THIS HOUSE BELIEVES

TOURISM IS A VIABLE
DEVELOPMENT STRATEGY FOR
POOR STATES.
Tourism accounts for a significant and growing source of global economic activity: receipts from
international tourism grew to a total value of $919 billion in 2010, representing a real terms increase
in takings over 2009 of 4.7%.[i] These figures also demonstrate the startlingly rapid recovery of the
industry from a severe down turn in leisure travel brought about by the global economic crisis of
2007-2009. The developing world’s share of total global tourist arrivals has now risen to 47%.[ii]

The almost continuous growth of the industry is not without its side-effects. Following growing
evidence of ecological damage at a number of the world’s most popular tourist sites, alongside fears
about the impact of tourism upon regions’ populations, politics and natural resources, international
organisations such as UNESCO have begun to look seriously at providing developing states with
incentives to limit the number of tourists that they accept into their territory.

Following the publication of the Brundtland Report[iii] on sustainable economic development and the
formal integration of environmental concerns into the political agenda of the United Nations in 1992,
the concept of “sustainable tourism”, which causes minimal environmental and cultural interference
in destination areas, has become increasingly popular. Sustainable approaches to leisure travel are
often associated with the more ambiguous term “eco-tourism”, which encompasses a range of
political and business focussed campaigns and activities, including voluntary schemes, offsetting the
carbon produced by air and land travel and “encounter-tourism”, in which the inhabitants of
marginalised and fourth world communities play host to travellers and receive a fee for incorporating
them into the life and activities of their families, towns and villages.

Tourism accelerates development.

POINT
Tourism vastly increases income within a particular state or region, not only through direct spending
by tourists, but also as a result of increases in tax revenue and the growth of local markets for food,
services and luxury goods. Tourism provides a boost to the amount of capital available in an area
that purely local spending cannot achieve, even if assisted by government subsidies or tax breaks for
domestic businesses.

In many developing states, tourism acts as an alternative to cash crops, improving terms of trade,
both within the country’s internal market and with its neighbours. Tourism helps to diversify
economies, reducing reliance on finite or export-led economic activities such as mining and
agricultural production. Both farming and mineral extraction are largely dependent on export
markets and the customs charges and cross-border trade agreements that facilitate them. Tourism is
set apart from this type of economic activity. The processes of production and exchange that define
tourism take place within the host state itself, while the capital that drives these activities originates
outside its borders. Foreign corporate investment- in the form of casinos, hotels and travel ports- is
supplemented by the commerce that it attracts.

Developing states can dictate the extent to which tourists’ spending is taxed, without having to make
the concessions and trade-offs inherent in trading with other national entities. Trading with tourists
also gives states a supply-side advantage when it comes to selling luxury goods. As large business
entities, importers are better able to use bulk purchasing and collective bargaining to acquire
discounts on food stuffs, clothing and jewellery from nations with underdeveloped export economies.
By contrast, trade with tourists allows a larger number of indigenous retailers to demand broadly
higher prices – tourists do not buy in bulk, nor do they bargain collectively.

Revenues from tourism can be used to enhance a developing state’s infrastructure, providing
quantities of capital that may normally be out of reach to central government or to aid providers. Via
taxes levied on hotels, tourists and goods providers, funding can be generated for the construction
of roads, hospitals, power stations and schools. Reinvestment of this type can be used to spur
further diversification within a state’s economy. It can make doing business within the state a more
attractive proposition for foreign investors.

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COUNTERPOINT
Even if the tourist trade is used as a launch pad for an economy seeking diversity and stability, it
must still consent to spending an extended period of time completely dependent on the funds of
tourists and tour operators. This constitutes a significant risk. There is no guarantee that a particular
state or region will remain a popular tourist destination. Further, tourist-led economies are highly
vulnerable to the effects of natural disasters, political and humanitarian disasters (such as wars and
pandemics) and financial fluctuations.

Weather events and earthquakes can rapidly destroy large portions of the infrastructure of a tourist
economy. Hotels collapse, beaches are ruined; air and sea ports become unusable. Even if
infrastructural damage is minimal, aesthetic damage and the humanitarian cost of a natural disaster
can depress tourist numbers in a region for years afterwards.

Pandemic diseases have had an even more marked effect on the industry. Such events, by definition,
affect wide areas, disrupting multiple economies. The bird-flu and swine-flue outbreaks caused a
severe downturn in the tourist trades in China and South America respectively. News reports and
alarmist press coverage contributed to a general concern that the disease was running rampant
throughout these regions. In Mexico the second quarter of 2009 saw tourist arrivals down by 19.2%
year on year.[i] This slump also happened in other South American states despite negligible infection
rates.[ii] Comparable reductions in tourist numbers have happened in south and east Asia following
the 2004 tsunami, the 2002 terrorist bombings in Bali and the 1997 terrorist attacks in Luxor. In
each case, the total number of visitors to a large geographical region dropped as a result of violence
or calamity in one, small area of that region.
Both direct and indirect damage hampers the ability of tourism dependent economies to begin the
process of expansion and diversification. Commercial reconstruction in disaster affected areas tends
to focus on rebuilding hospitality facilities, ensuring that insurance payments or capital saved for an
emergency is invested, once again, in the tourist trade.

[i] ‘Mexico's arrival numbers continue to decline’, eTN Global Travel Industry News, 2 February
2010,http://www.eturbonews.com/14176/mexicos-arrival-numbers-continue-decline

[ii] Smink, Veronica, ‘Swine flu infects Argentine economy’, BBC Mundo, 10 July

2009,http://news.bbc.co.uk/1/hi/8141996.st

Tourism is easier to regulate than manufacturing or resource

extraction.

POINT
Forming close ties with resource extraction firms and manufacturers is a popular development
strategy for many poorer states, but it offers significant disadvantages in comparison to tourism. Not
only does resource extraction, by its very nature, require states to consent to its territory sustaining
pervasive and long-term environmental damage, it also tends to incentivise infrastructure projects
that are only of use to the resource extraction industry. Roads can ferry medical supplies to
communities as easily as they ferry tourists. An oil pipeline will only ever be useful for transporting
oil.

Tourists’ cash can be employed in efforts to reduce the negative externalities generated by leisure
travel. Ecological damage resulting from increased volumes of air and sea traffic and the
construction of hospitality facilities is frequently cited as a reason to limit the growth of the tourism
industry in developing nations.

Dependence on the industry for jobs and investment is seen as reducing the amount of control that
developing states can exercise over potentially exploitative firms – if a firm pulls out in response to
assertive government action- taking jobs and money with it- that government will become
unpopular. However, the more money that a state makes from tourism, the more money it has to
invest in other sectors of its economy. By incentivising the development of alternative forms of
business and employment, a state can feasibly release itself from dependence on the tourist trade.
As profits from tourism grow, a state will become freer to dictate the terms on which tour operators,
hotel owners and tourists themselves do business – tourists’ money will have been used to create
other sources of growth, investment and employment within that economy.

Examples of this process in action can be found in the Bahamas, the Seychelles and South Africa.
The minute Bahamian island of Bimini came under threat from a large scale development plan
proposed, in part, by the Hilton Hotels group. Development of the island would have resulted in the
destruction of mangroves and fish habitats, compromising the livelihood of the island’s residents.
[i] Two decades earlier, the introduction of laws allowing minimally regulated and discrete
incorporation of offshore business entities enabled the Bahamian economy to diversify into the field
of financial services, reducing its dependence on tourism. Revenue from tourist activities had
enabled the Bahamian state to fund the investment in infrastructure, services and expertise that
underlay this process of reform.[ii] As a result of economic diversification, the government of the
Bahamas was able to compel Hilton to restrict its activities. Reliable funding of state institutions and
subsidy and welfare programmes used by the residents of Bimini, reduced demand for jobs supplied
by the hotel group.

[i] TourismConcern, ‘Save Bimini’,http://www.tourismconcern.org.uk/bimini.html

[ii] A Paradise for The Americas,http://www.geographia.com/bahamas/investment/toursm01.htm

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Tourism aids conservation programmes.

