Project Document
NTF III Myanmar:INCLUSIVE tourism focusing on Kayah State
(August 2014)
A Netherlands Trust Fund III Project
1
Programme Title:The Netherlands Trust Fund III (NTF III)
Programme Period:September 2014 to June 2017
Project Title:NTF III Myanmar: Inclusive Tourism Focussing on Kayah State
Site of the Project:Myanmar
Partner Organizations:Centre for the Promotion of Imports from Developing Countries (CBI)
Executive Agency:International Trade Centre (ITC)
The International Trade Centre (ITC) and the Dutch Centre for the Promotion of Imports from Developing Countries (CBI) have been cooperating for decades. This cooperation has most recently been embodied in a series of programmes called Netherlands Trust Fund I (NTF I), which ended in 2009, and Netherlands Trust Fund II (NTF II), which started in 2009 and ended June 2013.Building on the NTFII programme and its lessons learned, the purpose of the Netherlands Trust Fund phase III programme is to increase the income of producers and exporters in selected sectors in selected priority developing countries, including in Myanamar and its tourism industry. The expected impact will be reflected in jobs created and maintained in selected sectors. Job creation reduces poverty and is strongly correlated with reductions in other measures fighting poverty such as access to basic human needs, health and education.
The present project aims to create and maintain jobs in the Myanmar tourism sector. This will be achieved by increasing the income of enterprises and local communities, and by enhancing the competitiveness of Myanmar’s tourism industry and related supply chains, especially at the Kayah state level, ultimately contributing to sustainable economic development.
To achieve this, the project will work along three axes in line with the NTF III programme approach, namely: a) enhancing the export capacity of tour operators as well as of SMEs (both, enterprises that supply goods and services to the Kayah state tourism industry as well as local communities), b) strengthening of tourism-related TSIs in Kayah state as well as Yangon, and c) creating business linkages with tourists and those intermediaries that offer Kayah state as a destination for incoming tourists.
The International Trade Centre (ITC) will emphasize strong involvement of country expertise to design and conduct the planned activities of the programme, to optimize efficiency, engagement and relevance.
Approved:______Date:______
Mr.Toe Aung Myint
Secretary of Myanmar Trade Development Committee, Director General, Department of Trade
Promotion, Ministry of Commerce, The Republic of the Union of Myanmar
Approved:______Date:______
Mr. Tint Thwin
Director General, Directorate of Hotels and Tourism Development, Ministry of Hotels and Tourism, The Republic of the Union of Myanmar
Approved:______Date:______
Mr. Anders Aeroe
Director, Division of Market Development on behalf of
Ms. Arancha Gonzalez
Executive Director
International Trade Centre (ITC)
Approved:______Date:______
Mr. Dick De Man
Deputy Managing Director and Head Institutional Development
Centre for the Promotion of Imports from Developing Countries (CBI)
PROJECT PLANProject title: / NTF III Myanmar: Inclusive Tourism Focussing on Kayah State
Country: / Myanmar
Duration:
(months) / 3 years / Start date: / Planned 09/2014 / End date: / Planned 06/2017
Total estimated budget: / USD 1,901,108
The Parties understand that the present document constitutes preparatory work that reflects the Parties’ intentions in relation to the Project. The present document shall not be regarded as a contractual document binding on the Parties. The Parties’ intentions hereunder shall be formalized by subsequent written agreement, subject to ITC internal approval procedures.
Contents
Project Document
Project Summary
Project Purpose
1. Background & Context
2. Rationale
3. Strategy
4. Results Framework
5. Organization & Management
6. Budget
7. Monitoring & Evaluation
8. Communication
ANNEX I: Logical Framework
ANNEX II: Work plan
ANNEX III: Monitoring Plan
ANNEX IV: Risk Management Plan
ANNEX V: Communication Plan
ANNEX VI: Analysis of Additional project stakeholders
ANNEX VII: Synergies and collaboration of NTF III Myanmar with CBI activities in the tourism sector in Myanmar
Annex VIII: NTFIII Countries, Sectors and Tentative Budget Allocation
Annex IX: Coherence with partner government policies and strategies
ANNEX X: Ongoing tourism development projects in Myanmar
Project Summary
The NTF III Myanmar project is part of the Netherlands Trust Fund III /NTF III programme. NTF III isan Export Sector Competitiveness Programme based on a four-year partnership agreement signed by the Centre for the Promotion of Imports from developing countries (CBI) and the International Trade Centre (ITC) in July 2013. The programme is built around one outcome, namely “export competitiveness of selected sectors in selected countries enhanced”. This will be achievedthrough an integrated approach to sector development. The Programme will conduct activities in Bangladesh (IT/ITES sector), Kenya (IT/ITES and Avocado sectors), Myanmar (Tourism sector) and Uganda (IT/ITES and Coffee sectors). The planned budget allocation per country and per overall programme is illustrated in Annex .
