1.

Introduction

Globalization in an economic sense stands for the Increasing markets interdependence

and multifarious production in different countries through trade in goods and services,
flows of capital, international strategic alliances, cooperation, mergers and exchanges of
technology. The saturation of some domestic markets as an antecedent for
internationalization of multi-national companies has eventually culminated a quest for
new selling opportunities, with this trend countries like South Africa with its diverse
cultural base, a moderately stable economy and infrastructure stands to benefit from the
globalization phenomena, This document discusses apposite dimensions of globalization
taken it from the continental perspective, listing hindrances to the tourism industry and
how South Africa has remedy most of this hindrances to auspicate a growth continual
from pre apartheid to the post apartheid era. This document further introspectively
assesses other vital sections of the economy how global tourism has ameliorated the
economic performance through job creation and a contribution to the GDP.

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 2. Internationalization and Globalization
Internationalization is the process by which firms become involved in serving markets
outside their home country (Teare, Boer 1993, 194), with Globalization becoming the
highest form of internationalization. Globalization in an economic sense stands for the
Increasing markets interdependence and multifarious production in different countries
through trade in goods and services, flows of capital, international strategic alliances,
cooperation, mergers and exchanges of technology. Globalization can also be defined as
the increase in the international division of labor, achieved through the international
fragmentation of production, as well as the political trend towards a more liberal
economic order (Smeral 1998, 372). The saturation of some domestic markets as an
antecedent for internationalization of multi-national companies has eventually culminated
a quest for new selling opportunities.
The aim of a multi-national corporations is to produce affordable consumables using
cheap raw materials and labor within the host nation whilst at the same time providing
jobs for unskilled workers, which thus assist in alleviating the poverty that plagues third
world nations. Globalization is often said to be a positive phenomena for both first world
and third world nations, however Weibing and Xingqun (2006) identify certain issues,
which show the contrary.

3. Hindrances to Tourism in Africa

While Cornelissen (2005) lists the following as hindrances to tourism in Africa, it is
interesting to note that South Africa as a nation has made every effort to remedy these
maladies driven by the desire to achieve a solid place in the global tourism market: These
include bad infrastructure, Volatile politics, recurring protracted conflicts, and weak
economies.

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3.1 Bad infrastructure
Through the construction and maintenance of tollgates along the country’s national
highways South Africa has not only managed to maintain their roads but to extend them
as well. In terms of air travel, South Africa has refurbished both the Johannesbug and
Cape Town international Terminals to world standards. The construction of the Gautrain
has upgraded rail travel for easy commuting from the Johannesbug international airport to
the city. Of particular significance for sea travel is the construction of the Durban harbor.

3.2 Volatile Politics

Post-Apartheid South Africa is hardly prone to volatile politics rather they uphold a
consistent desire to maintain peace and reconciliation throughout politic transitions. As
key players within the Southern African Development Committee (SADC) , South
African leaders are involved in conflict resolution. A crucial instance was when the
current president Jacob Zuma travelled to Zimbabwe in order to establish peace and
resolution between the Zimbabwean president Robert Mugabe and the new prime
Morgan Tsvangirai for the sake of establishing a transitional government.

3.3 Recurring protracted conflicts

Post Apartheid South Africa has had no recent instances of conflict besides the
xenophobic attacks which occurred in 2008 and diminished the country’s attractiveness
as a tourist destination. However the economic recession also occurred in 2008 and thus
the potential for South Africa to receive foreign arrivals compounded the effects of
reduced tourism in that year. In the build up to the South African hosted FIFA World Cup
2010 South Africa has thus aggressively campaigned the country as a safe tourist
destination and actively took the opportunity to squash any unruly behavior by locals that
was suspiciously xenophobic in nature.