POINT
Managed properly, tourism and the conservation of wildlife habitats and areas of archaeological
significance need not be mutually exclusive activities. Indeed, recent trends in ecotourism have
demonstrated that tourists themselves can be co-opted to monitor and survey the environments that
they are visiting. The fees paid by tourists to gain access to heritage locations such as Pompeii, the
valley of kings and Machu Pichu can be funnelled into restoration and preservation schemes on those
sites.

Recommendations by bodies such as UNESCO are aimed at maintaining the accessibility of sites to
the paying public, while ensuring that the revenues tourist interest generates are used to reinforced
locations against the erosion caused by the presence of so many individuals.[i] Similarly, research
projects in Belize have found a willing source of free labour among leisure divers who come to
explore the country’s reefs. Cooperation with tourists allows scientists to teach divers how to
minimise the damage that their presence may cause to reef structures, without restricting tourists
movements or driving away a potential source of commerce.

[i] Pedersen, Arthur, ‘Managing Tourism at World Heritage Sites’, World Heritage manuals,

2002,http://whc.unesco.org/uploads/activities/documents/activity-113-2.pdf

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COUNTERPOINT
The damage that tourists cause is not limited to archaeological sites and local ecosystems. The
presence of tourists can also destabilise and perturb the routines and traditions of an area’s
communities. Within developing states, tourists can cause significant disruption and damage to the
patterns of ordinary life. Religious, artistic, medical and agricultural knowledge is considered to be an
important resource by a wide range of aboriginal and forth world communities. What tourists may
assume to be innocent queries can constitute an attempt to acquire carefully taught skills and
practices, bound closely to a group’s identity and history.

Further, the construction of tourist accommodation- even in wealthy, developed states- is often
driven by concerns over cost and a desire to maximise profit margins. Attempts to remain true to
local architectural vernaculars and to create building that are unobtrusive and aesthetically pleasing
are often talked about by hoteliers, but rarely implemented.

Tour operators obstruct development.

POINT
The tourism industry sells experiences. Travel agents and tour operators all but guarantee that
holidaymakers will encounter particular cultural activities and particular festivals; will see certain
sights and interact with a certain type of people. Tourism, at its most commercial, changes diverse
and dynamic environments and societies into commodities, sold to travellers on the strength of
stereotypes and characterisations. The image of Hawaii projected by travel agents will always
comprise ukuleles, flower garlands, grass skirts and sunshine. Central Australia will always be
associated with romanticised images of a timeless (and largely fictional) aboriginal culture, which
only serve to mask the extent of prejudice and marginalisation within Australian aboriginal
communities. In order to guarantee that the Seychelles will always remain associated with crisp,
uncluttered beeches and palm groves, tour companies have spent increasing amounts of money
buying up and privatising stretches of seashore.

In short, the tour industry demands that popular tour destinations conform to a certain, caricatured
image of themselves. In order to maintain this illusion, to maintain the idea of destination-as-
commodity, tour operators obstruct development and modernisation. Further, the demands of local
tour industries often require the full-time inhabitants of tour destinations to conform to stereotypes
of their own culture.

“Encounters” with local inhabitants and fourth world communities within tourist areas indicate
apparent cooperation between hoteliers and locals, but this could not be further from the truth. In
Tanzania, following the development of luxury Safari lodges on the Ngorongoro crater, the Thomson
and Serena hotel groups have begun to employ members of the Masai community to sell beads or
meet with groups of tourists. Concurrently, however, security guards and local police officers on the
pay rolls of these companies have begun to turn away Masai cattle herds from pasture land
contained within grounds of the resorts. For the Masai, work on hotel premises pays at a subsistence
rate, while cattle and grazing rights constitute the most valuable forms of asset held by their
community. Loss of grazing land has led to a decline in incomes that has left 70% of the Tanzanian
Masai population living below the poverty line.[i]

As a result of images propagated by their own marketing departments and populist, orientalist myths
about “unspoilt”, “uninhabited” tropical locations and timeless, “traditional” peoples living “simpler”
lives, tour operators are incentivised to restrict economic growth and expansion in developing
nations.
[i] Planetsafari, ‘Pastoralism versus tourism in Tanzania’, 5 September
2010,http://www.planetsafaris.com/index.php/highlights/pastoralism_versus_tourism_in_tanzania/

COUNTERPOINT

There is a strong didactic tradition within western tourism, which

emphasises the role of travellers in fostering cultural contact and
exchange. It can be argued that positive, open and value neutral
attitudes to travel still exist, albeit in different forms.

Volunteer schemes operated by organisations such as the VSO are

increasingly being promoted as travel experiences, as well as charitable
endeavours. Such schemes forcibly confront young travellers with the
underdeveloped conditions of the communities that they offer their
services to. They allow unmediated contact with the inhabitants of
developing states.

As noted below, western tourists should not be portrayed as barely

educated dupes, in thrall to the promises made in tour companies’
brochures. While some companies do offer tourists “packaged”
experiences, many more simply facilitate travel to and between places
that their customers find interesting.

Travel of this type confers all of the advantages of trade with tourists on
host economies, while minimising potential disputes over land ownership
and infrastructure.

The dispute surrounding land rights within the Ngorongoro crater has
been driven largely by purchases of land an entertainment facilities by
senior members of various Arabian royal families. This is not
characteristic of the difficulties encountered by popular tourist
destinations generally. It is contended that senior members of elite,
unaccountable and stratified institutions such as the Saudi royal family
will always be likely to use their wealth and influence to evade democratic
controls on land use. Attention should be drawn to the plight of the
Tanzanian Masai, but restriction of other tourist activities in other
territories would be counterproductive.

Tourism does not reduce corruption or promote good governance in

developing states.

POINT
The resolution supposes that the developing states currently trading with tour operators have
functioning polities, systems of financial accountability and state institutions that are capable of
upholding the rule of law. This assumption is misguided. Highly integrated, long term development
strategies of the sort set out by side proposition can only be implemented by an accountable,
effective government; without a strong administrative state, development will be, at best,
uncoordinated and at worst non-existent.

Corruption is likely to reduce the amount of tourist revenue accessible to ordinary people. Rent-
seeking and bribery have led to the subversion and manipulation of land deals between local
authorities and tour companies in Tanzania, Kenya, South Africa and India. It is rare for local
populations in developing countries to be consulted on the terms of land deals, with state authorities
taking a paternalist approach to the terms of any settlement. This then comes full circle as
corruption discourages tourists from visiting a country that they would otherwise be interested in
visiting as they know that there is likely to be a lot of extra charges that they have not budgeted for.
[i]

[i] Tolentino, Francis N., ‘Tourism and corruption index’, Manila Bulletin Publishing Corporation, 11
March 2009,http://www.mb.com.ph/node/198488

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COUNTERPOINT
The opposition appear to be arguing in favour of ensuring that tour operators exercise greater
caution when assessing and review the political and legal practices of destination states. The
opposition side’s points do nothing to disprove that tourism is beneficial for developing states in
general.

It is ridiculous to expect tour operators to attempt to critique and dismantle dictatorial regimes. The
most that can be expected of them is thorough scrutiny of new business partners. Large firms are as
likely to be the targets of corruption as they are to benefit from it. The stakes- and sums of money-
associated with the tourist trade are not as high as in the oil industry. In other words, tour operators
are unlikely to be able to bribe officials and will be reluctant to comply with requests to pay bribes.

Far from entrenching dictatorial or corrupt governments, tourism may help in ousting them. Touring
politically contentious areas may serve to bring home the flaws and depredations of oppressive
regimes to some of the west’s wealthiest and most highly educated citizens.

Restricting and boycotting tourist activity may serve to reform developing states that are slipping
toward extreme forms of authoritarianism and oppression. High profile boycotts of sporting events in
South Africa (the 1985 grand prix, the 1970 on South African participation in international cricket and
its suspension from FIFA in 1961)[i] brought political and racial oppression within the country to a
wider international audience.

[i] Laverty, Alex, ‘Sports Diplomacy and Apartheid South Africa’, The African

File,http://theafricanfile.com/academics/usc/sports-diplomacy-and-apartheid-south-africa/
 Tourism undermines the privacy and autonomy of fourth world
communities.

