Significant improvements in security mean that the sector is now poised to pick up.

Tourism has grown faster than the global economy for the eighth consecutive year. Today, more than a billion people travel internationally, with around half these journeys destined for developing countries. Pakistan is uniquely placed to take advantage of this trend.

Travellers can experience the historical heritage of one of the oldest civilisations in the world, worship at the rich collection of Sufi shrines, Hindu temples, Sikh gurdawaras and Buddhist monasteries, scale some of the highest mountains in the world, or simply experience natural beauty ranging from blossoming trees against a backdrop of snow-clad peaks in Gilgit-Baltistan to pristine beaches in Gwadar.

However, despite this wealth of tourist attractions, Pakistan’s tourism sector trails far behind that of India, Turkey, Sri Lanka and the region in general.









The direct contribution of the travel and tourism sector to Pakistan’s gross domestic product is just 2.8 per cent compared to the regional average of 3.5pc.

In terms of receipts from foreign tourists across South Asia ($33.82 billion in 2016), Pakistan scrapes a share of less than 1pc of this important source of foreign exchange compared to India's share of 69pc, Sri Lanka’s 10pc and Maldives’ 7pc.

Moreover, in sharp contrast to the dramatic improvements in the share of travel and tourism to India’s economy, in Pakistan, this share has remained fairly stagnant.

What is the economic potential for tourism in Pakistan? What is holding us back from reaching the potential and what can be done about it?

Boosting the economy

What if Pakistan’s international tourism sector contributed to the economy at similar rates as the rest of South Asia? The gains to GDP would be $1.5 billion.

What if Pakistan surpasses South Asia and international tourism contributed at world average rates? The gains to GDP would be $3.5 billion — equivalent to the value of Pakistan’s largest current export item, cotton.









Simple back-of-the-envelope calculations show a substantial economic impact of existing domestic tourism as well.

For instance, looking at just domestic tourism to heritage and religious sites in Punjab, the Tourism Development Corporation of Pakistan (TDCP) identifies 480 such sites across the province. Of these, 106 are of historical importance, 120 religious and a further 26 of both religious and historical importance.

Assuming a modest average spend of Rs200 per trip per person and using TDCP data on the number of visits to each site, revenue generation through these domestic visits is currently estimated at Rs54 billion per year — two-thirds of what international tourists spend in Pakistan each year.

With the right policies in place, Punjab alone can contribute a three- to four-fold increase in the revenue generated by domestic tourism.

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Pakistan is an especially important site for both Sikh and Buddhist tourists. At one point, Punjab was the centre of the only Sikh empire in history. Nankana Sahib, the birthplace of Baba Guru Nanak, is one of the holiest sites for Sikhs, with the potential to attract as many pilgrims as the Golden Temple in Amritsar.

Yet, barely 6,000 Indian Sikhs visit Pakistan, in contrast to over 50 million that visit the Golden Temple — just 120 kilometres away from Nankana Sahab — each year (this includes multiple visits from the same visitors).

The number of pilgrims coming to Pakistan each year and where they stay is controlled and managed for political and security reasons by the state, albeit with fewer restrictions on diaspora Sikhs as compared to Indian Sikhs.

According to survey data, a whopping 83pc of the eight million diaspora Sikhs living outside India have shown interest in visiting Pakistan. In addition, 79pc of the 20 million Indian Sikhs expressed an interest in visiting Pakistan. In sharp contrast, just 10pc had actually come to the country.

Nankana Sahib

Improvements in visa restrictions, security and infrastructure can lead to an increase in tourist numbers and a change in the profile of existing Sikh tourists, which is currently heavily biased towards low-end visitors (those who won’t be spending too much).

For instance, allowing one-day visas for day trips to Nankana Sahib, a mere two-hour drive from Wagah, can boost visits from Indian pilgrims.

Conservative estimates of the economic impact of boosting Sikh tourism, that keep the current expenditure profiles and mix of pilgrims as given and assume that a small fraction of the Sikhs that expressed an interest in visiting Pakistan do actually visit, show an approximately 85-fold increase in Sikh tourists’ expenditure on goods and services in Pakistan. The current spend of Rs208 million can reach almost Rs18 billion.

This is assuming 44,000 annual visitors (a mix of diaspora and national Sikhs, with some high-spending and others low-spending tourists) with most staying for two weeks, some single-day visits and spending between Rs4,000 to Rs20,000 per day per person.

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The gains to the economy, however, are not restricted to these direct expenditures on hotels and transport. They create ripple effects through the economy via indirect and induced expenditures.

Hotels purchase more goods and services from their suppliers and expand their facilities (indirect expenditures). When the region becomes more active as a tourist hub, increased employment and economic activity spillover to higher spending on all goods and services in the area (induced effects).

