State-led tourism development, tourism zoning and customary land rights

As discussed in Chapter 2, one of the dominant discourses employed to promote tourism ventures is that of tourism as an important driver of economic development through the provision of jobs and as a foreign exchange earner for the host country. Therefore, many national governments in the Global South have prioritised the tourism sector as an engine of economic growth and developed top-down tourism strategies, such as national tourism plans, state-developed infrastructure and incentives for the development of tourism facilities (Richter, 2008). It is important to note that ‘the state apparatus’ does not only include elected officials but also more or less “permanent institutions and the elites that staff them” (Clancy, 2001, p. 17). The state’s role in tourism development may include any combination of planning, provision, securitisation, risk taking, financing as well as expropriation and relocation of communities that stand in the way of tourism development.

The establishment of Mexico’s Cancun megaresort in 1973/74 and the subsequent expansion of tourism along the Riviera Maya has probably been the most commonly cited case of state-led tourism development in the literature (Clancy, 2001; Murray, 2007). This case will be examined in the first section of this chapter. It will be followed by a discussion of recent state-led tourism development projects in the Philippines. This Southeast Asian country has an equally long-standing history of declaring huge tracts of lands and entire islands as tourism zones, going back to the early 1970s when then President Marcos used tourism for personal gains and political leverage (Richter, 1999). Another section in this chapter will examine the case of a tourism mega-con-cession leased by a Chinese state-owned company in Cambodia’s southwestern Koh Kong Province. The final section will discuss how the government of Timor Leste has attempted to centrally develop tourism in its Oecusse enclave, as the country — one of the poorest in the Asia-Pacific region - faces a major economic downturn with the depletion of its offshore oil and gas reserves.

Foreignising paradise through state-led tourism development -the case of Cancun and La Riviera Maya, Mexico

Until the early 1970s, Mexico’s tourism sector was small and informal, with only the coastal resort of Acapulco attracting a sizable number of foreign

State-led tourism development 27 tourists, hailing mostly from the United States (Gladstone, 2005). Former Mexican President Miguel Alemán-Valdes (1946—1952) who later became the General Director of the National Tourism Commission for 25 years is commonly referred to as the ‘father of the Mexican tourism industry’. This ‘title’ was owed to his development of strategic plans for tourism in the 1950s and his channelling of investments to Acapulco where he and his cronies had vested interests, as they had previously acquired large tracts of land in the area (Clancy, 2001; Ambrosie, 2015).

Back then, the north-eastern corner of the Yucatán peninsula in the Mexican state of Quintana Roo was one of the poorest and most remote regions of the country (Padilla, 2015). What would become one of the most famous international tourism hotspots - Cancún — was a small sandspit with an adjacent community of no more than 500 Indigenous Mayans who eked out their modest livelihoods as fishers and farmers. Suffering from the collapse in demand for sisal fibre and a nation-wide economic crisis in the early 1970s, the region was deemed in urgent need of an injection of national and foreign investment through absorbing US American tourists that had been ‘exiled’ from their favourite holiday spots in Cuba (Ambrosie, 2015). The creation of Integrally Planned Centres (IPCs) or tourism megaprojects was regarded by government planners and the Bank of Mexico as an ideal instrument to valorise underutilised natural resources in coastal areas (Vargas Martinez, Castillo Nechar and Viesca González, 2013). The choice of Cancún - its name derived from the Mayan word for ‘nest of serpents’ — as the first megaproject was reportedly a result of market analysis combined with computer-supported studies of weather patterns by bankers in the country’s capital Mexico City (Clancy, 2001). The area was also considered sparsely populated and therefore provided few obstacles to the relocation of locals (Ambrosie, 2015).

The early phase of Cancún’s development was managed by the Bank of Mexico’s National Trust Fund for Tourism Infrastructure {Fondo de Promoción de Infraestructura Turística — INFRATUR). This fund - like its successor Fondo Nacional para el Desarrollo Turístico (FONATUR) — was endowed with the power to expropriate land and relocate communities for the purpose of tourism development (Ambrosie, 2015; cf. Box 3.1). To make way for the Cancún hotel zone and the adjacent ‘service city’ Ciudad Cancún, these agencies expropriated 170 Indigenous landowners living on the sandspit and its surrounding area, dredged lagoons and removed mangrove forests (Clancy, 2001). The area ‘acquired’ from local people constituted only about 400 hectares, while the remaining 7,340 hectares comprised a land grant under a presidential decree (Ambrosie, 2015). Funding for the development of the tourism infrastructure was provided by trust fund monies and the country’s national development bank (NAFINSA) which received a large loan from the InterAmerican Development Bank (IDB), its first direct financing of a tourism project (Clancy, 2001; Murray, 2007). By 1981, the IDB would have provided more than US$300 million for tourism development in Mexico, including two large additional loans for Cancún (Clancy, 2001).