POINT
Tourists, by their very nature, are temporary and fleeting inhabitant of the areas that they visit.
Consequently, they have little time to familiarise themselves with the norms and values of local
inhabitants. In developed nations this may lead to little more than mild inconvenience and demands
that influxes of leisure travellers be limited and managed by taxation and segregation into tourist
districts (as in Venice).

Within developing communities, however, tourists can cause significant disruption and damage to
the patterns of ordinary life. Religious, artistic, medical and agricultural knowledge is considered to
be an important resource by a wide range of aboriginal and forth world communities. What tourists
may assume to be innocent queries can constitute an attempt to acquire carefully taught skills and
practices, bound closely to a group’s identity and history. More prosaically, tour companies’ tendency
to present communities as part of a managed experience, rather than functioning social spaces in
which people work and make their homes, can lead to invasions of privacy. As a correspondent for
the Guardian noted in 2011, residents of the remote Columbian town of “that some tourists can’t
distinguish between the wildlife and the Amazon’s residents, snapping photos of indigenous families
as if they were another animal.”[i]

[i] Muse, Toby, ‘Amazon town bans tourists’, guardian.co.uk, 25 March

2011,http://www.guardian.co.uk/world/2011/mar/25/indigenous-peoples-amazon-tourism-pressures

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COUNTERPOINT
This argument assumes that tourists are undereducated dupes who are unable to understand that
they should conduct themselves conservatively when visiting foreign communities.

The vast majority of western tourists- especially those inclined to spend large amounts of time and
money locating and visiting fourth world communities- are highly educated. Side opposition that the
problems presented by prying or curious tourists are intractable. In reality, a gentle reminder is
usually all that is required to remind tourists that they are visiting sacred sites or working
communities. Secular or non-Christian tourists in the United Kingdom fall uncomplainingly silent
when visiting Cathedrals and churches. Visitors to America’s war memorials and to the world trade
centre memorial site adopt sombre and reverent tones. There is no reason to believe that rational,
intelligent individuals will not adapt their behaviour to the communities that they visit if asked to do
2 debate:

Tunisia is well known for its numerous tourist attractions and its holiday destinations on its coastline.
In 2010, the tourism industry brought in a revenue of £1.18 billion (3.2 billion dinar) 1. The industry
employed 450,000 people directly and 2 million indirectly 2.  The beach holiday resorts are popular
with Europeans due to the high temperatures, high quality of hotels and, unlike many other Muslim
countries, the availability of alcohol. The remains of the ancient city of Carthage, excavated in the
mid nineteenth century, have attracted those interested in history and classical studies.  The
Saharan desert has also proved to be a popular tourist destination; the set of the fictional planet of
Tatooine from the Star Wars films is a famous attraction.

The leisure industry suffered in 2011 when the Jasmine revolution swept President for life Ben Ali
from power. Tourism decreased from £1.18 billion to £814 million (2.2 billion dinar) in 2011 due to
the perceived instability in the new transitional environment 2. While there has been an increase in
revenue since the revolution, the event has prompted a discussion on whether Tunisia should rely on
their tourism anymore. Post revolution Tunisia has been focussed on using this sector for economic
recovery. Tunisian minister Jamal Gamra has been quoted as saying that ‘the importance of tourism-
and investment in tourism- to the economy cannot be understated’ 3. This debate is focussed on
whether relying upon tourism for future economic growth is viable or not. 

Vulnerable to unrest

POINT
Relying on tourism ensures that the economy is at the mercy of unrest. The violence and break
down in law and order following the Tunisian revolution resulted in a notable decrease in tourists as
tourists were unwilling to visit an area which they view as dangerous. This is demonstrated by the
footfall of tourists which declined from 6,487,000 in 2010 to 4,456,000 in 2011 1. The increase in
attacks by Salafists, a conservative sect of Islam which promotes Sharia law and has attacked tourist
destinations, has dissuaded many potential visitors 2. This has been exacerbated by government
travel information which generally advises against visiting regions during periods of unrest, especially
for Westerners who are perceived as profitable targets for ransom 3. The resultant decrease in
tourists reduces revenue, making tourism an unreliable industry for Tunisia.

1)      African Manager, ‘Tunisia-Tourism: Clear Improvement, but a timid pace!’, data accessed 24
January 2014

2)      Whewell,T. ‘Justice kiosk: Tunisia’s alternative law enforces’, BBC, 30 July 2013

3)      Department of Foreign Affairs and Trade ‘Kidnapping threat worldwide’

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COUNTERPOINT
The long term affects that instability have on industries such as tourism is overstated. Since the
Tunisian revolution, there has been a continued effort by Salafists to attack tourist destinations.
However, tourism has recovered from the low point of 2011. In the first ten months of 2013 Tunisia
attracted 5.5 million tourists, increasing by 5.7% over 2012 1. The continued growth of the sector
demonstrates that the impact which instability has is exaggerated. Besides instability would equally
affect other industries; closing factories, damaging perceptions of an ability to complete orders etc.

Profit margins are too small

POINT
A major problem for Tunisia’s tourism sector is the small profit margin. The industry’s main targets
are European, middle class income visitors on package holidays to sea-side resorts. This has resulted
in a low per-capita spending rate as food, drink and travel are all usually included in sea-side holiday
resorts. Average per-capita spending for tourists in Tunisia amounted to around $385 in 2012 which
is low when compared to Egypt’s $890 and Greece’s $1000 1. This reliance on a low-profit niche in
the tourism industry is a systematic flaw which will not provide the economic growth which the
country needs.

1)      Achy,L. ‘The Tourism Crisis in Tunisia Goes Beyond Security Issues’, Al Monitor, 26 June 2012

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COUNTERPOINT
Even an all inclusive package holiday benefits the economy through buying local products and hiring
staff locally. To get beyond the lower end of the market Tunisia is diversifying its tourism for more
profitable gains through cultural activities which can be charged separately to board and lodging.

Cultural tourism equates to around 37% of worldwide tourism 1 and Tunisia is beginning to further
embrace this aspect. The set of the fictional planet of Tatooine from the Star Wars films is a popular
destination for tourists, although this is now threatened by sand dunes 2. There are other notable
locations which are not threatened however. The ancient city of Carthage, excavated in the mid-
19th century, the world heritage site of Kairouan, and the Saharan desert are prominent destinations
for cultural tourism. The growth of this sub-sector could incur more profitable gains.

Overseas competition

POINT
Tunisia’s tourism industry is at risk from overseas competition. International tourism is a very
competitive market, relying on the industry is therefore an illogical policy. Tunisia is already being
undercut on prices by other countries despite its low fees. Morocco, Spain and Turkey can afford to
charge a lower price for package tours than Tunisia due to better air transportation links 1. Even
before the Jasmine revolution, Tunisia was starting to lose ground to these countries. The ten years
before the removal of Ben Ali saw the number of tourists to Tunisia rise from five to seven million,
whilst Morocco rose from five to nine million2.  Outside of the Mediterranean, Tunisia must compete
with popular tourist destinations such as the Far East, North America and Australasia.

1)      African Manager, ‘Tunisia-Tourism: Clear Improvement, but a timid pace!’, data accessed 24
January 2014

2)      Achy,L. ‘The Tourism Crisis in Tunisia Goes Beyond Security Issues’, Al Monitor, 26 June 2012

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COUNTERPOINT
The majority of modern economic industries have to face overseas competition. Tunisia, like its
North African neighbours, was convinced in the 1990s to emplace neo-liberal reforms in return for
increased lending from the World Bank and other lenders. These reforms, based on the free market
principles, ensured that protectionism ended and domestic industries had to compete against other
international actors. Sectors such as agriculture have become increasingly threatened by overseas
competition since the 1990s1. The disparity between rich and poor created by the reforms has been
listed as one of the major factors for the Jasmine revolution 2.

Tourism causes pollution

POINT
The tourism industry in Tunisia results in notable damage to the environment. Without sustainability,
economic growth will only last in the short term. This is especially pertinent for tourism, where
environmental beauty is of particular importance. From the construction of infrastructure and travel,
to the general waste produced, tourism is problematic in the sense that it can often cause pollution;
which in turn damages the country’s reputation1. Most tourists to the region are from Europe,
although there are an increasing number of Russians which means travel becomes a major source of
pollution. A return journey via plane from London to Tunis creates around 310 kg of CO2 (standard
passenger jets create around 0.17kg of CO2 per km) 2. This is disproportionately damaging compared
to other vehicles, but is the most practical way of reaching Tunisia. Other impacts such as overuse of
water, land degradation and littering can all cause problems as well 3.

