational
organised crime groups are believed to be involved in the trafficking of Malaysian
children to other countries and arranging illegal entry into Malaysia. Thus,
increasing number of tourists had led to further worsening of the situation. While
the Government of Malaysia has anti-trafficking legislation in place and has
developed support services for trafficked victims, it needs to fully implement and
enforce the law to tackle multi-dimensional aspects of trafficking by
discreetly distinguishing trafficked victims from migrant workers and people
arrested for prostitution The Government must increase efforts to prosecute and
convict state officials who receive benefits from or are involved in trafficking
and/or exploit potential victims. Thus, increasing number of tourists had led to
further worsening of the situation. This shows that tourism industry in Malaysia
though has a positive effect in some parts of the society but to large extent it has
deteriorated the quality of the society prevailing in Malaysia.
 CONCLUSION
After the analysis it can be concluded,that Tourism forms a very important sector
in Malaysia.
• In the recent years it has developed by leaps and bounds. The trend over the
year has been increasing constantly with little downfall in some years.
• It has a substantial effect on the economy of the country. It’s increasing
contribution to the GDP,generation of employment,earning of foreign
exchange has earned the position of a very important sector.It has also led
to the expansion of various other related industries.
• The social impact of tourism is however not quite well.Though it has led to
enrichment of various cultures,traditions and values,it still has a bigger
setback of human trafficking going on in the country.The rapid growth of
tourism acts as a fuel to the traffickers as it increases the demand.Though
several measures are taken by the government to stop it still more are to be
taken in order to eradicate it completely.
Thus,in order to further develop the tourist industry in Malaysia,an all round
development is needed.Care is to be taken not to harm the ecosystem,for which
more sustainable development is needed.
 BIBLIOGRAPHY
➢ Wood,Robert E., “International tourism and Culture Change in South East
Asia” ,University of Masachussetts,Boston
➢ Yasak,Mohd.Nawayai, “Development of Ecotourism in Malaysia”
,Department of Wildlife and National Park
➢ “The Tourism Industry in Malaysia”, The Financial Express
➢ “Malaysia”, Library of Congress,Federal research Division
➢ Mirbabayev ,Batir;Shagazatova,Malika ,“The economic and Social Impact
of Tourism”
➢ 2007
➢ ASEAN Child Sex Tourism Review
➢ Stop Human Trafficking in Malaysia,(report)
➢ Mohammad, Badurruddin;Som,Ahmad Paud Mat;Juson,Jamil;Wong,Kong
Yew, “Island tourism in Malaysia-Not so Good News” , School of
Housing,Building,Planning,University of Malaysia