The World Travel and Tourism Council estimates that every rupee of direct expenditure is expected to lead to an additional spend of Rs1.46. Every direct job in the travel and tourism sector also implies an additional 1.55 jobs in related sectors. Incorporating these multiplier effects, the total contribution of Sikh tourists is projected to reach approximately Rs44 billion every year, generating over 82,000 jobs.

Takht-i-Bahi.— Fazal Khaliq

Similarly, Buddhist tourism has an estimated market of 500 million Buddhists across the world. Pakistan’s Gandhara region comprising Mardan, Taxila and Swat holds a special place for them. Korean Buddhists in particular trace their religious origin to the area that is now Pakistan, where Korean monk Hyecho travelled 1,300 years ago.

Just recently, a 48-feet-long Buddha was also unearthed in Haripur, making it the world’s oldest sleeping Buddha statue. Takht-i-Bahi in Khyber Pakhtunkhwa and the sites in northern Punjab alone have the potential to attract a major proportion of the 50 million Mahayana Buddhists in Korea, China and Japan.

A 2016 Gallup survey of the Buddhist population across a selected pool of countries identified 58 million “interested visitors” of which 5pc (2.9 million) were “likely to visit” Pakistan. Poor security situation, lack of marketing and tourist facilities and the absence of a functional Buddha stupa are currently preventing this potential from being realised.

Facilitating these tourists and reaching just 1pc realisation for Pakistan would mean 29,000 visitors a year, with a revenue inflow of $62.9 million in the near term. Accounting for the direct and indirect effects, Buddhist tourism can contribute over Rs16 billion to GDP and provide employment to 30,772 people.

What is holding us back?

Where can we begin in order to realise this potential? The most important impediment identified in surveys in the past has been Pakistan’s security situation. Significant improvements in security mean that the sector is now poised to pick up.

In recognition of this, the Pakistan Tehreek-i-Insaf-led government has shown a keen interest in reviving this sector. They have established a national task force on tourism, followed by approval of a National Tourism Coordination Board. They have also announced a new visa policy, plan to provide online visa facility for 175 nations and have relaxed the system of No Objection Certificate for certain regions.

Tourism remains a key area of cooperation under the China-Pakistan Economic Corridor, realising the enormous potential of Chinese tourists and impact on international tourism of overall improvements in infrastructure.

There are, however, some additional factors that remain unaddressed. A critical one is an appropriate institutional and regulatory structure that allows for conservation and regulation, provision of facilities, effective management and data-driven planning to understand and attract tourists in a manner that is environmentally sustainable.

Existing institutional and regulatory arrangements for the tourism sector remain weak, complex and in need of serious reform. Multiple agencies and departments are involved in the sector, without any specialised experience in managing heritage and religious sites and without conformity in practicing international or Unesco standards. Special management structures like the Walled City Authority do exist, yet there is a need for a consistent approach that applies to all sites of significance.

Katas Raj. —Nefer Sehgal

Federal-provincial coordination poses further challenges. Federal jurisdiction over some heritage sites is still maintained by the Evacuee Trust Property Board (ETBP) even though it has no legal authority post-18th Amendment.

The impact of these issues is exemplified in the experience of Katas Raj, a complex of seven ancient Hindu temples. The ETBP exercises complete authority over the development and restoration of Katas Raj without apparent oversight of the provincial archaeology department or any in-house expertise in conservation and restoration.

This institutional flaw has led to renovations using plaster and paint, which have permanently destroyed any remaining vestiges of antiquity. The floors and steps throughout the complex have been re-laid using white marble that looks completely anachronistic in that environment. Most importantly, nearby cement factories have contaminated and dried up the centuries-old pool of water considered holy by Hindus.

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While suo moto action was taken after media reports last year, the experience highlights the gaps in the regulatory environment that have allowed substantial and potentially irreversible damage to historical sites.

Other issues that arise from poor institutional arrangements include poor tourism infrastructure, low involvement of the private sector, inadequate marketing and low enforcement of quality standards.

The Punjab Tourism for Economic Growth report develops five strategic thrust areas to address these issues and unlock tourism’s potential: tourism infrastructure, safety and security, branding, developing talent for tourism services and policies for sustainable tourism that involve and benefit local communities, as well as regulation that preserves heritage sites.

With these arrangements in place, Pakistan can look forward to revamping its tourism industry to take its rightful place in the country's development.

Header photo: Tomb of Bibi Jawindi in Uch Sharif, by Usama Shahid

This piece is based on a report by the Consortium for Development Policy Research, supported by the World Bank, and titled "Punjab Tourism for Economic Growth". The team of researchers was led by Mr Suleman Ghani (policy consultant and former civil servant). The views expressed here are the authors’ alone.

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