1)      United Nations Environment Programme ‘Environmental Impacts’ data accessed 28 January
2014

2)      BBC, ‘Pollution warning on holiday flights’, 1 May 2000

3)      United Nations Environment Programme ‘Tourism’s Three Main Impact Areas’   data accessed
28 January 2014

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COUNTERPOINT
Environmental damage caused by alternative sectors is far worse. Pollution in the industrial sector
has become much more evident since the removal of Ben Ali’s regime. 13,000 tonnes of industrial
pollution are released from the Gulf of Gabes every year, causing high rates of infertility,
miscarriages and deaths1. This is a common theme amongst Tunisia’s industrial areas and is far more
destructive than tourist activities.

Produces Employment

POINT
Tourism is the second largest employer in the country. The industry produces over 400,000 jobs for
Tunisians1. This employment figure is vital to Tunisia which has a large number of students in
higher-education, around 346,000 in 2010, and a consequentially high expectation of employment 2.
Tourism also has a positive effect on other linked industries such as transport, creating jobs in these
sectors as well.  This creation of employment allows more people to sufficiently contribute to society
through taxes and the purchasing of goods through their wages. This, in turn, produces economic
growth and should therefore be encouraged.

1)      Padmore,R. ‘Tunisia tourism industry looks to rebuild’, BBC, 22nd August 2013

2)      Global Edge, ‘Tunisia: Economy’, data accessed 27 January 2014

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COUNTERPOINT
While the sector does provide employment, there is a regional and gender disparity. The number of
women employed by the generally female friendly industry is below the national average. Only
22.5% of those employed in tourism are female, while the national average is 25.6% 1,
demonstrating a clear under-representation.  Regional disparity also exists between coastal and
inland regions. Years of coastal-focused economic growth has resulted in an underdeveloped interior
region with few jobs in the tourism sector2.

Investment

POINT
Tourism should be relied upon for economic growth as it attracts significant foreign investment.
Tourism is the largest form of foreign currency income, with around £728 million being produced by
external visitors in 20121. Attracting Europeans, who have relatively large disposable incomes, has
been a prominent tactic of the industry with favourable results. It is estimated that Europeans
account for 95% of all overnight stays in Tunisia 2. The other major sectors of services and
agriculture do not inspire foreign investment of this magnitude.
1)      Khalifa,A. ‘Foreign direct investment and tourism receipts pick back up in Tunisia’, Global Arab
Network, 7 October 2012

2)  Choyakh,H. ‘Modelling Tourism Demand in Tunisia Using Cointegration and Error Correction
Models’ pg.71

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COUNTERPOINT
The prominence of foreign investment in tourism has decreased since Ben Ali’s fall. Prior to the
Jasmine revolution, financial actors who were close to the ruling regime were encouraged to invest
and given a privileged position. Once the regime was removed, so were the favourable conditions 1.
Reliance on Europe for tourists, and the foreign investment that accompanies them, has also proven
to be unwise. Since the 2008 economic crisis, many potential European tourists have been out of
work, or have reduced disposable incomes at the very least, which has decreased the flow of tourists
and financial investment2.

Other industries are less reliable

POINT
Other sectors, such as agriculture and the industrial sectors, have proven to be unreliable as well.
Tunisia’s agriculture sector is the largest employer in the country and has received significant
investment since the 1980s. Despite this, the sector performed poorly between 1985-2000 and was
costly to the Tunisian economy; ensuring low returns and importation of food to meet domestic
demand1. The industrial sector also demonstrated itself to be vulnerable in the 2008 economic
recession. In addition, the low value of produced goods creates little opportunity for lucrative
profits2. The flaws of these sectors make them unviable as alternatives to tourism. 

1)      Aoun,A. ‘The Performance of Tunisian Agriculture: An Economic Appraisal’ pg.7

2)      Elj,M. ‘Innovation in Tunisia: Empirical Analysis for Industrial Sector’ 2012

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COUNTERPOINT
The potential for growth within other sectors of Tunisia’s economy is far greater than that of
tourism, if invested in properly. The energy sector has been highlighted as a potential avenue for
development, as energy efficiency projects would provide employment and a lower cost of
production in the industrial sector 1.  At present, the industrial sector’s low profits are the product of
high-energy costs due to energy imports. Sustainable energy production in Tunisia through projects
such as solar panels would help increase profit margins.
Research and development in industry and agriculture also has the potential to increase profits and
employment. At present there are few private R&D departments in comparison to those in the public
sector, but it provides another avenue for greater technical efficiency in other areas which could then
create a higher revenue2.

3 debate:

THIS HOUSE WOULD SUBSIDISE

POOR COMMUNITIES
A subsidy is a form of government assistance to a group or economic sector. A direct subsidy usually
means that taxpayers’ money is used to help support an activity, industry or social group which
would not be competitive or viable without financial assistance. Sometimes the subsidy is indirect,
for example if the government sets the price for certain products and/or requires that they must be
bought from certain producers. In either case, the government is intervening economically to
support favoured sectors or communities.

Some of the most common types of subsidies are: direct subsidies (providing money), indirect
subsidies (any subsidy that does not involve a direct transfer), tax subsidies (lowering tax bills),
production subsidies (payment per unit of output), infrastructure subsidies (money build
infrastructure), trade protection (limiting the amount of competition through measures such as
quotas, tariffs etc), export subsidies (often to compensate for others trade protection), procurement
subsidies (favoritism in procurement) and consumption subsidies (to lower the cost to consumers).
When it comes to dealing with poor communities, the main types of subsidies are direct, indirect, tax
and infrastructure subsidies.

Poor communities exist in every country all over the world, from those living in the favelas of Brazil,
the slums of India, the suburbs of Paris or Bucharest, the inner-cities of Washington DC, Baltimore or
New York, rural areas, or refugee camps, and while they are all different, with different concerns,
they all have poverty in common. Poor communities should be thought of as being those who are
poor in comparison to the average in that country. While subsidies are often thought of as state
subsidies, one needs to consider whether different forms of international aid should not be
considered subsidies as well. The debate over subsidies thus varies depending on the community
that it seeks to address and the extent to which they manage to achieve their intended goals. While
subsidies have generally proven to have a relatively positive short-term effect, in the long-run their
effects have sometimes been judged insignificant or even negative. Common subsidies used for poor
communities are direct, indirect, tax and infrastructure subsidies.   Alternatives to subsidies include
private investments, economic and social reforms, and different forms of social integration schemes
focusing mainly on housing or education schemes.

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 Subsidies are the most efficient way for a state to redistribute wealth
within its borders.

POINT
Poor communities, often concentrated in rural areas or around large cities, carry a large risk for
social instability, whether through epidemic illnesses, crime, drug abuse or political and social
revolts. Even the most developed countries find it difficult to deal with these communities without
paying proper attention to their development. The suburbs of Paris have recently been in the
attention of the press for the violent riots led mainly by poor, unemployed, young men from
immigrant families who felt abandoned by their own government (BBC News, ‘Timeline: French
Riots’, 2005). France is by no means the only country dealing with such problems, and in order to
avoid such high-risk behaviour, the state should be encouraged to create new subsidy schemes that
address these communities in particular. For example, employment could be subsidised by paying
companies to create new jobs in such deprived areas.

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COUNTERPOINT
While we do not concede that subsidies are the most efficient means of redistributing wealth even if
they are then is this redistribution something we want to see? Poor communities should instead be
shown how to pull themselves up rather than having subsidies spoon fed to them. Giving those in
poor communities the education and means to better themselves is a much more effective long term
solution. Redistribution of wealth through subsidies is simply discouraging the poor from working
hard towards the betterment of their lives both because the state is already giving them enough to
survive and because they know the state will begin taking what they have earned away if they do
manage to work their way up.