In Myanmar, the tourism sectorhas beenchosenon the basis of the seven export priority sectors identified under the National Export Strategy (NES) undertaken by the Ministry of Commerce, with technical assistance provided by ITC. ITC analyzed all seven sectors with regard to possible trade-related technical assistance and recommended the tourism sector for NTF III activities. The Ministry of Commerce endorsed the selection.[1]The Myanmar state of Kayah was chosen as the destination for project implementationin close consultation with the Ministry of Hotels and Tourism, the Ministry of Commerce, as well as the private sector.Kayah state was chosen because of its culturally rich and untapped potential to develop cultural community tourism tours, linking handicraft and food producers to the tourism value chain, while at the same time addressing high poverty levels especially among ethnic minorities.
NTF III Myanmar follows the same logic as the programme at impact, outcome, and output level. At the impact level it targets job creation in the Myanmar tourism industry and related supply chains. At outcome level it is envisaged to increase the export competitiveness of the Myanmar tourism sector as well as the competitiveness of the sector’s local supply chains. To achieve the long-term impact and the outcome, the project will deliver in three main ways.
Under Output 1, the project will increase the export capacity of tourism enterprises as well as tourism supply chains and community producers and service providers.This will involve building export capacity among Kayah state tourism-related enterprises by (i) developing, in an inclusive approach, new tourism products in the form of cultural community tours with an impact on local revenue generation, and (ii) improving local supply chains for the tourism industry.
Under Output 2, ITC will work with partners to improve performance of tourism associations to provide tourism development support services to members.This includes the Yangon-based Union of Myanmar Travel Association (UMTA) and the Myanmar Tourism Marketing Association (MTM),as well as associations of tourism-related supply chains in Kayah state.
Under this output, ITC will assessthe capacity of the only existing tourism association, i.e. the Kayah Hotelier Association as well as the feasibility of supporting SMEs by setting up tourism-related value chain associations (e.g. in crafts). Based on the findings, the project will formalize and strengthen one or both associations. In addition, the project will assist the newly established Kayah branch office of the Ministry of Hotels and Tourism to engage with the tourism-related private sector in Kayah state. Finally, at national level,through a training of trainer approach based on the CBI-developed EXPRO training methodology, the project will enable UMTA and MTM’s staff to, first, analyse and understand the European and Asian tourism markets and, second, to become CBI EXPRO training coaches of other UMTA and MTM’ member tours operators.
Under Output 3, ITCwill strengthen linkages between local producers, service providers and tour operators. The project will enable local producers and service providers to adapt and sell their products and services to the tourism industry. In addition, project advisors will link Yangon-based inbound tour operators to foreign in-bound tour operators through trade fairs. This will include showcasing the unique offering of Kayah state. As part of this, ITC advisors will help partners develop and implement a marketing strategy specifically for Kayah state within the framework of Myanmar Marketing. Yangon-based tour operators will therefore be both direct beneficiaries and act as the market link for Kayah state tourism stakeholders.
Project Purpose
The project aims to create and maintain jobs in the Myanmar tourism sector. This will be achieved by increasing the income of enterprises and local communities, and by enhancing the competitiveness of Myanmar’s tourism industry and related supply chains, especially at the Kayah state level, ultimately contributing to sustainable economic development.
To achieve this, the project will work along three axesin line with the NTF III programme approach, namely: a) enhancing the export capacity of SMEs (both, enterprises that supply goods and services to the Kayah state tourism industry as well as local communities),b) strengthening of tourism-related TSIs in Kayah state as well as Yangon, and c) creating business linkages with tourists and those intermediaries that offer Kayah state as a destination for incoming tourists.
1.Background Context
Situation Analysis
Myanmar’s tourism sector has a strong potential for growth.
The average annual increase in international visitor arrivals for the period 2009-2013 was 33%.. This potentialis attributed mainly to Myanmar’s political and economic reform process, improved connectivity, and rising demand to visit Myanmar from all major source markets.
For the first time in its history, Myanmar received over 2 million international visitors in 2013.[2] This is an exceptional increase if one considers that in 2003 Myanmar received less than 600,000 visitors. The total income from tourism activity was USD 926 million in 2013, compared to USD 254 million in 2010. The increase of tourism in Myanmar is an opportunity for local communities – especially rural, poor and marginalized people, to take up gainful employment and income generating opportunities in tourism value chains by providing goods and services to visitors.
Asian arrivals to Myanmar have steadily outpaced their Western counterparts in recent years, and making Myanmar attractive to Asian travellers will be crucial for the development of the tourism sector. The top five origin markets were Thailand (16% of arrivals by air in 2012), the People’s Republic of China (12%), Japan (8%), the United States (6.3%) and the Republic of Korea (6%). France, Malaysia, Singapore, the United Kingdom, and Germany each accounted for about 4-5%. Overall, visitors from Asia accounted for 64.1% of all arrivals by air. 21.9% originated from Western Europe, 7.4% from North America and 3.4% from Oceania. Of the 465,614 arrivals through land gateways in 2012, most were citizens from Thailand, who stayed less than one day. The estimated overall average length of stay in 2012 was 7 days.[3]
There is a big difference between arrivals during the low season (April-September) and the high season (October-March). This results in challenges especially in the high season as public services become overwhelmed (e.g. collection of solid waste) and negative environmental impacts are exacerbated (insufficient measures to protect heritage assets and lack of coordinated stakeholder engagement in tourism planning). Moreover, in the high season, the demand for hotels outstrips supply. The resulting price increases lead to visitor dissatisfaction.