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3.4 Economic weakness
South Africa is one of the strongest economies within the African continent as cited by
the Economist, Barclays Capital, an investment bank, listed South Africa among the top
ten "advanced emerging markets", further branding South Africa as one of a "new breed
of countries poised to exhibit solid and stable growth". PricewaterhouseCoopers, a
consultancy, expects South Africa to be the world's seventh-fastest growing economy up
to 2050, with growth averaging 5%.
Whilst a considerable amount of foreign exchange is received in the tourism industry
much of it is channelled back into the first world countries by importing foreign
consumables that supply the demands of a highly consumerist tourist.
Further to this Weibing and Xingqun (2006) posit that multi-nationals are detrimental to
the host economy as they squash job opportunities by buying out small family owned
businesses and local entrepreneurs in their efforts to gain monopoly in areas that would
generate a large income for them.
Weibing and Xingqun (2006) do however state that there is a positive element of
globalisation which is that because international tourism is often exalted as a special form
of export (in comparison with traditional exports of raw materials or products with low
added value), it does reduce the vulnerability of the third world countries to resources
exploitation.

4. Positive impact of tourism on the South African Economy

Global tourism has auspicated a boost to the economic performance of South Africa as
well as to increase foreign direct investment into the economy, (Institute of Global
Dialogue, 2007). Tourism is according to the United Nations World Trade Organization
(UNWTO) as cited by Cornelissen (2005) as the stay of at least one night, but less than a
year, from one’s normal environment. This includes business, conferences and other non
leisure activities as well.

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What tourism has effectively managed to do is that it has helped to release the economic
burden on the two main industries that South Africa relies on to bring in foreign revenue,
these industries being mining and agriculture. Global tourism is beneficial to the
economy due to its multiplier potency, which is its propensity to involve a collection of
industries in the creation of a single tourist product. As a result global tourism becomes a
valuable component of a nation’s economic policy agenda. As a result leisure and tourism
economy in the African continent as a whole has grown to the extent that in recent years
it has on several occasions surpassed the average rate of increase of tourism at a global
level according to Cornelissen (2005).

Although a large chunk of tourism market is leisure, quite a significant part of it is

business based tourism that helps to market South Africa as stable in environment for
foreign direct investment and market expansion for multi-national and transnational
establishments. Thus what has emerged is a Meetings, Incentives, Conferences and
Exhibitions (MICE) market tourism potential. The MICE market is the fastest growing
segment of the international tourism generating US$10 billion per annum globally, as a
result the provision of convention centers has as a result become a core component of
development policies, ( Cornelissen, 2005) in 2004 for example Cape Town hosted 21
international meetings. What South Africa has managed to as a result of global tourism is
that it has managed to market other sectors of its economy as viable tourist options and
thus generated a perennial flow of tourism allowing more consistent revenue and thus
reducing the impact that reduced holiday tourism seasons may have on the host economy
in terms of foreign exchange generation.
Cape Town specifically as a tourist destination within South Africa markets itself as a
brand through image enhancement owing to the commitment of national marketing
agents and foreign tourism producers. This process of imaging draws attention to it as a
tourist destination globally but it also helps local government deal in a timely manner and
extensively with socio-economic issues that the province faces.
Although Table Mountain, Kirstenbosch Botanical Gardens and the Winelands offer
spectacular scenery (Cornelissen,2005), townships and shack towns like Khayelitsha
which are virtually at the Cape Town International airports doorstep only draw concern

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and highlight the economic disparity between the rich and the poor. This detracts from
the nation’s image especially for socially conscious and activist inclined travels. The
government has thus over the years as a transformation goal (motivated by equalizing the
people groups in the nation and improving the livelihood of the previously disadvantage)
and development policy set out to provide housing for the poor. Partly this might be a
drive towards alleviating poverty and ameliorating the livelihood of communities below
the poverty line but this further comes as an antecedent to government lessening the
heightened gap between the affluent and poor, and a direct impact of globalization.

5. Tourism bridging the Economic divides

According to the National Department of Tourism through the hosting of the 2010 FIFA
World Cup, South Africa’s ability to draw global tourists, Jobs were not only saved but
also created and in addition retrenchment was cushioned as massive construction of
stadiums and transport infrastructure was undertaken. Small, Medium and Micro
Enterprises’ were uplifted as township tourism received attention.
3% of the South African Workforce is employed by the tourism sector, with
unemployment in South Africa in 2007 being at 25.6% tourism was the largest provider
of jobs and earner of foreign currency Business tourism was said to generate R20 billion
into country annually which in effect sustains approximately 260 000 jobs and pays about
R6 billion in salaries and R4 billion in taxes . As a result tourism gives;
“labour intensive and small scale opportunities for the poor allowing them to
directly supply goods and services produced by locals to tourists and tourism
entrepreneurs allowing them to directly capture and benefit from visitor
spending.”
(Institute for Global Dialogue, 2007)
The added socio economic benefits of allowing the poor to actively participate in the
tourist market is that women and youth also get employment opportunities , allowing to
use their creative abilities to fend for households where the primary male breadwinners
are incapacitated or absent.