Poor communities create criminality

POINT
The longer suburbs sectioned off for the economically vulnerable are in existence, the more likely
they will turn into real slums, creating long lasting problems such as the ones currently experienced
in the cities of Latin America. Latin America contains 13 of the 20 countries with the highest
intentional homicide rate (Global Burden of Armed Violence, Geneva Declaration on Armed Violence
and Development, 2008). Brazil is one of the most criminalized countries of the world with roughly
23.8 homicides per 100,000 residents, muggings, robberies,kidnappings and gang violence (The
Economist, ‘No End of Violence’, 2007). These areas have become a haven for criminals and drug
lords, who both have a clear interest in keeping these communities poor so that they can continue to
exert their influence on them and use them as a hiding and recruiting ground for illegal activities.
Subsidies would help people escape poverty and as a result break the cycle of crime.

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COUNTERPOINT
The existence of slums and favelas and their increasing criminality in Latin America cannot be
explained by the lack of social subsidies. In fact, quite the opposite is the case: the leftward turn in
Latin America with an increase in state subsidies that promised to help poor communities has yet to
ease the problems of criminality. Subsidies not only do not help or provide only weak temporary
relief, but they are also used to manipulate political opinions and influence the poor particularly
around election time. The successful presidential campaigns of Lula da Silva in Brazil, and Hugo
Chavez in Venezuela have been run precisely on promises to the poor that for the most part were
left unfulfilled. Because government subsidies are not efficient, the large problem of social unrest is
not avoided.

Furthermore the poor communities in the suburbs of Paris were already receiving state subsidies for
housing and education, but this did not keep them from rioting. Therefore subsidies do not
guarantee a reduction in crime.

Subsidies create a sense of social equality

POINT
Subsidies help create the equality and non-discrimination that is essential in the new multi-cultural
states of today. With more and more people moving across the globe and the clear realization of
inequalities in lifestyles, creating this sense of equality is essential. If we are serious about our
commitment to universal human rights, including the right to equal survival chances and
opportunities, then we need to consider using subsidies to promote these values. Many of the
poorest areas have a disproportionate number of immigrants or ethnic minorities, Seine-Saint-Denis
for example has the largest percentage of immigrants in France(Wikipedia, ‘Demographics of
France’) and is one of the poorest department’s(Astier, ‘French ghettos mobilise for election’, 2007)
so these communities are where the state needs to show that it is committed to non-discrimination
by helping with subsidies. Without such a commitment to equality, problems like the unrest in the
suburbs of Paris, the reaction to the flooding of New Orleans, crimes in the favelas of Rio de Janeiro
and South Africa will simply become uncontrollable.

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COUNTERPOINT
This kind of idealism and desire to make the world an equal place has already gotten us into quite a
bit of trouble, ruining a large part of the world under the rule of communism. The idea that we could
solve all the world’s problems through redistribution of wealth through government subsidies is not
only naïve but also dangerous. Being committed to new human rights and wanting to offer help to
the poor is not the same thing as imposing subsidies. Indeed, in many countries subsidies for
particular activities end up favouring well-off landowners and the urban middle classes. Examples
include agricultural subsidies in the EU (Financial Programming and Budget, 2011) and the USA,
subsidies for power and water in rural India (Press Trust of India, ‘World Bank asks India to cut
‘unproductive’ farm subsidy’, 2007), and subsidies for water or Higher Education in much of Latin
America. In each case the well-off benefit disproportionately, while the poor end up paying via the
tax system and through reduced economic growth (Farmgate: the developmental impact of
agricultural subsidies, ukfg.org.uk). It would be much better to price these activities at commercial
levels and to develop economic policies aimed at growth and job creation.

Substandard living conditions have a broad environmental

impact

POINT
Unless we do something about it we risk seeing our planet destroyed. The destruction of
forests for coal or agricultural land, the destruction of farmland through illegal buildings
lacking proper infrastructure, water pollution, deserting arable land in the countryside in
order to move to the city are all serious environmental problems and their effects are
long lasting (Hande, ‘Powering our way out of poverty’, 2009). Subsidies need to be
used to provide incentives for people to act in ways which will preserve the
environment for the benefit of all (Hande, ‘Powering our way out of poverty’, 2009).

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COUNTERPOINT
Rich communities have a disastrous effect on the environment as well. The question of whether
development is possible without manipulating nature and the environment is again entirely separate
from the question of subsidies. Ultimately, the problem is one of resources and the best distribution
and management of those resources, particularly natural resources. Getting people to understand
that forests, water and land are essential resources that need to be preserved is what should be
done (Hande, ‘Powering our way out of poverty’, 2009). Subsidies have in fact often created more
environmental problems by investing in poorly built infrastructure and housing, and by encouraging
people to stay in areas that could otherwise not support them.

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Government supervised redistribution of wealth is inefficient

POINT
Given that in general state taxation and redistribution systems have been under fire for being
inefficient, it is doubtful that subsidies, as a particular form of tax redistribution would be more
efficient. Not only is a bureaucratic mechanism for creating and distributing subsidies a nightmare,
but the effects of such subsidies have often been questioned as well. Fuels subsidies to keep prices
down for example might help the poor to heat their homes but they also encourage wasting fuel and
not getting the most efficient heating systems so more fuel is used resulting in more need for
subsidies (Jakarta Globe, ‘Subsidies a Costly, Inefficient Crutch’, 2010).

The needs of poor communities, such as the immigrant communities in the suburbs of Paris, as often
much larger than the state can provide, and patch solutions are often no solution at all. Subsidies
will not be able to solve the problems of unemployment and the concentration of the poor and
immigrants in particular areas. Other solutions are required for such problems and oftentimes, the
involvement of the private sector has proven to be more efficient. Encouraging a more competitive,
dynamic economy by reducing the burdens of taxation and regulation is the best way to provide a
route out of poverty, especially if improved educational provision and meritocratic hiring policies are
also implemented.

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COUNTERPOINT
Rather than criticising the inefficiencies of current subsides we should put efforts into improving
subsidies so they work efficiently. This is clearly a very complex issue and would involve taking each
poor community as individual with different needs. One specific example of where this has been
efficient is subsidising housing in poor communities, such as the Gautreaux program in Chicago. This
project involved the CHA (Chicago Housing Authority) handing out 7,500 housing vouchers out to
residents of deprived communities (thus providing a housing subsidy to those residents). The project
was widely considered a success and was supported by the government until its completion in 1998.
Longitudinal studies suggested that participants where ‘pleased to be living in safer neighbourhoods
with quality schools and greater job opportunities’, which all occurred as a result of the Gautreaux
project (Fisher, Gautreaux Assisted Housing Program, 2005). This project shows that subsidies can
be successful if we look and attend to at the particular needs of each poor communities.

The risk of creating dependence

POINT
Always looking at the state for solutions makes these communities dependent on the government in
a world in which the state will continue to gradually lose its power. On an individual level increases
in people taking disability benefits over the long term are a good example of dependency, in
Australia for example between 1972 and 2004 those receiving the Disability Support Pension rose
fivefold well above the increase in the disabled population(Saunders, ‘Disability Poverty and Living
Standards’, 2005, p.2). Putting more pressure on increasingly weaker states is probably not the best
idea. While strong social-democratic states such as France might be able to handle it, developing
countries or unstable states will never be able to withstand these pressures. We need to look for
solutions elsewhere, and we need to accept the fact that there might not be one solution for all.
Each community, facing different kinds of problems, will have to be addressed differently. The new
rise in the field of corporate social responsibility signifies that corporations are looking to take over
some of the responsibilities of the state.

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COUNTERPOINT
While getting the private sector involved might indeed be a more effective solution, the reality is that
many of these poor communities are groups of outsiders. They often discriminated against by the
rest of the population, including decision makers from private business. For example in France
employers databases often have the abbreviation BBR or NBBR to indicate if someone is white.(SOS
Racisme, ‘Discrimination, Présentation’) These communities often find themselves abandoned, and at
the mercy of the state. Despite its inefficiencies, the state remains the main organisation capable to
reaching out to all different communities, of gathering funds and redistributing them, and of making
new investment opportunities in places where the free market would not otherwise have created
them. At the risk of some inefficiency, this problem does require solvency, and while ideally things
might run otherwise, this is the closest solution to the problem at hand. Governments have also
been creative with their subsidies schemes, often getting the private sector involved by providing
them with incentives such as tax breaks.