Figure 1 presents visitor forecasts (both land and air arrivals) for three different growth scenarios, namely a conservative estimate, a mid-range, and a high growth scenario.
Figure 1: Visitor Forecasts, 2013-2020
Source: Ministry of Hotels and Tourism (The Republic of the Union of Myanmar).
Spending is forecasted to increase from an average of $135 per day in 2012, to $170 in 2020, and the average length of stay is expected to rise from 7 to 8 days. These predictions would imply an increase in tourism receipts to $1.83 billion in 2015 and $3.82 billion in 2020 (conservative growth scenario)[4].Creating demand for repeat travellers is significant for the country as typical second-time visitors on average spend 35% more per day than first-time visitors because of a positive first-time experience.
Six main destinations currently receive the majority of international visitors. These are Yangon, Bagan, Inle Lake, Kyaikhto, Mandalay, and Ngapali Beach. Already now the infrastructure in these locations is overstretched and a further increase in tourists could have a negative impact by damaging culture, history, and natural attractions. Therefore it will be important to diversify tourist arrivals into new destinations and locations. The government has changed its policy and started to promote areas that were previously closed to foreign tourists.
Looking at well-established destinations in other countries, tour operators usually tend to increase variety and quality by including in their proposed packages alternative tourism activities, such as nature-based tourism, eco-tourism, adventure and experiential tourism.
Applying this model to Myanmar, Kayah state offers numerous possibilities to enhance the typical Myanmar tourism package. Kayah state has recently been opened to international tourists following the signature of peace agreements. Tourism in the State is therefore still at its infant stage of development,but provides a high potential for development, especially for cultural, wildlife, and community-based tourism.
The unexplored parts of Kayah state are appealing for tourists who are willing to forgo luxury for unspoiled culture, landscape and forests. The state suffers from a high ratio of people living under the poverty line. Tourism development is therefore an important activity for increasing income, jobs and helping to expose the local population to global opportunities. Based on this, and the recommendation of the Minster of Hotels and Tourism,the Vice Minister of Commerce, the Union of Myanmar Travel Association,and various other resource persons, NTF III selected Kayah as the focus for thisproject on inclusive tourism.ITC’s feasibility and project formulation mission to Myanmar confirmed this choice. During this mission, the ITC team met with the Kayah Chief State Minister and other State Government officers. The Chief State Minister was interested to develop tourism and partner with ITC on a tourism project. The project’s timing is appropriate since the Ministry of Hotels and Tourism plans to open a state-level branch office in Kayah State.
Tourism development must benefit the communities in the area visited, not least because local people make Myanmar a memorable experience. Despite its low tourist penetration, the area is culturally very rich and shows untapped potential to develop cultural community tourism tours, linking handicraft and food producers to the tourism value chain. Furthermore, the region has a good tourism potential being geographically and strategically located close to both, Naypyidaw, the national capital of Myanmar, and the much visited Inle Lake (3 hours by boat or1 hour by car). Kayah state is also bordering Thailand’s Mae Hang Son Province. At a roundtable organized by ITC on Kayah’s potential for tourism, the large majority of Myanmar’s in-bound Tour Operators associated under UMTA reported to already have Kayah in their offer or the plan to explore Kayah as possible addition to their offer. All welcomed ITC’s plan to assist in increasing and improving the product and services offer to be able to extend the duration of the tourists’ stay. Successful Myanmar tour operators interviewed at the Berlin Tourism Börse who already offer Kayah expressed interest from European outbound tour operators for such authentic places and would welcome more local offer as for example food or presentation of traditional skills for tourists while visiting local communities to enhance the experience. The people of Pan Pet, one of the villages usually visited by tourists in Kayah state, reported that during the tourism peak season (November to February), 2-3 groups visit the village daily, but besides occasional sales of crafts and tips demanded for pictures taken, no revenue remains in the village.
Rural grass-roots organizations already working with rural communities could provide a starting point for the project. Each village elects representatives and 5-6 villages form a Rural Development Committee (RDC). So far, about 70 independent RDCs exist that could be partners in reaching out to rural communities. The expected impact is to create income generating activities and to support jobs in Kayah’s tourism industry and related sectors.
needs assessment
The needs of the tourism sector are spelled out in the Government’s tourism sector policies under the Responsible Tourism Policy, the Community involvement in Tourism Policy, the Tourism Master Plan, as well as the National Export Strategy (NES). ITC has undertaken two needs assessment missions, one jointly with CBI, to further assess the needs of the sector from a trade perspective, and with special focus on Kayah state.