ABSTRACT
This chapter provides an overview of the problems and prospects of tourism in the Indian Ocean region (IOR) with special focus on its role to promote economic development. Net foreign exchange earnings determine the proportion of income from the tourism sector spent on imports of goods and services to meet the demand of the overseas tourists, wages paid to the expatriate labour employed in the tourism industry, and the nature of capital investment. The chapter evaluates the percentage share of tourism receipts from international tourism for determining the importance of tourism in the growth of national income in the IOR. The importance of tourism to economic growth in many countries of the IOR is recognised. The continuing success of tourism would depend on the availability of: infrastructure including adequate transport and communication systems, suitable accommodation such as hotels and motels; a safe law and order situation; and facilities for shopping and entertainment for tourists.