Social change

POINT
As modern societies are clearly moving away from an agricultural economy to an
industrial and post-industrial economy, new demographic challenge arise with high
concentrations of people in urban areas where jobs are available. From 2008 more than
50% of the world’s population lives in cities meaning that poverty is now growing
faster in urban than rural areas (UNFPA, ‘Urbanization: A Majority in Cities’, 2007).
The solution here is not subsidies, but rather the spreading of jobs across the whole
economy, including rural areas, and the re-education of those who need to fill these
jobs. These are structural problems that every society will need to address, regardless of
how many subsidies the state is providing or not.

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COUNTERPOINT
The change from an agricultural or rural economy to an urban one does not preclude subsidies as  a
way of lifting people out of poverty  it simply means that subsidies have to be more targeted. As
most cities continue to grow and attract more and more people from rural areas, the state needs to
find a way to address the problem of urban migration, which is closely linked to the formation of
poor communities particularly around cities. Illegal immigration also contributes tremendously to this
problem, particularly in areas such as the Mexico-California border. Targeted subsidies can slow the
pace of migration, by giving those in the countryside and in poorer countries a better standard of
living where they already live.

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 Communities should be engineered to be self sufficient

POINT
As the introduction and opposition argument 1 explain, subsidising poor communities involves taking
money away from wealthy communities. It is unfair to make the wealthy members of a community
pay for the benefit of the poorer members, when the poorer members should be putting in the effort
to raise and support their own communities. Those who are wealthy have earned their wealth by
working hard. If they wish to be subsidizing poor communities they can give to charities that work in
poorer areas.

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COUNTERPOINT
Telling poor communities they should help themselves is not the answer; they already want to help
themselves. Poverty often occurs in a cycle, meaning that for many it is inescapable. Education in
poor areas is often worse, leading to people being less qualified for higher paying jobs, stuck in
badly paid work, therefore living in undesirable housing that often has inadequate education, and
thus the cycle continues for their children. The only way for people to escape this cycle is with
government subsidies. Some would argue that forcing people to live in these conditions while others
live in wealth is more immoral than asking the wealthy to help the poor.

4) A subsidy is a monetary payment made by a government to the producers of a particular type of

commodity or product. Payments of this type are usually ex gratia – producers are not required to
provide anything to the government in return. Subsidies are usually provided to industries or
businesses in order to ensure that otherwise unprofitable or costly economic activities continue to be
performed; alternatively, subsidy payments may be used in order to prevent the sale price of
products or commodities from rising above a certain level. Subsidies applied to agricultural
commodities by a national government are frequently intended to protect its citizens from sudden
changes in living standards – the affordability of staple foods, prepared foods and luxury goods,
relative to average incomes.

For much of the last fifty years, most western states have generously subsidised their own farming
industries, with a notable step up in spending in the late 1990s. The USA was the first to create wide
scale agricultural subsidy packages. The 1922 Grain Futures Act was intended to protect farmers
from sudden falls in the market price of grain by using a subsidy mechanism to guarantee that the
sale of a crop would generate a minimum level of income, irrespective of its sale price.[i]

By 2007, the total value of farm subsidies provided by the US government had grown to $25 billion.
[ii] In addition there are indirect subsidies, for example every year since 2000 there has been a
disaster aid bill that subsided farms insurance by $40 billion to 2007.[iii] Indeed when Federal
funding for a range of indirect support mechanisms for the farming industry, such as tariff protection
and competition controls are added in the total subsidies could be as much as $180billion.[iv] By
2006, the European Union’s system of unified agricultural subsidies, the Common Agricultural Policy,
was distributing almost €49.8 billion to farmers across the continent.[v]

In both the EU and the US, the growing cost of subsidies has produced intense criticism, both from
tax payers and from sections of the farming community. Although their delivery methods differ, both
the European and American subsidy schemes tend to offer the most lucrative support packages to
their largest agribusinesses. Smaller, family run farms complain that subsidies serve only to give
large farms an unjust competitive advantage in domestic markets.[vi] Subsidies have also been
blamed for overproduction. Subsidy payments have previously enabled farmers to make profits on
their crops far in excess of market price. Attempts to dispose of unsalable produce have led to
immense waste. Farm lobbying movements maintain that without subsidies, US and EU agriculture
would face an uncertain future, with negative social and economic effects on westerns states as a
whole.

Internationally, farm subsidy programmes have been subject to attack by anti-poverty campaigners
who allege that they suppress the incomes of farmers and obstruct economic development in many
of the world’s poorest states.[vii]  Subsidies and other forms of farming support have become a
sticking point in at the (currently stalled) Doha round of World Trade Organisation –talks, with
developing states rejecting US and EU offers to reduce direct subsidies as insufficient and deceptive.

Free trade and aid distribution

POINT
Government intervention in the marketplace contradicts the values of free-trade advocated by
western liberal democracies. The complexities of agricultural subsidies, price supports, regulations
and protective tariffs means that farming in the US and the EU now has the air of a command
economy. Coupled with highly liberal international trade markets and the relative ease of shipping
foodstuffs around the world, subsidy schemes are increasingly subject to manipulation by farmers
seeking to maximise the size of their support payments without engaging in additional productive
activity. For example, “set-aside”[i] payments have been used by both European and American
administrations to encourage farmers to leave a proportion of their fields fallow, in order to maintain
the productivity and fertility of farming soil. However, many farmers have claimed set-aside
payments by designating fertile land that is difficult or impossible cultivate (land on steep inclines,
land obstructed by streams) as fallow fields.

By promoting behaviour of this type, however inadvertently, the CAP and America’s Farm bills
effectively reduce the credibility and good will that the west can command when engaged in trade
talks with developing states. Policy makers may attempt to frame the debate over subsidies in terms
of food supply security. However, the de facto protectionism of current subsidies regimes does
nothing more than trade diplomatic credibility and geo political security for stable domestic food
prices. Other countries that the developed world is engaging in protectionism and so are unwilling to
compromise in areas where the developed world wants changes – as a result the Doha trade round
is going nowhere, the developed world has to concede and abolish these subsidies. 

[i] ‘Set-Aside’, UK Agriculture, http://www.ukagriculture.com/crops/setaside.cfm

 
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COUNTERPOINT
A subsidised farming industry is not protectionism rather it helps to create the most stable farming
infrastructure possible. Agricultural commodities are subject to significant swings in price, due
unpredictable changes in the weather, in pest activity and market volatility. Without government
support to smooth the impact of market fluctuations, huge numbers of American farmers would be
pushed into bankruptcy and forced off of their land and into penury. This would have knock on
effects on economies throughout Europe and the United States, and would devastate many small
rural communities.

Even if side proposition only eliminated subsidies paid to large agribusinesses, rather than farms with
substantial family or community involvement, food prices within developed states would still be
significantly disrupted. This would have a material impact upon the standard of living of all but the
wealthiest individuals. Moreover, ending subsidy schemes would also reduce the volume of food
exports currently being sent to developing states. While side proposition may attempt to argue that
this will benefit the domestic economies of developing nations, they fail to recognise that the needs
and demands of developing populations will quickly outgrow the types of products available on
domestic markets. Milk powder is a necessity in any state with a high birth rate – so how will a state
with a minimal dairy industry and almost no livestock reserves satisfy this source of demand? States
including Equatorial Guinea, Micronesia and Sao Tome would be confronted with exactly this type of
problem.

Subsidies exacerbate poverty

POINT
Subsidies cause poverty, both domestically and internationally. By maintaining the price of certain
goods at a low level that does not reflect their market price, subsidies prevent farmers in the
developing world from selling comparable goods to international customers for a comparable price.
Despite higher labor costs wealthy western farmers are able to undercut their poorer counterparts in
the developing world, with any shortfall in their incomes accounted for by their government subsidy.