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The institute of Global Dialogue (2007) gives a comprehensive list of MICE market
events that have benefitted the South African economy, the amounts generated and the
way in which they are generated. Below are just 2 of the significant events that have
influenced tourism in South Africa in the past decades:

World Summit on Sustainable Development (2002)

R 2.7 billion rand in direct expenditure was generated; there was a subsequent R8.4
billion boost in business sales due to the increased demand of goods and services
produced by the expenditure.

Cricket World Cup (2003)

4.4 million US dollars were generated, the event hosted in South Africa had a billion
viewers worldwide and the county received 25000 foreign visitors.

6. Tourism and Black Economic Empowerment

As one of South Africa’s primary goals in leveraging out the distribution of wealth in the
country across all racial groups, the Tourism Black Economic Empowerment Charter was
launched in 2005. The key objectives were, “enabling ownership, employment equity,
strategic management, skills development, preferential procurement, enterprise
development and social development of the previously disadvantaged.”

Global tourism has thus helped South Africa to draw up comprehensive development
policies as well as to distribute budgeted finances appropriately. In addition there are
opportunities for the uneducated to receive financial assistance in order to enhance their
opportunities of employment. As more jobs are created there is an opportunity to plough
resources back into the economy to boost the country’s Gross Domestic Product and thus
further bolster an already strong South African economy. Social issues like race relations
are improved as each racial group feels that their needs are addressed and met and there is
greater opportunity for a harmonious socio economic environment where all citizens are
enabled to work to towards a common goal.

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7. Globalized Tourism and Property
The property sector is another of the areas that has been positively influenced by
increased global tourism. The South African tourism sector analysis (2007) reports that in
2006, it experienced a 6.4% increase in occupancy rates at hotels, guest houses as well as
other forms of tourist accommodation. In the recent years office space has increased in
demand due to multi- national and trans-national organization wanting to expand their
operations, the degree to which this occurred may have been less had it not been for the
indirect effects of global business tourism, allowing entities to assess and distinguish
South Africa as a stable economy in which to establish their businesses. In addition
commercial properties for manufacturing and assembly business have been identified and
purchased thus; this form of property also generates foreign revenue and also compels the
country to improve technological operations and computerization in order to meet the
demands of both the local and the foreign markets. . Furthermore with the hosting of the
2010 World Cup, This has recently improved the image of South Africa as a tourist
destination thus increasing the influx of visitor’s helped to market property increasing the
value real estate, rentals and increasing hotel occupancy.
In the period between 1996 to 2002 40 new hotels constructed, golf courses and golf
estates with residential components, refurbishment and expansion of the Cape Town
International airports, the construction of a casino and the Cape Town International
Convention Center (CTICC). There has also been the previously mention boom in
development policies for the poor, which has enabled them to invest in property. The
construction of world class malls, (in the Waterfront which has been extended to include
shops that house designer wear from international fashion houses as well as the Century
City mall that has 400 shops and is the largest mall in South African) was the part of the
gentrification process of the city, which has made these malls the loci of tourist
consumption.

8. Globalized Tourism and Technology

South Africa as a strong economy has benefitted from globalization as the convergence
of global technology has helped it to cater for tourists, (Kruger-Cloete, 2001). Online
ticketing and booking systems as well as self-service check in systems. In addition the

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country has been able to make use of the internet to market its destinations worldwide.
Technology has also assisted in the construction of infrastructure. The more that the
country receives international tourism the more that multinational and transnational
corporations channel technology to an emerging economy such as South Africa to benefit
their satellite branches.
An important to note about tourism as an industry is that technology a factor of
globalization drives it and in turn tourism drives advances in technology. Hence it may
be deduce that there is a cyclic relationship between tourism and globalization and how
they drive each other.