Box 3.1 FONATUR: The world’s most powerful national tourism organisation?

FONATUR (Fondo Nacional para el Desarrollo Turístico) is arguably one of the most powerful national tourism organisations in the world, overseeing an annual multi-billion US$ budget. It was founded in 1974 through a merger of the National Trust Fund for Tourism Infrastructure (Fondo de Promoción de Infraestructura Turística - INFRATUR) within the Bank of Mexico and a half-dormant financial trust fund Fondo de Garantía y Fomento al Turismo - FOGATUR.

FONATUR actively promotes foreign investment in tourism real estate by providing extremely favourable conditions for investors, including 100 per cent participation in shared capital and subsidised loans for hotel construction. FONATUR also provides and maintains the entire infrastructure around its resort developments, including airports, marinas, access roads, electricity networks, freshwater supplies and sewage systems.

Apart from Cancún, its most famous integrated resort development, FONATUR has developed at least four other integrated resort complexes, namely Los Cabos, Ixtapa, Loreto and Huatulcoy Bays. Other large-scale tourism infrastructure projects planned and implemented by FONATUR include the 333-berth Cozumel Marina and the ‘Maya Train’ megaproject (cf. Chapter 9). FONATUR operates with near-complete autonomy, can bypass local and provincial legislation, and has the power to expropriate land owners for tourism as a public benefit. In Ixtapa, for instance, large-scale expropriation of communal lands (ejidos) by FONATUR led to intense conflicts with the local Indigenous population.

FONATUR has also provided advisory services for tourism development in other Latin American countries, including Cuba and the Dominican Republic. The creator and first head of FONATUR, known as ‘the father of Cancún’, later became the Secretary General of the United Nations World Tourism Organization (UNWTO). Hence, FONATUR’s influence on tourism development has extended well beyond Mexico’s borders.

Sources: Clancy, 1999, 2001; Hiernaux-Nicolas, 2003;

Telfer and Sharpley, 2008; Ambrosie, 2015

One of the most significant hurdles to attracting foreign investment in support of continued tourism growth in Cancún was of a legal nature; the 1917 Constitution of Mexico did not allow foreigners to own property in coastal areas, i.e. land within 50 kilometres of any ocean (Murray, 2019). To get around this obstacle, FONATUR. created a special type of trusteeship (fidiecotniso) to regulate land transfers for the benefit of international investors (Clancy, 2001). Rather than taking the form of a lease, a fideicomiso is a renewable trust held initially for 50 years through a Mexican fiduciary bank

State-led tourism development 29 that holds the title to the property on behalf of the foreign investor (Murray, 2019). Yet, initially, foreign investors remained hesitant to invest in property in a hitherto unknown tourist destination. In 1975, Club Méditerranée agreed to the operation of a 600-room hotel on a franchise basis, while INFRATUR/FONATUR had to take care of the construction and maintain ownership of the land and its premises (Clancy, 2001). International hotel chains only started to invest in hotel properties in the early 1980s, at which point Canctin’s infrastructure was already well developed and tourist numbers started rising by double-digit percentages annually (Ambrosie, 2015).

In order to entice Mexican investors, INFRATUR/FONATUR offered discounts on the sale price of land, provided land-for-share swaps and invested in the megaresort’s infrastructure (Ambrosie, 2015). As the megaresort was built from the ground up, FONATUR ultimately became the governing power of the area, with one of its executives even assuming the role of city mayor (Clancy, 2001). By the end of the 1980s, Cancún had become the single largest tourist destination in Mexico (Clancy, 1999) and in 2017, the resort city welcomed more than six million visitors (Wiedeman, 2019).

The rapid expansion of the hotel zone and the service city from the 1990s onward came at considerable environmental costs; while initially some land had been set aside for environmental protection (Clancy, 2001), hundreds of hectares of wetlands and mangrove forests were dredged and destroyed in violation of strict national environmental laws and the Ramsar Convention on Wetlands of International Importance to which Mexico had become a signatory in 1986 (Brundage, 2016). In 2015, local protests formed against another massive tourism development promoted by FONATUR, the Tajamar Malecón project, which threatened the existence of 143 acres (56 hectares) of mangrove forest and its unique wildlife (Mangrove Action Network, 2016). In a particularly cynical move, an injunction promoted by 113 local children — who invoked their right to a healthy environment - to suspend the project was granted by a local judge on the condition that the kids pay the equivalent of more than USS1 million in compensation to the foreign and domestic investors (Hernández, 2016). When the mangrove area was ultimately destroyed in a pre-dawn operation protected by strong riot police presence, FONATUR insisted that the action did not represent ‘environmental damage’ but only ‘environmental impact’ based on authorisation by the appropriate authorities (Brundage, 2016; Hernández, 2016).