Not only do subsidies harm the competitiveness of developing states’ export economies, they can
also affect their domestic markets. Large food export businesses based in developed states are able
to sell western produce to the citizens of underdeveloped states for less than its production cost.
Once again, the shortfall is accounted for by subsidy payments. For examples, onion growers in
Jamaica once lived off profits generated by their domestic market. However, once growers based in
the United State gained the right to sell their produce in Jamaica, their heavily subsidised onions
quickly put local producers out of business.[i]

A further example of the trend illustrated above is provided by the international cotton trade.
Growing cotton in West Africa is a much cheaper and much more efficient activity than growing it in
the USA. It should be possible for growers in states such as Mali to export their cotton profitably,
benefiting themselves, their states’ economies and consumers in the developed world. However,
American subsidies incentivise over-production in the United States, which encourages US cotton
farmers to sell their fibre overseas at massive discounts. This case study illuminates another of the
negative externalities that exists in the status quo. Cotton is a hardy commodity, able to grow in
areas that would normally be unsuitable for producing other cash crops. As the Guardian notes, an
economy built on cotton cannot easily adapt to growing other forms of produce; survival and
subsistence in Mali are entirely dependent on Malian farmers’ ability to sell fibre.[ii]

If farmers in the developing world cannot be allowed by the developed countries to be competitive
on even the most basic products such as agriculture where they have an advantage how can we
expect to eliminate poverty? 

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COUNTERPOINT
Neither the US nor the EU can be held responsible for international externalities caused by subsidy
policies. If the US were to stop funding its farming industry, other developed nations would continue
to engage in practices that would distort the international market. Indeed, the USA’s share of world
food exports has been either flat or falling for almost 25 years, so it would be disproportionate to
claim that the US is the primary cause of declining farm revenues in the developing world.

The European Union only has the ability to prevent its members applying subsidies to products that
they trade to other EU member states. If EU subsidies were abolished, individual member states
would still be within their rights to impose subsidies on goods exported to foreign markets.

Moreover, other developed states that are not affiliated with the US and the EU also spend large
amounts of money on subsidy policies. Farmers in both Norway and Switzerland receive
approximately 70% or their revenue from government payments. Similarly Japan protects its farming
community with an array of national subsidies and tariffs.

Finally, it should be pointed out that the international market for cotton is not analogous or
comparable to the international market for staple foods. It is possible to make a case for eliminating
subsidised cotton, while retaining the subsidy structure used to support the prices of grain, rice and
other consumables. If side proposition truly wish to create an environment in which poorer states’
agribusinesses can compete on equal terms with their wealthier counterparts, they should be
prepared to make a nuanced distinction between the need to eliminate subsidies in some areas, and
the importance of retaining them in others.

Subsidies incentivise environmentally harmful farming practices

POINT
Subsidies can contribute significantly to longer term ecological and environmental damage. By
rendering the export of food so profitable, subsidies increase the use of air freight and rapid road
haulage, increasing the emissions cost of trading produce.
Subsidies also cause the loss of land management and farming skills amongst the working population
of developing states. As small farmers and more affluent land owners are priced out of domestic
markets by imports from the developed world, they will increasingly turn to alternative methods of
making money. Farming skills will not be passed on to other family members or to agricultural
workers. Unemployed agricultural workers will be affected by deskilling. In addition, they may
migrate away from their home states in search of jobs. Otherwise useful, fertile land may be left
fallow, becoming damaged and eroded due to neglect.

Subsidies encourage monoculture farming – the large scale production of specialised produce.
Subsidies instituted by the US government that were intended to encourage the production of maize
for use in biofuels led many farmers to give over excessive acreage to the crop. Monoculture crops
can expose farmer to economic risks that subsidies cannot compensate for. If a particularly virulent
strain of disease attacks a monoculture crop it is likely to spread quickly, assisted by the large, un-
partitioned fields and storage areas that are characteristic of the practice. This, in turn, will lead to
widespread crop failure, incurring significant losses for the farmers involved. Moreover, the need to
protect large amounts of uniformly vulnerable biomass from pests and disease causes farmers to
employ large quantities of pesticides, insecticides and herbicides, all of which can damage soil
quality, pollute water sources and harm local biodiversity.[i]

Finally, subsidies also encourage intensive agricultural production in unsuitable or unstable areas.
Examples of this practice include the cultivation of fruit and vegetable crops in naturally arid areas of
south California. Successful cultivation of this produce has necessitated the construction of extensive
and disruptive irrigation networks. The burden that irrigation has placed on the Sacramento-san
Joaquin delta, west of San Francisco has become so great that the salinity of delta water is now
slowly increasing, due to tidal intrusion of seawater. This change in the salt content of irrigation
water threatens to pollute the same soil that the irrigation system feeds.[ii]

[i] Price, Aaron E., ‘Corn Monoculture no friend of Biodiversity’, Ethanol: Salvation or Damnation?,

University of Nebraska-Lincoln College of Journalism and Mass Communications DEEP Report,
2008,http://digitalcommons.unl.edu/journalismstudent/16/

[ii] Ikehara, Marti E., and Ingebritsen, S.E., ‘Sacramento-San Joaquin Delta The sinking heart of the
state’, U.S. Geological Survey,http://pubs.usgs.gov/circ/circ1182/pdf/11Delta.pdf

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COUNTERPOINT
Food is a unique good, in the sense that it is essential for sustaining life, and plays a significant role
in ensuring social stability and supporting the health and development of children. Governments
should not gamble on an industry that supplies a commodity of such great importance by exposing
farmers to the fluctuations and speculative impulses of the food markets. Nor should farmers and
their crops be exposed the effects of sudden environmental change without some form of defence
mechanism or insurance scheme being put in place.
Realpolitik dictates that, no matter how interdependent and interlinked the world becomes, it will
always be necessary for the state to secure a reliable food supply for its population. The importance
of retaining some form of independence from other commodity suppliers has been heightened by the
geopolitical debates surrounding the war on terror.

It would be perverse to expect developed states to recreate the economic and political conditions
that led to dependency on mineral oil within their domestic markets for grain, milk and sugar.

Political unrest has affected stability in Africa’s major food producing regions (Zimbabwe, Cote
d’ivoire); climactic disasters in Russia (one of the world’s largest grain exporters) have caused bread
prices to rise across the world. All of these occurrences could adversely affect food prices and reduce
standards of living within supposedly safe, secure and wealthy states who therefore need to be able
to produce enough food to cover most of their needs rather than relying on imports.

There are limits to the extent to which cash and monetary wealth can be used to influence
environmental and ecological conditions in the world at large. The destruction of agricultural land or
harmful agricultural practices can take decades to correct. Under these circumstances, domestic food
subsidies are entirely necessary form of government spending. 

Subsidies foster growth in developing economies

POINT
American and European food subsidies actually act to support growth and productivity in the
developing world. The kinds of foodstuffs typically exported to poorer states are staples like wheat,
maize, milk products and sugar. Subsidy and food aid schemes ensure that basic goods are available
to consumers in poorer states at prices lower than a domestic market could comfortably sustain.[i]

It is arguable that the most efficient development solution for many of the world’s poorest states
does not include investing in capital intensive commodity crops. Spending on fertilisers, land and
equipment is essential for farmers seeking to grow sufficient quantities of corn or soy to compete in
global and local market places. The scale of capital investment required by maize and wheat is so
high that domestic food prices within many African and Asian states would jump rapidly if
wholesalers, manufacturers and families were no longer able to acquire these commodities via
subsidised imports from developed countries.

Agricultural businesses in the developing world are more likely to profit from exports of labour-
intensive produce. Palm oil, prepared vegetables, spices, cocoa and cut flowers are crops that can
only be produced in a narrow range of climates and environments. The geographical locations of the
largest palm oil and cocoa producers give them a competitive advantage over more prosperous
northerly states. Similarly, the higher price commanded by commodities that are difficult to produce
in other areas of the world means that farmers’ profit margins will be wider once they have
accounted for transportation costs. Compare this situation with the profit made on processed
potatoes in the US and the UK- often fractions of a penny or a cent- and the advantages of exporting
value-added goods become obvious.[ii] 

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COUNTERPOINT
As observed by the analyst Daniel Davies, not all primary commodity producers are impoverished
states, and not all of these states participate in trade agreements or customs unions as lucrative as
those operated by the EU.[i]

States such as Brazil and Malaysia have already made significant progress towards achieving their
development goals. Their governments do not find it difficult to guarantee that families have enough
to eat; they are beginning to interact with international markets on their own terms, identifying and
pursuing trade opportunities based on aspirational and normative ideas, rather than the imperative
of achieving a minimal standard of economic, infrastructural and social development. Such states
occupy a precarious position. They may wish to reduce their dependence on development aid, may
wish to take certain state and social services out of the hands of NGOs or intergovernmental
agencies. However, without the ability to compete against other states on fair terms, these states
may remain continuously dependent on foreign support.