9. Rebuttal or objections to the positive effects of tourism on the South African

economy
Economic leakage is a threat to the economy, Cornelissen (2005) defines this as being the
process by which;
Income created through tourism sector is not transmitted due to another tourism
activity like the sourcing factor inputs or services from another destination for
use of the services of a firm not located within a tourist locale and where
repatriation of profits occurs.

Another threat of tourism to South Africa is that with this increasing need and push to
meet international standards and thus meet the demand of foreign visitors (that are often
made of nationals from developed consumerist nations in the Americas and Western
Europe) is that it risks losing its own national identity and becoming homogenized as part
of one culture dominated by the “West”. The diversity and uniqueness of South Africa is
diluted, this is a pitfall heavily associated with globalizations ability to homogenize
everything to the detriment of individual cultures that make nations function according to
their economic, political and social structures.
Whilst tourism revenues the entire nation from a cumulative perspective, at an individual
level where certain provinces receive more direct revenues than others there is a tendency
for there to be a greater differentiation of economies between provinces and this may not

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help to influence the standard of living for the poor within. An example is that Cape
Town is able to market itself independent of South Africa as a country to the international
world. Amongst the international community through rigorous marketing Cape Town is
familiarized and easily identified through name recognition and this tends to draw the
greatest number of tourist to Cape Town and not necessarily to poorer parts of South
Africa, where tourism more rural based as opposed to urban tourism.

10. Globalization, Tourism and the Environment

In addition there is a great environmental impact to tourism as the government has to
consider more sustainable ways of tourism in order to reduce construction in
undeveloped areas of the country, where the natural habitat in that area is home to
wildlife, or is the source of natural water supplies, and indigenous fauna and flora.
The Criteria for sustainable tourism is defined by the World Toursim
Organisation(1995) as cited by Elsie-Kruger (Year?) as:

• Balancing ecologically sound, economically viable, and socially

equitable tourism development;
• The natural, cultural and human environments must be integrated in
assessing the impacts on cultural heritage and local communities;
• Ensuring participation at all levels requires efficient cooperation
mechanisms;
• Incorporating innovation is the real challenge in creating integrated
planning and management instruments;
• By using ecologically honest pricing, a more equitable distribution of
the benefits of tourism can be achieved;
• In technical assistance grants, priority areas such as environmental and
cultural spaces should be targeted; and
• The creation of open networks for information, research, dissemination
and the transfer of appropriate tourism and environmental knowledge
and technology are prerequisites.

(Elsie- Kruger, 2008)

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In order to reduce exploitation due to tourism the General Agreement on Tourism
Services (GATS) helps to regulate the industry. The Institute for Global Dialogue (2007)
disputes that GAT regulates tourism on the assumption that it produces a single
homogeneous tourism product when it in actual fact affects many economic sectors. This
generally makes hard to assess its impacts on the economy as a study has to be made of
all affected industries, and the extent to which tourism influences each industry must thus
be measureable to provide adequate and accurate data for assessment.
There is a segment of the global tourist traffic that is occupied by individuals that are
friends and relatives of South African citizens. Often for economic reasons these
individuals immigrate to South Africa, and establish business or take up employment in
the host country. South Africa has benefitted through tourism from these individuals as
they often help to fill the gap of scarce skills within the country. This presents an
opportunity for locals to train in those skills well and thus boosts the employment of the
local peoples. The down side how ever to immigration in South Africa was specifically
highlighted by the 2008 Xenophobic attacks, where locals felt that they were not free to
seek for employment as foreigners from neighboring countries were taking jobs that were
meant for them, at this a foreigner includes these abovementioned immigrants or the

11. Conclusion
The South African tourism industry outperforms most other industries, considering the
fact that there has not been a decline in foreign arrivals especially at a time when the
world and most global players have experience a diminution in their respective
economies, this being an antecedent of varied economic effects with ramifications
affecting global economic leaders. The tourism industry still continues to outperform
most economic sectors with respect to job creation and direct contribution to the nations
GDP. Section 3 of this document highlights Africa and some potential hindrances as
argued by Cornelissen (2005) and how South Africa has surmounted most of these
hindrances. This accentuates why South Africa continues to win as a tourist destination
and the salutary drive towards more investments to facilitate the socio economic
improvement of its main tourist centers. There is quiet

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