Land invasions and resource grabs by domestic and foreign investors in Cancún have also proven detrimental to other rights of local residents. Following the allotment of private beach concessions in the 1990s, only two public beaches - Playa Delfines and Playa Langosta - remain that can be enjoyed by the inhabitants of Cancún (Vargas Martinez, Castillo Nechar and Viesca González, 2013). A comprehensive study by Domingez Aguilar and Garcia de Fuentes (2007) exposed the drastic inequality in freshwater supply in Cancún; while the hotel zone enjoys a piped water service withoutinterruptions, households in the city centre receive piped water for only a few hours per day. Meanwhile, the poorest households in the peripheral and outlying squatter settlements have neither provision for piped water nor sewerage and have to meet their water demand either through tanker services — at ten times the cost that hotel operators and most households in the city centre would pay — or from shallow wells that residents have to dig themselves (Aguilar and de Fuentes, 2007).

Notwithstanding the megaresort’s significant contribution to Mexico’s tourism revenues, Cancún has gone through a series of economic setbacks, primarily caused by natural and human-made disaster events. Among the most damaging ones — prior to the COVID-19 pandemic of 2020 — were Hurricanes Gilbert in 1988 and Wilma in 2005, the 9/11 terror attacks that dramatically reduced tourist numbers from the USA and the AH INI influenza pandemic of 2009 (Vargas Martinez, Castillo Nechar and Viesca González, 2013). Hurricane Wilma was particularly destructive, causing an estimated economic damage of about USS1.4 billion (Moncada, 2009). The impact of extreme storm events has been exacerbated by the removal of protective vegetation for hotel and infrastructure development, particularly the destruction of coastal mangrove forests mentioned above. Hurricane Wilma and other major storms in combination with ocean currents have accelerated beach erosion, forcing the government to spend the equivalent of tens of millions of US dollars to replenish the beaches around Cancún (Lacey, 2009; Mexican News Daily, 2017). In 2010, for instance, more than five million cubic metres of sand were reportedly dredged from marine banks of surrounding islands and poured onto Cancún’s beaches despite strong opposition from environmental organisations (Vargas Martinez, Castillo Nechar and Viesca González, 2013).

Sand grabbing has also been common for the provision of construction material for the hotel infrastructure (Pérez Villegas and Carrascal, 2000). Seeing their most important asset erode into the ocean, some hotel owners have taken matters into their own hand and built artificial reefs and seawalls to halt beach erosion (Barrell, 2010). A hotel owner was fined and five of his employees detained in 2009 for building a breakwater into the ocean and illegally pumping sand from the ocean floor to the hotel beach (Lacey, 2009). In 2017, the tourism secretary of Quintana Roo ordered the suspension of 15 private beach recovery projects and announced a US$30 million beach rehabilitation plan, with major investment from a Spanish construction company (Mexico News Daily, 2017). Yet it is only a matter of time until the next storm event will undo these desperate efforts. In fact, during the writing of this chapter, Hurricane Delta hit the Yucatán Peninsula just south of Cancún in early October 2020 but — fortunately — it was not as destructive as previous storm events.

Meanwhile, Cancún itself has been described as a ‘hurricane’ bringing mass tourism to other parts of the Riviera Maya, the name given to the 140km eastern Yucatan coastline running from Cancún down to Tulum. What has until recently been considered the “last, undeveloped Caribbean beach property in North America” (Houghton, 2012, n.p.) is being rapidly bought up by US American, Canadian and European investors. In 2006, Playa del Carmen, 70km south of Cancún, was considered one of the fastest growing cities in the world (Guy, 2018). The land rush - mostly driven by small-scale foreign investment — has reached as far as Tulum, formerly a sleepy fishing village, whose population tripled between 2008 and 2015 (Guy, 2018). Large international hotel chains have so far shunned the area due to insecure land tenure and conflicting property claims (Monroe, 2017). In the 1970s, the Mexican government designated around 10,000 hectares of land around Tulum as communal land (ejido) to landless peasants, many of them Indigenous Mayans (Wiedeman, 2019). When changes to the Mexican constitution and a new Agrarian Law in 1992 allowed the privatisation of ejidos (Farley et al., 2012), many ejidatarios (communal landholders) started to sell their plots to domestic and foreign investors, in some cases to several buyers. The resulting multiple claims to the same beachfront property led to a series of seizures of foreign-owned hotels in Tulum between 2002 and 2016 (Semple, 2016; Monroe, 2017; Wiedeman, 2019). More than 30 hotel owners were evicted under threat of violence, often supported by court orders, with the confiscated properties rapidly resold and redeveloped (Monroe, 2017; Wiedeman, 2019). Despite strong condemnation of the evictions by several foreign embassies, none of the evicted owners have been able to return (Monroe, 2017).

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