To put it simply, sometimes the best form of development aid that one state can offer another is an
acknowledgement that it should be allowed to participate in the business of statehood as an equal.
Although cheap foreign food may facilitate a basic level of development, developing states must
eventually be granted the freedom to engage with the world’s markets on their own terms.

The hazards inherent in a state of perpetual underdevelopment, and the dearth of skills and political
capital that it causes, are much greater, on balance, than the minimal risk to food security associated
with an increase in the export of foodstuffs from the developing world. 

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Subsidy reform is already taking place in many areas of the world

POINT
There is much about the proposition side case that smacks of orientalism. The quality of life of
individuals in many of the world’s poorest states has been immeasurably improved by the ready
availability of cheap western food imports.[i] The ability of western farmers to provide food at lower
prices than their competitors in the developing world’s domestic market is actually driving growth
and productivity among poor agricultural producers.

Subsidies’ contribution to poor agricultural production in the developing world is marginal. Indeed,
many of the poorest states trade with European Countries on terms as favourable as those set out in
the treaties of the European Union. Under the Everything But Arms scheme, underdeveloped states
can export goods to EU states without being required to pay tariffs or customs charges.[ii]Further, as
noted below, changes to the CAP have now create a European subsidy regime that carefully controls
production rates, punishes over production and ensures  surpluses are not “dumped” onto the export
market. Under a range of partnership agreements, the EU now sources 71% of its agricultural
imports from developing states.[iii]
Increasing developing state’s dependence on their domestic agricultural markets is likely to increase
food prices within their borders. The relative level of sophistication of developing states’ transport
infrastructure and agricultural technologies is much lower than in Europe. Consequently, the cost of
producing a commodity- grain, say- within a developing nation, and then transporting it to
consumers will be much higher. Poorly maintained roads will increase journey times and will cause a
larger proportion of stock to spoil before it can be sold. Credit and stock systems will be slow and
undeveloped, impacting on the efficiency of doing business with local farmers.

All of the factors listed above also affect export trade. While international travel may be a relatively
fast and efficient affair, the process of moving bulky agricultural goods to ports and airports, let
alone soliciting and processing orders from European importers, will prove extremely difficult for
farmers in the developing world.[iv] The diversification of the food export industry envisioned by side
proposition simply will not happen. Underfunding and underdevelopment of infrastructure in poorer
states will not allow it. Moreover, the increased cost of transporting goods across rural areas,
particularly as many of the poorest countries are cursed with being landlocked, in the subcontinent
or Africa places a premium on food before it even reaches the communities that will consume it.
[v] At the very least, the controlled reduction of food prices by subsidies ensures that this premium
is affordable.

Attempts by side proposition to imply that rural communities suffer disproportionately under the
current subsidies scheme are rendered nonsensical by the observation that not all agricultural goods
are staple foods. Growers of tobacco or coffee and the other forms of labour intensive export goods
mentioned above are already engaged in a trade that has a great deal of developmental potential.
However, requiring them to pay higher prices for domestically produced food might undermine the
profits farmers make on flowers or spices. Moreover very few rural populations are entirely self-
sufficient, and will always require access to external supplies of staple products.[vi]

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COUNTERPOINT
Farm subsidies represent little more than a highly inefficient foreign aid scheme, funded wealthy
states’ tax payers.

In essence, subsidies do little more than use tax revenue to reduce the price and control the
production of certain agricultural goods. These goods, as has been discussed above, are then sold to
the developing world at prices lower than poor states’ domestic markets can match. This is,
effectively, equivalent to making payments to developing states – individuals in developing states
spend less money on food under the status quo, so have more money to spend on other things.[i]

This situation is problematic, firstly because it obstructs the development of developing states’
agricultural sectors. A rational system of aid giving should not create dependence or inhibit growth.
Secondly, “funds” provided to developing states via subsidy schemes are also shared with wealthy
first-world farmers an agribusinesses. Subsidies remain a considerable source of profit for the
agricultural sector. It seems irrational to pay farmers to improve the monetary and fiscal
environment in developing states, rather than allowing aid-giving states to provide money directly to
underdeveloped areas. Under the status quo, first world agribusinesses do little more than add to
the transaction costs of sending aid to developing economies.
If the quality of roads and rail lines in a state is so poor that food deliveries are delayed, why not pay
for upgrades to transport infrastructure? If both the educational institutions and the service sector of
a state are underdeveloped, invest in a state’s education system and encourage partnerships with
ship brokers and accountancy firms?

Subsidising food in order to offset the worst effects of deprivation, marginalisation, environmental
damage and retrograde or corrupt government will do nothing more than entrench the poverty that
afflicts many developing nations. It will prevent states’ agricultural sectors growing or functioning
competitively and it will continue to foster the dependence on western largess that contemporary
development theory attempts to avoid.

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Subsidy reform of the type proposed will undermine agricultural

businesses in the developing world

POINT
Even adamant anti subsidy advocates agree that abolishing current financial assistance measures will
do more harm than good. Reform of current subsidy policies would achieve more than their complete
elimination. Many family farms in the US and the EU are running on extremely slim profit margins,
which are squeezed by supermarkets,[i] and eliminating their subsidy payments would devastate
their incomes, forcing the sale of land and the sale or slaughter of livestock.

The lacunae and negligent administrative conduct that anti-subsidy campaigners claim is
characteristic of the policy’s overall inefficiency are simply design flaws that appropriate legislation
can correct. Both the Rural America Preservation Act[ii] and the 2002 Farm Bill[iii] offer the
opportunity to remove many of these negative traits from America’s farm subsidy regime. They will
cap the amount given to large, heavily capitalised agricultural corporations. These policies will also
assist in encouraging the conservation and husbandry of natural resources, and ensuring the health
of existing farm soil. Policy makers already recognise the perversity of paying owners of farmland
large sums simply to keep the land clear and ready for agricultural use, without also monitoring

Similarly, in Europe, reforms to the Common Agricultural Policy following the ratification of the
Treaty of Nice in 2003 now require farmers to engage in sustainable agricultural practices. Penalties
reduce the size of the subsidy available to farmers who disregard the limits imposed by the Treaty.
The EU is also due to begin applying a policy of intervention pricing. Intervention pricing represents
a form of dynamic subsidy. If commodity prices fall below a certain level, the EU will buy up produce
in order to raise its price. This method allows the EU to reduce standard subsidy payments, which
might incentivise overproduction during periods of economic stability, while allowing it to protect
farmer’s incomes if market prices fall.
COUNTERPOINT
Reform will never effectively turn the tables in subsidy distribution. Large-scale agribusinesses have
the power to manipulate policy through lobbying and directed campaign contributions in order to
ensure they can maintain their comfortable government issued subsidies.

Small family farms cannot compete with rich agro-corporations, who can spend millions of dollars
lobbying to stop legislation that would reform current problematic subsidy expenditures. This is
exactly why the implementation of bills similar to the 2002 Farm Bill (alongside others supported by
subsidy reform activists such as Senators Chuck Grassley and Byron Dorgan) has been slow and
piecemeal. As any system aimed at channelling federal money to agriculture will be open to abuses
by individuals or organisations with sufficient resources to identify the lacunae in subsidy systems, it
would be far better to end subsidies completely, supporting poorer farming families instead through
welfare benefits and tax credits.

Further, although the EU has made headway in reforming its approach to farm subsidies, it has done
nothing to address other forms of subsidy. Payments made to cotton producers within the EU have
survived reform programmes initiated in 1999, 2003 and 2007 more or less intact.[i] Moreover, the
EU cotton subsidy is one of a small number of EU agricultural payments that remains linked to
production – raising the same issues relating to over-production and export market distortion
discussed above.