South Asia Taps Tourism Potential for Inclusive and Sustainable Growth

News Release | 16 November 2009

MANILA, PHILIPPINES - Efforts by Nepal, India and Bangladesh to take advantage of the tourism potential of their rich natural and cultural attractions, including many of the world's major Buddhist sites, are getting support from the Asian Development Bank (ADB).

ADB Board of Directors today approved a total of $57.5 million in grants and loans for the South Asia Tourism Infrastructure Development Project, which will develop and improve infrastructure and services for key tourism sites in the three countries. It will also help increase the capacity of sector agencies to sustainably manage and protect sites, and will target increased involvement by local communities in tourism.

South Asia is one of the poorer regions of the world but has many renowned natural and cultural attractions, including the world's highest mountain and the Sacred Garden in Lumbini, Nepal, where Buddha was born, the Rumtek Buddhist Monastery in India's Sikkim state, and ancient monasteries and temples in western Bangladesh. Countries in the sub-region, including India, Nepal and Bangladesh have formed a working group for collective action to tap the synergies of their complementary tourism sites in order to expand tourism. However, development has been hindered by limited connectivity to sites, inadequate infrastructure, and a lack of capacity by sector agencies to develop and manage key destinations.

The project will target transport and other infrastructure upgrades and will improve water supply, sanitation and solid waste management services to enhance the environment at key sites. Support will be given to increase the capacity of sector agencies to sustainably manage and protect attractions, while steps will be taken to increase involvement by local communities in the tourism sector.

"Tourism plays an important role in the regional economy and this project will benefit around 2.4 million people through increased income and employment, health and environmental improvements, and reduced travel time," said Gülfer Cezayirli, Principal Urban Development Specialist in ADB's South Asia Department.

"The project features a subregional approach to tourism development that will bring wider benefits than a single country approach, and will help spread jobs and income to areas currently bypassed by existing tourism markets," added Ms. Cezayirli. "It includes a program to ensure that poor and remote communities have the knowledge and skills to take advantage of new tourism opportunities."

Along with ADB's loans and grants, the governments of the three countries, and the OPEC Fund for International Development, will provide the balance of the project cost of $89.5 million.

India will receive a loan of $20 million equivalent from ADB's ordinary capital resources. Nepal will receive a grant of $12.75 million, and a loan of $12.75 million equivalent, both from ADB's concessional Asian Development Fund (ADF). Bangladesh will receive a $12 million equivalent ADF loan.

The project executing agencies are Nepal's Ministry of Tourism and Civil Aviation, India's Sikkim State Department of Tourism, and Bangladesh's Department of Archaeology, Ministry of Cultural Affairs.The project is due for completion by September 2014.